HNFHC - AGM Information 2020 | FinancialReports.eu

Hua Nan Financial Holdings Co., Ltd. Meeting Minutes for 2020 Annual General Shareholders’ Meeting

Time ： 9 ： 00 a.m. on Friday ,19 June, 2020.

Venue ： No.123, Songren Rd., Xinyi District, Taipei City. Present Shares ：

Total outstanding shares of the Company：12,172,740,178 shares, total shares of shareholders residing in China：18,564,896 shares, Total outstanding shares eligibly for the meeting (equivalent to the first one minus the second one in accordance with the law)：12,154,175,282 shares, total shares represented by shareholders present in person and their proxies：10,270,839,491 shares (6,148,202,221 shares from E-Voting), Percentage of share held by shareholders present in those issued share：84.505%.

Chairman ：

Chang, Yun-Peng, the Chairman of the Board of Directors(with seal) Directors Present ：

Lin, Ming-Cheng (Vice Chairman), Lo, Pao-Chu (Director and President) , Wu, Kuei-Sen(Independent Director), Lin, Kuo-Chuan (Independent Director), Yang, Ming-Hsien(Independent Director), Chen, Sung-Tung (Independent Director), Jeng, Shih-Ching(Director), Wang, Chou-Wen (Director) ,

Chen, Ho-Chyuan (Director), Yen, Yu-Min (Director), Lin, T.(Director), Lin, Chih-Yu (Director), Lin, Chih-Yang(Director), Shen, Vivien, Chia-Ying(Director)

Attendees ：

Deloitte Touche Tohmatsu Limited：CPA Chang, Ding-Sheng, Senior Manager, Wu, Chun- Lin

Baker & McKenzie：Attorney Liu, Tsung-Chin,

Attorney Tu, Wei-Cheng Recorder ： Liu, Yi-Chang (with seal)

Chairman of the Meeting announced that the aggregate ：

Total outstanding shares of the Company：12,172,740,178 shares, total shares of shareholders reside in China：18,564,896 shares, total outstanding shares eligibly for the meeting：12,154,175,282 shares (equivalent to the first one minus the second one in accordance with the law), Total shares represented by shareholders present： 10,270,582,729 shares (6,148,202,221 shares from E-Voting), percentage of share held by shareholders present in in those issued share：84.503%, which constituted a quorum so declare the meeting began.

Remarks by Chairman：Omitted

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Matters to be Reported

Report No.1

Case：The Company's 2019 business report. (Noted)

Report No.2

Case：The Audit Committee's review report on the 2019 Financial Statements. (Noted)

Report No.3

Case：The Company's Report on Remuneration Distribution of Employees and Directors for 2019. (Noted)

Report No.4

Case：The report on rationale and relevant matters on the unsecured corporate bonds of 1[st] issued in 2019. (Noted)

Summary of shareholder’s speech:

The Shareholder (No. 4386) inquired matters regarding the loss of warrant business of Hua Nan Securities with recommendations; which were responded by the Company's Chairman in details respectively.

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Matters for Ratification (1)

Proposal ： Ratification of the 2019 business report and financial statements. (Proposed by the Board of Directors)
Details ： The company's 2019 business report and financial report have been approved by all members of the Company's Audit Committee and passed in the 10[th] meeting of the Company's 7[th] Board of Directors. The financial report has been audited and certified by CPAs Chang, Ding-Sheng and Lai, Kwan-Chung of Deloitte & Touche Taiwan and are hereby submitted for ratification. Please refer to pages 7 to 34 of the Handbook for the 2019 Annual Business.

Summary of shareholder’s speech:

The Shareholder (No. 4386) inquired matters regarding the loss of warrant business of Hua Nan Securities with recommendations again.

Resolution ： Out of the total cast votes, the number of the affirmative votes is 9,478,840,452 (in which 5,359,781,289 votes were cast through E-Voting), which accounts for 92.28886% of the total votes which can be casted by present shareholders. The number of the objection votes is 270,872(in which 261,794 votes were cast through E-Voting), which accounts for 0.00264% of the total votes which can be casted by present shareholders. The number of abstention votes is 788,163,138(in which 788,159,138 votes were cast through E-Voting), which accounts for 7.67379% of the total votes which can be casted by present shareholders. The number of the invalid votes is 0 accounting for 0% of the total votes which can be casted by present shareholders. The number of the votes which were not cast is 3,565,029 accounting for 0.03471% of the total votes which can be casted by present shareholders. As such, the number of the affirmative votes exceeds the legal threshold. The proposal has been approved as submitted.

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Matters for Ratification (2)

Proposal ： Ratification of Distribution of 2019 Profits.

(Proposed by the Board of Directors)

Details ：

I. The Company's undistributed earnings at the beginning of 2019 was NT$(same here under) 1,784,694,149. After accounting for the 15,955,269,719 in net profits after current year taxes, remeasured amount in defined benefit plans of 366,308,988, disposal of equity instruments at fair value through other comprehensive income was 453,112,528, and reverse from special capital reserve arising from first adoption of TIFRS was 20,498,979, the earnings shall be distributed as follows in accordance with the Articles of Incorporation and related regulations. (Please refer to pages 36 of this Handbook)
(I) Provision for legal reserve: 1,515,634,718. (Pursuant to the Articles 209-1 of the Company Act and Ministry of Economic Affairs—Jan., 9, 2020—Letter No.of Ching – shang – tzuti – 10802432410)
(II) Distribution of shareholder dividends--cash (0.5603 per share): A total of 6,820,386,322.
- Distribution of shareholder dividends--stock (0.5603 per share): A total of 6,820,386,320.
(III) Ending undistributed earnings: 1,784,633,971.
(IV) The net profit after tax for 2019 has been distributed in full and therefore it is not required to pay the 10% tax on undistributed earnings.
II. After the distribution proposal is passed in the annual general shareholder’s meeting:
(I) Cash dividends:
- The Board of Directors shall separately establish a distribution base day.
(II) Stock dividends:
- Once the plan for capital increase is approved by the competent authority, the Board of Directors will be authorized to set the base date for the distribution of dividends.
III. If the Company's shares in external circulation are subsequently changed due to re-acquisition, transfer or cancellation of its treasury stock or other reasons, which impact the shareholder dividend ratio and dividend ratio, a proposal is to be submitted to authorize the Board of Directors to process the changes.

Summary of shareholder’s speech:

The Shareholder (No. 566246) inquired matters regarding the management of branch of Hua Nan Commercial Bank with recommendations; which were responded by the Company's Chairman in details respectively.
The Shareholder (No. 4386) inquired matters regarding the business management of Hua Nan Securities with recommendations.

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Resolution ： Out of the total cast votes, the number of the affirmative votes is 9,501,202,960 (in which 5,382,144,797 votes were cast through E-Voting), which accounts for 92.50659% of the total votes which can be casted by present shareholders. The number of the objection votes is 246,495 (in which 236,417 votes were cast through E-Voting), which accounts for 0.0024% of the total votes which can be casted by present shareholders. The number of abstention votes is 765,825,007 (in which 765,821,007 votes were cast through E-Voting), which accounts for 7.4563% of the total votes which can be casted by present shareholders. The number of the invalid votes is 0, accounting for 0% of the total votes which can be casted by present shareholders. The number of the votes which were not cast is 3,565,029, accounting for 0.03471% of the total votes which can be casted by present shareholders. As such, the number of the affirmative votes exceeds the legal threshold. The proposal has been approved as submitted.

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Matters for Discussion (1)

Proposal ： Issue new shares through capitalization of the 2019 earnings. (Proposed by the Board of Directors)

Details ：

I. To increase the scale of capital and strengthen its financial structure, the company shall appropriate NT$6,820,386,320 from the distributable earnings of 2019 for capital increase and issue 682,038,632 shares at a face value of $10 per share in accordance with Article 240 of the Company Act. After earnings are converted into capital increase, the number of issued shares shall be 12,854,778,810 shares, and the paid-in capital shall be NT$128,547,788,100.
II. After passage in the annual general shareholders meeting and approval of the competent authority, the Company shall request that Board of Directors determine a capital increase ex-dividend date and issue 56.03 shares for every one thousand shares held. Distributions that amount to less than one full share may be grouped by shareholders within 5 days of the ex-dividend date at the Company's shareholder service agency. Fractions of a share that cannot be grouped into full shares shall be paid in cash (This is calculated to the amount of one whole NTD, and any decimal point below one NTD will be rounded down). The Chairman has been authorized to engage a designated party to subscribe to the accumulated share fractions at face value.
III. The rights and obligations associated with the new shares issued for the cash increase are identical to those associated with the existing shares.
IV. If the Company's shares in external circulation are subsequently changed due to re-acquisition or cancellation of its treasury stock (or other reasons which impact the shareholder dividend ratio), a proposal is to be submitted to authorize the Board of Directors to process the changes.
V. In the event that the issuance of new stocks is revised due to changes in regulations or approval of the competent authority, the shareholders are requested to authorize the Board of Directors at the annual general shareholder’s meeting to process the revision.
Resolution ： Out of the total cast votes, the number of the affirmative votes is 9,500,798,900 (in which 5,381,808,685 votes were cast through E-Voting), which accounts for 92.50265% of the total votes which can be casted by present shareholders. The number of the objection votes is 572,648 (in which 517,622 votes were cast through E-Voting), which accounts for 0.00514% of the total votes which can be casted by present

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shareholders. The number of abstention votes is 765,879,914(in which 765,875,914 votes were cast through E-Voting), which accounts for 7.45684% of the total votes which can be casted by present shareholders. The number of the invalid votes is 0, which accounting for 0% of the total votes which can be casted by present shareholders. The number of the votes which were not cast is 3,633,029, which accounting for 0.03537% of the total votes which can be casted by present shareholders. As such, the number of the affirmative votes exceeds the legal threshold. The proposal has been approved as submitted.

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Matters for Discussion (2)

Proposal ： Release the Prohibition on Directors from Participation in Competitive Business.(Proposed by the Board of Directors)

Details ：

I. Pursuant to paragraph 1 of Article 209 of the Company Act, A director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.
II. The Company’s directors and the judicial persons that they represent may participate in competitive business of the Company, as such the release of the prohibition is proposed.
III. The Company’s directors and the judicial persons that they represent that is within the scope of the company’s business are as of the attachment.

Attachment `：` List of releasing of non-competition clause

Attachment`：`List of releasing of	non-competition clause
Director and the judicial person represented by the director	Concurrent Company	Position Held
Sung-Tung,Chen (Independent Director)	BO-SHIH Investment Co., Ltd.	Director
Vivien, Chia-Ying Shen (China Man-Made Fiber Corporation)	SHUO-RONG Investment Co., Ltd.	Director

Summary of shareholder’s speech:

The Shareholder (No. 207981) inquired matters regarding the loss of warrant business of Hua Nan Securities and how the Company faces the challenges of digitalization and internet-only bank; which were responded by the Company's President and Executive Vice President of Hua Nan Commercial Bank in details respectively.

Resolution ： Out of the total cast votes, the number of the affirmative votes is 9,435,433,239 (in which 5,319,047,646 votes were cast through E-Voting), which accounts for 91.86623% of the total votes which can be casted by present shareholders. The number of the objection votes is 3,725,164 (in which 1,150,808 votes were cast through E-Voting), which accounts for 0.03627% of the total votes which can be casted by present

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shareholders. The number of abstention votes is 828,038,059 (in which 828,003,767 votes were cast through E-Voting), which accounts for 8.06203% of the total votes which can be casted by present shareholders. The number of the invalid votes is 0, accounting for 0% of the total votes which can be casted by present shareholders. The number of the votes which were not cast is 3,643,029, which accounting for 0.03547% of the total votes which can be casted by present shareholders. As such, the number of the affirmative votes exceeds the legal threshold. The proposal has been approved as submitted.

