IBF — AGM Information 2017

Jul 12, 2017

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Handbook for the 2017 Annual Meeting of Shareholders

Time: June 16, 2017 (Friday)

Place:2F., No.113, Sec.7, Jhongshan N. Rd., Shihlin Dist., Taipei City, Taiwan, R.O.C.(National Training Institute For Farmers' Organizations TIEN-MOU Convention Center)

This English version handbook is a summary translation of the Chinese version and is for reference only. If there is any discrepancy between the English version and Chinese version, the Chinese version shall prevail.

1

Table of Contents
I. Meeting Procedure		P3
II. Meeting Agenda		P4
	Report items	P5~ P6
	(A)2016 Business Report (B)Audit Committee's Review Report on the 2016 Financial Statements (C)Report on distribution of employees' compensation and directors' remuneration of 2016 (D)Implementation of Share Buyback Program
	Recognition items	P6~ P7
	(A)Adoption of the 2016 Business Report and Financial Statements (B)Adoption of the Proposal for Distribution of 2016 Profits
	Discussion items (A)	P8~ P9
	(A)Proposal for a new share issue through capitalization of earnings. (B)Amendment to the Operational Procedures for Acquisition and Disposal of Assets
	Election items	P9~ P12
	The 6th Election of Directors(including Independent Directors) (please refer to the appendix)
	Discussion items (B)	P12
	(A)Proposal for Release the Prohibition on Directors from Participation in Competitive Business
	Questions and Motions

2

Waterland Financial Holdings Co., Ltd.

Procedure for the 2017 Annual Meeting of Shareholders

1. Call the Meeting to Order.

2. Chairperson Remarks

3. Report items

4. Recognition items

5. Discussion items (A)

6. Election items

7. Discussion items (B)

8. Questions and Motions

9. Adjournment

3

Waterland Financial Holdings Co., Ltd.

Year 2017

Agenda of Annual Meeting of Shareholders

1. Call the Meeting to Order.(Report the number of shares present )

2. Chairperson Remarks

3. Report items

(A)2016 Business Report

• (B)Audit Committee's Review Report on the 2016 Financial Statements

• (C)Report on distribution of employees' compensation and directors' remuneration of 2016

(D)Implementation of Share Buyback Program

4. Recognition items

(A)Adoption of the 2016 Business Report and Financial Statements

(B)Adoption of the Proposal for Distribution of 2016 Profits

5. Discussion items (A)

(A)Proposal for a new share issue through capitalization of earnings.

• (B)Amendment to the Operational Procedures for Acquisition and Disposal of Assets

6. Election items

The 6th Election of Directors(including Independent Directors) (please refer to the appendix)

7. Discussion items (B)

• (A)Proposal for Release the Prohibition on Directors from Participation in Competitive Business

8. Questions and Motions

9. Adjournment

4

Report Items

Report No.1

2016 Business Report

Report No.2

Audit Committee's Review Report on the 2016 Financial Statements

Report No.3

Report on distribution of employees' compensation and directors' remuneration of 2016

Explanation:

• A. This matter was to conform to Article 235-1of the Company Act and Article 32 of the Articles of Incorporation of Company.

• B. The Company’s Profit before tax which has not deducted employees' compensation and directors' remuneration in 2016 was NT$2,147,555,151 , from which the Company planned to allocate NT$22,549,329(1.05%) as employees’ remuneration and NT$32,213,327(1.5%) as directors’ remuneration in cash.

• C. The motion has been approved at 7th meeting of Remuneration Committee of 2th term on March 8, 2017, and also approved by 23th meeting of the board of 5th term on March 22, 2017.

Report No.4

Implementation of Share Buyback Program

Explanation:

• A. This matter was to conform to Article 28-2(7)of the Securities and Exchange Act

• B. Results of the 5th Batch of share Buyback Program are listed below

5

Date of Board of Directors	2016/3/28
Legal basis	Article 28-2(1)of the Securities and Exchange Act
Purpose of buy-back	Transfer to employees
Buybackperiod	2016/3/29~2016/5/28
repurchase price per share	5.52~11.78
Number of shares bought back	40,000,000
Total value of shares bought back (The average buyback price per share)	NT$316,245,320 (per share NT$7.91)

• C. The relevant shares for the 5th repurchase shall be transferred to the employees once or in subordinated terms within three years from the date of the repurchase of the shares.

