China Development Financial : CDF) Q3

China Development Financial Holding Corporation and Subsidiaries

Consolidated Financial Statements for the

Nine Months Ended September 30, 2023 and 2022 and Independent Auditors' Review Report

INDEPENDENT AUDITORS' REVIEW REPORT

The Board of Directors and Shareholders

China Development Financial Holding Corporation

Introduction

We have reviewed the accompanying consolidated balance sheets of China Development Financial Holding Corporation (the "Corporation") and its subsidiaries as of September 30, 2023 and 2022, the related consolidated statements of comprehensive income for the three months ended September 30, 2023 and 2022 and for the nine months ended September 30, 2023 and 2022, the consolidated statements of changes in equity and cash flows for the nine-month periods then ended, and the related notes to the consolidated financial statements, including a summary of significant accounting policies. 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 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 Securities Issuers, Regulations Governing the Preparation of Financial Reports by Insurance Enterprises, the guidelines issued by the authority and International Accounting Standard 34 "Interim Financial Reporting". Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

We conducted our reviews in accordance with the Standards on Review Engagements of the Republic of China 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our reviews, nothing has come to our attention that caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Corporation and its subsidiaries as of September 30, 2023 and 2022, its consolidated financial performance for the three months ended September 30, 2023 and 2022, and its consolidated financial performance and consolidated cash flows for the nine-month ended September 30, 2023 and 2022, in accordance with the Regulations Governing the Preparation of Financial Reports by Financial Holding Companies, 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 Securities Issuers, Regulations Governing the Preparation of Financial Reports by Insurance

- 1 -

Enterprises, the guidelines issued by the authority and International Accounting Standard 34 "Interim Financial Reporting".

The engagement partners on the reviews resulting in this independent auditors' review report are Yi-Chun Wu and Jr-Shian Ke.

Deloitte & Touche

Taipei, Taiwan

Republic of China

November 20, 2023

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 review such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors' review 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' review report and consolidated financial statements shall prevail.

- 2 -

CHINA DEVELOPMENT FINANCIAL HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars)