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Questions and Motions

None

Summary of shareholder’s speech `：`

Shareholder (No. 4386) inquired matters regarding the issuance and sale of specific financial products and the stock affairs of Hua Nan Securities; which were responded by Executive Vice President of Hua Nan Commercial Bank, President of Hua Nan Investment Trust and Acting President of Hua Nan Securities in details respectively.

Adjourned ： 10 ： 12 a.m.

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Attachment

Main criteria for the issuance of 1[st] of unsecured ordinary corporate bonds in 2019:

bonds in 2019:	bonds in 2019:
Corporate bond type		2019 1st of unsecured corporate bonds
Issuance(processing)date		January9,2020
Face value		NT$10,000,000
Issuance and trading place		Taiwan
Issuanceprice		100% of face value
Total amount		The total amount of issued corporate bonds is NT$5 billion.
Coupon rate		The coupon rate is an annual interest rate of 0.88%.
Term		The issuance period is 10 years and the maturity date is January9,2030.
Priority order of compensation		The creditors of the Company's corporate bonds have the same priority order of compensation as the Company's other creditors of unsecured debts.
Warrantyagency		None
Trustee		Trust Department,Yuanta Commercial Bank
Underwritingagency		Hua Nan Securities Co.,Ltd.
Certifyingattorney		EternityAttorneyOffice: AttorneyKang-JungChan
Certifying CPA		Deloitte & Touche: Ding-ShengChang,Kwan-ChungLai
Terms of payment		Method of calculation and payment of interest: Annual calculation of simple interest and one payment per year in accordance with the coupon rate from the date of issuance. Method of principal payment: One-time payment upon maturity.
Unpaidprincipal		NT$5,000,000,000
Terms and conditions for redemption or early liquidation		None
Restriction clauses		None
Inclusion in qualifying capital		None
Name of credit rating agency (CRA), rating date, and results of corporate bond ratings		None
Other appended rights	Amount of converted (exchanged or subscribed) ordinary shares, GDRs, or other securities as of	None

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	the annual report publishing date
	Measures for issuance and conversion (swaps or warrants)	None
Dilution effect and other effects on existing shareholders caused by the issuance, conversion, trade, or subscription, and issuance condition of shares		None
Name of the custodian institution entrusted with securities to be converted		None

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Hua Nan Financial Holdings Co., Ltd. 2019 Business Report

I. Domestic and International Finance Environment in 2019

The trade war between the United States and China impacted global economic growth and trade in 2019 while manufacturing industries in major economies suffered declines. According to IHS Markit estimates, the global economic growth rate in 2019 was approximately 2.6% which was far lower than the 3.2% in 2018. The global economy was evidently in a decline. However, the financial market has been boosted by reduced interest rate and monetary easing policies implemented by of central banks across the world. The optimism toward new technological developments and applications (i.e., 5G, AI, IoT, and electric vehicles) coupled with the restart of trade negotiations between the United States and China have created a bull market as the Dow Jones continuous reached new record heights.

As a result of international developments, the global supply chain reorganization accelerated the return of Taiwanese businesses to Taiwan for investments. Taiwan's stock market also benefited from tech company stocks and record highs in the American stock market and rose by 23% throughout the year. According to estimates of the Directorate-General of Budget, Accounting and Statistics, Executive Yuan on February 12, 2020, the annual economic growth rate in 2019 was approximately 2.71% which was a marginal decrease of 0.04% from 2.75% in 2018. The marginal decline was a result of uncertainties in the global economy created by the trade war between the United States and China. The decline in international raw material prices also reduced exports. Consumer spending grew as a result of increased demand in the automobile market and smart phones and growth in the stock market. The return of Taiwanese businesses to Taiwan for investment and increased capital expenditures of the semiconductors industry also offset unfavorable factors.

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II. Business Plan and Results of Business Strategies

The Group shall carefully evaluate risks and adopt the following strategies in response to the aforementioned domestic and international political and economic changes: 1. Grasp business opportunities in the return of Taiwanese businesses and offshore capital to Taiwan. 2. Strengthen loans for small and medium enterprises and wealth management plans for business owners. 3. Implement flexible adjustments of investment strategies amid fluctuations in the financial market to increase profitability. 4. Reduce exposure in China and increase bad debt provision in response to risks of a declining economy. 5. Increase the ratio of securities and life insurance products in contributions to profits. 6. Develop FinTech and attract young customers to respond to the challenges of Internet-only banks. With the participation and professional guidance provided by all Directors and Supervisors of the Group and the hard work of all employees, the Company's net profit after tax in 2019 amounted to NT$15.955 billion which was 9% increase from 2018. The earnings per share (EPS) was NT$1.31 and return on equity (ROE) was 8.79%. The net profit after tax of the subsidiary Hua Nan Commercial Bank (HNCB) was NT$15.169 billion which was 6% increase from the previous year. Its profitability reached new heights and the non-performing loan ratio was reduced to 0.12% with outstanding performance in asset quality. Hua Nan Securities'(HNSC) net profit after tax was NT$931 million which was a 104% increase from the previous year. The brokerage and underwriting market share increased from 3.28% to 3.36% which ranked first among securities firms with government capital. South China Insurance(SCIC)'s net profit after tax was NT$651 million which was a 3% increase from the previous year. The total premium income from written policies amounted to NT$9.074 billion.

The Group continues to improve and work hard in corporate governance, green finance, environmental sustainability, corporate social responsibility,

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digital innovations in financial services, and high-quality consumer products. The main achievements in 2019 are explained below:

(I) Maintaining Sound Management
Asset quality: The non-performing loan and loan loss coverage ratios of the subsidiary HNCB were 0.12% and 1031.65%, respectively, which were superior to industry averages.
Capital adequacy ratio: The Group's capital adequacy ratio at the end of 2019 was 115.72%. HNCB's capital adequacy ratio was 13.88%, with a Tier 1 capital adequacy ratio of 11.63%.
Corporate governance: The Company is included in the top 5% bracket in the 5th Corporate Governance Evaluation established by the Taiwan Stock Exchange in 2018. The Company is also selected for inclusion in the "Corporate Governance 100 Index Constituent Stocks", "FTSE4Good Emerging Index", "TSE4Good TIP Taiwan FSG Index", "Taiwan HC100 Index", and "Taiwan RAFI EMP 99 Index."
Legal Compliance:
- (1) Establishment of the Legal Compliance Committee of the Group: To effectively advance the Group's compliance operations, the Group's Legal Compliance Committee effectively supervises all companies to pay attention to changes in the domestic and foreign regulatory environment and respond accordingly.
- (2) Implementing Key Compliance Matters of the Group: The Group shall establish consistent anti-money laundering and counter-terrorism financing regulations for the Group and adopt consistent risk assessment methodology to effectively offset money laundering and terrorist financing risks. The Company is also committed to protecting personal data. In addition to the establishment of group policies, the Company also uses personal

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data protection meetings and international certifications to ensure the effectiveness of personal data protection.

(3) Establishment of the Legal Compliance System of the Group:

The Group uses the compliance data reporting system to conduct real-time and regular online reporting and manage the legal compliance and effectiveness of the Group's business activities. In addition, the anti-money laundering information sharing platform of the Group is used for comparison, review, confirm, transmission, and usage of the Group's AML information to effectively offset the Group's money laundering and terrorism financing risks.

(II) Strengthening Cross-Selling

Group cross-selling benefits: The achievement rate the Group's cross-selling business operations as the amount of contribution to income was 104% in 2019.
Strengthen the Group's Cross-Selling Businesses: The Group shall implement "simple product explanation", "key product recommendations", and "rapid logistics support" to integrate channel resources and improve the positive development of cross-selling business volume.

(III) Promoting Digital Finance

Develop FinTech Patents: As of the end of 2019, the Group has obtained 91 FinTech patents in mobile platforms, big data, artificial intelligence, security and control mechanisms, and biometrics.
Create Smart Financial Products: The Group created the first conversational mobile bank powered by AI and promoted services such as financial certification blockchains, facial recognition fund withdrawal, fund transfer, and mobile payment. We use technologies to make financial services more efficient.

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Promoting Big Data Business Applications: We established a Group-level Big Data Business Development Team and trained dozens of data analysts to use big data for promoting business development and increase the value of data.
FinTech Innovation Competition: The Group organized the fourth "Hua Nan Financial Holdings' FinTech Innovation Competition " and consolidated powers of the industry, academia, researchers, and innovators. A total of 302 teams participated in the contests which was the largest nationwide FinTech innovation Competition. The works entered in the contest excel in both quality and quantity. We hope that the contest can integrate campus and industry development ahead of time and implement innovation and creativity in the industry to cultivate future FinTech research and development talents.
(IV) Implementing Corporate Social Responsibilities
Promote charitable activities:
- (1) The Group's goals for public welfare include caring for disadvantaged groups, popularizing knowledge and education, supporting sports activities, and nurturing cultural and creative industries. The Group sponsored or hosted over 30 charitable activities in 2019, including the "Excellent Hua Nan Care for the Elderly" activity, "President Tsai Ing-Wen and High School Students Face-to-Face Forum", "Unified Invoice Cup for Road Running", "one ball for one dream" fundamental baseball cultivating plan, sponsorship for the training fees for the gymnasts Li, Chih-Kai, Huang, Ke-Chiang, and coach Lin, Yu-Hsin, the second "Little Gymnast Camp", and the French musical "Notre Dame the Paris".
- (2) The Company has always supported sports activities and received the "Sports Activists Awards" of the Sports Administration of the

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Ministry of Education in 2019. It was the Company's eighth such award and the third consecutive award for Gold Sponsorship, Long Term Sponsorship, and Promotional Bronze Awards.

Implementation of green finance:
(1) The subsidiary, HNCB, extended loans of NT$95.8 billion for green energy technology companies as of the end of 2019, which was an increase of NT$18.1 billion or 23.3% from NT$77.7 billion as of the end of 2018.
(2) The subsidiaries HNCB and HNVC have invested NT$1.283 billion in green energy technology companies.
(3) The subsidiary HNCB issued NT$1 billion green bond and invested NT$5.46 billion green bond at face value as of the end of 2019.
(4) The subsidiary HNCB continues to support the development of green energy technology companies, SCIC focuses on the impact of climate change on the harvest of agricultural products and responds to the Council of Agriculture's initiatives for developing insurance policies for various agricultural products with property insurance companies. SCIC launched the "papaya insurance" and "lychee insurance" in hopes of using insurance products to help farmers mitigate the impact brought forth by climate change and establish a safety net for agriculture in Taiwan.

III. Budget Implementation and Profitability Analysis

In 2019, the Company generated net income after tax of NT$15.955 billion with an EPS of NT$1.31. Profits increased by NT$1.3 billion compared to 2018, mainly due to profit increase of the subsidiaries HNCB and HNSC. In terms of the operations of subsidiary companies, Hua Nan Commercial Bank remains the main source of profits of the Group. The bullish stock market in

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2019, increase in profits from changes in financial assets and liabilities, lack of major non-performing loans, and recovery of bad debts in the year resulted in an increase of NT$862 million in profits compared to 2018. The increased profits of Hua Nan Securities from proprietary trading and dividends income and the organization of the underwriting for Shanghai Commercial and Savings Bank increased profits by NT$475 million from 2018. The profitability of other subsidiaries was at similar levels with the previous year, and all subsidiaries have maintained profitability.