Recognition Items

Proposal No.1

Adoption of the 2016 business report and consolidated financial statements of the Company. (Proposed by the Board)

Explanation:

• A. The Business Report and the Company’s Consolidated Financial Statements of 2016 have been examined by the Audit Committee,as well as approved by the 5[th] board meeting of the 23th term of the Board of Directors.

• B. The 2015 Business Report and Consolidated Financial Statements are attached as Attachment (omitted).

Resolution:

6

Proposal No.2

Adoption of the distribution of 2015 profits. (Proposed by the Board)

Explanation:

• A. The motion has been approved by 23th meeting of the board of 5th term.

• B. 2016 net profit after tax is NT$ 2,110,209,292. After setting aside the legal reserve of NT$ 211,020,929, the unappropriated retained earnings are NT$ 1,905,152,785

• C. The proposed cash dividends to shareholders is NT$1,488,341,152 (NT$ 0.55 per share).The proposed stock dividends to shareholders is NT$405,911,230 (NT$ 0.15 per share). It is proposed that the Board of Directors be authorized to make relevant adjustment, if any, based on the total number of shares outstanding on the recode date.

• D. Cash dividends shall be calculatedand rounded down to dollar in proportion to stakeholding. The total amount of odd fraction will be counted as other income of Company.

• E. The 2016 Profit Distribution Table is attached as below.

Waterland Financial Holding CO., Ltd

Profit Distribution Table

Year 2016

(Expressed in New Taiwan dollars)

Beginning retained earnings Add(Less): Actuarial adjustment on defined benefit plans Adjusted unappropriated earnings Add(Less): Profit of the year Less: Legal reserve (10%) Distributable profit Distributable items: Cash dividends to ordinary shares Stock dividends to ordinary shares Unappropriated earnings	$24,362,367 -18,397,945 5,964,422 2,110,209,292 -211,020,929 1,905,152,785 -1,488,341,152 -405,911,230 $10,900,403

Resolution:

7

Discussion (A)

Proposal No.1

Proposal for a New Share IssuanceThrough Capitalization of Earnings. (Proposed by the Board)

Explanation:

• A. In order to increase the company working capital and strengthen operational capacity, it is proposed to appropriate NT$405,911,230 from the 2016 distributable earnings as stock dividends.The par value of the shares to be issued is NT$10 and the total number of the common shares to be issued is 40,591,230 shares .

• B. The distribution of the new shares should be made to the shareholders with no consideration at the ratio of 15 new shares for every 1,000 shares held by shareholders. Odd lots less than one share thus collected by the Company will be placed at its par value with specific parties as determined by the Chairman of the Board of Directors.

• C. The rights and obligations on the new shares issued through the capitalization of earnings are the same as those of the existing shares.

• D. After this proposal is approved by the Annual General Meeting and the governing agency, the Board of Directors will determine the ex-right date for the capital increase and distribution of shares.

• E. If due to the amendment to laws or regulations or upon the approval of the governing agency, the board of directors is to be authorized to be in full charge of relevant matters of this case.

Resolution:

8

Proposal No.2

Amendment to the Operational procedures for Acquisition and Disposal of Assets. (Proposed by the Board)

Explanation:

• A. The motion has been approved by 23th meeting of the board of 5th term.

• B. This matter was to conform to Regulations Governing the Acquisition and Disposal of Assets by Public Companies.

Resolution:

Election Items

Proposal No.1

For election of the Company's directors of 6th term (Proposed by the Board)

Explanation:

• A. The term of office of directors of 5th term was supposed to expire on June 19, 2016.According to the Articles of Incorporation of the Company, that thirteen (13) directors, including four (4) independent directors are to be elected at this AGM. The tenure of the 6th Term for three years

• B. the election of the Company’s directors (including independent directors) shall be subject to a candidate nomination system.The name list of candidatesfor directors (including independent directors) has been reviewed and approved by the board of Directors on May 3, 2017.

• C. Please see the attachment as below

Election result:

9

List of Director (Including Independent Director) Candidates

Title/ Name	Shareholdings (shares)	Education & Professional Qualifications	Major Past Positions & Current Positions
Director Chi-Lin Wea (Ren Wang Co., Ltd.)	53,830,821	Ph.D. in Economics, University of Paris	Major Past Positions:  Dean, Graduate Institute of International Business, National Taiwan University  Secretary General of the Cabinet, Taiwan Government (Republic of China)  Chairman, Land Bank of Taiwan Current Positions:  Chairman,Waterland Financial Holdings  Chairman,International Bills Finance Corp.
Director Steven Hung (Ren Wang Co., Ltd.)	53,830,821	L.L.B., National Taiwan University	Major Past Positions:  Chairman,Waterland Financial Holdings  Chairman,Taiwan Financial Asset Service Corporation  Independent Director, China Steel Corporation Current Positions:  Chairman, Waterland Securities Co., Ltd.  Director, Waterland Financial Holdings
Director Chin-Yuan Kung (Ren Wang Co., Ltd.)	53,830,821	Taipei Institute of Technology	Major Past Positions:  Director, Taiwan Business Bank Co.,Ltd.  Director, First Financial Holdings  Director, First Commercial Bank Co.,Ltd. Current Positions  Representative, Lidu Real Estate (Shanghai) Co., Ltd.  Director, Waterland Financial Holdings
Director Chih-Chiang Ho (Ren Wang Co., Ltd.)	53,830,821	Master , University of Stirling	Major Past Positions:  Chairman, Pacific Securities Co., Ltd.  Vice Chairman, Pacific Securities Co., Ltd. Current Positions:  Vice Chairman, Waterland Securities Co., Ltd.  Director, Waterland Financial Holdings
Director Cheng-Lin,Chen (Ren Wang Co., Ltd.)	53,830,821	Vanung University	Major Past Positions:  Chairman,Pauguo Realestate Management Co., Ltd. Current Positions:  Chairman,Pauguo Realestate Management Co.,Ltd.
Director (First Commercial Bank)	82,889,217	－	－
Director (Taiwan	48,648,588	－	－

10

Title/ Name	Shareholdings (shares)	Education & Professional Qualifications	Major Past Positions & Current Positions
Cooperative Bank)
Director (Hua Ji International Development Corp.)	197,658	－	－
Director (Hua-Kang International Asset Management Corp)	197,658	－	－
Independent Director (Yeong-Chyan Wu)	0	Ph.D. in law, University of Washington	Major Past Positions:  Dean,School of Lifelong Learning ,Shih Hsin University Current Positions:  President, Shih Hsin University  Independent Director, Waterland Financial Holdings
Independent Director (Joanna Lei)	0	Ph.D. Annenberg School, University of Pennsylvania	Major Past Positions:  Director, Eastern Broadcasting Co.,Ltd.  Member of the Legislative Yuan Current Positions:  Vice Chairman, DigiDom Cable TV Co., Ltd.  Independent Director, Waterland Financial Holdings
Independent Director (Ching-Sung Wu)	0	Ph.D.Universit y of California,Los Angeles	Major Past Positions:  Professor,College of Management,National Taiwan University Current Positions:  Dean,College of Business, Chinese Culture University  Independent Director, Waterland Financial Holdings
Independent Director (Yao-ShingWang)	0	Master of Public Finance, National Chengchi University	Major Past Positions:  Chairperson of the Board, Land bank of Taiwan  Division Director, Deputy Director, Director-general, Bureau of Monetary Affairs, Ministry of Finance, R.O.C.  Director-general, Training Institute, Ministry of Finance, R.O.C. Current Positions:  Associate Professor in MA programe in Management and Adminstration at College of Commerce in National Chengchi University

11

Title/ Name	Shareholdings (shares)	Education & Professional Qualifications	Major Past Positions & Current Positions
			 Independent Director, Waterland Financial Holding

Discussion (B)

Proposal No.1

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

Explanation:

• A. Pursuant to the Articles 209-1 of the CompanyAct, 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.

• B. Based on business or investment, The directors may participate in competitive business of the Company, as such the release of the prohibition is proposed.The Company’s directors and party of representativethat is within the scope of the company’s business are as of the attachment.

Resolution:

12

Attachment:

The Company’s directors and party of representative that is within the scope of the company’s business:

Directors and Party of Representative	Other companies	Position
Taiwan Cooperative Bank	 United Taiwan Bank  Taipei Forex Inc.  Taiwan Futures Exchange  Taiwan Asset Management Corporation  T aiwan Financial Asset Service Corporation  Financial Information Service Co., LTD.  Financial eSolution Co., LTD  LIANAN Service Co., LTD.  United Real Estate Management Co.,Ltd.  T-Wallet mobile phone Co., LTD.	 Director  Director  Director  Director  Director  Director  Director  Director  Director  Director
Taiwan Cooperative Bank (Teng-Shan Tai)	 Taiwan Cooperative Bank  United Taiwan Bank	 Vice President  Director
First Commercial Bank	 FCB International leasing Co., LTD.  First Commercial Bank(U.S.A)  Eastasia Real Estate Management Co.,Ltd.  LIANAN Service Co., LTD.  CDIB Partners Investment Holding Corp  T aiwan Financial Asset Service Corporation  T-Wallet mobile phone Co., LTD.	 Chairman、 Director  Chairman、 Director  Director  Director  Director  Director  Director

