Fubon Life Assurance Financial Statements

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					         FUBON LIFE ASSURANCE CO., LTD.
            FINANCIAL STATEMENTS
              June 30, 2007 AND 2006

      (with Independent Auditors’ Report thereon)




Address: 14F, No. 108, Sec. 1, Tun Hua S. Road, Taipei, Taiwan
Telephone: 886-2-8771-6699
                                FUBON LIFE ASSURANCE CO., LTD.
                                     June 30, 2007 AND 2006


        Contents                                                  Page
Independent Accountants’ Report                                    1
Balance Sheets                                                    2–3
Statements of Income                                               4
Statements of Changes in Shareholders’ Equity                      5
Statements of Cash Flows                                           6
Notes to Financial Statements
  (1) Organization and Business Activity                           7
  (2) Summary of Significant Accounting Principles               7 – 17
  (3) Reason And Effect Of Changes In Accounting Principles        17
  (4) Details of Major Accounts                                  17 – 40
  (5) Related Party Transactions                                 41 – 49
  (6) Pledged Assets                                               49
  (7) Commitments and Contingencies                                49
  (8) Significant Disaster Loss                                    50
  (9) Significant Subsequent Events                                50
 (10) Others                                                       50
 (11) Notes To Disclosure Events                                 50 – 51
 (12) Segment Financial Information Disclosure                     51
                                    INDEPENDENT ACCOUNTANTS’ REPORT

The Board of Directors
Fubon Life Assurance Company Limited

We have audited the accompanying balance sheets of Fubon Life Assurance Company Limited as of
June 30, 2007 and 2006, and the related statements of income, changes in shareholders’ equity and cash
flows for the six-month periods ended June30, 2007 and 2006. These financial statements are the
responsibility of the Company’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards and “Rules
Governing Certified Public Accountants’ Certification of Financial Statements” of the Republic of
China (R.O.C.). Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly the financial position of Fubon
Life Assurance Company Limited as of June 30, 2007 and 2006, and the results of its operations and
cash flows for the six-month periods ended June 30, 2007 and 2006, in conformity with the “Regulations
Governing the Preparation of Financial Statements by Security Issuers”, the “Principles of Preparing
Financial Reports for Life Insurance Companies” , the related financial accounting standards of the
“Business Entity Accounting Act” and of the “Regulation on Business Entity Accounting Handling” and
the R.O.C. generally accepted accounting principles.
As described in Note III, commencing from January 1, 2006, Fubon Life Assurance Company Limited
adopted SFAS No.34 “Financial Instruments: Recognition and Measurement” and SFAS No.36
“Financial Instruments: Disclosure and Presentation” as well as the revised previously issued statements.
However, the adoption of this new accounting method movement decreased net income and basic
earnings per share by $641,373 thousands and $1.14 dollars for the six-month period ended June 30,
2006, respectively. In accordance with SFAS No.34, the financial assets and liabilities at the beginning
of 2006 were revalued based on fair value and amortized cost. In its initial adoption of above- mentioned
new accounting standard, the Company reclassified its financial assets and liabilities accordingly. Also,
cumulative effect of change in accounting principle and adjustment item of stockholders’ equity
amounted to $63,155 thousands and $2,849,375 thousands for the six-month period ended June 30, 2006,
respectively.




Taipei, Taiwan, R.O.C.
July 31, 2007
Note to Readers
The accompanying financial statements are intended only to present the financial position, results of operations and cash flows in
accordance with the 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 financial statements are those generally accepted and applied in the Republic of
China.

                                                                   -1-
                                                      FUBON LIFE ASSURANCE CO., LTD.
                                                              BALANCE SHEETS
                                                            June 30, 2007 AND 2006
                                      (Expressed in Thousands of New Taiwan Dollars, unless otherwise stated)


                                                                                                                                 2007          2006
ASSETS
Current Assets
 Cash and cash equivalents(Notes (4)-(A),(4)-(U) and (5))                                                                    $     8,012,057     6,022,274
 Financial assets measured at fair value through profit or loss(Notes (4)-(B)and(4)-(U))                                           1,553,009       198,301
 Available-for-sale financial assets-current(Notes (4)-(B),(4)-(U)and (5))                                                        45,317,482    32,405,194
 Debt investments without active market-current (Note (4)-(B))                                                                     4,514,365       976,776
 Notes receivable - net(Note(4)-(U))                                                                                                 314,040       365,183
 Reinsurance recovery receivables-net(Note(4)-(U))                                                                                     5,801         3,362
 Due from other reinsurers-net(Note(4)-(U))                                                                                           57,715        44,995
 Accrued income and interest receivable(Note(4)-(U))                                                                               2,134,419     1,681,625
 Other receivables(Notes(4)-(U)and (5))                                                                                            2,129,000     2,541,597
 Other current financial assets(Notes (4)-(B)and (4)-(U))                                                                                  -       291,800
 Other current assets                                                                                                                297,365       255,863
      Total Current Assets                                                                                                        64,335,253    44,786,970
Loans
 Policy loans(Notes(4)-(D),(4)-(U)and (5))                                                                                         5,235,805     5,054,157
 Short-term advances receivables(Notes(4)-(C )and(4)-(U))                                                                            881,306       736,494
 Collateral loans-net(Notes (4)-(E),(4)-(U) and (5))                                                                               8,061,795     4,457,632
 Non-performing loan (Note(4)-(M))                                                                                                     3,202             -
     Total loans                                                                                                                  14,182,108    10,248,283
Fund and Long-Term Investments
 Financial assets measured at fair value through profit or loss-non current (Notes (4)-(B),(4)-(F)and(4)-(U))                        284,287       615,277
 Available-for-sale financial assets-non current(Notes (4)-(F)and(4)-(U))                                                         51,360,139    46,838,835
 Derivative financial assets for hedging-noncurrent (Notes (4)-(B),(4)-(G)and(4)-(U))                                                 15,241             -
 Financial assets carried at cost-non current (Note (4)-(F))                                                                       1,965,894     2,682,342
 Debts investments without active market-non current (Notes (4)-(F) and (5))                                                     102,322,152    97,951,582
 Investments measured by the equity method (Note (4)-(H))                                                                             53,634       483,228
 Real estate investments-net (Notes(4)-(I) and (5))                                                                                7,065,238     2,525,444
 Other financial assets - non current(Notes (4)-(F)and(4)-(U))                                                                    13,717,600    24,030,300
  Fund and Long-Term Investments                                                                                                 176,784,185   175,127,008
Property and Equipment(Notes (4)-(J) and(5))
Cost
  Land                                                                                                                               42,475        42,475
  Buildings and equipment                                                                                                            35,024        35,024
  EDP equipment                                                                                                                     132,820       129,209
  Transportation equipment                                                                                                            3,733         3,601
  Other equipment                                                                                                                    66,315        70,140
  Leasehold improvement                                                                                                             140,338       131,365
  Prepayment for real estate investment                                                                                                 245             -
                                                                                                                                    420,950       411,814
Less: accumulated depreciation                                                                                                      268,363       250,281
       Net Property and Equipment                                                                                                   152,587       161,533
Intangible Assets
   Computer software                                                                                                                 34,953        36,585
  Deferred pension costs(Note (4)-(O))                                                                                                1,770         2,023
   Goodwill(Note (4)-(K))                                                                                                           515,769       553,974
       Total Intangible Assets                                                                                                      552,492       592,582
Other Assets
  Other deferred charges(Note (4)-(R))                                                                                                 1,160         7,317
   Refundable deposits (Notes (4)-(L), (4)-(U),(5) and (6))                                                                        1,087,337     1,497,490
   Non-performing loans(Note (4)-(M)) and (4)-(U))                                                                                       600           600
  Investment-type insurance policy assets(Note (4)-(N))                                                                           60,510,995    39,798,917
       Total Other Assets                                                                                                         61,600,092    41,304,324
TOTAL ASSETS                                                                                                                 $   317,606,717   272,220,700




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




                                                                                   -2-
                                                       FUBON LIFE ASSURANCE CO., LTD.
                                                               BALANCE SHEETS
                                                             June 30, 2007 AND 2006
                                       (Expressed in Thousands of New Taiwan Dollars, unless otherwise stated)


                                                                                                                                  2007           2006
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
  Bonds sold under agreement to repurchase (Notes (4)-(P),(4)-(U) and (5))                                           $              4,627,868      8,020,781
  Financial liabilities measured at fair value through profit or loss-current (Notes (4)-(B),(4)-(G),(4)-(U) and (5))                  68,068        464,108
  Derivative financial liabilities for hedging-current(Notes(4)-(B),(4)-(G)and (4)-(U))                                                   191              -
  Notes payable(Note(4)-(U))                                                                                                            8,966              -
  Commission payable(Note(4)-(U))                                                                                                     482,570        323,359
  Indemnity payments and life insurance proceeds payable(Note(4)-(U))                                                                 954,555         24,903
  Other payable(Notes (4)-(U))                                                                                                      7,035,159      1,572,254
  Other current liabilities(Notes (4)-(R))                                                                                            978,260        920,905
      Total Current Liabilities                                                                                                    14,155,637     11,326,310
Long-Term Liabilities
and (5))                                                                                                                             281,172        831,498
  Derivative financail laibilities for hedging-noncurren(Notes (4)-(B),(4)-(G)and(4)-(U))                                              4,141        114,087
  Accrued pension liabilities(Note (4)-(O))                                                                                          142,356        131,933
     Total Long-Term Liabilities                                                                                                     427,669       1,077,518
Reserves for Operations(Note (4)-(T))
  Reserve for unearned premiums                                                                                                       110,367        121,957
  Reserve for life insurance liability                                                                                            219,764,554    205,744,930
 Special reserve for life insurance proceeds                                                                                          802,709        938,285
 Special reserve for indemnity payments                                                                                                48,933         27,534
      Total Reserves for Operations                                                                                               220,726,563    206,832,706
Other Liabilities
  Guarantee deposits received(Note (5))                                                                                                52,760          9,770
   Investment-type insurance policy liabilities(Note(4)-(N))                                                                       60,510,995     39,798,917
       Total other liabilities                                                                                                     60,563,755     39,808,687
Total Liabilities                                                                                                                 295,873,624    259,045,221
Shareholders' Equity(Note (4)-(Q))
   Common stock                                                                                                                     5,648,000      5,648,000
  Capital surplus                                                                                                                   5,131,513      5,131,513
   Additional paid- in capital                                                                                                            335            335
   Legal reserve                                                                                                                      526,250        247,245
   Special reserve                                                                                                                    801,646        680,982
   Accumulated deficit                                                                                                              2,725,627        399,035
  Unrealized gains on financial instruments                                                                                         6,906,728      1,123,064
  Cumulative translation adjustments                                                                                                        -        (48,709)
  Net loss on unrecognized pension cost                                                                                                (7,006)        (5,986)
Total Shareholders' Equity                                                                                                         21,733,093     13,175,479
Commitments and Contingencies(Note (7))
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                    $   317,606,717    272,220,700



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




                                                                                    -3-
                                                    FUBON LIFE ASSURANCE CO., LTD
                                                        STATEMENTS OF INCOME
                                             FOR THE YEARS ENDED June 30, 2007 AND 2006
                                    (Expressed in Thousands of New Taiwan Dollars, unless otherwise stated)


                                                                                                                             2007                   2006
Operating Revenues
  Premiums income(Note (5))                                                                                          $           27,484,684              26,709,055
  Reinsurance commission income                                                                                                     473,132                 472,961
  Reinsurance payments refund                                                                                                       377,913                 311,150
  Recovered premiums and reserves                                                                                                26,951,824              10,851,322
  Recovered special reserves for life insurance proseeds                                                                            201,709                 218,265
  Interest income(Note (5))                                                                                                       3,791,531               3,056,348
  Gain on valuation of financial assets(Notes (4)-(G))                                                                              204,842                 130,142
  Gain on valuation of financial liabilities(Notes (4)-(G))                                                                         484,296                       -
   Income from equity investments under the equity method (Note (4)-(H))                                                              7,108                  34,076
   Foreign exchange gains                                                                                                           477,983                       -
  Gain on desposal of investment(Notes (4)-(H))                                                                                   1,190,484               2,472,030
   Gain on real estate investments (Notes (4)-(I) and (5))                                                                           63,370                 304,563
  Investment-type insurance policy revenues (Note (4)-(N))                                                                       30,125,994              10,149,452
  Other operating income                                                                                                          1,174,402                 159,499
     Total Operating Revenues                                                                                                    93,009,272              54,868,863
Operating Costs
  Reinsurance premiums ceded                                                                                                        (908,446)               (836,582)
  Underwriting expenses                                                                                                               (2,499)                 (2,082)
  Commission expenses(Note (5))                                                                                                   (2,173,162)             (1,209,741)
  Insurance payments                                                                                                             (28,751,535)            (12,278,675)
  Provision for policyholders' reserve                                                                                           (26,884,055)            (27,053,021)
  Provision for special reserves for life insurance proceeds                                                                        (134,730)                (74,055)
  Stability fund                                                                                                                     (27,009)                (26,616)
  Interest expenses                                                                                                                  (50,234)                (29,430)
  Loss on valuation of financial assets (Note (4)-(G))                                                                               (11,063)               (191,957)
  Loss on valuation of financial liabilties (Note (4)-(G))                                                                                 -                (970,337)
 Foreign exchange losses                                                                                                                   -                (862,985)
  Investment-type insurance policy losses(Note (4)-(N))                                                                          (30,125,994)            (10,149,452)
  Other operating costs                                                                                                               (6,060)                 (8,912)
      Total Operating Costs                                                                                                      (89,074,787)            (53,693,845)
Operating Gross Profit                                                                                                             3,934,485               1,175,018
Operating Expenses
  Operating expenses(Notes(5))                                                                                                     (574,445)               (467,624)
   Administrative expenses(Note (5))                                                                                               (293,263)               (219,388)
  Training expenses                                                                                                                  (5,181)                 (3,794)
     Total Operating Expenses                                                                                                      (872,889)               (690,806)
Net Operating Income                                                                                                              3,061,596                 484,212
Non-Operating Revenues
   Rental income(Note (5))                                                                                                            5,749                   4,644
   Gain on disposal of fixed assets(Note (5))                                                                                           996                   5,679
  Miscellaneous income                                                                                                               17,475                  20,095
       Total Non-Operating Revenues                                                                                                  24,220                  30,418
Non-Operating Expenses
   Loss on disposal of fixed assets and other assets                                                                                   (244)                 (3,440)
  Miscellaneous expenses                                                                                                            (20,524)                (33,992)
       Total Non-Operating Expenses                                                                                                 (20,768)                (37,432)
Income from continuing operations before tax                                                                                      3,065,048                 477,198
Income tax expense (Note (4)-(R))                                                                                                  (339,421)               (141,318)
Income before extraordinary items and cumulative effect of changes in accounting principle                                        2,725,627                 335,880
  (net of tax of $0) (Note(3))                                                                                                            -                  63,155
Net Income                                                                                                          $             2,725,627                 399,035
                                                                                                                    Before Tax    After Tax Before Tax    After Tax
Earnings per share (in New Taiwan dollars) (Note (4)-(S))
 Income from continuing operations before tax                                                                        $    5.43          4.83     0.84           0.59
 Cumulative effect of change in accounting principle                                                                         -             -     0.11           0.11
Net Income                                                                                                          $     5.43          4.83     0.95           0.70




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



                                                                                -4-
                                                                                            FUBON LIFE ASSURANCE CO., LTD.
                                                                               STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                                                                     FOR THE YEARS ENDED JUNE 30, 2007 AND 2006
                                                                            (Expressed in Thousands of New Taiwan Dollars, unless otherwise stated)



                                                                Common Stock Issued               Capital surplus
                                                                                                                                                                                     Unrealized       Unrealized Loss
                                                                                           Additional          Gains on                                                               gains on        of Valuation on Cumulative Net loss on
                                                                Shares                      paid-in          Disposal of           Legal            Special          Accumulated      financial         Long-Term      translation unrecognized
                                                              (Thousands)    Amount         capital          Fixed Assets         reserve           reserve             deficit     instruments         Investments   adjustments pension cost      Total

Balance, January 1, 2006                                          564,800   $ 5,648,000      5,131,513                 335                   -         572,395         2,581,032                  -         (231,204)     (37,804)      (5,986)   13,658,281
Reversal of special claim reserves transferred
 to special reserve in 2005                                             -             -                 -                  -              -            108,587          (108,587)                 -                             -            -             -
Recognition of legal reserve                                            -             -                 -                  -        247,245                  -          (247,245)                 -                -            -            -             -
Distribution for cash dividend                                          -             -                 -                  -              -                  -        (2,206,337)                 -                -            -            -    (2,206,337)
Allocation for employee's bonus                                         -             -                 -                  -              -                  -           (18,863)                 -                -                         -       (18,863)
Recovery of cumulative unrecognized pension cost                                                                                                                                                                                                           -
Cumulative translation adjustments                                      -             -                 -                  -                 -                 -               -               -                   -      (10,905)           -       (10,905)
Unrealized gains on financial instruments                               -             -                 -                  -                 -                 -               -       1,123,064                   -            -            -     1,123,064
Reversal of unrealized losses on valuation of
 long-term investments                                                  -             -              -                   -                   -               -                -                -            231,204             -            -       231,204
Net income for the six-month period ended June 30, 2006                 -             -              -                   -                                   -          399,035                -                  -             -            -       399,035
Balance, December 31, 2006                                        564,800   $ 5,648,000      5,131,513                 335          247,245            680,982          399,035        1,123,064                  -       (48,709)      (5,986)   13,175,479