Hua Nan Financial Holdings Condensed Financial Statements of 2019

Company	2019 NPAT (Audited)	2019 NPAT (Budget)	2018 NPAT (Audited)	EPS	ROE
Hua Nan Financial Holdings	NT$15.955 billion	NT$14.444 billion	NT$14.621 billion	NT$1.31	8.79%
Hua Nan Bank	NT$15.169 billion	NT$14.002 billion	NT$14.307 billion	NT$1.83	7.94%
Hua Nan Securities	NT$931 million	NT$659 million	NT$456 million	NT$1.15	7.34%
South China Insurance	NT$651 million	NT$646 million	NT$635 million	NT$3.25	11.95%
Hua Nan Investment Trust	NT7 million	NT$15 million	NT$14 million	NT$0.21	1.27%
Hua Nan Venture Capital	NT$24 million	NT$13 million	NT$13 million	NT$0.12	1.53%
Hua Nan Assets Management	NT$20 million	NT$10 million	NT$9 million	NT$0.20	1.83%

IV. Economic Outlook and Development Strategies for 2020

The global economy is expected to decline in 2020 and changes will be mainly based on the subsequent development of the COVID-19 pandemic, the implementation and progress on the phase 1 trade agreement between the United States and China, decline of the economy of Mainland China, fluctuations in the international stock, exchange, and bond markets, changes in oil prices and other commodities, and the effect of geopolitics on the global economy.

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The uncertainty caused by the COVID-19 epidemic in Taiwan has affected production, consumption, trade, and other regular economic activities and thus reduced the expansion of foreign trade and impacted private consumption. However, the continuous investments in the semiconductors industry, the continuous increase in the return of Taiwanese businesses, and establishment of 5G networks have led to growth in investments. The Directorate General of Budget, Accounting and Statistics, Executive Yuan estimates that the economic growth rate of 2020 will be of 2.37%, which is a slight decline from 2019.

The finance industry will face the following opportunities and challenges: 1. Domestic monetary easing means the interest spread of banks will continue to decline. 2. The global supply chain reorganization will accelerate the return of Taiwanese businesses to Taiwan or redirect them from China to Southeast Asia. 3. The finance industry becomes more regional and dependent on both innovation and policy support. 4. FinTech development and competition from Internet-only banks. 5. Increased importance of compliance, anti-money laundering, and information security. 6. Investors focus more on the implementation of CSR and ESG of companies. 7. The COVID-19 pandemic cuts supply chains and increases non-performing loans for banks.

The Group aims to become a "high-quality financial institution with FinTech development and innovation, profitability, legal compliance, and risk management". We have established 6 major operating strategies for the aforementioned opportunities and challenges: 1. Generate earnings from diverse sources. 2. Balance profit contribution within the Group and increase benefits created by the use of assets and capital. 3. Plan additional overseas

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operations and expand the scale of overseas operations. 4. Intensify FinTech development to increase operating efficiency and competitiveness. 5. Establish a culture of governance, risk management, and compliance culture (GRC). 6. Fulfill corporate social responsibility, strengthen corporate governance, and cultivate talents. The Group aims to effectively improve its operating performance, make securities and property insurance the Group's second and third profit engines, and use big data analytics to expand the target customer base and strengthen the Group's cross-selling and digital marketing capabilities.

Although the international economic conditions are full of challenges, we remain optimistic regarding Taiwan's economic development. Once COVID-19 is under control and the trade war between the United States and China deescalates, the purchase orders reverted to Taiwan and the return of Taiwanese businesses and new technological development (5G, AI, Internet of Things, and electric vehicles) will improve Taiwan's economic outlook. We expect the Group's profitability to continue to grow and we shall achieve greater growth than the economic growth rate to meet the expectations of customers, shareholders, and employees.

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Hua Nan Financial Holdings Co., Ltd. Audit Committee's Audit Report

The Company's Board of Directors prepared and submitted the 2019 business report and financial statements. The financial statements have been audited by Ding-Sheng Chang, CPA, and Kwan-Chung Lai, CPA, of Deloitte & Touche Taiwan. The statements and reports prepared and submitted by the Board of Directors have been audited by the Audit Committee and no inconsistencies have been found. The Committee has prepared an Audit Report following unanimous agreement in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

To Hua Nan Financial Holdings Co., Ltd. 2020 Shareholders' Meeting

Hua Nan Financial Holdings Co., Ltd. Kuei-Sen Wu, Convener of the Audit Committee

March 23, 2020

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Hua Nan Financial Holdings Co., Ltd. Audit Committee's Audit Report

The 2019 earnings distribution proposal prepared and submitted by the Board of Directors have been audited by the Audit Committee and no inconsistencies have been found. The Committee has prepared an Audit Report following unanimous agreement in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

To Hua Nan Financial Holdings Co., Ltd. 2020 Shareholders' Meeting

Hua Nan Financial Holdings Co., Ltd. Kuei-Sen Wu, Convener of the Audit Committee

April 27, 2020

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INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders Hua Nan Financial Holdings Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Hua Nan Financial Holdings Co., Ltd. (the Company) and its subsidiaries, which comprise the consolidated balance sheets as of December 31, 2019 and 2018, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of December 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Financial Holding Companies, Regulations Governing the Preparation of Financial Reports by Securities Issuers, Regulations Governing the Preparation of Financial Reports by Public Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms, Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants, Regulations Governing the Preparation of Financial Reports by Insurance Companies, the guidelines issued by the authority, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Rules Governing Auditing and Certification of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those regulations and standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company and its subsidiaries in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2019. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Company and its subsidiaries’ consolidated financial statements for the year ended December 31, 2019 are stated as follows:

Impairment Loss of Discounts and Loans

As detailed in Note 5 to the consolidated financial statements, the Company and its subsidiaries’ management assess the impairment loss of discounts and loans based on the assumptions about the

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probability of default and the expected loss rate. The Company and its subsidiaries uses judgment in making these assumptions and in selecting the inputs to the impairment evaluation, based on the the Company and its subsidiaries’ historical experience, existing market conditions as well as forward looking estimates as of the end of each reporting period. Assessing evidence of the probability of default and impairment on discounts and loans, and determining whether the credit risk has increased significantly since the initial recognition are critical judgments and estimates and complied with the relevant laws and regulations. Therefore, the impairment loss of discounts and loans is identified as a key audit matter.

Please refer to Note 4 to the consolidated financial statements for the accounting policies related to impairment evaluation on discounts and loans, Note 5 for critical accounting judgments and key sources of estimation uncertainty, significant assumptions and input values used refer to Note 51 and Note 14 for related presentation and disclosure.

Our audit procedures performed in respect of the above key audit matter include understanding the methodology, key assumptions and parameter settings used by the management to measure the financial asset impairment model in accordance with International Financial Reporting Standard No.9. Assessing whether it is appropriate to reflect the actual situation of discounts and loans and whether the credit risk has been significantly increased since the initial recognition, the definition of default and credit impairment, exposure at default, probability of default, loss given default and forward-looking information are reasonable and consistent with the calculation of expected credit losses. Obtain the information related to the evaluation of such financial assets by the management, test the completeness of the related information, and then select samples from the cases of discounts and loans to verify the accuracy of the calculation. In addition, confirm the classification and the provision of allowance for impairment loss complied with the relevant laws and regulations.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Financial Holding Companies, Regulations Governing the Preparation of Financial Reports by Securities Issuers, Regulations Governing the Preparation of Financial Reports by Public Banks, Regulations Governing the Preparation of Financial Reports by Securities Firms, Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants, Regulations Governing the Preparation of Financial Reports by Insurance Companies, the guidelines issued by the authority, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company and its subsidiaries’ ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and its subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Company and its subsidiaries’ financial reporting process.

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Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company and its subsidiaries’ internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company and its subsidiaries’ ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company and its subsidiaries to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company and its subsidiaries to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and

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where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the years ended December 31, 2019 and 2018 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Dien-Sheng Chang and Kwan-Chung Lai.

Deloitte & Touche Taipei, Taiwan Republic of China

March 23, 2020

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

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HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

ASSETS CASH AND CASH EQUIVALENTS (Notes 4, 6 and 45) DUE FROM THE CENTRAL BANK AND OTHER BANKS (Notes 6, 7 and 45) FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Notes 4, 8 and 45) FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (Notes 4, 5, 9, 11 and 47) INVESTMENTS IN DEBT INSTRUMENTS MEASURED AT AMORTIZED COST, NET (Notes 4, 5, 10, 11 and 47) SECURITIES PURCHASED UNDER AGREEMENTS TO RESELL (Notes 4 and 12) RECEIVABLES, NET (Notes 4, 5, 13 and 45) CURRENT TAX ASSETS (Notes 4, 43 and 45) DISCOUNTS AND LOANS, NET (Notes 4, 5, 14 and 45) REINSURANCE CONTRACTS ASSETS, NET INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD, NET (Notes 4 and 15) OTHER FINANCIAL ASSETS, NET (Notes 4, 5, 16 and 45) INVESTMENT PROPERTIES, NET (Notes 4, 19 and 47) PROPERTY AND EQUIPMENT, NET (Notes 4, 17, 45 and 47) RIGHT-OF-USE ASSETS (Notes 3, 4, 18 and 45) INTANGIBLE ASSETS, NET (Notes 4 and 20) DEFERRED TAX ASSETS (Notes 4 and 43) OTHER ASSETS, NET (Notes 4, 21, 45 and 47) TOTAL LIABILITIES AND EQUITY DEPOSITS FROM THE CENTRAL BANK AND BANKS (Notes 22 and 45) FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS (Notes 4 and 8) SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE (Notes 4, 8, 9, 10 and 24) COMMERCIAL PAPER PAYABLE, NET (Notes 23, 46 and 47) PAYABLES (Note 25) CURRENT TAX LIABILITIES (Notes 4, 43 and 45) DEPOSITS AND REMITTANCES (Notes 26 and 45) BONDS PAYABLE (Notes 27 and 46) OTHER BORROWINGS (Notes 28 and 46) PROVISIONS (Notes 4, 29 and 30) OTHER FINANCIAL LIABILITIES (Notes 31 and 45) LEASE LIABILITIES (Notes 3, 4, 18, 45 and 46) DEFERRED TAX LIABILITIES (Notes 4 and 43) OTHER LIABILITIES (Notes 4, 32 and 45) Total liabilities EQUITY ATTRIBUTABLE TO OWNER OF THE PARENT (Notes 4 and 33) Share capital Ordinary shares Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain on investments in equity instruments measured at fair value through other comprehensive income Unrealized gain (loss) on investments in debt instruments measured at fair value through other comprehensive income Changes in the fair value attributable to changes in the credit risk of financial liabilities designated as at fair value through profit or loss Gain (loss) on overlay approach measured at fair value through other comprehensive income Total other equity Total equity attributable to owner of the parent NON-CONTROLLING INTERESTS Total equity TOTAL		2019 Amount % $ 39,320,763 2 142,073,952 5 79,832,198 3 221,684,061 8 448,789,348 17 799,551 - 46,116,677 2 356,269 - 1,670,450,065 61 4,288,211 - 164,524 - 25,170,232 1 10,999,439 - 31,915,460 1 2,096,128 - 914,006 - 3,353,551 - 3,503,792 - $ 2,731,828,227 100 $ 117,698,753 4 3,050,189 - 36,570,660 1 18,530,988 1 37,298,835 1 1,252,443 - 2,224,016,962 82 60,291,611 2 1,458,000 - 20,632,462 1 10,792,205 1 2,046,274 - 6,157,412 - 3,330,776 - 2,543,127,570 93 121,727,402 5 17,758,986 1 16,322,174 - 6,471,594 - 16,941,042 1 39,734,810 1 (1,304,234 ) - 9,291,816 - 1,351,567 - - - 138,162 - 9,477,311 - 188,698,509 7 2,148 - 188,700,657 7 $ 2,731,828,227 100		2018
				Amount % $ 48,510,679 2 156,720,416 6 86,705,474 3 191,447,673 7 450,489,822 17 489,059 - 41,214,028 2 418,349 - 1,623,317,849 61 4,030,604 - 110,724 - 30,407,131 1 10,922,997 - 32,264,055 1 - - 762,044 - 3,496,800 - 2,899,159 - $ 2,684,206,863 100 $ 132,267,041 5 4,803,071 - 46,323,247 2 15,950,469 1 43,481,315 2 1,677,066 - 2,155,650,451 80 58,589,023 2 2,121,000 - 19,967,657 1 13,631,338 1 - - 6,119,745 - 9,467,857 - 2,510,049,280 94 115,436,133 4 17,758,986 1 14,860,042 - 6,492,093 - 15,829,364 1 37,181,499 1 (109,568 ) - 4,591,269 - (679,088 ) - 10,347 - (34,097) - 3,778,863 - 174,155,481 6 2,102 - 174,157,583 6 $ 2,684,206,863 100