13

Directors and Party of Representative	Other companies	Position
	 TAIPEI FINANCIAL CENTER CORP.  Turn Cloud Technology Service Inc.	 Director  Director
Ren Wang Co., Ltd. (Chi-Lin Wea)	 Chi Ding Venture Capital Co.,Ltd  Hua Ding Venture Capital Co.,Ltd  Yuan Ding Venture Capital Co.,Ltd  Ho Ding Venture Capital Co.,Ltd  Lian Ding Venture Capital Co.,Ltd  Li Din Venture Capital Co.,Ltd  Fu Ding Venture Capital Co.,Ltd	 Chairman  Chairman  Chairman  Director  Director  Director  Director
Ren Wang Co., Ltd. (Cheng-Lin,Chen)	 Pauguo Realestate Management Co., Ltd.	 Director

：

14

Appendix

List of the Shares Held by Each Director and All Directors

• A. The total number of the issued shares of the Company is 2,746,074,821, and the minimum number of shares required to be held by all directors is 185,763,942.(shareholding ratio 6.76%)

• B. For the reason that there is an audit committee established in the Company, the legal requirement on the minimum number of shares held by supervisors does not apply to the Company.

Book closure date: April 18,2017

				Book closure date: April 18,2017
Position	Name	Shareholding		Corporate shareholder
		share	ratio
Chairman	Chi-Lin Wea	53,830,821	1.96％	Ren WangCo., Ltd.
Vice Chairman	Jin-Der Chiang	82,889,217	3.02％	First Commercial Bank
Director	Steven Hung	53,830,821	1.96％	Ren Wang Co., Ltd.
Director	Chin-Yuan Kung	53,830,821	1.96％	Ren WangCo., Ltd.
Director	Yu-Pei Chao	53,830,821	1.96％	Ren Wang Co., Ltd.
Director	Chih-ChiangHo	53,830,821	1.96％	Ren WangCo., Ltd.
Director	Michael Chen	197,658	0.01％	Hua Ji International Development Corp.
Director	Teng-Shan Tai	48,648,588	1.77％	Taiwan Cooperative Bank
Director	James Y. L. Wei	197,658	0.01％	Hua-Kang International Asset Management Corp.
Independent Director	Joanna Lei	0	--
Independent Director	Yeong-Chyan Wu	0	--
Independent Director	Ching-Sung Wu	0	--
Independent Director		0	--
Total		185,763,942	6.76％

15

Consolidated Financial Statements

Balance Sheet

Accounting Title	2016/12/31	2015/12/31
Balance Sheet
Assets
Cash and cash equivalents	1,993,195	2,734,098
Due from the central bank and call loans to banks	177,492	120,050
Financial assets at fair value through profit or loss	123,200,250	127,070,694
Available-for-sale financial assets, net	103,914,636	102,316,875
Securities purchased under resell agreements	589,962	9,998
Receivables, net
Receivables, net	15,073,595	15,740,911
Current tax assets
Total current tax assets	488,767	851,436
Held-to-maturity financial assets, net	988,462	987,991
Investments accounted for using equity method, net	1,618,287	1,588,668
Other financial assets, net
Other financial assets, net	4,552,218	4,884,159
Property and equipment, net	1,903,896	1,920,318
Intangible assets, net	364,019	366,123
Deferred income tax assets	96,821	110,489
Other assets, net
Other assets, net	1,210,981	1,479,000
Total assets	256,172,581	260,180,810
Liabilities and equity
Liabilities
Due to the central bank and banks	18,505,752	12,947,067
Financial liabilities at fair value through profit or loss	235,128	269,914
Securities sold under repurchase agreements	183,998,860	193,195,917
Commercial papers issued, net	8,211,458	7,900,802
Payables
Total payables	6,706,110	7,458,154
Current tax liabilities	177,103	190,741
Provisions