Balance, January 1, 2007                                          564,800   $ 5,648,000      5,131,513                 335          247,245            680,982         2,681,463       5,735,240                   -      (52,441)      (7,006)   20,065,331
Reversal of special claim reserves transferred
 to special reserve in 2007                                             -             -                 -                  -              -            120,664          (120,664)                 -                -            -            -             -
Recognition of legal reserve                                            -             -                 -                  -        279,005                  -          (279,005)                 -                -            -            -             -
Distribution for cash dividend                                          -             -                 -                  -              -                  -        (2,262,365)                 -                -            -            -    (2,262,365)
Allocation for employee's bonus                                         -             -                 -                  -              -                  -           (19,429)                 -                -            -            -       (19,429)
Reversal of cumulative translation adjustments on long-term
investments                                                             -             -                 -                  -                 -                 -               -               -                   -       52,441            -        52,441
Unrealized gain on financial instruments                                -             -                 -                  -                 -                 -               -       1,171,488                   -            -            -     1,171,488
Recovery of cumulative unrecognized pension cost                                                                                                                                                                                -                          -
Net income for the six-month period ended June 30, 2007                 -             -              -                   -                -                  -         2,725,627               -                   -            -            -     2,725,627
Balance, June 30, 2006                                            564,800   $ 5,648,000      5,131,513                 335          526,250            801,646         2,725,627       6,906,728                   -            -       (7,006)   21,733,093



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




                                                                                                                           -5-
                                               FUBON LIFE ASSURANCE CO., LTD.
                       STATEMENTS OF CASH FLOWS FOR SIX-MONTH PERIODS ENDED JUNE 30, 2007 AND 2006
                                      (Expressed in Thousands of Dollars, unless otherwise stated)


                                                                                                                                       2007           2006
Cash flows from operating activities:
  Net income                                                                                                                       $     2,725,627       399,035
  Adjustments to reconcile net income to net cash provided by Operating activities:
   Depreciation and amortization                                                                                                            34,114         25,446
   Bad debt expense                                                                                                                          4,632          7,183
   (Decrease) increase in reserves                                                                                                        (134,748)    16,057,489
   Gain on surrender value                                                                                                                 (51,174)       (33,545)
   Exchange losses (gains) on valuation of financial instruments                                                                          (261,475)       792,454
   Gain on valuation of financial assets                                                                                                  (204,842)      (130,142)
   (Gains) loss on valuation of financial liabilties                                                                                      (484,296)       970,337
   Loss on valuation of financial assets                                                                                                    11,063        191,957
   Gain on disposal of investments                                                                                                        (204,747)      (517,123)
   Gain on disposal of real estate investments                                                                                                   -       (295,898)
    Other losses                                                                                                                            19,103         19,103
   Dividend revenue on long-term equity investment under equity method                                                                      (7,108)       (34,076)
   Gain on disposal of fixed assets                                                                                                           (752)        (2,239)
   Gain on equity investments accounted under the equity method                                                                         (1,025,192)             -
   Cumulative effect of change in accounting principle                                                                                           -        (63,155)
    Decrease in financial assets measured at fair value through profit or loss-current                                                  (1,124,253)             -
    (Increase) decrease in available-for-sale financial assets-current                                                                     888,050     (6,317,713)
    Decrease in debts investment without active market-current                                                                             474,875        280,147
   Decrease in notes receivable                                                                                                            100,300        347,281
   (Increase) decrease in accrued income and interest receivable                                                                          (131,017)       140,703
    (Decrease) increase in due to other reinsurer                                                                                            2,065         (1,016)
   (Decrease) increase in reinsurance recovery receivable                                                                                  (49,126)         1,347
   Decrease in other receivable                                                                                                         (1,329,378)      (954,939)
   Decrease in other current financial assets                                                                                                    -        525,649
   Increase in other current assets                                                                                                        (37,476)      (149,144)
   Decrease in notes payable                                                                                                              (303,755)       (11,330)
   Increase (decrease) in commission payable                                                                                                23,543       (165,442)
   Increase(decrease) in indemnity payable                                                                                                 894,253         (8,348)
   Increase in other payable                                                                                                             1,759,683        196,544
    Increase (decrease) in other current liabilities                                                                                       427,200     (2,352,624)
     Increase (decrease) in refundable deposits                                                                                             73,725       (272,600)
   Increase (decrease) in accrued pension liabilities                                                                                          174         (1,421)
 Net cash flows provided by operating activities                                                                                         2,089,068      8,643,920
Cash flows from investing activities:
    Increase in short-term advances receivable                                                                                             (71,845)       (54,256)
    Increase in loans                                                                                                                     (785,086)    (2,134,303)
    Increase in overdue receivable                                                                                                          (7,715)        (1,428)
    Proceeds form disposal of financial assets-non current                                                                              10,524,339     15,147,750
    Increase in financial assets-non current                                                                                           (15,556,444)   (31,294,675)
    Proceeds from disposal of real estate investment                                                                                             -      1,710,544
    Increase in real estate investment                                                                                                  (2,655,618)    (1,576,004)
    Proceeds from disposal of property and equipment                                                                                         2,067        160,609
    Purchase of property and equipment                                                                                                      (9,495)       (11,876)
    (Decrease) in other financial assets-noncurrent                                                                                      2,955,450              -
     Increase in deferred charges                                                                                                           (2,884)        (4,587)
      Disposal of long-term investment under the equity method                                                                           1,837,414              -
 Net cash used in investing activities                                                                                                  (3,769,817)   (18,058,226)
Cash flows from financing activities:
    (Decrease) increase in bonds sold under agreement to repurchase                                                                      3,677,868      3,910,752
    Increase in guarantee deposits received                                                                                                 26,425          7,931
    Distribution for cash divident                                                                                                               -     (2,206,337)
 Net cash provided used by financing activities                                                                                          3,704,293      1,712,346
Net decrease in cash and cash equivalents                                                                                                2,023,544     (7,701,960)
Cash and cash equivalents, beginning of the period                                                                                       5,988,513     13,724,234
Cash and cash equivalents, end of the period                                                                                       $     8,012,057      6,022,274
Supplemental disclosure of cash flows information
Cash paid for interest during the period                                                                                           $       226,599           14,589
Stockholder dividend payable                                                                                                       $     2,262,364                -
Employess bonuses payable                                                                                                          $        19,429           18,863



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




                                                                                         -6-
                           FUBON LIFE ASSURANCE CO., LTD.
                          NOTES TO FINANCIAL STATEMENTS
                                JUNE 30, 2007 AND 2006


(1) ORGANIZATION AND BUSINESS ACTIVITY

  Fubon Life Assurance Company Limited (“Fubon Life Assurance”) was incorporated on July 3,
  1992 under the Laws of the Republic of China. Fubon Life Assurance obtained its license on June 3,
  1993 and commenced commercial operations on July 15, 1993. Fubon Life Assurance is currently
  engaged in selling a number of life insurance products. During their meeting on October 26,2001,
  the shareholders of Fubon Life Assurance approved a resolution about the share swap for the
  purpose of transforming Fubon Insurance into a financial holding company for Fubon Securities Co.,
  Ltd. (“Fubon Securities”), Fubon Commercial Bank Co., Ltd. (“Fubon Bank”) and Fubon Life
  Assurance Co., Ltd. (“Fubon Life Assurance”), which shall become subsidiaries of that financial
  holding company. This was achieved by first transferring substantially all of the assets and
  liabilities and related operations of Fubon Insurance to a new wholly owned subsidiary. The “old”
  Fubon Insurance was renamed Fubon Financial. Secondly, shares of Fubon Securities, Fubon Bank
  and Fubon Life Assurance were exchanged for shares in Fubon Financial at the following exchange
  ratios.

                           Exchange Ratio for each Fubon Financial Share

   Fubon Securities                                 1.5078
   Fubon Bank                                       1.7053
   Fubon Life Assurance                             0.7556

   On December 19, 2001, Fubon Group successfully accomplished its corporate restructuring
   through the following events: (1) transfer of Fubon Insurance’s entire business into Fubon
   Financial, and (2) swap of Fubon Financial shares with those of Fubon Life Assurance, Fubon
   Bank and Fubon Securities which became subsidiaries of Fubon Financial.

   As of January 1, 2001, Fubon Life Assurance had acquired the business and related assets and
   liabilities of Citicorp Life Insurance Ltd. (“CitiLife”) Taiwan Branch.

   As of June 30, 2007 and 2006, Fubon Life Assurance issued common stock worth $5.648 billion in
   favor of Fubon Financial Holding Company Limited, and had 683 and 651 employees, respectively.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES

   Fubon Life Assurance’s financial statements were prepared in conformity with the “Regulations
   Governing the Preparation of Financial Statements by Security Issuers”, the “Principles of
   Preparing Financial Reports for Life Insurance Companies”, the related financial accounting
   standards of the “Business Entity Accounting Act” and of the “Regulation on Business Entity
   Accounting Handling” and the R.O.C. generally accepted accounting principles. The significant
   accounting principles are as follows:

  (A) Accounting Estimate

        When the Company prepares the financial statement, it measures, evaluates and disclosures
        the assets, liabilities, revenues, and expenses of financial statement under the essential
        assumptions according to the related regulations. However, the actual result could have the
        difference with the estimated result.


                                              -7-
                       FUBON LIFE ASSURANCE CO., LTD.
                   NOTES TO FINANCIAL STATEMENTS (CONT’D)


(B)   Foreign Currency Translation

      The Company recorded transactions in New Taiwan Dollar. The non-derivative foreign
      currency transactions of the Company are recorded at the rate of exchange prevailing on the
      date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
      translated into the functional currency at the rate of exchange ruling at the balance sheet date.
      Any resulting exchange differences are included in the income statement. Non-monetary
      assets and liabilities that are measured in terms of historical cost in a foreign currency are
      translated into the functional currency using the rate of exchange at the date of the initial
      transaction. Non-monetary assets and liabilities measured at fair value in a foreign currency
      are translated into the functional currency using the rate of exchange ruling at the balance
      sheet date. Any exchange differences resulting from fair value variation through profit and
      loss are included in the income statement, and exchange differences resulting from fair value
      variation through equity are accounted for as equity adjustments.

      Foreign currency denominated assets and liabilities of overseas subsidiaries are translated at
      the spot rate on the balance sheet date; the components of their stockholders’ equity are
      translated at the historical rate. Dividends are translated at the exchange rate on the date of
      declaration. Income statement accounts are translated at the weighted-average rate of the year,
      with difference reflected as cumulative translation adjustments to stockholders’ equity.

(C)   Principles of classifying assets and liabilities as current and non-current

      Cash or cash equivalents that are not restricted in use, assets held for trading purposes, or
      assets held on short-term basis and are expected to be converted to cash within 12 months
      after the balance sheet date are classified as current assets; otherwise, they are classified as
      non-current assets.

      Liabilities that must be fully liquidated within 12 months after the balance sheet date are
      classified as current liabilities; otherwise, they are classified as non-current liabilities.

(D) Cash and cash equivalents

      All highly liquid investments with maturity period of three months or less at the date of
      purchase are considered to be cash equivalents. The carrying amounts of beneficiary
      certificates and short-term notes approximate fair value, the valued interest income is
      recognized by period.

(E)   Asset Impairment

      Effective January 1, 2005, the Company adopted the Statement of Financial Accounting
      Standards No. 35 (SFAS 35) “Accounting for Asset Impairment”. According to SFAS 35, the
      Company assesses at each balance sheet date whether there is any indication that an asset
      (individual asset or cash-generating unit) other than goodwill may have been impaired. If any
      such indication exists, the Company estimates the recoverable amount of that asset. The
      Company recognizes impairment loss for an asset whose carrying value is higher than the
      recoverable amount.




                                               -8-
                       FUBON LIFE ASSURANCE CO., LTD.
                   NOTES TO FINANCIAL STATEMENTS (CONT’D)


      The Company reverses an impairment loss recognized in prior periods for assets other than
      goodwill if there is indication that the impairment loss recognized no longer exists or has
      decreased. The carrying value after the reversal should not exceed the recoverable amount or
      the depreciated or amortized balance of the assets assuming no impairment loss was
      recognized in prior periods. The impairment loss is irreversible commencing from January 1,
      2006, goodwill can not be amortized. Please refer to Note (2)-(N).

      Impairment loss and gain on impairment loss are charged to non-operating revenues or
      expenses.

(F)   Financial Assets

      According to the Statement of Financial Accounting Standards (SFAS) No.34“ Financial
      Instruments: Recognition and Measurement” which is effective from January 1, 2006,
      financial assets are classified into financial assets measured at fair value through profit and
      loss, available-for-sale financial assets, held-to-maturity financial assets, and financial assets
      measured at cost and debt instrument with no active market.

      Financial instruments held by the Company are recorded on trading date and initially
      recognized at fair value plus transaction costs, except for financial instruments held for
      trading purpose, which are initially recognized at fair value. Subsequent to their initial
      recognition, the financial instruments held by the Company are classified according to the
      purpose of holding as follows:

      (a) Financial assets measured at fair value through profit or loss: These included financial
          assets or liabilities held for trading and financial assets or liabilities designated at fair
          value at initial recognition. Financial assets which are measured at fair value are
          classified as held for trading if they have been acquired principally for the purpose of
          selling or repurchasing in the near term. The derivative financial instruments held by the
          Company, except for those designated as hedging instruments, are classified under this
          account. In addition, hybrid instrument and a set of financial assets or liabilities
          accounted inconsistently are booked as financial assets or liabilities designated at fair
          value at initial recognition. The set of financial assets or liabilities are booked as financial
          assets or liabilities designated at fair value through profit or loss at initial recognition in
          order eliminate inconsistent accounting. In accordance with the Company’s risk control
          policy or investment strategy, a set of financial assets or liabilities and its components
          managed are also designated at fair value.

      (b) Available-for-sale financial assets: Financial assets are measured at fair value and
          unrealized gains and losses thereon are recognized as an adjustment item of stockholders’
          equity. The impairment loss is recognized if there is evidence indicating that a decline in
          the value of an investment is other than temporary. If the impairment loss in the following
          period is reduced, reversal of loss for equity investments is adjusted to stockholders’
          equity, and reversal of loss for debt instrument is credited to current income if the
          reduction of impairment loss resulted from a subsequent event .




                                                -9-
                      FUBON LIFE ASSURANCE CO., LTD.
                  NOTES TO FINANCIAL STATEMENTS (CONT’D)


     (c) Financial assets measured at cost: Equity instruments with no quoted market price and
         whose fair value cannot be reliably measured are stated at cost. The impairment loss is
         recognized if there is evidence indicating that a decline in the value of an investment is
         other than temporary, and the impairment loss is irreversible.

     (d) Debt instrument with no active market: These are debt instruments with no active market
         quote and measured at amortized cost. The impairment loss is recognized if there is
         evidence indicating that a decline in the value of an investment is other than temporary. If
         in a subsequent period, the amount of the impairment loss decreases and the decrease can
         be related objectively to an event occurring after the impairment was recognized, the
         previous recognized impairment loss is reversed through the profit and loss .The carrying
         value after the reversal should not exceed the amortized balance of the assets assuming no
         impairment loss was recognized.

     (e) Other current financial assets: These are prepaid investment and structured deposits, the
         right of the other financial merchandise contract of the Company from other entity.
         Structured deposits are recorded at cost stated in the contracts, and the interest rates are
         linked to market rates and other financial benchmarks. Interest income thereon is
         recognized after holding the structured deposits to maturity. Impairment of principals
         would be occurred when investors of structured deposits redeem structured deposits
         before maturity date. The structured deposits were recognized as “Other current financial
         assets” or “Other financial assets - non current” by the due date, respectively.

(G) Derivative products and hedging

     The derivative products held by the Company were used for evading the interest risk and
     exposing exchange risk caused by the operative, financial and investment activities. When the
     derivative products which don’t correspond with hedge accounting principal regard as
     financial assets or liabilities held for trading.

     As the conditions of the fair value hedge, cash flow hedge, and hedges of a net investment in a
     foreign operation corresponded with hedge accounting principal will recognize as follows:

     (a) Fair value hedge: Changes in the fair value of derivatives that are designated and qualify
         as fair value hedging instruments against the exposure to changes in fair value of a
         recognized asset or liability or an unrecognized firm commitment, are recognized through
         profit and loss in the current period.

     (b) Cash flow hedge: Where a derivative financial instrument is designated as a hedge of the
         variability in cash flow of a recognized asset or liability or a highly probable forecast
         transaction, the effective portion of any gain or loss on remeasurement of the derivative
         financial instrument to fair value is recognized directly in equity. When the hedged
         transaction actually affecting the profit and loss, the gain or loss previously recognized in
         equity should be recognized through current profit and loss. Any gain or loss from the
         change in fair value relating to an ineffective portion of the hedge transaction is
         recognized immediately through profit and loss.




                                             - 10 -
                      FUBON LIFE ASSURANCE CO., LTD.
                  NOTES TO FINANCIAL STATEMENTS (CONT’D)


      (c) Hedges of net investment in foreign operation: The effective portion of any gain or loss
          on the hedging instrument relating to the hedge against foreign currency fluctuation in
          foreign operation is recognized directly in equity until the disposal of the foreign
          operation, at which time the cumulative gain or loss recognized directly in equity is
          recognized in profit and loss.

(H) Allowance for doubtful accounts

      Allowance for doubtful accounts on notes receivable, premium receivable, receivable in
      arrears, policy loan and collateral loans is provided for based on the results of review of
      collectibility of the balances and the allowance provision rates prescribed by the relevant
      regulations and Tai Tsai-Tax No.0920454036 issued by the Ministry of Finance. In
      compliance with the Value-Added and Non-Value-Added Business Tax Law, writing off of
      overdue loans based on 3% of sales or setting aside allowance for bad debts is discontinued
      because the percentage of the overdue loans of Fubon Life Assurance was lower than 1%.

(I)   Loans

      Loans include short-term advances receivable, policy loans, mid-term collateral loans (with
      maturity periods ranging from one to seven years), and long-term collateral loans (with
      maturity period of over seven years). The Company automatically grants an advance to the
      insured and the loan proceeds are offset against the overdue premium in accordance with the
      contract. Policy loans are secured by insurance policies issued by the Company. Collateral
      loans are secured by real properties and are approved by the competent authority for special
      projects. Loans are carried at principal amounts outstanding, net of unearned income and
      amounts charged-off. Interest is recognized on accrual basis using the interest method.