The accompanying notes are an integral part of the consolidated financial statements.

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HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

INTEREST REVENUE (Notes 4, 34 and 45) INTEREST EXPENSE (Notes 4, 34 and 45) NET INTEREST NET REVENUES OTHER THAN INTEREST Commission and fee revenues, net (Notes 4, 35 and 45) Income from insurance premiums, net (Notes 4 and 36) Gain on financial assets and liabilities at fair value through profit or loss, net (Notes 4, 8, 37 and 45) Gain on investment properties, net (Note 19) Realized gain on financial assets at fair value through other comprehensive income (Notes 4 and 38) Foreign exchange gain (loss), net (Notes 4 and 39) Impairment loss on assets (Notes 4, 11 and 21) Share of profit of associates (Notes 4 and 15) (Loss) gain on overlay approach (Notes 4, 8 and 11) Other non-interest income, net (Notes 4 and 45) Total net revenues other than interest TOTAL NET REVENUES		2019 Amount % $ 45,056,216 96 (19,642,639) (42) 25,413,577 54 8,715,726 19 3,134,440 7 2,624,180 6 698,767 1 2,282,910 5 3,827,427 8 (25,858) - 6,038 - (183,524) - 210,650 - 21,290,756 46 46,704,333 100		2018 Amount % $ 44,713,719 97 (18,153,500) (39) 26,560,219 58 8,668,508 19 2,780,451 6 10,358,878 22 471,766 1 1,629,876 4 (4,715,795) (10) (9,658) - 4,426 - 133,078 - 120,735 - 19,442,265 42 46,002,484 100	Percentage Increase (Decrease)
					% 1 8 (4) 1 13 (75) 48 40 181 168 36 (238) 74 10 2

(Continued)

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HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

ALLOWANCE FOR DOUBTFUL ACCOUNTS, COMMITMENT, AND GUARANTEES (Notes 4, 13 and 14) CHANGE IN PROVISIONS FOR INSURANCE LIABILITIES, NET (Notes 4 and 29) OPERATING EXPENSES (Notes 30, 40, 41, 42 and 45) Employee benefits Depreciation and amortization Others Total operating expenses NET PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Notes 4 and 43) NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME (LOSS) (Notes 4, 8, 33 and 43) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Changes in the fair value attributable to changes in the credit risk of financial liabilities designated as at fair value through profit or loss Unrealized gain (loss) on investments in equity instruments at fair value through other comprehensive income		2019 Amount % (1,409,146) (3) (396,178) (1) (16,737,583) (36) (2,144,388) (4) (7,320,780) (16) (26,202,751) (56) 18,696,258 40 (2,740,890) (6) 15,955,368 34 (454,397) (1) (10,347) - 4,247,464 9		2018 Amount % (3,533,260) (8) (23,475) - (16,099,214) (35) (1,262,452) (3) (8,412,874) (18) (25,774,540) (56) 16,671,209 36 (2,049,774) (4) 14,621,435 32 (458,222) (1) (11,245) - (241,102) -	Percentage Increase (Decrease)
					% (60) 1,588 4 70 (13) 2 12 34 9 (1) (8) 1,862 (Continued)

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HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Income tax relating to items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations Unrealized gain (loss) on investments in debt instruments at fair value through other comprehensive income Gain (loss) on overlay approach measured at fair value through other comprehensive income Income tax relating to items that may be reclassified subsequently to profit or loss Other comprehensive income (loss) for the year TOTAL COMPREHENSIVE INCOME FOR THE YEAR NET PROFIT ATTRIBUTABLE TO: Owner of the parent Non-controlling interests COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owner of the parent Non-controlling interests EARNINGS PER SHARE (Note 44) Basic and diluted		2019 Amount % 88,088 1 (1,194,666) (3) 2,078,866 5 183,524 - (59,476) - 4,879,056 11 $ 20,834,424 45 $ 15,955,270 34 98 - $ 15,955,368 34 $ 20,834,297 45 127 - $ 20,834,424 45 $ 1.31		2018 Amount % 145,273 - 432,556 1 (1,172,352) (3) (133,078) - 39,589 - (1,398,581) (3) $ 13,222,854 29 $ 14,621,319 32 116 - $ 14,621,435 32 $ 13,222,708 29 146 - $ 13,222,854 29 $ 1.20	Percentage Increase (Decrease)
					% (39) (376) 277 238 (250) 449 58 9 (16) 9 58 (13) 58

The accompanying notes are an integral part of the consolidated financial statements.

(Concluded)

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

==> picture [1091 x 294] intentionally omitted <==

----- Start of picture text -----

Other Equity
Changes in the Fair
Revaluation Unrealized Value Attributable
Gain (Loss) Gain (Loss) on to Changes in the
on Investments in Investment in Credit Risk of
Equity Instruments Debt Instruments Financial Reclassification of
Measured at Fair Measured at Fair Liabilities Other
Exchange Unrealized (Loss) Value Through Value Through Designated as at Comprehensive
Retained Earnings Differences on Gain on Other Other Fair Value Income due to the
Share Capital Capital Surplus Unappropriated Translating Available-for-sale Comprehensive Comprehensive Through Profit Adoption of Non-controlling
Capital Stock Share Premium Treasury Stock Donated Assets Others Total Legal Reserve Special Reserve Earnings Total Foreign Operations Financial Assets Income Income or Loss Overlay Approach Interests Total Equity
BALANCE AT JANUARY 1, 2018 $ 110,465,199 $ 17,702,376 $ 52,349 $ 2,936 $ 1,325 $ 17,758,986 $ 13,658,494 $ 6,492,093 $ 15,363,375 $ 35,513,962 $ (542,124 ) $ 1,014,968 $ - $ - $ 21,592 $ - $ 1,580 $ 164,234,163
Effect of application - - - - - - - - (1,857,703 ) (1,857,703 ) - (1,014,968 ) 4,543,465 463,753 - 88,903 435 2,223,885
BALANCE AT JANUARY 1, 2018 AS RESTATED 110,465,199 17,702,376 52,349 2,936 1,325 17,758,986 13,658,494 6,492,093 13,505,672 33,656,259 (542,124 ) - 4,543,465 463,753 21,592 88,903 2,015 166,458,048
Appropriation of 2017 earnings
Legal reserve - - - - - - 1,201,548 - (1,201,548 ) - - - - - - - - -
Cash dividends - - - - - - - - (5,523,260 ) (5,523,260 ) - - - - - - - (5,523,260 )
Stock dividends 4,970,934 - - - - - - - (4,970,934 ) (4,970,934 ) - - - - - - - -
Cash dividends distributed by subsidiaries - - - - - - - - - - - - - - - - (59 ) (59 )
Net profit for the year ended December 31, 2018 - - - - - - - - 14,621,319 14,621,319 - - - - - - 116 14,621,435
Other comprehensive (loss) income for the year ended December 31, 2018 - - - - - - - - (312,949 ) (312,949 ) 432,556 - (241,132 ) (1,142,841 ) (11,245 ) (123,000 ) 30 (1,398,581 )
Total comprehensive income (loss) for the year ended December 31, 2018 - - - - - - - - 14,308,370 14,308,370 432,556 - (241,132 ) (1,142,841 ) (11,245 ) (123,000 ) 146 13,222,854
Disposal of equity instruments at fair value through other comprehensive income - - - - - - - - (288,936 ) (288,936 ) - - 288,936 - - - - -
BALANCE AT DECEMBER 31, 2018 115,436,133 17,702,376 52,349 2,936 1,325 17,758,986 14,860,042 6,492,093 15,829,364 37,181,499 (109,568 ) - 4,591,269 (679,088 ) 10,347 (34,097 ) 2,102 174,157,583
Appropriation of 2018 earnings
Legal reserve - - - - - - 1,462,132 - (1,462,132 ) - - - - - - - - -
Cash dividends - - - - - - - - (6,291,269 ) (6,291,269 ) - - - - - - - (6,291,269 )
Stock dividends 6,291,269 - - - - - - - (6,291,269 ) (6,291,269 ) - - - - - - - -
Cash dividends distributed by subsidiaries - - - - - - - - - - - - - - - - (81 ) (81 )
Reversal of special reserve - - - - - - - (20,499 ) 20,499 - - - - - - - - -
Net profit for the year ended December 31, 2019 - - - - - - - - 15,955,270 15,955,270 - - - - - - 98 15,955,368
Other comprehensive (loss) income for the year ended December 31, 2019 - - - - - - - - (366,309 ) (366,309 ) (1,194,666 ) - 4,247,435 2,030,655 (10,347 ) 172,259 29 4,879,056
Total comprehensive income (loss) for the year ended December 31, 2019 - - - - - - - - 15,588,961 15,588,961 (1,194,666 ) - 4,247,435 2,030,655 (10,347 ) 172,259 127 20,834,424
Disposal of equity instruments at fair value through other comprehensive income - - - - - - - - (453,112 ) (453,112 ) - - 453,112 - - - - -
BALANCE AT DECEMBER 31, 2019 $ 121,727,402 $ 17,702,376 $ 52,349 $ 2,936 $ 1,325 $ 17,758,986 $ 16,322,174 $ 6,471,594 $ 16,941,042 $ 39,734,810 $ (1,304,234 ) $ - $ 9,291,816 $ 1,351,567 $ - $ 138,162 $ 2,148 $ 188,700,657
----- End of picture text -----

The accompanying notes are an integral part of the consolidated financial statements.