16

Provisions for employee benefits	178,969	157,924
Provisions for guarantee liabilities	1,172,064	1,210,144
Other provisions
Total other provisions	48,377	79,736
Total provisions	1,399,410	1,447,804
Other financial liabilities
Total other financial liabilities	1,453,999	1,438,599
Deferred tax liabilities
Total deferred tax liabilities	21,081	30,732
Other liabilities
Total other liabilities	431,166	920,019
Total liabilities	221,140,067	225,799,749
Stockholders' equity
Equity attributable to owners of parent
Capital
Common stock	27,460,748	27,664,862
Total capital	27,460,748	27,664,862
Capital surplus	100,068	7,544
Retained earnings
Legal reserve	1,191,990	1,035,664
Special reserve	234,587	234,587
Unappropriated earnings	2,116,174	1,572,461
Total retained earnings	3,542,751	2,842,712
Other equity interest
Exchange differences on translation of foreign financial statements	-24,477	61,041
Unrealized gains (losses) on valuation of available-for-sale financial assets	171,858	584,818
Total other equity interest	147,381	645,859
Treasury shares	316,245	807,476
Total equity attributable to owners of parent	30,934,703	30,353,501
Non-controlling interests	4,097,811	4,027,560
Total stockholders' equity	35,032,514	34,381,061
Total liabilities and equity	256,172,581	260,180,810
Equivalent issued shares of advance receipts for common stock (unit: share)	0	0
Number of treasury share acquired by the company and subsidiaries (unit: share)	40,000,000	90,000,000

17

Statement of comprehensive income

Accounting Title	2016/4th	2015/4th
Statement of comprehensive income
Net income (loss)
Net interest income (expense)
Interest income	2,929,092	2,880,943
Interest expenses	889,159	1,041,210
Net interest income (expense)	2,039,933	1,839,733
Net income (loss) except interest
Net service fee (charge) and commissions income (loss)
Net service fee (charge) and commissions income (loss)	2,214,597	2,187,089
Gain (loss) on financial assets (liabilities) at fair value through profit or loss
Gain (loss) on financial assets (liabilities) at fair value through profit or loss	642,658	629,012
Realized gain (loss) on available-for-sale financial assets
Realized gain (loss) on available-for-sale financial assets	24,307	131,093
Foreign exchange gains (losses)
Foreign exchange gains (losses)	-102,992	-77,054
Impairment loss on assets (reversal of impairment loss on assets)
Impairment loss on assets (reversal of impairment loss on assets)	-60,894	-100,842
Share of profit (loss) of associates and joint ventures accounted for using equity method
Total share of profit (loss) of associates and joint ventures accounted for using equity method	86,034	92,101
Net other non-interest incomes (losses)

18

Rental incomes
Total rental incomes	79,829	82,985
Net other miscellaneous income (loss)
Net other miscellaneous income (loss)	391,786	155,549
Net other non-interest incomes (losses)	471,615	238,534
Net income (loss) except interest	3,275,325	3,099,933
Incomes	6,204,417	5,980,876
Expenses	3,560,030	4,009,034
Net income (loss)	5,315,258	4,939,666
Bad debt expenses and guarantee liability provisions
Total bad debt expenses and guarantee liability provisions	51,084	259,460
Operating expenses
Employee benefits expenses	1,735,435	1,731,892
Depreciation and amortization expense	91,556	102,465
Other general and administrative expenses	792,796	874,007
Total operating expenses	2,619,787	2,708,364
Profit (loss) from continuing operations before tax	2,644,387	1,971,842
Tax (expense) income	-445,772	-377,296
Profit (loss) from continuing operations	2,198,615	1,594,546
Profit (loss)	2,198,615	1,594,546
Other comprehensive income
Components of other comprehensive income that will not be reclassified to profit or loss, net of tax
Gains (losses) on remeasurements of defined benefit plans	-27,049	-23,556

19

Income tax related to components of other comprehensive income that will not be reclassified to profit or loss	4,597	4,026
Components of other comprehensive income that will not be reclassified to profit or loss, net of tax	-22,452	-19,530
Components of other comprehensive income that will be reclassified to profit or loss, net of tax
Exchange differences on translation	-97,027	14,348
Unrealised gains (losses) on valuation of available-for-sale financial assets	-395,932	192,020
Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be
	-28,289	51,937
reclassified to profit or loss
Components of other comprehensive income that will be reclassified to profit or loss, net of tax	-521,248	258,305
Other comprehensive income	-543,700	238,775
Total comprehensive income	1,654,915	1,833,321
Profit (loss), attributable to
Profit (loss), attributable to owners of parent	2,110,209	1,563,259
Profit (loss), attributable to non-controlling interests	88,406	31,287
Comprehensive income attributable to
Comprehensive income, attributable to owners of parent	1,593,333	1,859,122
Comprehensive income, attributable to non-controlling interests	61,582	-25,801
Basic earnings per share
Basic earnings (loss) per share from continuing operations, net of income tax	0.78	0.56
Total basic earnings per share	0.78	0.56
Diluted earnings per share
Diluted earnings (loss) per share from continuing operations, net of income tax	0.78	0.56
Total diluted earnings per share	0.78	0.56