      Either the payment of principal and interest that are delinquent for three months and beyond,
      or the loans that are not repaid within three months from due date have been prosecuted will
      recognized as overdue loans.

(J)   Non-Performing Loans

      Overdue loans are reclassified to non-performing loans with six months from due date,
      reinsurance recovery receivables are reclassified to non-performing loans with nine months
      from due date, and other receivables are reclassified to non-performing loans with nine
      months from due date ,respectively. Accrual of interest is suspended for non-performing loans,
      only memo entries are made. Interest collected thereafter is included in earnings only to the
      extent of cash actually received.

(K) Long-term equity investments under the equity method

      Investment in equity securities is accounted for under the equity method where the Company
      owns 20% or more of the investee’s voting shares and has significant operational influence
      over the investee. Under the equity method, the difference between the acquisition cost of the
      investment and the underlying equity of the investment is amortized over ten years on a
      straight-line basis and such amortization is recognized as investment income or loss.




                                             - 11 -
                       FUBON LIFE ASSURANCE CO., LTD.
                   NOTES TO FINANCIAL STATEMENTS (CONT’D)


      Upon disposition, gain or loss on disposal of long-term equity investment is calculated based
      on the difference between selling price and book value. The remaining capital surplus arising
      from long-term equity investment is adjusted to profit and loss based on the percentage of
      sales.

      In compliance with the ROC SFC regulations, Fubon Life Assurance adopted the ROC
      Statement of Financial Accounting Standards No 30 “Accounting for Treasury Stock “ for the
      parent company’s stock . Under the standard, the difference between the investment cost and
      the net equity of the investee acquired is recognized in accordance with this amended standard.
      The difference, which is caused by the overstatement or understatement in the fair value of
      depreciable, depleted or amortizable assets, is amortized over the remaining economic useful
      lives of these assets. The difference caused by the other assets is recognized when it realizes.

(L)   Real estate investments

      Real estate investments are carried at cost and other necessary expenses. The cost of real
      estate investments are stated at the lower of cost or aggregate market value. When there is
      evidence indicating a decline in the value of real estate investments, real estate investments
      are written down to reflect the real value and the resulting loss is recognized as non-operating
      expenses.

      Significant additions, improvements and reacquisition expenses are capitalized. Maintenance
      and overhaul expenses are charged to expense in the current period.

      Gain on disposal of real estate investments are charged to operating revenues

(M) Property and equipment

      Property and equipment are carried at cost or cost plus appreciation, less accumulated
      depreciation. Upon revaluation of land and depreciable assets, the net appreciation or
      increment is credited to capital surplus, which is used only for offset against any deficit and
      capitalization. Fixed asset is valued at acquisition cost, but can be revalued in accordance with
      the law. Depreciation of fixed asset except land is calculated on a straight-line basis over the
      estimated useful lives of the respective assets. The useful life of leasehold improvement is the
      shorter of the lease period or economic useful life. When fixed asset is disposed and sold, its
      cost and the related accumulated depreciation are eliminated in the books. Depreciation on
      depreciable assets is recognized on a straight-line method based on the “The Chart of the
      Usage Lives of Fixed Assets” issued by the Executive Branch. When the economic useful
      lives have expired, fixed assets that are still in use are depreciated based on the residual value.

      The useful lives of property and equipment were as follows:

      (a) Buildings: 3-55 years

      (b) Transportations: 5-6 years

      (c) Computers and other equipments:3-8 years




                                               - 12 -
                      FUBON LIFE ASSURANCE CO., LTD.
                  NOTES TO FINANCIAL STATEMENTS (CONT’D)


          Maintenance and overhaul expenses are charged to expense in the current period;
          significant additions, improvements and reacquisition expense are capitalized.
          Improvements and major renovation of properties are capitalized, while repairs and
          maintenance are expensed immediately. Gains or losses on disposal of property and
          equipment are charged to non-operating revenues or expenses.

(N) Goodwill

      Goodwill resulting from the acquisition of the business and related assets and liabilities of
      Citicorp Life Insurance Ltd., Taiwan Branch (“Citi Life”) is amortized. In accordance with the
      standard of the amended SFAS No. 1, goodwill can not be amortized commencing from
      January 1, 2006. However, when there is evidence indicating a decline in the value of
      goodwill on balance sheet date, goodwill is written down to reflect the real value and the
      resulting loss is recognized as non-operating expense.

(O) Statutory deposits

      In accordance with the ROC Insurance Law, Fubon Life Assurance deposits with the Central
      Bank of China an amount equal to 15% of its issued capital as guarantee for its insurance
      business. Fubon Life Assurance made these deposits in the form of government bonds and
      financial bills and such deposits were approved by the Ministry of Finance.

(P)   Pension

      Fubon Life Assurance established a retirement plan for all its employees. Pension plan
      benefits are based primarily on participants’ compensation and years of credited service.
      Fubon Life Assurance paid all pension in this retirement plan. The employees’ pension rules
      were suitable for use newly from July 1, 2005. The employees got the pension on conditions
      originally, but contribute monthly to special account an amount equal to 6% of salaries and
      wages now. This special account can take with the employee away when the employee leave
      office, the employee can decide in accordance with following or making old rules newly while
      changing in rules. However, the retirement plan maintenance by the Company has not been
      amended to conform to the Act.

      In compliance with ROC SFC regulations, Fubon Life Assurance adopted the ROC Statement
      of Financial Accounting Standards (SFAS) No. 18, “Accounting for Pensions”. An actuarial
      valuation of pension liability is performed as of the balance sheet date, and a minimum
      pension liability is disclosed in the financial statements based on the difference between the
      accumulated benefit obligation and the fair value of plan assets. Effective from October 2001,
      Fubon Life Assurance deposits an amount for pension benefits equal to 2% of monthly salary
      expenses in a designated account with the Central Trust of China.

      In compliance with the ROC statement’s twenty-fifth section of Financial Accounting
      Standards (SFAS) No 23 Interim Financial Reporting, the interim financial statement does not
      have to disclosure the related pension information.




                                             - 13 -
                      FUBON LIFE ASSURANCE CO., LTD.
                  NOTES TO FINANCIAL STATEMENTS (CONT’D)


(Q) Reinsurance due to/due from other insurance companies

      Based on the criteria for reinsurance ceding and ceded, inward reinsurance premiums,
      outward reinsurance premiums, accrued reinsurance claims payable and reinsurance recovery
      receivable are calculated according to the individual agreement entered into with other
      insurance companies, and are recorded monthly.

(R)   Bond sold under agreements to repurchase

      Bonds sold under agreements to repurchase are defined as transactions involving the sale of
      bonds coupled with an agreement to repurchase the same or substantially identical bonds at a
      stated price. Such transaction is considered a financing transaction if the risk and reward are
      transferred to the seller, otherwise it is considered a trading transaction.

      Under the financing criterion, the transaction under repurchase agreement is recorded at
      selling price and classified as a liability on the balance sheet. On the repurchase date, the
      difference between the selling price and repurchase price is accounted for as interest expense.

(S)   Reserves for operations

      Reserves are provided for in accordance with the ROC Insurance Laws and Enforcement
      Rules of the Ministry of Finance. Reserves are also certified by a valuation actuary approved
      by the Ministry of Finance.

      (a) Unearned premium reserve

          Unearned premium reserves for one-year term accident, health and group term life
          insurance policies are calculated based on statutory rate of net written premiums in the
          current year.

      (b) Policy reserve

          The provision for future policy benefits is calculated in accordance with the Enforcement
          Rules of the Insurance Law, the embedded interest rate of respective insurance policies
          and the statutory mortality rate approved by the Ministry of Finance.

      (c) Special reserve

          For retention with an insurance period of one year or less, the Company set aside the
          following special reserve:

          (1) Special catastrophe reserve

          (2) Special risk-volatility reserve




                                                - 14 -
                FUBON LIFE ASSURANCE CO., LTD.
            NOTES TO FINANCIAL STATEMENTS (CONT’D)


    (3) Other special reserves set aside to meet special needs

        The term” catastrophic event” as used in above means an event that meets the
        conditions of a major disaster as announced by the government, where a single event
        results in cumulative retained losses for all insurance types to a single company of at
        least NT$30 million, and cumulative losses payable for all insurance types by the
        entire insurance-of-the-person sector of at least NT$ 1 billion. Upon the occurrence
        of a catastrophic event, actual retained losses in excess of NT$30 million may be
        withdrawn from the special catastrophe reserve. When a special catastrophe reserve
        has been set aside for more than 15 years, it may be retired and the amount treated as
        income.

        For each type of insurance, when the balance of actual losses minus funds withdrawn
        from that insurance type’s special catastrophe reserve is lower than expected losses,
        the Company set aside 30 percent of the difference to the special risk-volatility
        reserve. When the balance of actual losses minus funds withdrawn from that
        insurance type’s special catastrophe reserve is greater than expected losses, the
        amount in excess may be withdrawn from the special risk-volatility reserve
        previously set aside. If the special risk-volatility reserve for a particular type of
        insurance is insufficient to cover losses, the losses may be withdrawn from the
        special risk-volatility reserve previously set aside for another type of insurance.
        When cumulative provisions for the special risk-volatility reserve exceed 30 percent
        of the amount of retained earned premiums for the current year, that portion in excess
        shall be retired and treated as income.

        With respect to life insurance, health insurance, or annuities with an insurance period
        of greater than one year, where the premiums written for policies entered into on
        January 1, 2001 or later are lower than the premiums required to funds the reserve
        calculated per the provisions in accordance with the principle of providing insurance
        reserves, in addition to the reserve that must be set aside pursuant to the provisions
        with the principle of providing insurance reserves, the Company further set aside a
        special reserve for insufficient premiums to cover the shortfall in premiums not yet
        due. According to Tai-Tsai-Pao No.0920700594 issued by the Ministry of Finance
        on January 24, 2003, in accordance with Article 15, item 1 of Regulations Governing
        the Setting Aside of Various Reserves by Insurance Enterprise, recovered special
        reserves is transferred to special reserve whether or not the Company earns in the
        following year according to the resolution of the shareholders’ meeting.

(d) Claims reserve

    Claims reserve includes reserves provided for incurred but not reported claims and
    reported but not approved claims. For incurred but not reported claims, the reserve on
    accident, health and one-year group term life policies is provided at 1% of net earned
    premiums in the current year. For reported but not approved claims, the reserve is
    provided on the basis of relevant documentation.

    For retention of personal accident insurance contract on January 1, 2006or later, a loss
    reserve is calculated and set aside using a method prescribed by the authority. Such
    calculation is based on claims adjustment experience and expenses.


                                      - 15 -
                       FUBON LIFE ASSURANCE CO., LTD.
                   NOTES TO FINANCIAL STATEMENTS (CONT’D)


          For incurred but not reported claims, the reserve is only provided with an insurance
          period of one year or less due to the revise of Article 17, item 1 of Rules Governing the
          Implementation of Insurance Law since from 2000. For reported but not approved claims,
          the reserve is provided on the basis of relevant documentation with an insurance period of
          more than one year.

(T)   Investment-type insurance policy

      Fubon Life Assurance is engaged in selling investment type insurance policies. The payment
      of premiums, net of administrative expenses, is recorded in a separate account and is used
      only in the way agreed to by the insured. The assets in this separate account are valued at
      market price on value date and the Company adopts related rules and ROC Financial
      Accounting Standards in determining the net assets value. According to the accounting
      practices of the insurance industry, the assets, liabilities, revenue and expenses in this separate
      account are recorded as “investment type insurance policy assets” “Investment – type
      insurance policy liabilities”, “Investment – type insurance policy revenue and “Investment –
      type insurance expenses”, respectively.

(U) Premium income and acquisition costs

      First-year premiums are recognized as income when premiums are collected and the policies
      are approved. Renewal premiums are recognized when collected. Acquisition costs,
      including commissions and other costs related to acquiring new business, are charged to
      current operations as incurred.

(V) Borrowing of Securities

      Fubon Life Assurance borrows securities through the Taiwan Stock Exchange Company. The
      pricing and the borrowing expense of auction trade are settled daily. The expense is
      calculated in accordance with the agreement between the Company and the borrowers. After
      returning the securities, the security broker is paid.

(W) Tax expense

      Fubon Life Assurance adopted the SFAS No. 22 “Accounting for Income Tax” under which
      intra-period tax is allocated in addition to computing the current period income tax payable/
      (refund). Furthermore, deferred income tax liabilities are recognized on future taxable
      temporary differences, and deferred income tax assets on future deductible temporary
      differences, prior year’s loss carry-forwards and investment tax credits. The realization of
      deferred income tax assets is further assessed and a valuation allowance if needed, is provided
      accordingly. Adjustment of prior year’s income tax expense is recorded as current period
      income tax expense in the year of adjustment.

      Deferred income tax assets and liabilities are classified as current or non-current in
      accordance with the underlying assets or liabilities. Deferred tax assets or liabilities are
      classified as current or non-current based on the length of the expected realizable or reversible
      period.




                                               - 16 -
                         FUBON LIFE ASSURANCE CO., LTD.
                     NOTES TO FINANCIAL STATEMENTS (CONT’D)


        The parent company of Fubon Life Assurance, Fubon Finance Holding Co., Ltd., was selected
        as the tax payer to declare a combined final business income tax and an additional 10% surtax
        on undistributed earnings in compliance with Article 49 of the Finance Holding Company
        Law.

        An additional 10% surtax on undistributed earnings is recognized as expense on the date when
        the shareholders meet and decide not to distribute the earnings.

(3) REASON AND EFFECT OF CHANGES IN ACCOUNTING

   Commencing from January 1, 2007, the Company adopted SFAS No. 37: “Intangible Assets” and
   No 38: “Non-Current Asset Held for Sale and Discontinued Operations”. However, the accounting
   change has no influence towards financial statement for the six-month period ended June 30, 2007

   Commencing from January 1, 2006, the Company adopted SFAS No.34 “Financial Instruments:
   Recognition and Measurement”. In accordance with SFAS No.34, the financial assets and liabilities
   at the beginning of 2006 were revalued based on fair value and amortized cost. However, the
   adoption of this new accounting method movement decreased net income and basic earnings per
   share for six-month period ended June 30 ,2006 by $641, 373 and $1.14, respectively. Furthermore,
   in its initial adoption of above- mentioned new accounting standard, the Company reclassified its
   financial assets and liabilities accordingly. Also, adjustments were made for financial assets and
   liabilities measured at fair value, which were accounted for as cumulative effect of change in
   accounting principle and amounted to $63,155 ; and for the financial assets and liabilities measured
   at amortized cost and available-for-sale financial assets, which were accounted for as adjustment
   item of stockholders’ equity and amounted to $2,849,375.

   Commencing from January 1, 2006, the Company adopted revised editions of SFAS
   No.1“Conceptual Framework for Financial Accounting and Preparation of Financial Statements”.
   Under this standard, goodwill is no longer amortized

(4) DETAILS OF MAJOR ACCOUNTS

  (A) CASH AND CASH EQUIVALENTS

        The details of this account were as follows:

                                                                                          (NT$'000)
                                                                               June 30
                                                                        2007            2006
         Cash on hand                                              $       8,019           7,567
         Cash in bank                                                  4,126,030       3,312,687
         Marketable securities                                         3,909,608       2,703,020
         Less: Statutory deposit                                         (31,600)         (1,000)
         Total                                                     $   8,012,057       6,022,274




                                               - 17 -
                      FUBON LIFE ASSURANCE CO., LTD.
                  NOTES TO FINANCIAL STATEMENTS (CONT’D)


(B)   FINANCIAL ASSETS – CURRENT

      (a) The details of the financial assets were as follows:

                                                                                       (NT$'000)
                                                                            June 30
                                                                     2007              2006
           Financial assets measured at fair value through
           profit or loss-current
            Stocks of listed companies                           $   1,175,684                -
            Cross currencies swaps                                      33,666           77,584
            Forward exchange contracts                                 343,659          120,717
           Total                                                 $   1,553,009          198,301

           Availabe-for-sale financial assets-current
            Stock of listed companies                            $ 31,607,666         17,271,327
            Foreign stocks                                                  -              3,733
            Government bonds                                                -             60,844
            Corperate bonds                                                 -            120,170
            Financial bonds                                           750,097          1,514,804
            Credit linked notes                                       140,176            152,029
            Foreign beneficiary certificate                         7,588,711          4,681,084
            Domestic beneficiary certificate                        5,230,247          8,560,697
           Subtotal                                                45,316,897         32,364,688
           Less: Unrealized gain or loss on foreign exchange              585             40,506
           Total                                                 $ 45,317,482         32,405,194

           Debt investments with no active market-current
            Corporate bonds                                      $           -          468,443
            Foreign corporate bonds                                      69616                -
            Financial bonds                                          3,567,468          508,333
            Foreign financial bonds                                    625,743                -
            Asset securitization beneficiary certificate                30,000
            Foreign fund                                                90,020                 -
            Foreign stock                                              132,291
           Less: Unrealized gain or loss on foreign exchange              (773)               -
           Total                                                 $   4,514,365          976,776
           Other financial assets-current
            Structured deposits                                  $           -          291,800




                                             - 18 -
                FUBON LIFE ASSURANCE CO., LTD.
            NOTES TO FINANCIAL STATEMENTS (CONT’D)


                                                                                 (NT$'000)
                                                                       June 30
                                                               2007              2006
    Financial liabilities measured at fair value
    through profit or loss -current
    Forward exchange contracts                            $      67,215           464,108
    Stock index futures-eletronic sector index futures              853                 -
    Total                                                 $      68,068           464,108

    Derivative financial liability for hedging -current
    Interest rate swap                                  $             191                -

(b) The discretionary investment trust fund represented Fubon Life Assurance’s funds
    intended for investment purposes. The investment activities of these funds amount to
    NT$4,500,000 thousand and NT$4,000,000 thousand as of June 30, 2007 and 2006 are
    currently being managed by Fubon Securities Investment Trust Co., Ltd, ING Securities
    Investment &Trust Co., Ltd. and Cathay Securities Investment Trust Co., Ltd. under
    Fubon Life Assurance’s one-year Discretionary Investment Service Contract with Fubon
    Securities Investment Trust Co., Ltd , Ltd, ING Securities Investment &Trust Co., Ltd.
    and Cathay Securities Investment Trust Co., Ltd. The funds’ activities are limited to
    investment in securities being traded in the Taiwan Stock Exchange and in the Taiwan
    OTC Exchange, securities being underwritten subject to approval by the SFC,
    Government bonds and corporate bonds, futures, interest future hedge contracts,
    convertible bonds, bonds and notes sold under agreements to repurchase, and other
    investments approved by the SFC. Idle funds are placed in banks. The investment
    manager is appointed and agreed by both parties and operates in accordance with Article
    146-1 of the Insurance Law. The investment fund trustee’s compensation, fees and
    expenses and the method and schedule of payment conform to the following:

    - Calculation of compensation, fees and expenses: the agreed fee ranged from 0.1% to
       2% for the six-month period ended June 30, 2007 and ranged from 0.1% to 0.75% for the
       six-month period ended June 30, 2006 adjusted by operating performance.