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HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Net profit before income tax Adjustments for: Depreciation expenses Amortization expenses Allowance for doubtful accounts, commitments, and guarantees Interest expense Interest revenue Dividend income Change in provisions for insurance liabilities, net Share of profit of associates accounted for using the equity method Loss (gain) on overlay approach Loss on disposal of property and equipment Gain on disposal of investment properties Loss on disposal of intangible assets Impairment loss on financial assets Impairment loss on non-financial assets Gain on disposal of collaterals assumed Gain on changing in leasing contract Changes in operating assets and liabilities Decrease in due from the Central Bank and other banks Decrease (increase) in financial assets at fair value through profit or loss Increase in financial assets at fair value through other comprehensive income Decrease (increase) in financial assets at amortized cost (Increase) decrease in receivables Increase in discounts and loans Decrease (increase) in assets under reinsurance contracts Decrease (increase) in other financial assets (Decrease) increase in deposits from the Central Bank and other banks Decrease in financial liabilities at fair value through profit or loss Decrease in derivative financial liabilities for hedging (Decrease) increase in securities sold under repurchase agreements Decrease in payables Increase in deposits and remittances Decrease in provisions (Decrease) increase in other financial liabilities (Decrease) increase in other liabilities Cash used in from operations Interest received Dividend received Interest paid Income tax paid	2019 $ 18,696,258 1,879,112 270,795 1,409,146 19,808,859 (45,814,819) (1,702,565) 396,178 (6,038) 183,524 80 (278,101) - 25,766 92 - (105) 2,001,531 6,867,820 (24,016,872) 1,646,828 (5,858,356) (48,625,083) 50,714 5,194,015 (14,568,288) (1,765,312) - (9,752,587) (4,737,089) 68,366,511 (309,357) (2,839,133) (6,148,359) (39,624,835) 46,268,837 1,692,808 (21,092,870) (2,548,169)	2018 $ 16,671,209 1,055,373 223,619 3,533,260 18,378,170 (45,539,589) (1,431,527) 23,475 (4,426) (133,078) 226 (76,718) 97 5,566 4,092 (122) - 9,457,622 (5,506,902) (25,155,223) (69,811,988) 5,095,835 (44,253,925) (22,747) (8,599,917) 48,139,981 (3,184,640) (4,082) 5,525,688 (1,202,695) 44,688,231 (82,428) 4,758,620 4,124,847 (43,324,096) 44,841,227 1,431,527 (18,037,256) (2,070,719)

(Continued)

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HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(In Thousands of New Taiwan Dollars)

Net cash used in operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of investments accounted for using equity method Acquisition of property and equipment Proceeds from disposal of property and equipment Acquisition of intangible assets Proceeds from disposal of collaterals assumed Acquisition of collaterals assumed Acquisition of investment properties Proceeds from disposal of investments properties Increase in other assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Decrease) increase in short-term borrowings Increase (decrease) in commercial paper payables Proceeds from corporate debentures Repayments of corporate debentures Proceeds from bank debentures Repayments of bank debentures Proceeds from long-term borrowings Repayment of the principal portion of lease liabilities Dividends paid on owners of the Company Dividends paid to non-controlling interest Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2019 (15,304,229) (49,170) (704,972) 235 (304,586) - - (1,200,249) 1,271,042 (740,765) (1,728,465) (863,000) 2,578,623 - - 6,000,000 (4,300,000) 200,000 (689,899) (6,272,656) (81) (3,347,013) (1,144,650) (21,524,357) 123,215,682 $ 101,691,325	2018 (17,159,317) (49,170) (824,596) 688 (317,392) 2,058 (6) (1,606,250) 573,337 (144,625) (2,365,956) 1,218,000 (11,572,628) 12,000,000 (5,000,000) 4,200,000 (6,050,000) 200,000 - (5,506,742) (59) (10,511,429) 437,849 (29,598,853) 152,814,535 $ 123,215,682 (Continued)

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HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(In Thousands of New Taiwan Dollars)

Reconciliation of the amounts in the consolidated statements of cash flows with the equivalent items reported in the consolidated balance sheets as of December 31, 2019 and 2018:

Cash and cash equivalents in consolidated balance sheets Due from the Central Bank and other banks that meet the definition of cash and cash equivalents in IAS 7 Securities purchased under agreements to resell that meet the definition of cash and cash equivalents in IAS 7 Cash and cash equivalents in consolidated statements of cash flows		December 31	December 31
		2019 $ 39,320,763 61,571,011 799,551 $ 101,691,325	2018 $ 48,510,679 74,215,944 489,059 $ 123,215,682

The accompanying notes are an integral part of the consolidated financial statements.

(Concluded)

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Hua Nan Financial Holdings Co., Ltd.

Balance Sheets

December 31, 2019 and 2018

	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
Assets		2019	2018
Cash and cash equivalents	$	300,089 $	422,127
Financial assets at fair value through other comprehensive income		761,454	874,254
Receivables, net		321,981	329,475
Current tax assets		494,240	1,086,735
Investments accounted for using equity method, net		219,581,779	204,742,800
Property and equipment, net		36,679	47,224
Right-of-use assets		64,816	-
Intangible assets, net		612	1,277
Deferred tax assets		2,808	2,808

Total

$ 221,564,458 $ 207,506,700

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Hua Nan Financial Holdings Co., Ltd.

Statements of Comprehensive Income For the Years Ended December 31, 2019 and 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

REVENUES Interest revenue Interest expense Share of profit of subsidiaries and associates Other non-interest income, net Total revenues OPERATING EXPENSES Employee benefits Depreciation and amortization Others Total operating expenses NET PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE NET PROFIT FOR THE YEAR OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Share of other comprehensive income (loss) of subsidiaries and associates accounted for using the equity method Unrealized loss on investment in equity instruments measured at fair value through other comprehensive income Income tax of items that will not be reclassified subsequently to profit or loss	2019 $ 6,877 (316,037) 16,802,143 51,413 16,544,396 (360,335) (73,336) (155,455) (589,126) 15,955,270 - 15,955,270 (13,957) 3,909,448 (112,800) 88,088	2018 Percentage Increase (Decrease) % $ 6,408 7 (307,912) 3 15,433,564 9 51,827 (1) 15,183,887 9 (337,058) 7 (13,401) 447 (212,109) (27) (562,568) 5 14,621,319 9 - - 14,621,319 9 (1,333) 947 (601,865) 750 (107,401) 5 145,273 (39) (Continued)

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Items that may be reclassified subsequently to profit or loss: Share of other comprehensive income (loss) of subsidiaries and associates accounted for using the equity method Income tax relating to items that may be reclassified subsequently to profit or loss Total other comprehensive income (loss) for the year TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE Basic and diluted	2019 $ 1,067,724 (59,476) 4,879,027 $ 20,834,297 $1.31	2018 Percentage Increase (Decrease) % $ (872,874) 222 39,589 (250) (1,398,611) (449) $ 13,222,708 58 $1.20 (Concluded)

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HUA NAN FINANCIAL HOLDINGS CO., LTD.

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

Capital Surplus	Capital Surplus		Retained Earnings
				Exchange Differences on Translating Foreign Operations $ (542,124 ) - (542,124 ) - - - - 432,556 432,556 - (109,568 ) - - - - - (1,194,666) (1,194,666) - $ (1,304,234)
Share Premium Treasury Stock $ 17,702,376 $ 52,349 - - 17,702,376 52,349 - - - - - - - - - - - - - - 17,702,376 52,349 - - - - - - - - - - - - - - - - $ 17,702,376 $ 52,349	Donated Assets $ 2,936 - 2,936 - - - - - - - 2,936 - - - - - - - - $ 2,936	Others $ 1,325 - 1,325 - - - - - - - 1,325 - - - - - - - - $ 1,325	Unappropriated Legal Reserve Special Reserve Earnings $ 13,658,494 $ 6,492,093 $ 15,363,375 - - (1,857,703) 13,658,494 6,492,093 13,505,672 1,201,548 - (1,201,548 ) - - (5,523,260 ) - - (4,970,934 ) - - 14,621,319 - - (312,949) - - 14,308,370 - - (288,936) 14,860,042 6,492,093 15,829,364 1,462,132 - (1,462,132 ) - - (6,291,269 ) - - (6,291,269 ) - (20,499 ) 20,499 - - 15,955,270 - - (366,309) - - 15,588,961 - - (453,112) $ 16,322,174 $ 6,471,594 $ 16,941,042

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Hua Nan Financial Holdings Co., Ltd.

Statements of Cash Flows For the Years Ended December 31, 2019 and 2018 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Net profit before income tax Adjustments for Depreciation expense Amortization expense Interest expense Interest revenue Dividend income Share of profit of subsidiaries and associates accounted for using the equity method Changes in operating assets and liabilities Decrease in receivable Increase in payables (Decrease) increase in provisions Interest received Dividend received Interest paid Income tax paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Acquisition of property and equipment Acquisition of intangible assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in commercial paper payables Proceeds from corporate debentures Repayments of corporate debentures Repayment of the principal portion of lease liabilities Cash dividends paid Net cash used in financing activities NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2019 $ 15,955,270 72,637 699 316,037 (6,877) (57,277) (16,802,143) 7,471 210,168 (3,745) 6,900 7,026,225 (312,256) (802) 6,412,307 - (1,973) (34) (2,007) (200,000) - - (59,682) (6,272,656) (6,532,338) (122,038) 422,127 $ 300,089	2018 $ 14,621,319 12,548 853 307,912 (6,408) (58,513) (15,433,564) - 174,874 3,448 6,386 6,380,027 (228,694) (679) 5,779,509 (25,000) (905) (457) (26,362) (7,100,000) 12,000,000 (5,000,000) - (5,506,742) (5,606,742) 146,405 275,722 $ 422,127

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Hua Nan Financial Holdings Co., Ltd. Statement of Earnings Distribution

2019

Unit: NT dollars	Unit: NT dollars
Undistributed earnings at the beginning of the period	1,784,694,149
Net profit after tax	15,955,269,719
Less: Remeasurements of defined benefitplans	366,308,988
Less: Losses from disposal of equity instruments at fair value through other comprehensive income	453,112,528
Add: Reverse from special capital reserve arising from first adoption of TIFRS	20,498,979
The net profit after tax of this period plus items other than the net profit after tax of this period are included in the undistributed earnings of the currentyear	15,156,347,182
Appropriations
Less: Legal reserve(10%)	1,515,634,718
Retained earnings available for distribution for this period	15,425,406,613
Allocation
Shareholder dividends-cash ($0.5603 per share)	6,820,386,322
Shareholder dividends-stock ($0.5603 per share)	6,820,386,320
Ending undistributed earnings	1,784,633,971

Note:For this period's motion to distribute cash dividends, the dividend will be calculated to the amount of one whole NTD, and any decimal point below one NTD will be rounded down. Shares below one dollar NTD will be adjusted from the largest decimal place and foremost account number until the total amount of cash dividends has been distributed.

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Appendix 1

Hua Nan Financial Holdings Co., Ltd. Articles of Incorporation

Chapter 1 General Provisions

Article 1. The Company is incorporated in accordance with the Financial Holding Company Act, the Company Act, and related laws and regulations to expand the economic scale and categories in consideration of developed synergu of the Company.
Article 2. The Company is named "Hua Nan Financial Holdings Co., Ltd." (Chinese: 華南金融控股股份有限公司 ).
Article 3. The Company's head office is established in Taipei City, and the Company may establish domestic or overseas branches at appropriate locations in response to business requirements.
Article 4. Any announcement made by the Company shall be published in newspapers, electronic newsletters, or a website set up or designated by the central competent authority.
Where the competent authority of securities prescribes other regulations regarding matters in the preceding paragraph, such regulations shall apply.