			September 30, 2023						December 31, 2022						September 30, 2022
ASSETS			Amount	%					Amount	%					Amount	%
CASH AND CASH EQUIVALENTS (Note 6)	$	65,654,409			2		$	132,489,379			4		$	92,998,549		3
DUE FROM THE CENTRAL BANK AND CALL LOANS TO FINANCIAL
INSTITUTIONS (Notes 7 and 47)			37,891,645			1					54,451,552			2					41,661,932		1
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (Notes 8,
9, 18, 46 and 47)			557,825,480			15					466,530,498			13				495,363,470		14
FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE
INCOME (Notes 10, 47 and 52)			252,903,153			7					215,165,592			6					370,726,398		10
DEBT INVESTMENTS MEASURED AT AMORTIZED COST (Notes 11, 18, 46
and 52)			1,704,659,083			46					1,678,606,935			47				1,542,944,277			43
FINANCIAL ASSETS FOR HEDGING (Note 12)			2,356,619		-					2,511,620			-					3,245,606		-
SECURITIES PURCHASED UNDER RESELL AGREEMENTS (Note 13)			66,791,169			2					31,770,532			1					35,813,731		1
RECEIVABLES, NET (Notes 14, 46, 47 and 52)			141,309,673			4					111,420,657			3					149,613,302		4
CURRENT TAX ASSETS			137,575		-					148,379			-					165,906		-
DISCOUNTS AND LOANS, NET (Notes 15, 46 and 52)			430,997,759			12					427,835,924			12				436,049,671		12
REINSURANCE ASSETS, NET (Note 16)			1,167,552		-					1,016,200			-					892,892		-
INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD, NET
(Notes 17 and 18)			21,577,622			-					20,100,667			1					19,426,104		1
OTHER FINANCIAL ASSETS (Notes 19, 46 and 47)			172,714,153			5					166,905,284			5					161,971,241		4
INVESTMENT PROPERTY, NET (Notes 20 and 47)			59,112,149			1					58,626,748		2					58,064,651		2
PROPERTY AND EQUIPMENT, NET (Notes 21 and 47)			32,030,274			1					33,670,962			1					34,322,144		1
RIGHT-OF-USE ASSETS, NET (Notes 22 and 47)			12,134,751			-					12,623,300			-					12,496,504		-
INTANGIBLE ASSETS, NET (Note 23)			17,888,303			-					18,342,534			1					18,504,785		-
DEFERRED TAX ASSETS (Note 43)			25,333,111		1					18,068,348			-					30,533,844		1
OTHER ASSETS, NET (Notes 24 and 46)			108,338,055			3					86,863,239			2					123,992,004		3
TOTAL	$	3,710,822,535			100		$	3,537,148,350			100	$	3,628,787,011			100
LIABILITIES AND EQUITY
LIABILITIES
Deposits from the Central Bank and financial institutions (Notes 25 and 46)	$	7,770,686		-		$	11,972,428			-		$	20,603,664		1
Financial liabilities at fair value through profit or loss (Notes 8 and 46)			106,763,190			3					82,361,141			2					140,385,841		4
Financial liabilities for hedging (Note 12)			838,437		-					581,359		-					542,234		-
Notes and bonds issued under repurchase agreements (Notes 8, 10, 11 and 26)			147,012,927			4					101,183,895			3					124,512,484		3
Commercial paper payable, net (Notes 27 and 47)			35,699,235			1					24,778,477		1					18,313,680		-
Payables (Notes 28 and 46)			98,274,863			3					90,722,635			3					124,078,749		3
Current tax liabilities			225,789		-					548,915			-					635,241		-
Deposits and remittances (Notes 29 and 46)			520,001,310		14					529,644,019			15				500,779,177		14
Bonds payable (Note 30)			101,281,435			3					91,643,007			3					91,893,333		3
Other borrowings (Notes 31 and 47)			27,684,109			1					23,675,664			1					28,638,354		1
Provisions (Notes 4 and 32)			2,119,496,501			57					2,094,580,716		59				2,122,031,984			58
Other financial liabilities (Note 34)			214,997,143			6					205,120,359			6					197,411,965		5
Lease liabilities (Notes 22 and 46)			4,267,276		-					4,603,517			-					4,486,705		-
Deferred tax liabilities (Note 43)			22,628,706		-					13,904,031			-					19,424,028		1
Other liabilities (Note 46)			68,515,616			2					53,042,811			1					66,608,913		2
Total liabilities			3,475,457,223			94					3,328,362,974			94				3,460,346,352			95
EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT (Notes 35 and 36)
Capital
Common stock			168,392,886		5					168,453,886			5					168,472,436		5
Preferred stock			15,821,424			-					15,821,424			-					15,821,424		-
Share capital awaiting retirement			(47,080)		-					-		-					(11,550)		-
Capital surplus			33,506,036			1					33,626,805			1					33,569,727		1
Retained earnings
Legal reserve			15,613,641			-					13,703,864			-					13,703,864		-
Special reserve			48,976,557			1					410,006			-					421,800		-
Unappropriated earnings			18,413,843		1					50,476,328			2					53,228,981		2
Other equity			(65,435,269)		(2)				(73,829,040)		(2)				(117,102,696)		(3)
Total equity attributable to owners of the parent			235,242,038			6					208,663,273			6					168,103,986		5
NON-CONTROLLING INTERESTS			123,274		-					122,103			-					336,673		-
Total equity			235,365,312			6					208,785,376			6					168,440,659		5
TOTAL	$	3,710,822,535			100		$	3,537,148,350			100	$	3,628,787,011			100

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

- 3 -

CHINA DEVELOPMENT FINANCIAL HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