    - Method of payment: remittance to Fubon Securities Investment Trust Co., Ltd. from
      Fubon Life Assurance’s custodial institution.

    - Schedule of payment: every fifth working day of the following month.

    As of June 30, 2007 and 2006, the details of the market values of investments were as
    follows:

                                                                                 (NT$'000)
                                                                       June 30
                                                               2007               2006
    Cash and cash equivalents                             $   1,528,623          2,087,103
    Stock of listed companies                                 3,530,540          1,781,175
    Convertible corporate bonds                                  11,775                  -
    Total                                                 $   5,070,938          3,868,278


                                      - 19 -
                       FUBON LIFE ASSURANCE CO., LTD.
                   NOTES TO FINANCIAL STATEMENTS (CONT’D)


          As of June 30, 2007 and 2006, the details of equity investments lent were as follows:

                    Name of stocks                Shares (thousand)                   Period
           June 30,2007
           Giant MFG Co., Ltd                                         47       2007.05.24~2007.11.23
           Foxconne Precision Comppnent
           Co. Ltd.                                               100          2007.05.31~2007.12.05
           Uni-President Enterprises Corp.                      2,000          2007.05.28~2007.11.27
           Yang Ming Marine Transport Corportaion                 400          2007.06.05~2007.12.04
           June 30,2006
           Hsinchu International Bank                           4,500          2006.03.27~2006.09.26


      (d) Please refer to note (4)-(F) for the terms and nature of structured deposits.

(C)   SHORT-TERM ADVANCE RECEIVABLES

      Pursuant to the approval of the Ministry of Finance, if payment for the insured’s premium is
      overdue, Fubon Life Assurance automatically grants an advance to the insured and the
      proceeds there of are offset against the overdue premium in accordance with the contract,
      provided that the contract has a cash surrender value. However, the insured may formally
      notify Fubon Life Assurance to stop this automatic payment. The balances of short-term
      advance receivables as of June 30, 2007 and 2006 were NT$881,306 thousand and
      NT$736,494 thousand, respectively.

(D) POLICY LOANS

      The details of this account were as follows:

                                                                                           (NT$'000)
                                                                                   June 30
                                                                            2007            2006
      Policy loans                                                $        5,235,805       5,054,157

      Pursuant to the Insurance Law, the insurer is able to apply for life insurance loan to the extent
      of the value of insurance contract reserves. If the repayment of principal and interest exceeds
      the value of insurance contract reserves, the insurance contract is suspended.




                                              - 20 -
                      FUBON LIFE ASSURANCE CO., LTD.
                  NOTES TO FINANCIAL STATEMENTS (CONT’D)


(E)   COLLATERAL LOANS

      The details of this account were as follows:

                                                                                       (NT$'000)
                                                                            June 30
                                                                     2007              2006
       Collateral loans                                          $   8,093,004         4,488,544
       Allowance for loan losses                                       (31,209)          (30,912)
       Net                                                       $   8,061,795         4,457,632


(F)   FINANCIAL ASSETS-NON CURRENT

      (a) The details of the financial assets were as follows:

                                                                                       (NT$'000)
                                                                            June 30
                                                                     2007              2006
           Financial assets measured at fair value
           through profit or loss-noncurrent
            Convetible bonds                                     $    196,007           607,292
            Interest rate swaps                                        53,220             7,985
            Cross currencies swaps                                      6,510                 -
            Forword Exchange contracts                                 28,550                 -
           Total                                                 $    284,287           615,277

           Available for Sale financial asets -current
            Stock of listed companies                            $  2,416,565          3,815,220
            Government bonds                                       25,910,549         29,702,002
            Corportate bonds                                        2,312,548          2,015,117
            Financial bonds                                        12,869,178         10,027,062
            Asset Securitization beneficiary cetificate             8,845,906          2,277,268
           Subtotal                                                52,354,746         47,836,669
           Less: statutory deposit                                   (994,607)          (997,834)
           Total                                                 $ 51,360,139         46,838,835

           Financial assets measured at cost-non current
           Stock of non-listed companies                         $   1,965,894         2,682,342


          Stock investment of non-listed companies held by the Company with no quoted market
          price and whose fair value cannot be reliably measured are stated at cost.




                                             - 21 -
                FUBON LIFE ASSURANCE CO., LTD.
            NOTES TO FINANCIAL STATEMENTS (CONT’D)



                                                                                  (NT$'000)
                                                                       June 30
                                                                2007               2006
     Debt investments with no active market-non current
      Corperate bonds                                 $ 6,165,721                 6,180,046
      Financial bonds                                    18,212,786              21,762,893
      Foreign corperate bonds                            25,976,895              25,313,922
      Foreign financial bonds                            36,871,278              29,323,154
      Foreign structured deposits                         8,404,496               9,262,150
      Preferred stock                                     6,249,619               6,249,619
      Asset Securitization beneficiary certificate        1,138,634               1,179,801
     Subtotal                                           103,019,429              99,271,585
     Less: Unrealized loss on foreign exchange             (697,277)             (1,320,003)
     Total                                            $ 102,322,152              97,951,582

     Other financial assets-non current
      Structured deposits                                   $ 13,717,600         24,030,300

     Derivative financial asset for hedging-noncurrent
     Interest rate swap                                $           15,241                 -

     Financial liabilities measured at fair value
     through profit or loss-non current
      Cross currencies swaps                                $    277,723            515,971
      Interest rate swaps                                            -              315,527
      Forward exchange contracts                                   3,449                -
     Subtotal                                               $    281,172            831,498

     Derivative financial liabilities for hedging-noncurrent
     Interest Rate Swap                                   $         4,141           114,087


(b) Structured deposits are recorded at cost stated in the contracts, and the interest revenue
    calculated by normal market rate, conjunctive finance index (rate of bonds, exchange,
    rate of CP2, London Inter Bank offered Rate (Libor)), and Constant Maturity Swap
    (CMS). Interest income thereon is recognized after holding the structured deposits to
    maturity. Impairment of principals would be occurred when investors of structured
    deposits redeem structured deposits before maturity date.

(c) Structured bonds are recorded at cost, and the rate of bonds calculated by shift of the
    conjunctive objective. Interest income is recognized when took it every maturity date.
    The conjunctive objectives are Libor of three to six months, hedged fund, fund of
    handling exchange rate, and CMS. The issuers of bonds are international bank, and they
    have better credit level.




                                       - 22 -
                                      FUBON LIFE ASSURANCE CO., LTD.
                                  NOTES TO FINANCIAL STATEMENTS (CONT’D)


      (G) Derivative Financial instrument and hedging accounting

               (a) Derivative financial instruments

                     1.     As of June 30, 2007 and 2006, the details of the derivative products were as follows:

                                                                                                                               (NT$'000)
                                                                                                June 30
                                                                          2007                                   2006
                                                                 Book Value    Principal                Book Value    Principal
Derivative financial instrument-assets(liabilities)
 Foreign exchange forward contracts                   301,545                         64,324,275            (343,391)         63,654,527
Cross curremcies swaps                               (237,547)                        11,151,495            (438,387)          9,207,783
 Interest rate swaps                                   64,129                          9,132,000            (421,629)          6,100,000
Stock Index futures-eletronic sector index futures       (853)                            78,093                    -                -
                                                   $ 127,274                          84,685,863          (1,203,407)         78,962,310


                     2.     As the mention above, presentation of derivative financial assets or liabilities present
                            as follow:

                                                                                                                              (NT$'000)
                                                                                  June 30 , 2007

                                                                                                       Stock index futures-
                                         Cross currencies                         Foreign exchange       eletronic sector
                                              swaps         Interest rate swaps   forword contract        index futures          Total

Financial assets measured at fair
value through profit or loss-current
                                         $       33,666                     -            343,659                         -       377,325

Financial assets measured at fair
value through profit or loss-non                  6,510              53,220                28,550                        -        88,280
current

Financial liabilities measured at fair
value through profit or loss-current
                                                        -                   -             (67,215)                  (853)        (68,068)

Financial liabilities measured at fair
value through profit or loss-non               (277,723)                    -              (3,449)                       -      (281,172)
current

Derivative financial assets for
hedging-noncurrent
                                                        -            15,241                        -                     -        15,241

Derivative financial assets for
hedging-current
                                                        -               (191)                      -                     -           (191)

Derivative financial liabilities for
hedging-noncurrent
                                                        -             (4,141)                      -                     -         (4,141)

                                         $     (237,547)             64,129              301,545                    (853)        127,274




                                                                  - 23 -
               FUBON LIFE ASSURANCE CO., LTD.
           NOTES TO FINANCIAL STATEMENTS (CONT’D)



                                                                                                     (NT$'000)
                                                                      June 30, 2006
                                       Cross currencies                           Foreign exchange
                                            swaps          Interest rate swaps    forword contract     Total

Financial assets measured at fair
value through profit or loss-current
                                       $       77,584                         -          120,717       198,301

Financial assets measured at fair
value through profit or loss-non                       -              7,985                      -       7,985
current
Financial liabilities measured at
fair value through profit or loss-                     -                      -          (464,108)    (464,108)
current
Financial liabilities measured at
fair value through profit or loss-           (515,971)            (315,527)                      -    (831,498)
non current

Derivative financial liabilities for
hedging-noncurrent
                                                       -          (114,087)                      -    (114,087)

                                       $     (438,387)            (421,629)              (343,391)   (1,203,407)


3.    Forward contracts, interest swaps, and cross currency swaps are contracted primarily
      to hedge against exchange risk from the Company’s foreign-denominated
      investments. The purpose of our company’s hedge strategy is to avoid most market
      price risk.

4.    The Company’s deposits with the customers' margin accounts amounted to
      NT$30,230 and NT$64,652 thousand as guarantee for its futures transactions as of
      June 30, 2007 and 2006. They are recognized as refundable deposit-future deposit.
      The gains or losses of futures contracts were as follows:

                                                                                                     (NT$'000)
                                                                                          June 30
                                                                                  2007               2006
      Unrealized gains (loss) on futures contracts                        $              766                   -

      Realized gains (loss) on futures contracts                          $        (19,654)            31,104


5.    The Company dealt in currencies option contract and paid NT$11,789thousand to
      gain the pull option (nominal principal $80,000 thousand), and the strike price was
      from 33.28 to 33.30 (US dollar/NT dollar) for the six-month period ended June 30,
      2007. The options have already expired or exercised and recognized disposal gain of
      NT$ 22,800 thousand as of June 30, 2007.




                                              - 24 -
                 FUBON LIFE ASSURANCE CO., LTD.
             NOTES TO FINANCIAL STATEMENTS (CONT’D)


    6.   As of June 30, 2007, the details of unrealized gains or losses on measured financial
         assets and liabilities were as follows:

                                                                                          (NT$'000)
          Gain on valuation of financial assets:                     2007                 2006
           Stocks of listed companaies                   $             47,149                    -
           Interest rate swaps                                         24,033               17,384
           Cross currencies swaps                                      40,176               91,406
           Exchange forward contracts                                  93,484                    -
           Government bonds and financial bonds for hedging                 -               21,352
          Total                                          $            204,842              130,142

          Loss on valuation of financial assets:
           Convertible bonds                                    $        11,063              34,509
           Foreign exchange forward contract                                  -             140,300
           Prepaid Investment                                                 -              17,148
          Total                                                 $        11,063             191,957

          Gain (loss) on valuation of financial liabilities:
           Exchange forward contracts                         $        285,940             (464,108)
           Cross currencies swaps                                      128,669              (76,616)
           Interest rate swaps                                          68,921             (429,613)
           Stock index futures-eletronic sector index futures              766                    -
          Total                                               $        484,296             (970,337)


(b) Hedge accounting

    1.   Cash flow hedge

         The assets and liabilities of the Company are charged by floating interest rate. It may
         cause risks that the future outflow of those assets and liabilities will fluctuate due to
         the change in market interest rate. However, the Company assessed the potential
         risks could be significant in the future, so it signed the interest rate swap contract for
         hedging.

         The cash flow hedging item and derivative financial instrument for hedging were as
         follows:

                                         Fair vale of
                                           hedging          Cash flow during      Related income/loss in
 Hedging item     Hedging instrument     instrument         expected period       the income statement
Folating
corporate bonds
、financial        Interest rate swap    $        10,909   2008.03.24~2014.02.13 2008.03.24~2014.02.13
bonds and
principle




                                        - 25 -
                   FUBON LIFE ASSURANCE CO., LTD.
               NOTES TO FINANCIAL STATEMENTS (CONT’D)


            The gain or loss arose from the cash flow hedge was recognized as the adjustment of
            shareholders’ equity as of June 30, 2007 as follows:

                                                                                       (NT$'000)
                                  Items                                              2006
            Current adjustment for shareholders' equity                        $          10,915

            Shareholders' equity transferred into non financial
            laibilities (recorded as deferred taxable laibilities)             $            2,729


       2.   Fair value hedge
            The Company possessed the assets with fixed interest rate which may fluctuate due
            to the change in market interest rate. It is the risk due to fair value fluctuation. The
            Company assessed this risk could be significant in the future. Therefore, it signed the
            interest rate swap contract for hedging. However, the Company has canceled this
            original hedge since June 2006.

            The detail of fair value hedge and derivative financial instrument for hedging as of
            June 30, 2006 were as follow:

                                                          Financial        Fair value of financail
                    Hedging Items                        instrument           instrument for
            Government bonds and                    Interest rate swap                   (114,087)
            financial

(H) INVESTMENTS UNDER EQUITY METHOD

                                                                                        (NT$'000)
                                                                     June 30
                                                 2007                            2006
                                            Amount      %                  Amount       %
    Fubon Venture Capital Ltd.             $ 53,634   20.00%                140,524   20.00%
    Met Life Fubon Limited                         -        -               342,704   50.00%
                                           $ 53,634                         483,228


   For six-month period ended June 30 , 2007 and 2006, investment gains from long-term equity
   investments were based on investees’ financial statements audited by other certified public
   accountants and amounted to NT$7,108 thousand and NT$34,076 thousand, respectively.

   On May 18, 2007, Fubon Venture Capital Co., Ltd obtained approval from stockholder’s
   meeting to dissolve and liquidate its business, it approval June 30, 2007.The refund amount
   due to the liquidation is based on the holding share.




                                           - 26 -
                      FUBON LIFE ASSURANCE CO., LTD.
                  NOTES TO FINANCIAL STATEMENTS (CONT’D)


      The Company sold the share of Met Life Fubon Limited (Citi Fubon Life Insurance Company
      Hong Kong Ltd.) to MetLife Group Co., Ltd with NT$1,839,040 (US$56,000) which was
      approved by the board of directors, and it recognized the investment gain of NT$12,000. In
      addition, it recognized the gain on disposal of investment of NT$1,025,192 thousand after
      deducting other essential expense.

(I)   REAL ESTATE INVESTMENTS

                                                                                        (NT$'000)
                                                                             June 30
                                                                      2007               2006
      Land                                                       $   5,577,134          2,323,934
      Buildings                                                      1,502,845            206,266
      Prepaid investment                                                 5,644                401
      Less:Accumulated depreciation-buildings                          (20,385)            (5,157)
      Total                                                      $   7,065,238          2,525,444


      In March, 2007 the Company purchased the lands and buildings which located in No. 0454
      land and No.02476 to 02482, 02484, 02485 and 02487 building, Sec. 3, Changchun Rd.,
      Zhongshan District, Taipei City, from Fubon Constructer Co., and the transaction was done in
      the same month. The contract amount was NT$1,890,000 thousand and the other acquisition
      cost transferred into real estate investment amounted to NT$1,900,672.

      In March, 2007 the Company purchased the lands and buildings which located in No. 485-2
      land and building, Sec.1 Linyi Rd.. Zhongzheng District, Taipei City from Fubon Constructer
      Co. , and the transaction was done in the same month. The contract amount was NT$737,800
      thousand and the other acquisition cost transferred into real estate investment amounted to
      NT$737,857.

      On September 14,2006, the Company purchased the land and building located in No. 193,
      Sec.4, Rueiguang Rd., Neihu District from Winbond Electronic Corp. amounted to
      NT$1,888,000 thousand , and the actual payment and other necessary expense was amounted
      to NT$1,898,544 thousand as of December, 2006.

      In June, 2006, the Company sold the land and buildings located in No.7, 10-1, 11, 12, 13, 14-2
      Land, No.2 Tianmu Sec., Shihlin District, Taipei City to Fubon Land Development for
      NT$1,713,000 thousand. After deducting the necessary expense from the contract price was
      NT$295,898 thousand, which is recognized as the gain of the real estate investments.