Chapter 2 Shares

Article 5. The Company has one hundred eighty billion New Taiwan Dollars (NT$180 billion) in authorized capital, which is divided into 18 billion shares with a face value of NT$10 each. The Board of Directors is authorized to issue the shares in separate installments.
Article 6. Shares issued by the Company are not required to be printed. The Company, however, shall register the shares with the centralized securities depository enterprise institution, and comply with the regulations of the institution.
Article 7. Shareholders of the Company shall provide their seal specimens which shall be kept by the Company.. Claims for collection of dividends, excersing the rights of a shareholder in writing, or written communication with the Company, shall be verified with the seal shown in the specimens.
Article 8. Except as otherwise provided by laws and regulations, the transfer of the Company's shares shall be signed by both the shareholder and the transferee. The shareholder shall fill out the share transfer application form set by the Company and file the application along with the shares to be transferred to the Company. Unless it is registered in the shareholders roster, the shareholder may not file claims against the Company based on the transfer. All transfers of shares shall be duly suspended within 60 days prior to the date of an annual general meeting, within 30 days prior to the date of an extraordinary general meeting, or within 5 days prior to the cut-off date set by the Company for the

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distribution of dividends, bonus, or other benefits.

Article 9. The Company shall handle shareholders service in accordance with the "Regulations Governing the Administration of Shareholder Services of Public Companies" promulgated by the competent authority.

Chapter 3 Business Operations

Article 10. The Company's business item: H801011 Financial Holding Company.

Article 11. The Company's scope of business is as follows:

The Company may invest in the following business:
- (1) Financial holding companies
- (2) Banking business;
- (3) Bills financing business;
- (4) Credit card business;
- (5) Trust business;
- (6) Insurance business;
- (7) Securities business;
- (8) Futures business;
- (9) Venture capital business;
- (10) Investments in foreign financial institutions approved by the competent authority;
- (11) Other business in relating to financial services recognized by the competent authority;
- (12) Other related financial business the Company may invest in by law.
Management of the investee enterprises in the preceding subparagraph.
The Company may apply to the competent authority for approval for investment in businesses other than those specified in Subparagraph 1.
Other related businesses approved by the competent authority.
Article 12. The Company's specialized business consists of investments and management of invested businesses. Its investments in other businesses shall not be restricted by the 40% of the Company's paid-up capital as specified in Paragraph Two of Article 13 of the Company Act.

Chapter 4 Shareholders Meeting

Article 13. The Company's shareholders meetings include regular meetings and special meetings. The regular shareholders meeting is convened within six months after the end of each fiscal year; special shareholders meetings are convened when necessary in accordance with the Company Act.
Unless otherwise provided in the Company Act or other related regulations, the shareholders' meeting shall be convened by the Board of Directors in accordance with laws.

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Article 14. The notice for convening a regular shareholders meeting shall be issued 30 days prior to the meeting and the notice for convening a special shareholders meeting shall be issued 15 days prior to the meeting. All shareholders shall be notified of the date, location, and purpose of the meeting and the Company may provide notifications to shareholders holding fewer than one thousand registered shares by means of a public notice.
Article 15. Where a shareholder is unable to attend the shareholders meeting, he/she may sign or affix his/her personal seal on a proxy form printed by the Company to specify the scope of authorization and designate a proxy to attend the meeting on his/her behalf. Except for trust enterprises or stock agencies approved by the competent authority, when a person who acts as the proxy for two or more shareholders, the number of voting power represented by him/her shall not exceed 3% of the total number of voting shares of the company, otherwise, the portion of excessive voting power shall not be counted.

The aforementioned proxy letter must be delivered to the Company at least five days prior to the shareholders meeting. If more than one written proxy is delivered, the first one that received by the Company shall prevail. However, this restriction does not apply to the withdrawal of prior proxies.

Article 16. The Company’s shareholders shall have one voting right per share unless otherwise provided in laws or regulations.

Article 17. Matters to be resolved by the shareholders meeting are as follows:

Establishment and amendment of the Company's Articles of Incorporation.
Election and dismissal of Directors.
Ratification of the statements prepared by the Board of Directors and the inspection reports issued by the Audit Committee.
Resolutions regarding the increase or decrease of capital of the Company.
Resolutions regarding the distribution of earnings and make-up of deficits.
Other matters to be resolved in the shareholders' meeting in accordance with laws.
Article 18. Unless otherwise specified by law, the Chairman of the Board of Directors shall chair the shareholders' meeting. Where the Chairman is on leave or unable to attend the meeting for any reason, the Vice Chairman, if appointed, shall stand proxy. If there is no Vice Chairman or if the Vice Chairman is also on leave or unable to exercise power for any reason, the Chairman may appoint one of Directors to stand proxy. If the Chairman does not appoint a proxy, the Directors shall elect one person from among themselves to stand proxy.
Article 19. Unless otherwise provided by the Financial Holding Company Act, Company Act and other applicable laws, all resolutions of the shareholders' meeting must be

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adopted by a majority vote of the shareholders present, who represent more than one-half of the total number of voting shares.

Article 20. Resolutions adopted at a shareholders meeting shall be recorded in the meeting minutes, which shall be signed or sealed by the chairman of the meeting and shall be distributed to each shareholder within 20 days after the close of the meeting. The public announcement of the meeting minutes mentioned in the preceding paragraph shall suffice.
Article 21. Unless otherwise specified by law or the Articles of Incorporation, matters related to the shareholders' meeting shall be processed in accordance with the Rules of Procedure for Shareholders Meetings of the Company. Chapter 5 Board of Directors
Article 22. The Company's Board of Directors shall have 15 to 21 Directors. Directors shall be elected based on a candidate nomination system at the shareholders' meeting from among the shareholders with disposing capacity. The term of office for Directors shall be three years, and Directors are eligible for re-election. When a Director’s term expires and another Director cannot be elected in time, he or she shall extend his or her duties until the re-elected director takes office. Pursuant to Article 183 of the Securities and Exchange Act, the Company shall have no less than two Independent Directors among the aforementioned number of Directors, and Independent Directors shall account for no less than one fifth of the Board of Directors. They shall be elected from the list of nominees for Independent Directors at the shareholders' meeting. The professional qualifications, shareholdings, restrictions on concurrent posts, nomination and election methods and other compliance of the Independent Directors shall be subject to the relevant provisions of the competent authority of securities.

An elected Director representing the government, a judicial person shareholder, or its representative may be replaced at any time by another representative to complete the remainder of the term of office of the replaced Director as the result of a change of his or her job duties.

Article 23. Unless otherwise provided in laws, the Company's Board of Directors shall appoint one Chairman of the Board among the directors by a majority vote at a meeting attended by more than two thirds of the Directors, and may also appoint a Vice Chairman through the same procedure as for the Chairman by the Board of Directors when necessary.

The Board of Directors is authorized to prescribe remunerations to Directors based on their participation in the operation of the Company and the value of their contributions according to the general remuneration level of other financial institutions.

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The provisional standard provided in the Labor Standards Act shall apply mutatis mutandis to the payments of severance and pension payable to the Chairman and Vice Chairman regardless of the requirements pertaining to age and service period.

Article 24. The Chairman of the Board of Directors shall internally chair the shareholders' meeting and meetings of the Board of Directors and shall externally represent the Company. If the Chairman is on leave or is unable to exercise power for any reason, the Vice Chairman, if appointed, shall stand proxy. If there is no Vice Chairman or if the Vice Chairman is also on leave or unable to exercise power for any reason, the Chairman may appoint one of Directors to stand proxy. If the Chairman does not appoint a proxy, the Directors shall elect one person from among themselves to stand proxy.

Article 25. Unless otherwise provided by law or regulation, the Company's shareholders' meeting shall be convened by the Chairman. Unless otherwise prescribed in the Financial Holding Company Act, Company Act or other regulations, the resolutions of a meeting of the Board of Directors shall be adopted by a majority vote of the Directors in attendance who represent more than one-half of all Directors. Directors shall personally attend board meetings. However, if a Director is unable to attend a board meeting, he/she may appoint another Director to serve as proxy to attend the meeting by submitting a proxy form specifying the scope of delegation. However, a Director may only serve as a proxy for one other Director.

For Board meetings conducted through video-conferencing, a Director who participates through video-conferencing is deemed to have attended in person.

Article 26. The functions of the Board of Directors are as follows:

Review and approval of business policies and plans.
Review and approval of the budget and final accounts.
Review and approval of important regulations.
Review and approval of the Company's capital increase or decrease and issuance of securities.
Proposal of the earnings distribution.
Resolutions on the issuance of corporate bonds.
Resolutions on the Company's share buyback plans.
Review of the acquisition or disposal of assets.
Review of important contracts.
Appointment or dismissal of managerial officers and audit supervisors.
Review of the construction, purchase, or sale of the Company's operation sites and buildings.
Determination of the date of the general shareholders' meeting or special

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shareholders' meeting.

Execution of the resolutions of the shareholder's meeting.
Review and approval of the appointment, dismissal and compensation of CPAs.
Appointment of directors and supervisors of subsidiaries.
Review and approval of the Audit Committee Charter.
Review and approval of remuneration for employees.
Other matters to be resolved in the board meeting in accordance with laws and authorization of the shareholders' meeting.
Article 27. The Board of Directors shall convene a regular meeting every month . A special meeting of the Board of Directors may be held in case of emergency or at the request of a majority of the Directors. Unless otherwise specified in the Financial Holding Company Act or the Company Act, the board meeting notice and the production and distribution of meeting minutes may be implemented in writing or by electronic means.
The Company's Board of Directors may establish different functional committees. Unless otherwise specified in related regulations or the Articles of Incorporation, the Board of Directors is authorized to establish the Rules of Procedure for Board of Directors Meetings for the organization and meetings of the Company's Board of Directors.
Article 28. The Board of Directors shall establish an Audit Department to oversee audit operations. The Department of Auditing shall have one Chief Auditor who shall supervise the audit operations of the Company and subsidiaries in accordance with resolution of meetings of the Board of Directors. The appointment and dismissal of the Chief Auditor shall be determined by the Board of Directors in accordance with related laws and regulations.
Article 29. The Audit Committee shall be composed of all Independent Directors with no fewer than three persons. One member shall be the convener and at least one member shall have accounting or financial expertise.
The supervisor system shall be abolished on the date the Audit Committee is established.
Article 30. The the powers and duties of the Audit Committee and other matters for compliance shall be processed in accordance with related regulations of the competent authority of securities.
Article 31. The Company's Directors may serve concurrently as Directors and Supervisors of subsidiaries in accordance with laws.
Article 32. The Company may, pursuant to relevant regulations, establish liability insurance contracts with insurance enterprises for the Company's Directors to cover the respective compensation liabilities in the performance of their duties.