		For the Three Months Ended September 30			For the Nine Months Ended September 30
	2023			2022			2023			2022
		Amount	%				Amount	%				Amount	%				Amount	%
INTEREST REVENUE (Notes 37
and 46)	$ 25,124,956	267	$ 20,865,627	84	$ 71,750,944	191	$ 57,240,029	58
INTEREST EXPENSE (Notes 37
and 46)		(6,297,430)	(67)	(2,661,663)	(11)	(16,790,130)	(45)	(5,064,122)	(5)
INTEREST PROFIT, NET		18,827,526	200	18,203,964	73	54,960,814	146	52,175,907	53
NONINTEREST PROFITS AND
GAINS, NET
Service fee and commission,
net (Notes 19, 38 and 46)	1,430,927		15	(142,117)	(1)	2,231,516	6	1,478,121	2
Net income from insurance
operations (Notes 39 and 46)	(20,555,114)	(219)	(3,558,381)	(14)	(36,999,385)	(98)	15,750,777	16
Gain (loss) on financial assets
and liabilities measured at
fair value through profit or
loss, net (Notes 8, 40 and 46)	(33,106,034)	(353)	(55,990,841)	(224)	(15,590,295)	(42)	(154,436,869)	(156)
Gain (loss) on investment
property, net	166,758		2	112,033	-	388,392	1	211,477	-
Realized gain (loss) on
financial assets measured at
fair value through other
comprehensive income
(Note 41)	558,063		6	(348,143)	(1)	1,336,901	3	3,071,502	3
Gain (loss) on disposal of
financial assets measured at
amortized cost (Note 11)	(285,494)	(3)	(208,944)	(1)	721,844	2	209,086	-
Foreign exchange gain (loss),
net	34,010,811	362	60,307,494	241	45,549,164	121	121,136,755	122
Impairment loss on assets, net	(28,422)	-	(96,866)	-	(425,481)	(1)	(1,713,077)	(2)
Share of the profit (loss) of
associates and joint ventures	(83,216)	(1)	112,889	-	1,530,904	4	(534,811)	(1)
Gain (loss) on reclassification
using the overlay approach
(Note 8)	13,240,825	141	13,352,253	54	(11,011,123)	(29)	74,118,226	75
Net changes in foreign
exchange valuation reserve	(5,023,589)	(53)	(7,108,189)	(28)	(5,647,899)	(15)	(13,181,636)	(13)
Others (Notes 46 and 48)	238,095		3	343,027	1	600,205	2	607,948	1
Total noninterest profits
and gains, net		(9,436,390)	(100)	6,774,215		27	(17,315,257)	(46)	46,717,499	47
TOTAL NET REVENUE		9,391,136		100	24,978,179	100	37,645,557	100	98,893,406	100
(ALLOWANCE) REVERSAL
FOR BAD DEBTS AND
LOSSES ON
COMMITMENTS AND
GUARANTEES	(349,942)	(4)	4,176	-	(294,589)	(1)	145,398	-
NET CHANGE IN RESERVE
FOR INSURANCE
LIABILITIES	8,848,569		94	(8,579,085)	(34)	6,428,752	17	(49,927,555)	(50)
OPERATING EXPENSES
(Notes 22, 33, 42 and 46)
Employee benefits	(4,963,241)	(53)	(4,694,705)	(19)	(14,537,329)	(39)	(13,374,608)	(14)
Depreciation and amortization	(914,365)	(10)	(877,108)	(3)	(2,714,616)	(7)	(2,479,552)	(2)
Other general and
administrative expenses		(2,277,133)	(24)	(2,218,543)	(9)	(6,253,044)	(16)	(6,145,533)	(6)
Total operating expenses		(8,154,739)	(87)	(7,790,356)	(31)	(23,504,989)	(62)	(21,999,693)	(22)
																				(Continued)

- 4 -

CHINA DEVELOPMENT FINANCIAL HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

			For the Three Months Ended September 30				For the Nine Months Ended September 30
			2023						2022						2023						2022
			Amount	%					Amount	%					Amount	%					Amount	%
NET PROFIT BEFORE
INCOME TAX	$	9,735,024		103	$	8,612,914		35	$	20,274,731	54	$	27,111,556	28
INCOME TAX EXPENSE
(Note 43)			(2,366,444)	(25)				(1,901,272)	(8)				(2,759,048)	(8)				(6,768,005)	(7)
NET PROFIT FOR THE
PERIOD			7,368,580		78				6,711,642		27				17,515,683	46				20,343,551	21
OTHER COMPREHENSIVE
INCOME (LOSS)
Items that will not be
reclassified subsequently to
profit or loss, net of income
tax
Share of the other
comprehensive income
(loss) of associates and
joint ventures			(80,120)	(1)				(231,861)	(1)				122,243	-				(1,444,827)	(2)
Gain (loss) on equity
instruments measured at
fair value through other
comprehensive income			(518,046)	(5)				(4,986,088)	(20)				(83,919)	-				(11,309,037)	(11)
Income tax relating to the
items that will not be
reclassified subsequently
to profit or loss (Note 43)			122,432		1				499,203	2				278,242	1				801,896	1
Items that will be reclassified
subsequently to profit or
loss, net of income tax
Exchange differences on
translation of financial
statements of foreign
operations			1,366,230		15				2,218,048		9				1,469,172	4				4,445,436	4
Share of the other
comprehensive income
(loss) of associates and
joint ventures			185,008		2				388,254	2				264,660	1				815,319	1
Income tax relating to items
that may be reclassified
subsequently to profit or
loss (Note 43)			1,111,780		12				1,537,990		6				72,866	-				11,228,839	11
Gain (loss) on debt
instruments measured at
fair value through other
comprehensive income			(5,055,104)	(54)				(11,267,467)	(45)				(4,222,704)	(11)				(58,835,026)	(59)
Other comprehensive income
(loss) on reclassification
using the overlay approach
(Note 8)			(13,240,825)	(141)				(13,352,253)	(54)				11,011,123	29				(74,118,226)	(75)
			(16,108,645)	(171)				(25,194,174)	(101)				8,911,683	24				(128,415,626)	(130)
TOTAL COMPREHENSIVE
INCOME (LOSS) FOR THE
PERIOD	$	(8,740,065)	(93)	$	(18,482,532)	(74)	$	26,427,366	70	$	(108,072,075)	(109)
NET PROFIT ATTRIBUTABLE
TO:
Owners of the parent	$	7,369,598		78	$	6,703,665		27	$	17,512,376	46	$	20,321,448	21
Non-controlling interests			(1,018)	-				7,977	-				3,307	-				22,103	-
		$	7,368,580		78	$	6,711,642		27	$	17,515,683	46	$	20,343,551	21
																								(Continued)