      In March, 2006, the Company negotiated price with Cheng Chen Development for the land
      and buildings located in No.252-1, 252-3, 252-4, 253, 257, 258, 259, 260, 261, 262 Land,
      No.6, Ren-ai Sec., Da-an District, Taipei City and signed a purchase contract with Cheng
      Chen Development to buy these properties. The Company finished the transaction in March,
      2006, and the contract price and other necessary expense was amounted to NT$1,118,912
      thousand.




                                             - 27 -
                      FUBON LIFE ASSURANCE CO., LTD.
                  NOTES TO FINANCIAL STATEMENTS (CONT’D)


      In March, 2006, the Company negotiated price with The First Insurance for the land and
      buildings located in No.245-2, 245-5, 246-2, 246-5, Land, No.6, Ren-ai Sec., Da-an District,
      Taipei City and signed a purchase contract with The First Insurance to buy these properties.
      The Company finished the transaction in March, 2006, and the contract price and other
      necessary expense was amounted to NT$445,022 thousand.

(J)   PROPERTY AND EQUIPMENT

      As of June 30, 2007 and 2006, none of the above assets well pledged to or secured by any third
      party.

(K) GOODWILL

      On July 19, 2000, Fubon Life Assurance entered into a “Business Transfer Agreement” (the
      “Agreement”) with Citicorp Life Insurance Ltd., Taiwan Branch (“CitiLife”). Under this
      Agreement, Fubon Life Assurance acquired the business and related assets and liabilities of
      CitiLife. This Agreement was approved by the Ministry of Finance on November 14, 2000
      and executed on January 1, 2001. It resulted in a payment of goodwill of NT$764,102
      thousand. The unamortized balance as of June 30, 2007 and 2006 amounted to NT$ 515,769
      thousand and NT$ 553,974 thousand, respectively.

(L)   REFUNDABLE DEPOSITS

      The details of this account were as follows:

                                                                                        (NT$'000)
                                                                             June 30
                                                                     2007               2006
      Statutory deposits                                         $     994,607            997,834
      Leasing deposits                                                  24,481             23,150
      Futures deposits                                                  30,230             64,652
      Others                                                            38,019            411,854
      Total                                                      $   1,087,337          1,497,490


      Articles 141 and 142 of the Insurance Law require an insurance company to place with the
      government statutory deposits equal to 15% of its paid-in capital. Such deposits will not be
      returned until cessation of business and liquidation has been completed. Fubon Life
      Assurance both deposited government bonds with par value of NT$ 847,200 thousand (fair
      value of NT$ 994,607 thousand and 997,834 thousand) with the Central Bank of China as of
      June 30, 2007 and 2006.




                                             - 28 -
                    FUBON LIFE ASSURANCE CO., LTD.
                NOTES TO FINANCIAL STATEMENTS (CONT’D)


(M) NON-PERFORMING LOANS

    The details of this account were as follows:

                                                                                    (NT$'000)
                                                                         June 30
                                                                  2007              2006
    Non-Performing loans transferring from policy laon       $       3,558                  -
    Other non-performing loans                                       5,851              1,428
    Allowance for overdue receivable losses                         (5,607)              (828)
    Net                                                      $       3,802                600


    Overdue loans are reclassified to non-performing loans within six months from due date,
    accrued reinsurance claims receivable and reinsurance recovery receivable within nine
    months from due date and other accounts receivable and accrued interest are reclassified to
    non-performing loans within three months from due date. Bad debts are recorded after
    deducting the anticipated recoveries.

(N) INVESTMENT – TYPE INSURANCE POLICY

    The details of this account were as follows:

                                                                                    (NT$'000)
                                                                         June 30
                                                                  2007              2006
    Investment-type insurance policy assets
     Receivables                                             $  2,544,553           1,215,443
     Securities                                                57,966,442          38,583,474
    Total                                                    $ 60,510,995          39,798,917

    Investment-type insurance policy liabilities
     Reserve                                                 $ 60,510,995          39,798,917

    Investment-type insurance policy revenues
     Gross written premiums                                  $ 20,483,394           5,804,928
     Recovered reserves                                         7,932,768           3,345,691
     Interest income                                              901,245               4,293
     Gain on disposal of securities                                     -             994,540
     Gain on foreign exchange                                     808,587                   -
    Total                                                    $ 30,125,994          10,149,452




                                           - 29 -
                          FUBON LIFE ASSURANCE CO., LTD.
                      NOTES TO FINANCIAL STATEMENTS (CONT’D)


                                                                                             (NT$'000)
                                                                                  June 30
                                                                          2007               2006
      Investment-type insurance policy expenses
       Claim                                                          $  8,989,039           3,456,522
       Provision for reserve                                            20,490,624           6,044,029
       Loss on disposal of securities                                      537,153                   -
       Loss on foreign exchange                                                  -             559,434
       Administrative expenses                                             109,178              89,467
      Total                                                           $ 30,125,994          10,149,452


(O) PENSION

                                                                                             (NT$'000)
                                                                                June 30
                                                                          2007               2006
      Value of pension fund assets                                    $     31,606             28,750
      Pension expense:
      Provisions for defined benefit plan                                    7,527              1,091
      Provisions for defined contribution plan                              37,953             26,529
      Total                                                           $     45,480             27,620
      Accrued pension liabilities                                     $    142,256            131,933


(P)   BONDS SOLD UNDER AGREEMENTS TO REPURCHASE

                                                                                             (NT$'000)
                                                                              June 30
                                                                      2007                  2006
      Government bonds sold under agreements to repurchase    $        4,627,868             8,020,781

      Term                                                   2007.07.02~2007.07.23 2006.07.03~2006.07.24
      Interest Rate                                               1.730%~2.100%       1.440%~1.460%


      In accordance with Tai-Tsai-Pao No.832062766 issued by the Ministry of Finance dated
      January 24, 1995, the government bonds held by the Company to deploy capital under
      agreements to repurchase through securities dealer.

(Q) SHAREHOLDERS’ EQUITY

      (a) Common stock

          As of June 30, 2007 and 2006, Fubon Life Assurance had authorized capital of NT$7.2
          billion and issued common stock of NT$5.648 billion.



                                                 - 30 -
                FUBON LIFE ASSURANCE CO., LTD.
            NOTES TO FINANCIAL STATEMENTS (CONT’D)


(b) Capital surplus

    Pursuant to the ROC Company Law, capital surplus is used only to offset a deficit or to
    increase share capital. Capital surplus is not distributable as cash dividends. Issuance of
    new shares from capital surplus is made only once a year. In addition, the amount that
    can be transferred to common stock shall not exceed the limit prescribed under the
    regulations of the Securities and Futures Commission.

(c) Retained earnings and earnings appropriation

    1.   Legal reserve

         The ROC Company Law requires the Company to allocate 10% of its current annual
         net income (less losses of prior years )as legal reserve, until such reserve equals the
         amount of common stock. The legal reserve shall be used exclusively to cover losses
         and shall not be distributed as cash dividends, but the legal reserve may be converted
         to common stock when it reaches an amount equal to at least one-half of common
         stock. Such distribution shall not exceed one-half of the legal reserve.

    2.   Special reserve

         In accordance with Tai-Tsai-Pao No.0920700594 issued by the Ministry of Finance,
         recovered special reserves is transferred to special reserve whether or not the
         company earns in the following year according to the resolution of the shareholders’
         meeting.

    3.   Distribution of earnings

         As prescribed under the Company’s Articles of Incorporation, the remaining annual
         earnings after appropriation for legal reserve and special reserve is distributed as
         follows:

         • 6% of remaining balance as minimum dividends to shareholders;

         • 1% ~ 5% of remaining balance as employees bonus; and

         • Remaining balance and prior years’ unappropriated retained earnings as
           additional dividends to shareholders upon shareholders’ approval.

    The distribution for employee's bonus and cash dividend in 2006 amounted to $19,429
    thousand, and $2,262,365 thousand were approved by the shareholders.

    The distribution for employee's bonus and cash dividend in 2005 amounted to $18,863
    thousand, and $2,206,337 thousand were approved by the shareholders.

    The earning distribution is as the same as the board of directors’ decision. The above
    employee bonus paid in cash and it is recorded as the current year’s expense. The earning
    per share in 2006 and 2005 decreased from 4.75 to 4.72 and from 4.72 to 4.97,
    respectively.


                                       - 31 -
                 FUBON LIFE ASSURANCE CO., LTD.
             NOTES TO FINANCIAL STATEMENTS (CONT’D)


(R)TAX EXPENSE

  (a) The components of income tax expense were as follows:

                                                                                 (NT$'000)
                                                               2007              2006
      Current income tax expense                           $    146,405           147,257
      Deferred income tax item
       Unrealized exchange loss                                   53,091         (194,537)
       Pension reserve not withdraw                               (1,617)               -
       Loss on valuation of financial instrument                 169,519         (306,821)
       Finance and tax difference in saralary expense             (2,655)          (2,669)
       Increase in loss carry forward                                  -          177,746
       Increase(decrease) in allowance for deferred                4,272          326,599
       assets
      Adjustments on prior year's income tax                     (29,594)            5,189
      Adjustments for withholding tax on bonds interest
      which was held by the owner prior to Fubon Life                  -           (3,871)
      Other                                                            -           (7,575)
      Income tax expense                                   $     339,421          141,318


  (b) The income tax rate was 25%, and the company complied with “Income Basic Tax Act”
      which is declared in January 1, 2006 to calculate the basic income tax.

      For six-month periods ended June 30, 2007 and 2006, the differences between the income
      tax expense calculated based on net income before tax and income tax provision were
      shown as follows:

                                                                                 (NT$'000)
                                                                 2007             2006
      Income tax expense before adjustments                    $ 766,252          119,300
      Tax effect of timing differences:
       Tax exempt securities transaction gain                    (265,616)       (162,347)
       Dividend income                                            (90,825)        (45,457)
       Gain from disposal of land                                       -         (76,042)
       Tax paid on interest income                                (27,511)         (5,959)
       Investment income under the equity method                   (1,777)         (8,519)
       Investment gain on disposal of the subsidary               (61,298)              -
       Additional tax on Income Basic Tax Act                      45,518               -
       Increase of allowance for deferred income tax asset          4,272         326,599
       Adjustments for withholding tax on bonds interest which          -          (3,871)
       was held by the owner prior to Fubon Life Assurance
       Prior year's estimated tax difference                      (29,594)          5,189
       Others                                                           -          (7,575)
      Income tax expense                                       $ 339,421          141,318




                                       - 32 -
                         FUBON LIFE ASSURANCE CO., LTD.
                     NOTES TO FINANCIAL STATEMENTS (CONT’D)


      (c) The components of deferred income tax assets and liabilities and their income tax effect
          were shown as follows:

                                                                                                    (NT$'000)
                                                                       2007                      2006
                                                                               Income                 Income
                                                                 Amount       tax effect    Amount   tax effect
Deferred income tax assets (liabilities)-current:
 (Gian) loss on valuation of financial instrument            $ (678,075)      (169,519)    1,227,286    306,821
  Unrealized exchange (gain) loss                              (212,364)       (53,091)      778,148    194,537
  Unrealized gain of available-for sale financial assets       (383,296)       (95,824)            -          -
  Unrealized gain due to cash flow transaction for hedging      (10,915)        (2,729)            -          -
  Allowance for deferred income tax assets                            -              -             -   (501,358)
Net deferred income tax assets-current                                        (321,163)                       -

Deferred income tax assets-non current:
 Pension reserve not withdraw                                $     40,736       10,184        19,028       4,757
 Finance and tax difference in saralary expense                    42,696       10,674        21,948       5,487
 Allowance for deferred income tax liability                            -      (20,858)            -      (2,987)
Net deferred income tax assets-non current                                           -                     7,257


      (d) Commencing in 2002, Fubon Life’s parent company, Fubon Financial Holding Company,
          elected to be the tax payer itself, and jointly declare and report profit-seeking enterprise
          income tax and the 10% tax surcharge on surplus retained earnings of a profit-seeking
          enterprise in accordance with the relevant provision of the Income Tax Law. Therefore,
          Fubon Life’s loss carry forward benefits incurred in 2002 was recognized by Fubon
          Financial Holding. However, in 2003, according to the (92) Chi-Mi No.239 issued by the
          Accounting Research and Development Foun-dation, Fubon Life recognized loss carry
          forward benefits, which was utilized by other Fubon Financial Holding Company’s
          Subsidiaries.

           For six-month period ended June 30, 2007 and 2006, the current income expense,
           deferred income tax expense (benefit), deferred income tax liabilities (assets), and
           income tax payable (receivable) calculated in conformity with R.O.C. SFAS No.22,
           “Accounting for Income Tax”, were reconciled with the related balances calculated for
           combined corporate income tax return filing with Fubon Financial Holding Company as
           follows:

                                                                                 2007
                                                                                                  Income tax
                                                                                 Deferred           payable
                                                     Current           Deferred   income            (due to
                                                     income           income tax    tax            affiliated
                                                   tax expense          expense  assets-net         parties)
Amounts calculated under SFAS                     $     146,405          222,610  321,163             369,015
Adjustments difference                                        -                -         -                    -
Amounts calculated for combined
corporate income tax return filing                $      146,405          222,610       321,163        369,015

                                                      - 33 -
                      FUBON LIFE ASSURANCE CO., LTD.
                  NOTES TO FINANCIAL STATEMENTS (CONT’D)



                                                                   2006
                                                                       Deferred   Income tax
                                            Current        Deferred     income   payable (due
                                          income tax      income tax tax assets- to affiliated
                                            expense         expense       net       parties)
Amounts calculated under SFAS            $    139,682           318        7,257      147,257
Adjustments difference                               -             -           -              -
Amounts calculated for combined
corporate income tax return filing       $      139,682          318          7,257       147,257


     (e) The R.O.C. tax authorities have assessed the Company’s income tax returns through
         2001. And, the R.O.C. tax authorities assessed to increase the amortization of discount or
         premium on bonds and undistributed earning which both amounted to NT$520,997
         thousand. The Company disagreed with the previous assessed taxable income and
         decided to apply to reexamine it. However, the Company still increased to recognize the
         tax expense in 2005 due to the conservative and prudence principle. In addition, the
         R.O.C. tax authorities have assessed the parent company of the Company’s income tax
         return through 2002, to increase its the amortization of discount or premium on bonds
         amounted to NT$601,837 thousand and not to deduct the tax expense for withholding tax
         on bonds interest which was held by the owner prior Fubon Life Assurance amounted to
         NT$3,603 thousand. Commencing in 2002, The Company’s parent company, Fubon
         Financial Holding Company, elected to be the tax payer itself, and jointly declare and
         report profit-seeking enterprise income tax, so the Company increased income expense
         which amounted to NT$51,880 thousand. The parent company of the Company cannot
         agree with this assessment, so it also applied to reexamine it.

     (f) Imputed tax information:

                                                                                       (NT$'000)
                                                                       2007            2006
          Undistributed earnings:
           After 1998                                           $    2,725,627          399,035
          Total                                                 $    2,725,627          399,035
          Shareholders' deductible income tax account           $      621,053          371,759
          Tax credit percentage                                        23.16%           33.33%
                                                                    (estimated)          (actual)




                                             - 34 -
                      FUBON LIFE ASSURANCE CO., LTD.
                  NOTES TO FINANCIAL STATEMENTS (CONT’D)



(S)   EARNINGS PER SHARE

      As of June 30, 2007 and 2006, the Company’s earnings per share calculated based on simple
      capital structure respectively were as follows:

                                                                  2007
                                          Amount                  Outstandin Earnings Per Share
                                     Before      After                g       Before    After
                                      Tax        Tax              Number of    Tax       Tax
      Basic earnings per share
      of common stock:
      Net income for 2007          $ 3,065,048        2,725,627        564,800     5.43        4.83
      Net income belongs to
      common shareholders for
      2007                         $ 3,065,048        2,725,627                    5.43       4.83


                                                                  2006
                                          Amount                  Outstandin Earnings Per Share
                                     Before      After                g       Before    After
                                      Tax        Tax              Number of    Tax       Tax
      Basic earnings per share
      of common stock:
      Net income for 2006          $ 477,198           335,880         564,800     0.84       0.59
      Cumulative effect of
      change in accounting              63,155          63,155         564,800     0.11       0.11
      Net income belongs to
      common shareholders for
      2006                         $ 540,353           399,035                     0.95       0.70


(T)   RESERVES FOR OPERATIONS

      (a) Reserve for unearned premiums

          The details of this account were as follows:

                                                                                          (NT$'000)
                                                                               June 30
                            Type of Policy                               2007             2006
          Life                                                     $       35,225           33,178
          Health                                                           42,602           40,097
          Accident                                                         32,540           48,682
                                                                   $      110,367          121,957




                                             - 35 -
                FUBON LIFE ASSURANCE CO., LTD.
            NOTES TO FINANCIAL STATEMENTS (CONT’D)



(b) Policy Reserve

    The details of this account were as follows:

                                                                                (NT$'000)
                                                                     June 30
                      Type of Policy                         2007              2006
     Life                                                $ 155,645,614       138,070,884
     Health                                                  6,191,716         5,005,845
     Annuity                                                57,927,224        62,668,201
                                                         $ 219,764,554       205,744,930


(c) Special reserve for life insurance proceeds

    The details of this account were as follows:

                                                                                (NT$'000)
                                                                     June 30
                      Type of Policy                          2007              2006
     Life                                                $     490,769           585,527
     Health                                                    178,266           207,761
     Accident                                                  133,674           144,997
                                                         $     802,709           938,285


    In accordance with Tai-Tsai-Pao No.0920700594 issued by the Ministry of Finance,
    special claim reserve of NT$120,664 thousand and NT$108,587 thousand, which was
    released in 2006 and 2005, was transferred to special reserve based on the resolution of
    the shareholders’ meeting in 2007 and 2006, respectively.