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Chapter 6 Managerial Officers

Article 33. The Company shall appoint one President who shall be nominated by the Chairman and approved by a majority of the Directors. The same rule shall apply to the dismissal of the President. The President shall oversee all business operations in accordance with the resolutions of meetings of the Board of Directors. Where the President cannot perform his/her duties, the Chairman shall designate a Vice President to perform such duties on behalf of the President.
Article 34. The Company shall appoint several Vice Presidents and Assistant Vice Presidents to assist the President in business operations. Their appointment and dismissal shall be proposed by the President and approved by a majority vote in the Board of Directors.
Chapter 7 Accounting Closing and Distribution of Earnings
Article 35. The Company's fiscal year is based on the calendar year, starting from January 1st and ends on December 31st of the same year. At the end of each fiscal year, the Board of Directors shall prepare the following statements, deliver them to the Audit Committee for review at least 30 days prior to a general shareholders meeting, and request ratification in the general shareholders' meeting.
Business report.
Financial statements.
Proposal for profit distribution or loss appropriation.
Article 36. If the Company has net income for the year, the Company shall set aside a certain amount as Directors' remuneration and employees' compensation based on net income before tax. The Board of Directors shall be authorized to determine the amount of the remuneration for each year within the specified scope. However, net income of the year shall be first used to offset accumulated loss, if any.
Directors' remuneration shall be no more than 1%.
Employees' compensation shall be between 0.02% and 0.15% and shall be distributed in stocks or cash. The recipients may include employees of affiliated companies that meet certain requirements. The Board of Directors shall set rules specifying the requirements.

The Company has adopted a surplus dividend policy to continue to expand its scale, enhance its profitability, and abide by related laws and regulations.

The earnings of the Company, if any, shall be first used to pay the tax due and offset accumulated loss in past years according to law, followed by setting aside a legal surplus reserve. Then, a special surplus reserve shall be allocated or reversed according to the regulations and laws or as required by business needs. Any remaining balance and undistributed earnings from previous years shall be the distributable amount, and the shareholders meeting shall resolve the distribution of

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the shareholder’s dividends and bonus within 30% to 100% of the distributable amount. The shareholders' dividends shall be distributed in cash and stock based on the Company’s operation plans. The cash dividends shall not be lower than 10% of the total amount of the dividends to be distributed. unless otherwise resolved by the shareholders meeting, cash dividends of less than NT$0.1 per share shall not be distributed.

Chapter 8 Supplementary Provisions Article 37. The Board of Directors is authorized to establish the Company's organizational regulations and important rules. Article 38. Matters not included in the Articles of Incorporation shall be processed in accordance with the Financial Holding Company Act, Company Act, and other relevant laws and regulations. Article 39. The Articles of Incorporation were established on November 14, 2001. The 1st amendment was made on May 24, 2002. The 2nd amendment was made on June 6, 2003. The 3rd amendment was made on June 11, 2004. The 4th amendment was made on December 17, 2004. The 5th amendment was made on June 9, 2006. The 6th amendment was made on June 9, 2010. The 7th amendment was made on June 24, 2011. The 8th amendment was made on June 22, 2012. The deletion of relevant regulations regarding Supervisors shall take effect from the date of the establishment of the Audit Committee.

The 9th amendment was made on June 20, 2014. The 10th amendment was made on June 12, 2015. The 11th amendment was made on June 24, 2016. The 12th amendment was made on June 14, 2019.

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Appendix 2

Hua Nan Financial Holdings Co., Ltd. Rules of Procedure for Shareholders' Meetings

Article 1 (Basis for Establishment)

To establish a strong governance system and sound supervisory capabilities for the Company's shareholders' meetings, and to strengthen management capabilities, these Rules are adopted pursuant to Article 11 of the "Corporate Governance Best Practice Principles for Financial Holding Companies."

Article 2 (Legal Application)

The rules of procedures for the Company's shareholders' meetings, except as otherwise provided by law or regulation or the Articles of Incorporation, shall be as provided in these Rules.

Article 3 (Convention and Notice of Shareholders' Meetings)

Unless otherwise provided by law or regulation, the Company's shareholders' meetings shall be convened by the Board of Directors.

The Company shall notify each shareholder of the convention of a shareholders' meeting no later than 30 days prior to the date of a regular shareholders' meeting or no later than 15 days prior to the date of a special shareholders' meeting, and shall prepare electronic versions of the shareholders' meeting notice and proxy forms, and the origins of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors, and upload them to the Market Observation Post System (MOPS). The Company shall prepare electronic versions of the shareholders' meeting agenda and supplemental meeting materials and upload them to the MOPS 21 days prior to the date of the regular shareholders' meeting or 15 days prior to the date of a special shareholders' meeting. In addition, the Company shall also prepare the shareholders' meeting agenda and supplemental meeting materials 15 days prior to the date of a shareholders' meeting and make them available for review by shareholders at any time. The meeting agenda and supplemental materials shall also be displayed at the Company and its professional shareholder services agent as well as being distributed on-site at the meeting place.

The reasons for convening a shareholders' meeting shall be specified in the meeting notice. With the consent of the addressee, the meeting notice may be given in an electronic form. A shareholder holding 1% or more of the total number of issued shares may submit to the

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Company a written proposal for discussion at a regular shareholders' meeting, provided that only one matter shall be allowed in each single proposal, and in case a proposal contains more than one matter, such proposal shall not be included in the agenda. In addition, when the circumstances of any subparagraph of Paragraph 4, Article 172-1 of the Company Act apply to a proposal put forward by a shareholder, the Board of Directors shall include it in the agenda.

Prior to the date on which share transfer registration is suspended prior to the convention of a regular shareholders' meeting, the Company shall give a public notice announcing the acceptance of proposals, the place and the period for shareholders to submit proposals to be discussed at the meeting; the period for accepting such proposals shall not be less than 10 days.

The number of words of a proposal to be submitted by a shareholder shall be limited to no more than 300 words. The shareholder who has submitted a proposal shall attend, in person or by a proxy, a regular shareholders' meeting where his proposal is to be discussed and shall take part in the discussion of such proposal.

The Company shall, prior to preparing and delivering the shareholders' meeting notice, inform, by a notice, all the proposal submitting shareholders of the proposal screening results, and shall list in the shareholders' meeting notice the proposals conforming to the requirements set out in this article. With regard to the proposals submitted by shareholders but not included in the agenda of the meeting, the cause of exclusion of such proposals and explanation shall be made by the Board of Directors at the shareholders' meeting to be convened.

Article 4 (Attendance by Proxy and Authorization)

A shareholder may appoint a proxy to attend a shareholders' meeting in his/her/its behalf by executing a power of attorney issued by the Company and stating therein the scope of power authorized to the proxy.

A shareholder may only execute one power of attorney and appoint one proxy only, and shall serve such written proxy to the Company no later than 5 days prior to the meeting date of the shareholders' meeting. In case two or more written proxies are received from one shareholder, the first one received by the Company shall prevail unless an explicit statement to revoke the previous written proxy is made in the proxy which comes later.

After the service of the power of attorney of a proxy to the Company, in case the shareholder issuing the said proxy intends to attend the shareholders' meeting in person or to exercise his/her/its voting power in writing or by way of electronic transmission, a proxy rescission notice shall be filed with the Company 2 days prior to the date of the shareholders' meeting as scheduled

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in the shareholders' meeting notice so as to rescind the proxy at issue; otherwise, the voting power exercised by the authorized proxy at the meeting shall prevail.

Article 5 (Principles Determining the Time and Place of a Shareholders' Meeting)

The place where a shareholders' meeting is held shall be the premises of the Company, or a place easily accessible to shareholders and suitable for a shareholders' meeting. The meeting shall begin no earlier than 9 a.m. and no later than 3 p.m.

Article 6 (Preparation of Attendance Book and Other Documents)

The Company shall furnish the attending shareholders or their proxies (hereinafter referred to as the "shareholders") with an attendance book to sign, or attending shareholders may hand in a sign-in card in lieu of signing in.

The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors, pre-printed ballots shall also be furnished.

Shareholders shall attend shareholders' meetings based on attendance cards, sign-in cards, or other certificates of attendance; solicitors soliciting proxy forms shall also bring identification documents for verification.

When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders' meeting. When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting.

Article 7 (Chairperson and Non-voting Participants of a Shareholders' Meeting)

If a shareholders' meeting is convened by the Board of Directors, the meeting shall be chaired by the Chairman of the Board of Directors. When the Chairman of the Board of Directors is on leave or for any reason unable to exercise the powers of the chairperson, the Vice Chairman shall act in place of the Chairman; if there is no Vice Chairman or the Vice Chairman is also on leave or for any reason and unable to exercise the powers of the chairperson, the Chairman shall appoint one of the directors to act as chairperson. Where the Chairman does not make such a designation, the directors shall select from among themselves one person to serve as chairperson.

Shareholders' meetings convened by the Board of Directors shall be attended by a majority of the directors.

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If a shareholders' meeting is convened by a party with power to convene other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, the chairperson of the meeting shall be elected from among themselves.

The Company may appoint its attorneys, certified public accountants (CPA), or related persons retained by it to attend a shareholders' meeting in a non-voting capacity.

Article 8 (Documentation of a Shareholders' Meeting)

The Company shall make an audio or video recording of a shareholders' meeting, and the recorded materials shall be retained for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recorded materials shall be retained until the conclusion of the litigation.

Article 9 (Calculation of Shareholder's Meeting Attendance Shares and Calling of Shareholder's Meetings)

Attendance at shareholders' meetings shall be calculated based on numbers of shares. The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in plus the number of shares whose voting rights are exercised by correspondence or electronically.

The chairperson shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chairperson may announce a postponement, provided that no more than two such postponements, for a combined total of no more than 1 hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the chairperson shall declare the meeting adjourned.

If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Paragraph 1, Article 175 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders' meeting shall be convened within one month.

When, prior to the conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chairperson may resubmit the tentative resolution for a vote by the shareholders' meeting pursuant to Article 174 of the Company Act.

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Article 10 (Discussion of Proposals)

If a shareholders' meeting is convened by the Board of Directors, the meeting agenda shall be set by the Board of Directors. The meeting shall proceed in the order set by the agenda, which shall not be changed without a resolution of the shareholders' meeting.

The provisions of the preceding paragraph apply mutatis mutandis to a shareholders' meeting convened by a party with power to convene other than the Board of Directors.

The chairperson shall not declare the meeting adjourned prior to the completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders' meeting. If the chairperson declares the meeting adjourned in violation of the rules of procedure, other members of the Board of Directors shall promptly assist the attending shareholders to elect a new chairperson in accordance with the statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

The chairperson shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the chairperson is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chairperson may announce the discussion closed and call for a vote.

Article 11 (Shareholders' Speech)

Before speaking, an attending shareholder shall specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak shall be set by the chairperson.

A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail.

Except with the consent of the chairperson, a shareholder shall not speak more than twice on the same proposal, and a single speech shall not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the chairperson may terminate the speech.

When an attending shareholder is speaking, other shareholders shall not speak or interrupt unless they have sought and obtained the consent of the chairperson and the shareholder that has the floor; the chairperson shall stop any violation.

When a juristic person shareholder appoints two or more representatives to attend a shareholders' meeting, only one of the representatives so appointed may speak on the same proposal. After an attending shareholder has spoken, the chairperson may respond in person or direct the relevant

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personnel to respond.

Article 12 (Calculation of Voting Shares and Recusal System)

Voting at a shareholders' meeting shall be calculated based on the number of shares.

With respect to resolutions of shareholders' meetings, the number of shares held by a shareholder with no voting rights shall not be calculated as part of the total number of issued shares.

When a shareholder is an interested party in relation to an agenda item, and there is the likelihood that such a relationship would prejudice the interests of the Company, that shareholder shall not vote on that item, and shall not exercise voting rights as a proxy for any other shareholder.