- 5 -

CHINA DEVELOPMENT FINANCIAL HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

			For the Three Months Ended September 30						For the Nine Months Ended September 30
					2023								2022									2023							2022
			Amount	%					Amount	%					Amount	%				Amount	%
TOTAL COMPREHENSIVE
INCOME (LOSS)
ATTRIBUTABLE TO:
Owners of the parent	$	(8,742,113)	(93)	$	(18,491,235)		(74)	$	26,423,604	70	$ (108,098,672)	(109)
Non-controlling interests					2,048		-						8,703		-						3,762	-					26,597	-
		$	(8,740,065)	(93)	$	(18,482,532)		(74)	$	26,427,366	70	$ (108,072,075)	(109)
EARNINGS PER SHARE
(Note 44)
Basic				$	0.44								$	0.40								$	1.05				$	1.21
Diluted				$	0.44								$	0.40								$	1.04				$	1.21
The accompanying notes are an integral part of the consolidated financial statements.																(Concluded)

- 6 -

CHINA DEVELOPMENT FINANCIAL HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars)

Equity Attributable to Owners of the Parent

Other Equity

Unrealized Gains

Exchange

(Losses) on

Differences on

Financial Assets

Capital

Translation of

at Fair Value

Other

Total Equity

Advance

Share Capital

Retained Earnings

Foreign

through Other

Comprehensive

Equity on

Attributable to

Receipts for

Awaiting

Unappropriated

Financial

Comprehensive

Income (Loss) on

Hedging

Owners of the

Non-controlling

Common Stock

Preferred Stock

Capital Stock

Retirement

Capital Surplus

Legal Reserve

Special Reserve

Earnings

Statements

Income

Reclassification

Instruments

Others

Treasury Shares

Parent

Interests

Total Equity

BALANCE AT JANUARY 1, 2022	$	171,896,598	$	18,930,436	$	31,175		$	-		$	36,147,480	$	10,035,815	$	298,120
Appropriation of the 2021 earnings
Legal reserve		-				-			-			-			-			3,668,049		-
Special reserve		-				-			-			-			-			-			123,680
Cash dividends - common shares		-				-			-			-			-			-			-
Cash dividends - preferred shares		-				-			-			-			-			-			-
		-				-			-			-			-			3,668,049		123,680
Share of profit or loss of associates and joint ventures accounted for
using equity method		-				-			-			-			1			-			-
Net profit for the nine months ended September 30, 2022		-				-			-			-			-			-			-
Other comprehensive income (loss) for the nine months ended
September 30, 2022, net of income tax		-				-			-			-			-			-			-
Total comprehensive income (loss) for the nine months ended
September 30, 2022		-				-			-			-			-			-			-
Retirement of treasury share		(3,407,137 )		(3,109,012 )		-			-			(2,555,352 )		-			-
Share-based payments		(17,025 )		-			(31,175 )		(11,550 )		(22,402 )		-			-
Changes in non-controlling interests		-				-			-			-			-			-			-
Disposal of equity investments at fair values through other
comprehensive income		-				-			-			-			-			-			-
Net changes in special reserve of subsidiaries		-				-			-			-			-			-			-
BALANCE AT SEPTEMBER 30, 2022	$	168,472,436	$	15,821,424	$	-		$	(11,550 )	$	33,569,727	$	13,703,864	$	421,800
BALANCE AT JANUARY 1, 2023	$	168,453,886	$	15,821,424	$	-		$	-		$	33,626,805	$	13,703,864	$	410,006
Appropriation of the 2022 earnings