(d) Special reserve for indemnity payments

    The details of this account were as follows:

                                                                                (NT$'000)
                                                                     June 30
                      Type of Policy                          2007              2006
     Life                                                $      25,881            12,111
     Health                                                      8,576             9,634
     Accident                                                   14,476             5,789
                                                         $      48,933            27,534




                                       - 36 -
                       FUBON LIFE ASSURANCE CO., LTD.
                   NOTES TO FINANCIAL STATEMENTS (CONT’D)



(U) INFORMATION ON DERIVATIVE TRANSACTIONS

   (a) Fair value information

         As of June 30, 2007 and 2006, the fair value of the Company’s financial assets and
         financial liabilities were as follows:
                                                        June 30, 2007              June 30,2006
                                                   Book value    Fair value   Book value   Fair value
    Financial assets:
    Cash and cash equivalents                       8,012,057     8,012,057    6,022,274    6,022,274
    Financial assets measured at fair
     value through profit or loss-current           1,553,009     1,553,009      198,301      198,301
    Available-for-sale financial assets-
     current                                       45,317,482    45,317,482   32,405,194   32,405,194
    Notes receiveable-net                             314,040       314,040      365,183      365,183
    Reinsurance recovery receivables-net                5,801         5,801        3,362        3,362
    Due from other reinsurers-net                      57,715        57,715       44,995       44,995
    Accrued income and interest receivable          2,134,419     2,134,419    1,681,625    1,681,625
    Other receivables                               2,129,000     2,129,000    2,541,597    2,541,597
    Other current financial asset                           -             -      291,800      291,800
    Derivative financial assets for hedging -
    current                                            15,241        15,241            -            -
    Policy loans                                    5,235,805     5,235,805    5,054,157    5,054,157
    Short-term advances receivables                   881,306       881,306      736,494      736,494
    Collateral loans-net                            8,061,795     8,061,765    4,457,632    4,457,632
    Non-performing loan from policy loan                3,202         3,202            -            -
    Financial assets measured at fair value
     through profit or loss-non current               284,287       284,287      615,277      615,277
    Available-for-sale financial assets-
     non current                                   51,360,139    51,360,139   46,838,835   46,838,835
    Other financial asset - non current            13,717,600    13,717,600   24,030,300   24,030,300
    Refundable deposits                             1,087,337     1,087,337    1,497,490    1,497,490
    Other non-performing loan                             600           600          600          600
    Financial liabilities:
    Bonds sold under agreement to
    repurchase                                      4,627,868     4,627,868    8,020,781    8,020,781
    Financial Liabilities measured at fair
      value through profit or loss-current             68,068        68,068      464,108      464,108
    Derivative financial liabilities for hedging
    -current                                              191           191            -            -
    Notes Payable                                       8,966         8,966            -            -
    Commission payable                                482,570       482,570      323,359      323,359
    Indemnity payments and life insurance
      proceeds payable                                954,555       954,555       24,903       24,903
    Other payable                                   7,035,159     7,035,159    1,572,254    1,572,254
    Financial Liabilities measured at fair
                                                      281,172       281,172      831,498      831,498
     value through profit or loss - non current
    Derivative financial liabilities for hedging
                                                        4,141         4,141      114,087      114,087
    -non current



                                                   - 37 -
                                  FUBON LIFE ASSURANCE CO., LTD.
                              NOTES TO FINANCIAL STATEMENTS (CONT’D)


             (b) Methods and assumptions used in estimating the fair values of financial instruments are
                 specified below:

                   1.    The fair value of short-term financial instruments is determined by their face value
                         on the balance sheet. Because these instruments will mature on short notice, the face
                         value is used as a reasonable basis for establishing the fair value. This method is
                         applied to cash and cash equivalents, notes receivables, accounts receivables,
                         accounts payable, and bonds sold under agreement to repurchase, etc.

                   2.    Market quotes of Financial Assets are used as their fair values if available; otherwise
                         valuation reports from financial institutions as references.

             (c) The fair value of the financial instruments of the Company, which were based on quoted
                 market price in active market or determined by using certain valuation techniques were as
                 follows:

                                                                    June 30, 2007                        June 30, 2006
                                                                          Determined value                     Determined value
                                                                          by using valuation                   by using valuation
                                                          Quoted prices       techniques       Quoted prices       techniques
Financial assets:
Cash and cash equivalents                                 $            -          8,012,057                -           6,022,274
Financial assets measured at fair value through profit
 or loss -current                                              1,553,009                            198,301
Available-for-sale financial assets-current                   45,317,482                  -      32,405,194                    -
Notes receiveable-net                                                  -            314,040               -              365,183
Reinsurance recovery receivables-net                                   -              5,801               -                3,362
Due from other reinsurers-net                                          -             57,715               -               44,995
Accrued income and interest receivable                                 -          2,134,419               -            1,681,625
Other receivables                                                      -          2,129,000               -            2,541,597
Other financial assets-current                                         -                  -               -              291,800
Derivative financial assetd for hedging -noncurrent               15,241                  -               -                    -
Policy loans                                                           -          5,235,805               -            5,054,157
Short-term advances receivables                                        -            881,306               -              736,494
Collateral loans-net                                                   -          8,061,795               -            4,457,632
Non-performing loan                                                    -              3,202               -                    -
Financial assets measured at fair value through
 profit or loss-non current                                      284,287                  -         615,277                    -
Available-for-sale financial assets-non current               51,360,139                  -      46,838,835                    -
Other financial assets - non current                                   -         13,717,600               -           24,030,300
Refundable deposits                                            1,087,337                  -       1,497,490                    -
Other non-performing loan                                              -                600               -                  600
Financial liabilities:
Bonds sold under agreement to repurchase                               -          4,627,868                -           8,020,781
Financial Liabilities measured at fair value
 through profit or loss-current                                  68,068                   -         464,108                    -
Derivative financial liabilities for hedging-current                191                   -               -                    -
Notes payable                                                         -               8,966               -                    -
Commission payable                                                    -             482,570               -              323,359
Indemnity payments and life insurance proceeds
 payable                                                               -            954,555                -              24,903
Other payable                                                          -          7,035,159                -           1,572,254
Financial Liabilities measured at fair value through
                                                                281,172                   -         831,498                    -
 profit or loss-non curren
Derivative financial liabilities for hedging-noncurrent            4,141                  -         114,087                    -




                                                                 - 38 -
                FUBON LIFE ASSURANCE CO., LTD.
            NOTES TO FINANCIAL STATEMENTS (CONT’D)


(d) Please refer to note (6) about the Refundable deposits financial assets held by the
    Company as of June 30, 2007 and 2006.

(e) As of June 30, 2007 and 2006, gain and loss from financial assets measured at fair value
    through profit or loss held by the Company amounted to NT$29,192 and NT$91,058
    thousand, respectively.

(f) As of June 30, 2007 and 2006, the fair value risk caused by the fixing interest financial
    assets amounted to NT$149,714,222 and 105,776,090 thousand, and the fair value risk
    caused by the fixing interest financial liabilities amounted to NT$0 and 8,020,781
    thousand, respectively. The cash flow risk caused by the floating interest financial assets
    of amounted to NT$11,024,375 and 58,698,019 thousand, respectively.

(g) For the six-month periods ended June 30, 2007 and 2006, the interest income and
    expenses arising from the financial assets and liabilities, which were not carried at fair
    value through profit or loss amounted to NT$3,694,023 and NT$2,969,040 thousand, and
    NT$50,234 and NT$29,430 thousand, respectively.

(h) For the six-month period ended June 30,2006, gain on available-for-sale financial assets
    are measured of fair value and unrealized gain and loss thereon are recognized as an
    adjustment item of stockholder‘s equity amounted to NT$21,352 thousand.

(i) Financial risk information

    1.   Marketing risk

         Fair value of the domestic and foreign bonds held by the Company varies according
         to the fluctuation of market interest or exchange rate. For the purposes of adjusting
         the interest sensitivity of the fixed income investment portfolio, the Company signed
         an interest rate swap contract. Furthermore, in order to prevent the risk of exchange
         rate, the Company signed a foreign exchange forward contracts, interest swaps and
         cross currency swaps to hedge.

         In addition to securities investment under equity method or measured at cost, the
         Company also held available-for-sale financial assets measured at fair value. As
         mentioned above, the Company will be exposed to the risk of fair value fluctuation.

    2.   Credit risk

         The inherent credit risk was caused from cash and cash equivalent, security
         investment, and bond investment. In order to diversify investment target and
         counterparty, the Company enacted clear investment limits for credit rating and
         transaction management strategy. Therefore, the Company considered that there was
         less credit risk on the financial assets.

    3.   Liquidity risk

         The working capital held by the Company was adequate to cope with increase in
         assets, liquidating the liabilities and implementing all the obligation of the contracts.


                                        - 39 -
               FUBON LIFE ASSURANCE CO., LTD.
           NOTES TO FINANCIAL STATEMENTS (CONT’D)


        Forward contracts, cross currency swaps, interest swaps and currency hedge
        contracts are contracted primarily to hedge against exchange risk. Cash paid or
        received from forwards contracts, cross currency swaps, currency hedge contracts
        were calculated at specified rate at the contract maturity date. Since there is no
        physical transfer of notional principals for interest swaps, cash flow risk is
        immaterial. Besides, no material cash flow risk is expected due to the limit to the
        amount of structured deposits and bonds set by the Company.

        Parts of security and debt instruments with no active market held by the Company
        imply liquidity risk. Other instruments with active market measured at fair value can
        be disposed off immediately.

   4.   Cash flow risk from interest-rate fluctuation

        Parts of debt investments held by the Company were calculated at floating interest.
        Risk of holding this type of investments would occur, because the Company’s cash
        flow would be influenced by the fluctuation of the market interest rate.

(j) Control risk and hedging strategy

   In order to maximize stockholder’s equity, protect the equity of all parties insured, and
   comply with the legal affairs, the Company undertook the control risk and hedging
   strategy. As mentioned above, the Company adopted risk management and control
   system to identify any investment risk (including marketing risk, credit risk, and
   operation risk). This assists in the effective management of the Company to control and
   measure marketing risk, credit risk, and operation risk.

   The Board of Directors is considered as the highest level of risk controller. The major
   risk control measures include control of risk management policy and setting the risk
   amount limit of loss and authority, for which of all the above should be approved by the
   Board of Directors.

   High level management is authorized to implement all the risk management strategies,
   and report to the board of directors periodically.




                                        - 40 -
                        FUBON LIFE ASSURANCE CO., LTD.
                    NOTES TO FINANCIAL STATEMENTS (CONT’D)


(5) RELATED PARTY TRANSACTIONS

  (A) Names and relationship of related parties

                 Name of related party                      Relationship with the Company
        Fubon Finance Holding Co., Ltd.             Parent Company
        Fubon Insurance Co., Ltd.                   The same parent company
        Taipei Fubon Commercial Bank Co.,
         Ltd.                                       The same parent company
        Fubon Securities Co., Ltd.                  The same parent company
        Fubon Securities Investment Trust Co.,
         Ltd.                                       The same parent company
        Fubon Futures Co., Ltd.                     An affiliate
        Taiwan Mobile Co., Ltd.                     An affiliate
        Tao Yin Co., Ltd.                           An affiliate
        Fubon Bills Finance Co., Ltd.               An affiliate
        Taipei Fubon Bank Insurance Agency
         Co., Ltd.                                  An affiliate
        Fubon Bank Life Insurance Agency Co.        An affiliate
        Fusheng Life Insurance Agency Co.           An affiliate
        Fubon Constructer Co.                       An affiliate
        Fubon Venture Capital Consulting Co.,
         Ltd.                                       An affiliate
        Sino Star Venture Capital Co. Ltd.          An affiliate
                                                    Directors, supervisors, managers        and   their
        Other related parties
                                                     spouses, close relatives, etc

  (B)   Significant transactions with related parties for the six-month period ended June 30, 2007, and
        2006 were summarized as follows:

        (a) Gross Written Premiums

                                                                                           (NT$'000)
                                                                        2007               2006
             Name of related party
             Fubon Insurance Co., Ltd.                             $      17,903             22,558
             Fubon Securities Co., Ltd.                                    8,108              7,620
             Taipei Fubon Commercial Bank Co., Ltd.                       90,963            104,911
             Others ( less than $10 million )                             15,351             20,383
                                                                   $     132,325            155,472


            The terms of the above transactions were similar to those with non-related parties.




                                               - 41 -
                FUBON LIFE ASSURANCE CO., LTD.
            NOTES TO FINANCIAL STATEMENTS (CONT’D)


(b) Rental revenue and refundable deposits

                                                                                 (NT$'000)
                                                2007                        2006
                                                   Guarantee                   Guarantee
                                         Rental     Deposits         Rental      Deposits
                                        Revenue     Received        Revenue     Received
    Name of related party
    Others ( less than $10 million )   $ 10,145             2,587        7,201           899


    Part of rental revenue and refundable deposits for the six-month period ended June
    30,2007 resulted from the rental of real estate investments and recognized as gain on real
    estate investments and refundable deposits which amounted to NT$5,347 thousand and
    NT$2,587 thousand, respectively.

(c) Rental expense and refundable deposits

                                                                                   (NT$'000)
                                                 Rental         Refundable
    2007                                        Expense          Deposits           Note
    Name of related party
    Fubon Insurance Co., Ltd.             $        15,894               5,499    Office rent
    Others ( less than $10 million )               11,800               3,992         "
                                         $         27,694               9,491


                                                                                   (NT$'000)
                                                 Rental         Refundable
    2006                                        Expense          Deposits           Note
    Name of related party
    Fubon Insurance Co., Ltd.             $        14,715               5,645    Office rent
    Others ( less than $10 million )               10,277               3,413         "
                                         $         24,992               9,058


    All of the above leases were operating leases and the terms of transactions were similar to
    those with non-related parties.

(d) Advertising expense

                                                                                   (NT$'000)
                                                                 2007              2006
    Name of related party
    Others ( less than $10 million )                        $       1,625              2,450




                                       - 42 -
                FUBON LIFE ASSURANCE CO., LTD.
            NOTES TO FINANCIAL STATEMENTS (CONT’D)


(e) Commission revenue

                                                                                (NT$'000)
                                                               2007             2006
    Name of related party
    Other (less than $10 million)                         $        5,036                -


(f) Commission expense

                                                                                (NT$'000)
                                                               2007             2006
    Name of related party
    Taipei Bank Life Insurance Agency Co.                 $     422,268          193,435
    Fusheng Life Insurance Agency Co.                           147,006           67,794
                                                          $     569,274          261,229

(g) Commission revenues of investment-type insurance policy

                                                                                (NT$'000)
                                                               2007             2006
    Name of related party
    Others ( less than $10 million )                      $        2,681           1,700

(h) Cash deposited with Taipei Fubon Commercial Bank Co., Ltd. were as follows:

                                                                                (NT$'000)
                                                                      June 30
                                                               2007             2006
    Nature
    Check deposit                                         $      12,463             4,955
    Demand deposit                                            3,091,993         2,568,950
    Time deposit                                                 91,428                 -
    Structured deposits                                         500,000                 -
                                                          $   3,695,884         2,573,905


    Structured deposits were recognized as other current financial assets.

    Furthermore, the holding financial bonds issued by Taipei Fubon Commercial Bank Co.,
    Ltd. both amounted to NT$500,000 thousand as of June 30, 2007 and 2006.




                                       - 43 -
                FUBON LIFE ASSURANCE CO., LTD.
            NOTES TO FINANCIAL STATEMENTS (CONT’D)


 (i) Certain investment funds purchased from Fubon Securities Investment Trust Co., Ltd.
     were as follows:

                                                                                    (NT$'000)
                                                                         June 30
                                                                  2007              2006
     Ju-I Fund                                              $       39,500          1,369,130
     Ju-I No. 2 Fund                                                     -          1,290,134
     Precision Fund                                                116,141             76,660
     Supreme Fund                                                   68,428                  -
     Fubon Fund                                                    312,555            218,764
     Technology ETF Fund                                           144,049                  -
     High Grow-Up Fund                                              67,872                  -
     Fubon Asia Technology                                           1,172                  -
     Millenium Dragon Boat Fund                                          -            580,069
     Chi-hsiang Fund                                                 1,392          1,101,364
     Global Bonds Fund                                               2,372                  -
     Fubon FU BAO Fund                                                 585                  -
     Fubon Global REIT Fund                                          1,353                  -
                                                            $      755,419          4,636,121


    Fubon Life Assurance purchased Fubon No. 2 Real Estate Investment Trust amounted to
    NT$832,895 and NT$758,470thousand, and it was recognized as available for sale
    securities-non-current for the six-month periods ended June 30,2007 and 2006. .

    Fubon Life Assurance purchased Fubon No. 1 Real Estate Investment Trust amounted to
    NT$747,885 thousand and NT$646,984 thousand for the six-month periods ended June
    30, 2007 and 2006, and it was recognized as available for sale securities-current.

(j) Secured loans to related parties were as follows:

    1.   Collateral loans

                                                                                    (NT$'000)
                                                                  Annual
                               Maximum           Ending           Interest           Total
                               Amount            Balance           Rate             Interest
         June 30, 2006
         Others ( less than
         $10 million )        $      6,802          5,615       2.79% ~3.04%                87


    2.   Fubon Life Assurance’s collateral loans were loans granted to related parties and the
         terms of these loans were similar to those with non-related parties. Furthermore, the
         fair value of the collateral has been judged enough to cover the loan, and therefore the
         creditor’s right can be assured.



                                        - 44 -
                 FUBON LIFE ASSURANCE CO., LTD.
             NOTES TO FINANCIAL STATEMENTS (CONT’D)


    3.   Policy loan

                                                                                      (NT$'000)
                                                                     Annual
                               Maximum           Ending              Interest          Total
                               Amount            Balance               Rate           Interest
         June 30, 2007
         Others ( less than
         $10 million )         $     2,150           2,150           6.80%                    24

         June 30, 2006
         Others ( less than
         $10 million )         $     1,500                 -       3.00%~6.80%                   2


    4.   Interest rate on related parties policy loans is based on 0.5% of the interest rate of the
         insurance policy on which a comparison is then made with interest rate of the
         domestic banks and the higher interest rate is chosen. The transaction terms are then
         considered to be normal and the secured loan can be lent with a specific proportion of
         the total warranty reserve as the creditor’s right can be assured.