The number of shares for which voting rights shall not be exercised under the preceding paragraph shall not be calculated as part of the voting rights represented by attending shareholders.

Except for trust enterprises or stock agencies approved by the securities authority in charge, when a person who acts as the proxy for two or more shareholders, the number of voting power represented by him/her shall not exceed 3% of the total number of voting shares of the Company; otherwise, the portion of excessive voting power shall not be counted.

Article 13 (Voting and Vote Monitoring and Counting Methods)

A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Paragraph 2, Article 179 of the Company Act.

When the Company holds a shareholders' meeting, it shall adopt the exercise of voting rights by electronic means and may adopt the exercise of voting rights by correspondence; when voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the shareholders' meeting notice. A shareholder exercising voting rights by correspondence or electronic means shall be deemed to have attended the meeting in person, but shall be deemed to have waived voting rights with respect to the special motions and amendments to the original proposals at that meeting; therefore, the Company shall avoid the submission of special motions and the amendments to the original proposals. A shareholder intending to exercise voting rights by correspondence or electronic means under the preceding paragraph shall deliver a written declaration of intent to the Company 2 days prior to the date of the shareholders' meeting. When two or more declarations of the same intent are delivered, the one received earliest shall prevail unless an explicit statement to revoke the previous declaration is made in the

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declaration which comes later.

In the event a shareholder who has exercised voting rights by correspondence or electronic means intends to attend a shareholders' meeting in person, a written declaration of intent to rescind the previous declaration of intent made in exercising the voting rights under the preceding paragraph shall be delivered to the Company, in the same manner previously used in exercising the voting rights, 2 days prior to the date of the shareholders' meeting. If the notice of rescission is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail.

When a shareholder has exercised voting rights both by correspondence or electronic means and has appointed a proxy to attend a shareholders' meeting, the voting rights exercised by the proxy at the meeting shall prevail.

Except as otherwise provided in the Company Act and the Company's Articles of Incorporation, the adoption of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of voting, for each proposal, the chairperson or a person designated by the chairperson shall announce the total number of voting rights represented by the attending shareholders.

A proposal is deemed to have been adopted when no attending shareholders give a dissent after being inquired by the chairperson, and the effect thereof is the same as a vote; if there are dissents, a vote in the preceding paragraph shall be adopted. In addition to the proposals listed in the agenda, other proposals submitted by shareholders or amendments or alternatives to the original proposals shall be seconded by other shareholders.

When there is an amendment or an alternative to the same proposal, the chairperson shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is adopted, the other proposals shall then be deemed rejected, and no further voting shall be required.

The vote monitoring and counting personnel for voting on a proposal shall be appointed by the chairperson, provided that all monitoring personnel shall be shareholders of the Company. Vote counting for shareholders' meeting proposals or elections shall be conducted in public at the place of the shareholders' meetings. Immediately after vote counting has been completed, the results of voting shall be announced on-site at the meeting, with a record of voting made.

Article 14 (Elections)

The election of directors at a shareholders' meeting shall be held in accordance with the

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"Regulations Governing the Election of Directors" adopted by the Company, and the results of voting shall be announced on-site immediately.

The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

Article 15 (Meeting Minutes and Acknowledgments)

Resolutions adopted at a shareholders' meeting shall be recorded in the meeting minutes. The meeting minutes shall be affixed with the signature or seal of the chairperson of the meeting and shall be distributed to all shareholders of the Company within 20 days after the close of the meeting.

The meeting minutes may be produced and distributed in an electronic form.

The Company may distribute the meeting minutes referred to in the preceding paragraph by means of a public announcement made through the MOPS.

The meeting minutes shall record the date and place of the meeting, the name of the chairperson, the method of adopting resolutions, and a summary of the essential points of the proceedings and the results of the meeting. The meeting minutes shall be retained throughout the life of the Company.

A proposal adopted via the method of adopting resolutions referred to in the preceding paragraph shall be recorded as "adopted unanimously after the chairperson inquires all shareholders in attendance" after the chairperson has inquired all attending shareholders and no shareholders have raised any objection. If shareholders do raise any objection, the resolution shall specify the voting method adopted and the number and percentage of rights voted in favor.

Article 16 (Public Disclosure)

On the day of a shareholders' meeting, the Company shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation and the number of shares represented by proxies, and shall make an express disclosure of the same at the place of the shareholders' meeting.

If matters put to a resolution at a shareholders' meeting constitute material information under applicable laws or regulations or under the regulations of Taiwan Stock Exchange Corporation, the Company shall upload the content of such resolution to the MOPS within the prescribed time period.

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Article 17 (Maintenance of Order at the Meeting Place)

The staff handling administrative affairs of a shareholders' meeting shall wear identification cards or armbands.

The chairperson may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an identification card or armband bearing the word "Proctor."

At the place of a shareholders' meeting, if a shareholder attempts to speak through any device other than the public address equipment set up by the Company, the chairperson may prevent the shareholder from doing so. When a shareholder violates the rules of procedure and defies the chairperson's correction, obstructing the proceedings and refusing to heed calls to stop, the chairperson may direct the proctors or security personnel to escort the shareholder from the meeting.

Article 18 (Recess and Resumption of a Shareholders' Meeting)

When a meeting is in progress, the chairperson may announce a break based on time considerations. If a force majeure event occurs, the chairperson may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

If the meeting place is no longer available for continued use and not all of the items (including extraordinary motions) on the meeting agenda have been addressed, the shareholders' meeting may adopt a resolution to resume the meeting at another place.

A resolution may be adopted at a shareholders' meeting to postpone the meeting for not more than,

or to resume the meeting within, five days, in accordance with Article 182 of the Company Act.

Article 19 (Approval Level)

These Rules, and any amendments hereto, shall be implemented after adoption by shareholders' meetings.

Article 20 (Revision History)

These Rules were established on June 18, 2010.

The first amendment was made on June 22, 2012. The deletion of provisions of these Rules regarding supervisors shall take effect from the date of the establishment of the Audit Committee. The second amendment was made on June 14, 2019.

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Appendix 3

I. The number of shares held by the Company's Directors on the book closure date (April 21, 2020) for the annual general shareholder’s meeting is disclosed in accordance with the "Regulations Governing Content and Compliance Requirements for Shareholder’s Meeting Agenda Handbooks of Public Companies".
II. The Company has issued a total of 12,172,740,178 shares, and the minimum required amount of shares held by all Directors is 160,000,000 shares. The Company has established an Audit Committee. Therefore, the minimum legal required amount of shares held by supervisors does not apply.

Hua Nan Financial Holdings Co., Ltd.

List of Shares Independently and Collectively Held by Directors

Title	Corporate Shareholder	Representative	Shares Held	Shareholding Ratio
Chairman	Ministry of Finance	Yun-Peng Chang	206,919,747	1.70%
Vice Chairman	The Memorial Scholarship Foundation to Mr. Lin HsiungChen	Ming-Cheng Lin	214,979,484	1.77%
Director	Ministry of Finance	Pao-Chu Lo	(206,919,747)	(1.70%)
Director	Bank of Taiwan	Shih-Ching Jeng	2,584,425,042	21.23%
Director	Bank of Taiwan	Chou-Wen,Wang	(2,584,425,042)	(21.23%)
Director	Bank of Taiwan	Ho-Chyuan,Chen	(2,584,425,042)	(21.23%)
Director	Bank of Taiwan	Yu-Min,Yen	(2,584,425,042)	(21.23%)
Director	Bank of Taiwan	Ming-Yu,Lin	(2,584,425,042)	(21.23%)
Director	Bank of Taiwan	vacancies to be filled	(2,584,425,042)	(21.23%)
Director	The Memorial Scholarship Foundation to Mr. Lin HsiungChen	T. Lin	(214,979,484)	(1.77%)
Director	The Memorial Scholarship Foundation to Mr. Lin HsiungChen	Chih-Yu Lin	(214,979,484)	(1.77%)
Director	The Memorial Scholarship Foundation to Mr. Lin HsiungChen	Chih-Yang Lin	(214,979,484)	(1.77%)
Director	He Quan Investment Co., Ltd.	An-Lan Hsu Chen	3,377,807	0.03%
Director	He Quan Investment Co., Ltd.	Michael, Yuan-Jen Hsu	(3,377,807)	(0.03%)
Director	China Man-Made Fiber Corporation	Vivien, Chia-Ying Shen	64,632,049	0.53%
Independent Director	Kuei-Sen Wu		0	0.00%
Independent Director	Kuo-Chuan,Lin		0	0.00%
Independent Director	Ming-Hsien,Yang		0	0.00%
Independent Director	Sung-Tung,Chen		0	0.00%
Total	Shares Held by All Directors		3,074,334,129	25.26%

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AI assistant

HNFHC — AGM Information 2020

52211_rns_2020-07-15_33fef7c5-d04c-4e26-93ee-d816df478341.pdf

Hua Nan Financial Holdings Co., Ltd. Meeting Minutes for 2020 Annual General Shareholders’ Meeting

Chairman ：

Attendees ：

Chairman of the Meeting announced that the aggregate ：

Matters to be Reported

Report No.1

Report No.2

Report No.3

Report No.4

Summary of shareholder’s speech:

Matters for Ratification (1)

Summary of shareholder’s speech:

Matters for Ratification (2)

Proposal ： Ratification of Distribution of 2019 Profits.

(Proposed by the Board of Directors)

Details ：

Summary of shareholder’s speech:

Matters for Discussion (1)

Details ：

Matters for Discussion (2)

Details ：

Attachment ： List of releasing of non-competition clause

Summary of shareholder’s speech:

Questions and Motions

None

Summary of shareholder’s speech ：

Adjourned ： 10 ： 12 a.m.

Hua Nan Financial Holdings Co., Ltd. 2019 Business Report

I. Domestic and International Finance Environment in 2019

II. Business Plan and Results of Business Strategies

(II) Strengthening Cross-Selling

(III) Promoting Digital Finance

III. Budget Implementation and Profitability Analysis

IV. Economic Outlook and Development Strategies for 2020

Hua Nan Financial Holdings Co., Ltd. Audit Committee's Audit Report

Hua Nan Financial Holdings Co., Ltd. Audit Committee's Audit Report

INDEPENDENT AUDITORS’ REPORT

Opinion

Basis for Opinion

Key Audit Matters

Impairment Loss of Discounts and Loans

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(In Thousands of New Taiwan Dollars)

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

(In Thousands of New Taiwan Dollars)

HUA NAN FINANCIAL HOLDINGS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018

Hua Nan Financial Holdings Co., Ltd.

Balance Sheets

December 31, 2019 and 2018

Hua Nan Financial Holdings Co., Ltd.

Statements of Comprehensive Income For the Years Ended December 31, 2019 and 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Hua Nan Financial Holdings Co., Ltd.

Statements of Cash Flows For the Years Ended December 31, 2019 and 2018 (In Thousands of New Taiwan Dollars)

Hua Nan Financial Holdings Co., Ltd. Statement of Earnings Distribution

2019

Hua Nan Financial Holdings Co., Ltd. Articles of Incorporation

Chapter 3 Business Operations

Chapter 6 Managerial Officers

Hua Nan Financial Holdings Co., Ltd. Rules of Procedure for Shareholders' Meetings

Article 10 (Discussion of Proposals)

Article 11 (Shareholders' Speech)

HNFHC AGM Information 2020

Attachment `：` List of releasing of non-competition clause

Summary of shareholder’s speech `：`