Legal reserve		-				-			-			-			-			1,909,777		-
Special reserve		-				-			-			-			-			-			48,566,551
		-				-			-			-			-			1,909,777		48,566,551
Share of profit or loss of associates and joint ventures accounted for
using equity method		-				-			-			-			(15,741 )		-			-
Net profit for the nine months ended September 30, 2023		-				-			-			-			-			-			-
Other comprehensive income (loss) for the nine months ended
September 30, 2023, net of income tax		-				-			-			-			-			-			-
Total comprehensive income (loss) for the nine months ended
September 30, 2023		-				-			-			-			-			-			-
Share-based payments		(61,000 )		-			-			(47,080 )		(105,028 )		-			-
Changes in non-controlling interests		-				-			-			-			-			-			-
Disposal of equity investments at fair values through other
comprehensive income		-				-			-			-			-			-			-
Net changes in special reserve of subsidiaries		-				-			-			-			-			-			-
BALANCE AT SEPTEMBER 30, 2023	$	168,392,886	$	15,821,424	$	-		$	(47,080 )	$	33,506,036	$	15,613,641	$	48,976,557

$	52,021,923		$	(5,126,549)	$	13,669,003	$	5,406,323	$	-	$	(1,458,485)	$	(9,071,501)	$	292,780,338	$	330,414		$	293,110,752
	(3,668,049 )		-			-			-			-		-			-			-			-			-
	(123,680 )		-			-			-			-		-			-			-			-			-
	(16,848,554 )		-			-			-			-		-			-			(16,848,554 )		-			(16,848,554 )
	(3,077 )		-			-			-			-		-			-			(3,077 )		-			(3,077 )
	(20,643,360 )		-			-			-			-		-			-			(16,851,631 )		-			(16,851,631 )
	-				-			-			-			-		-			-			1			-			1
	20,321,448			-			-			-			-		-			-			20,321,448		22,103			20,343,551
	-				5,254,493		(61,729,246 )		(71,948,636 )		3,269		-			-			(128,420,120 )		4,494			(128,415,626 )
	20,321,448			5,254,493		(61,729,246 )		(71,948,636 )		3,269		-			-			(108,098,672 )		26,597			(108,072,075 )
	-				-			-			-			-		-			9,071,501		-			-			-
	347				-			-			-			-		400,666			-			318,861			-			318,861
	-				-			-			-			-		-			-			-			(20,338 )		(20,338 )
	1,573,534			-			(1,573,534 )		-			-		-			-			-			-			-
	(44,911 )		-			-			-			-		-			-			(44,911 )		-			(44,911 )
$	53,228,981		$	127,944		$	(49,633,777)	$	(66,542,313)	$	3,269	$	(1,057,819)	$	-		$	168,103,986	$	336,673		$	168,440,659
$	50,476,328		$	(1,116,811)	$	(13,728,907)	$	(58,042,885)	$	3,301	$	(943,738 )	$	-		$	208,663,273	$	122,103		$	208,785,376
	(1,909,777 )		-			-			-			-		-			-			-			-			-
	(48,566,551 )		-			-			-			-		-			-			-			-			-
	(50,476,328 )		-			-			-			-		-			-			-			-			-
	-				-			-			-			-		-			-			(15,741 )		-			(15,741 )
	17,512,376			-			-			-			-		-			-			17,512,376		3,307			17,515,683
	-				1,732,337		(2,964,532 )		10,142,232		1,191		-			-			8,911,228		455			8,911,683
	17,512,376		1,732,337		(2,964,532 )		10,142,232		1,191		-			-			26,423,604		3,762			26,427,366
	10,809				-			-			-			-		415,295			-			212,996			-			212,996
	-				-			-			-			-		-			-			-			(2,591 )		(2,591 )
	932,752				-			(932,752 )		-			-		-			-			-			-			-
	(42,094 )		-			-			-			-		-			-			(42,094 )		-			(42,094 )
$	18,413,843		$	615,526		$	(17,626,191)	$	(47,900,653)	$	4,492	$	(528,443 )	$	-		$	235,242,038	$	123,274		$	235,365,312