(k) Account balance under the Discretionary Investment Service

                                                                                      (NT$'000)
                                                                           June 30
                                                                    2007              2006
    Name of related party
    Fubon Securities Investment Trust Co., Ltd.                $    2,980,998         3,831,560


(l) Other receivable

                                                                                      (NT$'000)
                                                                           June 30
                                                                    2007              2006
    Name of related party
    Fubon Finance Holding Co., Ltd.                            $     448,084            193,062
    Sino Star Venture Capital Co. Ltd.                                28,500                  -
    Fubon Constructer Co.                                                  -          1,541,700
    Other                                                              6,358              9,841
    Total                                                      $     482,942          1,744,603


    Because the Company’s income tax return have been combined with those of Fubon
    Financial Holding Co., Ltd., tax receivable and loss carry forward benefits were
    recognized as other receivable from Fubon Finance Holding Co., Ltd.




                                        - 45 -
                FUBON LIFE ASSURANCE CO., LTD.
            NOTES TO FINANCIAL STATEMENTS (CONT’D)


(m) Derivatives contract

    1.   Forward contract

                                                                               (NT$'000)
                                                                     June 30
                                                             2007              2006
         Name of related party
         Taipei Fubon Commercial Bank Co., Ltd.          $     37,235           (55,062)


         This was recognized as financial assets measured at fair value through profit and
         loss.

    2.   Interest rate swap contract

                                                                               (NT$'000)
                                                                     June 30
                                                             2007              2006
         Name of related party
         Taipei Fubon Commercial Bank Co., Ltd.          $          623                -


(n) Future Deposits

                                                                               (NT$'000)
                                                                     June 30
                                                             2007              2006
    Name of related party
    Fubon Futures Co., Ltd.                             $      15,616            64,652


(o) Bonds transactions

    1.   Straight Government Bonds transactions

         A. Purchases

                                                                               (NT$'000)
                                                             2007              2006
              Name of related party
              Fubon Securities Co., Ltd.                 $            -          560,289
              Fubon Bills Finance Co., Ltd.                           -          957,414
              Taipei Fubon Commercial Bank Co., Ltd.                  -          120,147
              Total                                      $            -        1,637,850




                                       - 46 -
              FUBON LIFE ASSURANCE CO., LTD.
          NOTES TO FINANCIAL STATEMENTS (CONT’D)


      B. Sales

                                                                            (NT$'000)
                                                           2007             2006
           Name of related party
           Fubon Securities Co., Ltd.               $             -          658,950
           Fubon Bills Finance Co., Ltd.                          -        1,502,465
           Taipei Fubon Commercial Bank Co., Ltd.                 -        1,409,169
           Total                                    $             -        3,570,584


2.    Bonds purchased under agreement to resell

2007                                                                    Bonds purchased
                                         Purchase            Interest     under resell
        Names of related parties           price             revenue       agreement
Taipei Fubon Commercial Bank Co., Ltd. $ 17,765,059              963          1,570,052
Fubon Securities Co., Ltd.                9,101,496              612            170,009
                                       $ 26,866,555            1,575          1,740,061


2006                                                                  Bonds purchased
                                         Purchase            Interest   under resell
        Names of related parties           price             revenue     agreement
Taipei Fubon Commercial Bank Co., Ltd. $ 47,453,857            5,075         631,707
Fubon Securities Co., Ltd.                  220,000                -                 -
                                       $ 47,673,857            5,075         631,707


3     Bonds sold under agreement to repurchase

2007                                                                      Bonds sold
                                             Purchase        Interest       under
           Names of related parties            price         expense       agreement
     Fubon Securities Co., Ltd.             $ 1,000,419          419                    -
     Taipei Fubon Commercial Bank Co., Ltd.           -             -                   -
                                            $ 1,000,419          419                    -


2006                                                                      Bonds sold
                                              Purchase       Interest       under
           Names of related parties             price        expense       agreement
     Fubon Securities Co., Ltd.             $ 17,977,302         963          1,197,894
     Taipei Fubon Commercial Bank Co., Ltd.      450,000          62                  -
                                            $ 18,427,302       1,025          1,197,894




                                  - 47 -
                FUBON LIFE ASSURANCE CO., LTD.
            NOTES TO FINANCIAL STATEMENTS (CONT’D)


(p) Financial bonds, Company bonds and stocks

                                                                                      (NT$'000)
                                                                                      2006
    Name of related party
    Fubon Securities Investment Trust Co.,Ltd                                    $ 16,116,457
    Fubon Venture Capital Consulting Co., Ltd.                                        287,280
                                                                                 $ 16,403,737


    The Company purchased financial bonds and corporate bonds from Fubon Securities
    Investment Trust Co., Ltd. and pledged that Fubon Life Assurance will receive CP+20BP
    capital yield rate each quarter, or it will compensate its loss. The capital yield rate will be
    paid at the end of each quarter, and the compensation period is from the settlement date to
    the maturity date of those securities.

(q) The Company purchased the lands and buildings which located in Changchun and Linyi
    Section, Zhongshan District, Taipei City from Fubon Constructer Co. The total contract
    amount and other acquisition cost was NT$2,638,529 thousand and recorded as the real
    estate investment.

    The Company sold six properties which are located in No. 7, No.10-1, No.11, No12,
    No13 and No 14-2, Tianmu Sec., Shinlin District, Taipei City, to Fubon Land
    Development Co., Ltd and spent NT$1,713,000 thousand to conclude this transaction in
    June 2006. After deducting the essential cost, there is a gain on disposal of NT$295,898
    thousand.

    Fubon Life Assurance spent NT$176,600 thousand selling operating land and building
    which is located in No.43, Wende Sec., Neihu District, Taipei City, to Fubon No. 2 Real
    Estate Investment Trust in the first half year of 2006. In addition, it also signed a lease
    contract with Fubon No. 2 Real Estate Investment Trust to rent parts of building for
    official business. After deducting the essential costs, it was recognized as gain on
    disposal of NT$5,663 thousand and deferred gain of NT$6,648 thousand. The
    amortization of deferred gain was recognized as the deduction of rent expenses amounted
    to NT$2,254 thousand in the first half year of 2007.




                                        - 48 -
                         FUBON LIFE ASSURANCE CO., LTD.
                     NOTES TO FINANCIAL STATEMENTS (CONT’D)



         (r) Other expenses (There was no related party accounts with dollar amount of at least $10
             million)

                                                                                        (NT$'000)
                                                                       2007             2006
             Nature
             Discretionary Investment Service Consulting
             Service                                              $       4,710             7,233
             Discretionary Investment Service Holding
             Service                                                        849             1,679
             Consulting Service Charge                                    7,996             7,807
             Trainning expense                                                -               447
             Insurance expense                                              597             1,032
             Administrative expense                                      19,806            14,766
             Operating expenses                                           7,310            10,234
             Total                                                $      41,268            43,198

(6) PLEDGED ASSETS

   (A) As of June 30, 2007 and 2006, pledged assets were as follows:

                                                                                        (NT$'000)
                                                                              June 30
                                                                       2007              2006
         Assets
         Time depisit                                             $       31,600          390,000
         Government bonds                                                994,607          997,834
                                                                  $    1,026,207        1,387,834


   (B)   Pursuant to the requirements of Articles #141 and 142 of the Insurance Law, government
         bonds were deposited with the Central Bank of China as guarantee for Fubon Life
         Assurance’s insurance business.

(7) COMMITMENTS AND CONTINGENCIES

   (A) As of June 30, 2007, Fubon Life Assurance had operating lease contracts for its offices which
       will expire in 2009. The minimum future rental commitments under these contracts amounted
       to approximately NT$187,652 thousand.

   (B)   As of June 30, 2007, Fubon Life Assurance had 11 insurance lawsuits and was required to pay
         total indemnities of approximately NT$44,750 thousand, which had been accrued in the
         accounts.




                                              - 49 -
                          FUBON LIFE ASSURANCE CO., LTD.
                      NOTES TO FINANCIAL STATEMENTS (CONT’D)



(8) SIGNIFICANT DISASTER LOSS

   None.

(9) SIGNIFICANT SUBSEQUENT EVENT

   None.

(10) OTHERS

   (A) Personnel expenses, depreciation, depletion and amortization for the six-month periods ended
       June 30, 2007 and 2006 were summarized by function as follows:

                                                                                               (NT$'000)
                                               2007                                2006
                                Operating     Operating              Operating    Operating
            Function             Costs        Expenses      Total     Costs       Expenses       Total
   Personnel Expenses:
    Salaries and wages                    -    258,856     258,856            -     241,572     241,572
    Insurance                             -     44,818      44,818            -      38,998      38,998
    Pension expenses                      -     45,480      45,480            -      27,620      27,620
    Other personnel expenses              -     10,396      10,396            -      11,036      11,036
   Depreciation                           -     25,599      25,599            -      17,370      17,370
   Amortization                           -      8,515       8,515            -       8,076       8,076


   (B)   Fubon Life Assurance first adopted Statement of Financial Accounting Standards No.34
         (SFAS 34) “Accounting for Financial merchandise”, certain accounts of the financial
         statements as of June 30, 2006 and for the six-month period ended June 30, 2007 were
         reclassified to conform the presentation adopted in the period’s financial statement, as the (4)
         demonstrates.

(11) NOTES TO DISCLOSURE EVENTS

   (A) Information on significant transactions

         (a) Funds lent to others: Not applicable.

         (b) Checks endorsed for others: None.

         (c) The position of holding securities: Form 1.

         (d) Accumulation of buying and selling same securities over NT$100,000,000 or 20% of
             capital: Form 2.




                                                - 50 -
                        FUBON LIFE ASSURANCE CO., LTD.
                    NOTES TO FINANCIAL STATEMENTS (CONT’D)



        (e) Acquisition of property and equipment over NT$100,000,000 or 20% of capital: Form 3.

        (f) Disposal of property and equipment over NT$100,000,000 or 20% of capital: Form 4.

        (g) Sales and purchase with related party over NT$100,000,000 or 20% of capital: none.

        (h) Account receivable with related party over NT$100,000,000 or 20% of capital: Form 5.

        (i) Information on derivative transactions: Please refer to Note (4)-(G) and (4)-(U).

  (B)   Disclosure on business investments

        (a) Significant influence on invested company: Form 6.

        (b) Funds lent to others: None.

        (c) Checks endorsed for others: None.

        (d) The position of holding securities: None.

        (e) Accumulation of buying and selling same securities over NT$100,000,000 or 20% of
            capital: Form7.

        (f) Acquisition of property and equipment over NT$100,000,000 or 20% of capital: None.

        (g) Disposal of property and equipment over NT$100,000,000 or 20% of capital: None.

        (h) Sales and purchase with related party over NT$100,000,000 or 20% of capital: None.

        (i) Account receivable with related party over NT$100,000,000 or 20% of capital: None.

        (j) Information on derivative transactions: None.

  (C)   Disclosure on investments in Mainland China: None.

(12) SEGMENT FINANCIAL INFORMATION DISCLOSURE

   In accordance with the section 25 R.O.C SFAS No.23, the lesser change of the segment profit could
   make the disclosure of the segment financial information not applicable.




                                              - 51 -
                                                                                           FUBON LIFE ASSURANCE CO.,LTD.
                                                                                           NOTE TO FINANCIAL STATEMENT
                                                                                                     June 30,2007
Form 1

                                                                                                                                                                           June 30, 2007
      Holding Company                   Type and name of security           Relationship                      Account                         Shares (in                                        Market price / Net         Note
                                                                                                                                                            Book Value      Percentage (%)
                                                                                                                                              thousands)                                         value of equity
Fubon Life Assurance Co., Ltd.   Foxconn 1                                       -          Financial assets measured at fair value through         1,000       107,000             -                       107,000   Convertible Bonds
                                                                                                       profit or loss-non current
                "                AUO 2                                           -                                   "                                670         66,732            -                        66,732           "
                "                China air 3                                     -                                   "                                100         10,500            -                        10,500           "
                "                Foxlink1                                        -                                   "                                 50          5,325            -                         5,325           "
                "                Transcend1                                      -                                   "                                 50          6,450            -                         6,450           "
                "                TTET Union Corporation                          -          Available-for-sale financial assets-non current         1,500         43,200                 0.94                43,200      Listed stock
                "                Nien Hsing Textile Co., Ltd.                    -                                   "                              6,187        143,848                 1.03               143,848           "
                "                Tainan Enterprise Co., Ltd.                     -                                   "                              2,218        118,421                 1.66               118,421           "
                "                TYC Brother Industrial Co, Ltd.                 -                                   "                              4,024         99,383                 1.61                99,383           "
                "                Basso Industry Co., Ltd.                        -                                   "                              4,854        254,847                 2.61               254,847           "
                "                Kaulin Mfg., Co., Ltd.                          -                                   "                              4,422        150,343                 2.61               150,343           "
                "                Yung Chip Paint & Varnish Mfg. Co., Ltd.        -                                   "                              3,988        231,304                 2.49               231,304           "
                "                China Motors Co., Ltd.                          -                                   "                              5,872        186,443                 0.43               186,443           "
                "                Great China Metal Industry Co., Ltd.            -                                   "                              7,169        128,684                 2.35               128,684           "
                "                Taiwan Secom Co., Ltd                           -                                   "                              5,475        306,594                12.32               306,594           "
                "                Giant Manufacturing Co., Ltd.                   -                                   "                              2,417        145,745                 0.86               145,745           "
                "                National Petroleum Co., Ltd.                    -                                   "                              9,985        309,535                 3.23               309,535           "
                "                Tawian Acceptance Corporation                   -                                   "                              3,393         77,878                 1.44                77,878           "
                "                Holiday Entertainment Co., Ltd.                 -                                   "                             10,881        220,340                 5.91               220,340           "
                "                A85306                                          -                                   "                             50,000         57,829            -                        57,829   Government Bonds
                "                A88101                                          -                                   "                            400,000        420,862            -                       420,862           "
                "                A89110                                          -                                   "                            500,000        547,892            -                       547,892           "
                "                A89111                                          -                                   "                            300,000        363,715            -                       363,715           "
                "                A90103                                          -                                   "                            450,000        527,125            -                       527,125           "
                "                A91104                                          -                                   "                          1,300,000      1,373,241            -                     1,373,241           "
                "                A92110                                          -                                   "                            200,000        205,430            -                       205,430           "
                "                A93107                                          -                                   "                            400,000        399,563            -                       399,563           "
                "                A93108                                          -                                   "                          3,150,000      3,190,598            -                     3,190,598           "
                "                A94104                                          -                                   "                          2,500,000      2,460,486            -                     2,460,486           "
                "                A90104                                          -                                   "                          1,200,000      1,502,206            -                     1,502,206           "
                "                A89113                                          -                                   "                          1,150,000      1,524,878            -                     1,524,878           "
                "                A89201                                          -                                   "                            900,000      1,229,525            -                     1,229,525           "
                "                A88103                                          -                                   "                            300,000        381,123            -                       381,123           "
                "                A88102                                          -                                   "                            500,000        645,843            -                       645,843           "
                "                A88201                                          -                                   "                            400,000        535,611            -                       535,611           "
                "                A90102                                          -                                   "                          3,550,000      4,576,964            -                     4,576,964           "
                "                A89107                                          -                                   "                          1,000,000      1,409,716            -                     1,409,716           "
                "                A90108                                          -                                   "                            850,000        997,894            -                       997,894           "
                "                A91107                                          -                                   "                            700,000        818,350            -                       818,350           "
                "                A87103                                          -                                   "                          1,200,000      1,468,965            -                     1,468,965           "
                "                A87201                                          -                                   "                            650,000        799,793            -                       799,793           "
                "                A96103                                          -                                   "                            500,000        472,940            -                       472,940           "
                "                B96614                                          -                                   "                            200,000        202,188            -                       202,188   Corporate Bounds
                "                B96615                                          -                                   "                            500,000        521,137            -                       521,137           "
                "                B98004                                          -                                   "                            175,000        177,246            -                       177,246           "