20

Statement of cash flows

Accounting Title	2016/4th	2015/4th
Statement of cash flows
Cash flows from (used in) operating activities, indirect method
Profit (loss) from continuing operations before tax	2,644,387	1,971,842
Profit (loss) before tax	2,644,387	1,971,842
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expense	63,517	73,232
Amortization expense	28,039	29,233
Provision (reversal of provision) for bad debt expense	51,084	269,747
Interest expense	889,159	1,041,210
Interest income	-2,929,092	-2,880,943
Dividend income	-129,175	-169,359
Share of loss (profit) of associates and joint ventures accounted for using equity method	-86,034	-92,101
Loss (gain) on disposal of property and equipment	206	2,872
Impairment loss on financial assets	60,894	100,842
Total adjustments to reconcile profit (loss)	-2,051,402	-1,625,267
Changes in operating assets and liabilities
Changes in operating assets
Decrease (increase) in financial assets at fair value through profit or loss	3,870,444	-16,187,713
Decrease (increase) in available-for-sale financial assets	-2,149,399	-22,220,292
Decrease (increase) in securities purchased under agreements to resell	-579,964	369,915
Decrease (increase) in receivables	940,574	2,504,096
Decrease (increase) in held-to-maturity financial assets	-471	-987,991
Decrease (increase) in other financial assets	286,523	-530,124
Decrease (increase) in other assets	271,308	-463,239
Total changes in operating assets	2,639,015	-37,515,348
Changes in operating liabilities
Increase (decrease) in financial liabilities at fair value through profit or loss	-34,786	2,280
Increase (decrease) in notes and bonds issued under repurchase agreement	-9,197,057	38,112,588
Increase (decrease) in payable	-1,171,669	1,399,303
Increase (decrease) in provisions for employee benefits	-6,004	-2,287
Increase (decrease) in provisions	-31,359	1,148
Increase (decrease) in other financial liabilities	15,400	185,554

21

Increase (decrease) in other liabilities	-461,409	626,180
Total changes in operating liabilities	-10,886,884	40,324,766
Total changes in operating assets and liabilities	-8,247,869	2,809,418
Total adjustments	-10,299,271	1,184,151
Cash inflow (outflow) generated from operations	-7,654,884	3,155,993
Interest received	2,571,322	2,607,822
Dividends received	205,205	236,519
Interest paid	-849,409	-1,045,234
Income taxes refund (paid)	278,186	-568,429
Net cash flows from (used in) operating activities	-5,449,580	4,386,671
Cash flows from (used in) investing activities
Acquisition of financial assets at cost	115,230	-156,417
Acquisition of investments accounted for using equity method	-49,000	0
Acquisition of property and equipment	-55,246	-69,232
Proceeds from disposal of property and equipment	3	3
Decrease in operation guarantee	-25,000	140,000
Increase in deposits settlement fund	19,153	-12,818
Increase in refundable deposits	2,586	-23,930
Acquisition of intangible assets	-16,793	-15,485
Increase in other financial assets	25,000	292,700
Increase in other assets	-10,855	-6,327
Net cash flows from (used in) investing activities	5,078	148,494
Cash flows from (used in) financing activities
Increase in due to the central bank and banks	5,558,685	-856,698
Increase in commercial papers payable	310,656	-2,238,371
Cash dividends paid	-695,886	-764,837
Payments to acquire treasury shares	-316,245	-322,242
Change in non-controlling interests	8,669	-13,399
Net cash flows from (used in) financing activities	4,865,879	-4,195,547
Effect of exchange rate changes on cash and cash equivalents	-104,838	13,013
Net increase (decrease) in cash and cash equivalents	-683,461	352,631
Cash and cash equivalents at beginning of period	2,854,148	2,501,517
Cash and cash equivalents at end of period	2,170,687	2,854,148
Cash and cash equivalents reported in the statement of financial position	1,993,195	2,734,098
Due from the central bank and call loans to banks qualifying for cash and cash equivalents under the definition of IAS 7	177,492	120,050

22

Statement of Stockholders' Equity

23