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

- 7 -

CHINA DEVELOPMENT FINANCIAL HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)

		For the Nine Months Ended
		September 30
	2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit before income tax	$ 20,274,731		$ 27,111,556
Adjustments for reconciliation with net profit
Depreciation expenses	2,173,012		1,915,291
Amortization expenses	1,141,827		1,075,052
Allowance (reversal) for bad debts and losses on commitments and
guarantees, net	294,589		(145,398)
Loss on financial assets and liabilities measured at fair value through
profit or loss, net	29,012,409		166,236,729
Interest expense	16,790,130		5,092,291
Interest revenue	(71,750,944)	(57,240,029)
Dividend income	(14,219,507)	(13,456,906)
Net changes in insurance liabilities	19,178,338		115,138,832
Net changes in reserve for changes in foreign exchange valuation	5,647,899		13,181,636
Share-based payments	202,187		318,514
Share of loss (profit) of associates and joint ventures	(1,531,442)	538,300
Loss (gain) on reclassification using the overlay approach	11,011,123		(74,118,226)
Gain on disposal of investments	(1,232,776)	(2,861,785)
Impairment loss on financial assets	426,801		1,706,168
Others	(515,146)	(338,371)
Changes in operating assets and liabilities
Due from the Central Bank and call loans to financial institutions	13,505		(3,132,652)
Financial assets at fair value through profit or loss	(55,531,337)	(32,029,473)
Financial assets at fair value through other comprehensive income	(40,631,304)	66,512,688
Debt investments measured at amortized cost	(32,161,148)	(309,520,725)
Securities purchased under resell agreements	(778,944)	(1,050,267)
Receivables	(29,164,532)	(16,347,985)
Discounts and loans	(3,244,285)	(28,440,115)
Other financial assets	1,884,983		(6,924,336)
Other assets	2,009,739		(21,635,645)
Deposits from the Central Bank and financial institutions	(4,201,742)	(219,882)
Financial liabilities at fair value through profit or loss	(41,629,426)	8,869,175
Notes and bonds issued under repurchase agreements	45,829,032		22,627,674
Payables	10,625,067		18,439,524
Deposits and remittances	(9,642,709)	17,276,720
Other financial liabilities	327,643		25,897,037
Other liabilities		15,479,308		(12,606,992)
Cash used in operations		(123,912,919)	(88,131,600)
Interest received	56,629,576		44,546,833
Dividends received	13,765,050		13,304,742
				(Continued)

- 8 -

CHINA DEVELOPMENT FINANCIAL HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars)

		For the Nine Months Ended
		September 30
	2023		2022
Interest paid	$ (17,746,698)	$ (3,316,512)
Income tax paid		(1,291,628)	(5,439,151)
Net cash used in operating activities		(72,556,619)	(39,035,688)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of financial assets at fair value through other
comprehensive income	-		100,000
Acquisition of financial assets measured at amortized cost	(808,567)	(525,916)
Principal from financial assets measured at amortized cost	-		92,529
Acquisition of financial assets at fair value through profit or loss	(276,389)	(1,668,311)
Proceeds of financial assets at fair value through profit or loss	515,845		83,752
Acquisition of investments accounted for using equity method	(156,365)	(371,273)
Proceeds from capital reduction of investments accounted for using the
equity method	401,100		259,871
Acquisition of property and equipment	(576,134)	(1,089,910)
Proceeds from sale of property and equipment	133,944		89,971
Acquisition of investment properties	(48,643)	(23,524,191)
Proceeds from disposal of investment properties	414,318		631,383
Others		(238,983)	148,053
Net cash used in investing activities		(639,874)	(25,774,042)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings	5,208,432		3,940,931
Decrease in funds from the Central Bank and banks	-		(129,490)
Increase (decrease) in commercial paper payable	10,920,758		(2,900,560)
Proceeds from corporate bonds	10,000,000		-
Repayments of corporate bonds	(20,000)	(40,000)
Proceeds from long-term borrowings	800,074		2,139,900
Repayments of long-term borrowings	(2,000,061)	-
Repayments of the principal portion of lease liabilities	(696,529)	(653,234)
Cash dividends paid	-		(16,851,631)
Net changes in non-controlling interests	(2,591)	(20,338)
Others		10,809		(887)
Net cash generated from (used in) financing activities		24,220,892		(14,515,309)
EFFECTS OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS		(164,078)	523,439
				(Continued)

- 9 -