                                                                                                                  - 53 -
                                                                                      FUBON LIFE ASSURANCE CO.,LTD.
                                                                                      NOTE TO FINANCIAL STATEMENT
                                                                                                June 30,2007
                                                                                                                                                                       June 30, 2007
     Holding Company                    Type and name of security      Relationship                       Account                         Shares (in                                        Market price / Net             Note
                                                                                                                                                        Book Value      Percentage (%)
                                                                                                                                          thousands)                                         value of equity
Fubon Life Assurance Co., Ltd.   B97709                                     -           Available-for-sale financial assets-non current       300,000        300,977            -                       300,977     Corporate Bounds
              "                  B98601                                     -                                  "                            1,100,000      1,111,000            -                     1,111,000              "
              "                  G18947                                     -                                                                 600,000        607,581            -                       607,581      Financial Bonds
              "                  G18986                                     -                                  "                              400,000        404,296            -                       404,296              "
              "                  G18985                                     -                                  "                              500,000        502,853            -                       502,853              "
              "                  G15956                                     -                                                               1,400,000      1,408,964            -                     1,408,964              "
              "                  GA9481                                     -                                  "                              300,000        279,185            -                       279,185              "
              "                  G15955                                     -                                  "                              200,000        200,495            -                       200,495              "
              "                  G11012                                     -                                  "                              200,000        201,420            -                       201,420              "
              "                  G11077                                     -                                  "                              600,000        600,600            -                       600,600              "
              "                  G11816                                     -                                  "                              300,000        304,410            -                       304,410              "
              "                  G11818                                     -                                  "                              500,000        513,932            -                       513,932              "
              "                  G11540                                     -                                  "                               50,000         50,142            -                        50,142              "
              "                  G11502                                     -                                  "                              600,000        600,000            -                       600,000              "
              "                  G19966                                     -                                  "                              290,000        290,145            -                       290,145              "
              "                  G1491Y                                     -                                  "                              350,000        358,747            -                       358,747              "
              "                  G1491B                                     -                                  "                              200,000        205,502            -                       205,502              "
              "                  G1491C                                     -                                  "                              200,000        205,455            -                       205,455              "
              "                  G1491R                                     -                                  "                              300,000        305,720            -                       305,720              "
              "                  G11432                                     -                                  "                            1,000,000      1,021,789            -                     1,021,789              "
              "                  G12401                                     -                                  "                            1,800,000      1,834,200            -                     1,834,200              "
              "                  G12402                                     -                                  "                              200,000        199,238            -                       199,238              "
              "                  G179A2                                     -                                  "                              500,000        504,600            -                       504,600              "
              "                  G10813                                     -                                  "                              600,000        600,000            -                       600,000              "
              "                  G12601                                     -                                  "                               70,000         69,930            -                        69,930              "
              "                  G11640                                     -                                  "                              300,000        299,974            -                       299,974              "
              "                  G13999                                     -                                  "                              500,000        500,000            -                       500,000              "
              "                  G12404                                     -                                  "                              800,000        800,000            -                       800,000              "
              "                  01009P                                     -                                  "                              280,000        281,703            -                       281,703   Property securitizations
              "                  01038S                                     -                                  "                              500,000        499,988            -                       499,988              "
              "                  01047S                                     -                                  "                            1,003,200      1,003,200            -                     1,003,200              "
              "                  01048S                                     -                                  "                              600,000        492,180            -                       492,180              "
              "                  01064S                                     -                                  "                              260,000        259,988            -                       259,988              "
              "                  01078S                                     -                                  "                            2,730,000      2,702,839            -                     2,702,839              "
              "                  01079S                                     -                                  "                            1,430,000      1,413,308            -                     1,413,308              "
              "                  961Capital Securities D                    -                                  "                            2,192,700      2,192,700            -                     2,192,700              "
              "                  Sanlihe-Television Co., Ltd                -                 Financial assets measured at cost                 3,025        109,700                 2.63               109,700       Unlisted stock
              "                  Cashbox Enterprise Co., Ltd                -                                  "                               10,375        367,500                 6.92               367,500              "
              "                  Hexawave, Inc                              -                                  "                                1,310          8,227                 1.83                 8,227              "
              "                  BCOM Electronics, Inc                      -                                  "                                   69          2,072                 0.07                 2,072              "
              "                  Toppolx and Philips Display Company        -                                  "                               12,000        120,000                 2.84               120,000              "
              "                  Arcoa Communication Co.,Ltd                -                                  "                                  338          9,480                 0.25                 9,480              "
              "                  Fubon Securities Finance Co.,Ltd           -                                  "                               23,143        137,425                 5.79               137,425              "
              "                  Chih Tou Electronic Co.,Ltd                -                                  "                                8,500         85,000                 1.70                85,000              "
              "                  Taiwan High Speed RailCo.,Ltd              -                                  "                               40,555        400,000                 0.80               400,000              "
              "                  Fu Yu Venture Capital Co.,Ltd              -                                  "                                2,000         20,000                 1.48                20,000              "
              "                  Chia Technology Venture Co.,Ltd            -                                  "                                1,250         12,500                 3.73                12,500              "
              "                  Chia Bon Venture Capital Co.,Ltd           -                                  "                               10,000        100,000                10.00               100,000              "

                                                                                                              - 54 -
                                                                                              FUBON LIFE ASSURANCE CO.,LTD.
                                                                                              NOTE TO FINANCIAL STATEMENT
                                                                                                        June 30,2007
                                                                                                                                                                          June 30, 2007
     Holding Company                    Type and name of security              Relationship                     Account                      Shares (in                                          Market price / Net         Note
                                                                                                                                                           Book Value      Percentage (%)
                                                                                                                                             thousands)                                           value of equity
              "                  Phalanx Biotech Group Inc                          -                Financial assets measured at cost             2,113        24,010                    2.86                24,010    Unlisted stock
Fubon Life Assurance Co., Ltd.   Hwa Wei Venture Capital Co.,Ltd                    -                                 "                            3,000        30,000                    3.00                30,000          "
              "                  Hwa Vi Venture Capital Co.,Ltd                     -                                 "                            4,000        40,000                    3.86                40,000          "
              "                  Global Strategic Venture Capital Co.,Ltd           -                                 "                            3,750        32,900                    2.42                32,900          "
              "                  Bank of Communication First Venture Capital        -                                 "                            4,200        39,800                    4.20                39,800          "
                                 Co.,Ltd
              "                  Vision Venture Capital Co.,Ltd                     -                               "                              6,000        60,000                    6.49                60,000           "
              "                  Huei-Yang Venture Capital Co.,Ltd                  -                               "                              8,000        80,000                    4.10                80,000           "
              "                  Hsin Yung Enterprise Corp.                         -                               "                             12,600       287,280                    8.69               287,280           "
              "                  B96608                                             -           Debts investment without active market-non       450,000       450,000             -                         449,933   Corporate Bounds
                                                                                                                 current
              "                  B96606                                             -                               "                            150,000        158,245            -                         153,387          "
              "                  B67907                                             -                               "                            100,000        100,000            -                          99,999          "
              "                  B67908                                             -                               "                            250,000        250,000            -                         249,998          "
              "                  B903PJ                                             -                               "                            500,000        500,000            -                         505,522          "
              "                  B903S4                                             -                               "                             70,000         70,000            -                          69,996          "
              "                  B903S9                                             -                               "                            500,000        500,000            -                         499,996          "
              "                  B903RY                                             -                               "                            500,000        500,000            -                         499,971          "
              "                  B92128                                             -                               "                            300,000        316,352            -                         315,875          "
              "                  B92166                                             -                               "                            200,000        200,000            -                         199,978          "
              "                  B712A                                              -                               "                            200,000        211,168            -                         210,978          "
              "                  BA4DA1                                             -                               "                            200,000        195,963            -                         197,057          "
              "                  BA4D71                                             -                               "                             50,000         48,991            -                          49,265          "
              "                  BA4D91                                             -                               "                            200,000        196,017            -                         197,057          "
              "                  BA8091                                             -                               "                            500,000        495,612            -                         496,914          "
              "                  BA8101                                             -                               "                            500,000        495,594            -                         496,901          "
              "                  BA3B91                                             -                               "                            300,000        294,390            -                         296,771          "
              "                  BA3BG1                                             -                               "                            200,000        196,262            -                         197,845          "
              "                  BA3BA1                                             -                               "                            300,000        294,395            -                         296,771          "
              "                  BA3BF1                                             -                               "                            200,000        196,262            -                         197,845          "
              "                  BA2771                                             -                               "                            300,000        297,882            -                         298,774          "
              "                  BA2871                                             -                               "                            200,000        198,588            -                         199,184          "
              "                  Hua Nan Bank 90-2                                  -                               "                            250,000        258,410            -                         250,000   Financial Bonds
              "                  First Bank 90-1                                    -                               "                            100,000         82,338            -                         100,000          "
              "                  G11074                                             -                               "                            400,000        400,000            -                         400,000          "
              "                  G10266                                             -                               "                            500,000        500,000            -                         499,987          "
              "                  G10279                                             -                               "                            500,000        500,000            -                         499,961          "
              "                  G10406                                             -                               "                            500,000        500,000            -                         499,921          "
              "                  G179BH                                             -                               "                            500,000        500,836            -                         499,999          "
              "                  G19968                                             -                               "                            200,000        200,000            -                         201,669          "
              "                  Taishin Bank 91-1                                  -                               "                             50,000         51,698            -                          50,000          "
              "                  G11428                                             -                               "                          1,500,000      1,500,000            -                       1,500,000          "
              "                  GA7571                                             -                               "                            400,000        396,700            -                         398,179          "
              "                  GA7581                                             -                               "                            400,000        396,703            -                         398,179          "
              "                  GA7601                                             -                               "                            400,000        396,720            -                         398,179          "
              "                  GA7611                                             -                               "                            400,000        396,700            -                         398,179          "
              "                  GA7621                                             -                               "                            400,000        396,703            -                         398,179          "
              "                  GA7631                                             -                               "                            400,000        396,706            -                         398,179          "

                                                                                                                    - 55 -
                                                                                  FUBON LIFE ASSURANCE CO.,LTD.
                                                                                  NOTE TO FINANCIAL STATEMENT
                                                                                            June 30,2007
                                                                                                                                                              June 30, 2007
     Holding Company                   Type and name of security   Relationship                     Account                      Shares (in                                     Market price / Net            Note
                                                                                                                                               Book Value      Percentage (%)
                                                                                                                                 thousands)                                      value of equity
Fubon Life Assurance Co., Ltd.   GA7771                                 -           Debts investment without active market-non       500,000       486,172             -                    489,235       Financial Bonds
                                                                                                     current
              "                  GA7781                                 -                               "                            500,000        486,217            -                    489,235              "
              "                  GA92L1                                 -                               "                            300,000        296,406            -                    297,461              "
              "                  GA92A1                                 -                               "                            400,000        396,989            -                    397,942              "
              "                  GA9491                                 -                               "                            500,000        480,813            -                    485,583              "
              "                  GA9511                                 -                               "                            500,000        482,726            -                    487,019              "
              "                  GA92A1                                 -                               "                            400,000        397,048            -                    397,942              "
              "                  GA9501                                 -                               "                            500,000        480,603            -                    485,363              "
              "                  GAE431                                 -                               "                            500,000        467,620            -                    472,063              "
              "                  GAE441                                 -                               "                            500,000        467,631            -                    472,063              "
              "                  GA2461                                 -                               "                            200,000        194,702            -                    196,610              "
              "                  GA2471                                 -                               "                            200,000        194,698            -                    196,610              "
              "                  GA4561                                 -                               "                            300,000        291,524            -                    293,382              "
              "                  GA1801                                 -                               "                            300,000        294,415            -                    296,372              "
              "                  GA1811                                 -                               "                            300,000        294,415            -                    296,372              "
              "                  GA1821                                 -                               "                            200,000        196,286            -                    197,581              "
              "                  GA1831                                 -                               "                            200,000        196,286            -                    197,581              "
              "                  GA1841                                 -                               "                            200,000        197,548            -                    198,449              "
              "                  GAD121                                 -                               "                            300,000        293,007            -                    294,531              "
              "                  GA5121                                 -                               "                            500,000        496,063            -                    497,769              "
              "                  GA5131                                 -                               "                            500,000        496,006            -                    497,766              "
              "                  GA5141                                 -                               "                            500,000        496,010            -                    497,766              "
              "                  GA5161                                 -                               "                            500,000        496,053            -                    497,758              "
              "                  GA5551                                 -                               "                            500,000        488,735            -                    492,706              "
              "                  GA5561                                 -                               "                            500,000        488,622            -                    492,593              "
              "                  GA5791                                 -                               "                            500,000        498,088            -                    498,665              "
              "                  GA5801                                 -                               "                            500,000        482,845            -                    487,354              "
              "                  GA5811                                 -                               "                            300,000        288,740            -                    291,493              "
              "                  Taiwan Coperative Bank 90-1            -                               "                            500,000        513,004            -                    500,000              "
              "                  FNR 2003-30 EB 5% 2018/4/25            -                               "                             12,101        422,427            -                    384,050   Foreign Corporate Bonds
              "                  FNR 2003-35 KJ 4.75% 2018/5/25         -                               "                             24,000        829,703            -                    736,530              "
              "                  FHR 2604 YT 5% 2032/11/15              -                               "                             20,000        700,361            -                    611,424              "
              "                  FHR 2600 MK 5% 2032/6/15               -                               "                             50,000      1,752,281            -                  1,545,194              "
              "                  FNR 2003-43 EU 5% 2018/5/25            -                               "                             17,999        634,595            -                    566,757              "
              "                  FHR 2596 VM 5% 2022/12/15              -                               "                             10,000        350,224            -                    312,108              "
              "                  FNR 2003-43 ED 5% 2018/5/25            -                               "                             10,000        351,420            -                    315,729              "
              "                  GNR 2003-40 ND 5% 2033/5/20            -                               "                             10,000        351,745            -                    294,189              "
              "                  FNR 2003-49 TH 4.75% 2018/6/25         -                               "                              8,552        299,410            -                    260,689              "
              "                  FHLMC 2626 WD 5% 2033/6/15             -                               "                             33,902      1,166,262            -                  1,024,893              "
              "                  FNR 03-65 PE 5% 2033/7/25              -                               "                             10,000        351,134            -                    303,116              "
              "                  FNR 2003-58 PG 5% 2033/7/25            -                               "                             15,000        526,809            -                    450,899              "
              "                  FNR 2003-67 TJ 4.75% 2018/7/25         -                               "                              9,000        313,231            -                    275,247              "
              "                  FHR 2632 PD 5% 2031/11/15              -                               "                             10,716        366,137            -                    336,154              "
              "                  FNR 2003-89 WT 5% 2033/8/25            -                               "                             18,040        589,962            -                    558,304              "
              "                  FHR 2673 PD 5.5% 2032/2/15             -                               "                              7,000        236,843            -                    222,135              "
              "                  FNR 2003-21 XG 5.5% 2033/3/25          -                               "                             15,814        528,730            -                    493,082              "
              "                  FNR 2003-34 ME 5.5% 2033/5/25          -                               "                             13,991        466,464            -                    435,525              "

                                                                                                       - 56 -
                                                                                      FUBON LIFE ASSURANCE CO.,LTD.
                                                                                      NOTE TO FINANCIAL STATEMENT
                                                                                                June 30,2007
                                                                                                                                                                  June 30, 2007
     Holding Company                    Type and name of security      Relationship                     Account                      Shares (in                                     Market price / Net            Note
                                                                                                                                                   Book Value      Percentage (%)
                                                                                                                                     thousands)                                      value of equity
Fubon Life Assurance Co., Ltd.   FHR 2531 PM 5.5% 2032/12/15                -           Debts investment without active market-non        10,000       335,307             -                    312,210   Foreign Corporate Bonds
                                                                                                         current
              "                  FHR 2740 PE 5.5% 2034/1/15                 -                               "                             10,000        329,532            -                    312,415              "
              "                  FHR 2736 BH 5.5% 2034/1/15                 -                               "                             10,105        331,880            -                    315,651              "
              "                  FNR 04-19 SM 4.5% 2033/6/25                -                               "                              6,173        204,644            -                    173,257              "
              "                  FHR 2852 SQ 4.5% 2034/9/15                 -                               "                             20,008        679,911            -                    583,258              "
              "                  FHR 2858 HT 5.3% 2034/9/15                 -                               "                              9,573        325,058            -                    301,514              "
              "                  FHR 2852 SX 4.75% 2034/9/15                -                               "                             29,991      1,019,137            -                    880,152              "
              "                  FHR 2948 SG 7.25% 2035/3/15                -                               "                              8,927        279,331            -                    281,101              "
              "                  FHR 2949 SD 7.5% 2035/3/15                 -                               "                              3,326        104,694            -                     95,788              "
              "                  FHR 2941 ER 7.5% 2035/3/15                 -                               "                              5,319        167,432            -                    163,211              "
              "                  FNR 05-36 TA 7.5% 2035/5/25                -                               "                              4,743        149,548            -                    151,947              "
              "                  FNR 05-42 SD 7.5% 2035/5/25                -                               "                              4,699        148,405            -                    136,104              "
              "                  FHR 2977 SE 7.4% 2035/5/15                 -                               "                              9,419        294,994            -                    292,701              "
              "                  FNR 2005-45 SG 7.3% 2035/6/25              -                               "                              6,689        210,041            -                    194,209              "
              "                  FNR 2005-46 TP 7.5% 2035/5/25              -                               "                              9,071        284,815            -                    288,207              "
              "                  FHR 3008 FM 7.42% 2035/7/15                -                               "                             13,391        425,919            -                    421,654              "
              "                  FNR 05-79 SD 7.3% 2019/6/12                -                               "                             12,239        395,430            -                    349,143              "
              "                  FHR 3030 CS 7.3% 2035/9/15                 -                               "                             14,362        476,134            -                    431,489              "
              "                  FHR 3034 BT 7.32% 2035/9/15                -                               "                             13,922        461,573            -                    485,648              "
              "                  FHR 3069 CT 7.6% 2035/11/15                -                               "                              1,931         64,162            -                     63,581              "
              "                  FHR 3092 TM 7.3% 2035/12/15                -                               "                              7,530        250,222            -                    248,755              "
              "                  FNR 06-102 TS 7.25% 2036/10/25             -                               "                             13,877        455,912            -                    431,555              "
              "                  FHR 3219 CT 7.5% 2036/12/15                -                               "                              7,278        239,107            -                    237,649              "
              "                  FHR 3223 WM 6.1% 2035/6/15                 -                               "                             22,905        760,530            -                    700,125              "
              "                  FHR 3224 TB 8.4% 2036/9/15                 -                               "                             18,566        610,646            -                    599,970              "
              "                  FHR 3223 YN 8.4% 2036/10/15                -                               "                             20,690        680,500            -                    669,653              "
              "                  FNMA 4.375%                                -                               "                             15,000        521,526            -                    467,826              "
              "                  Freddie Mac                                -                               "                             16,000        541,429            -                    501,140              "
              "                  MWD 6.75% 2011/4/15                        -                               "                             13,000        473,283            -                    441,488              "
              "                  MWD 5.3% 2013/3/1                          -                               "                              7,000        245,194            -                    222,866              "
              "                  SINGTEL 6.376% 2011/12/1                   -                               "                              7,000        243,718            -                    236,093              "
              "                  Goldman Sachs 6.6% 2012/1/15               -                               "                              5,000        175,187            -                    169,219              "
              "                  Goldman Sachs 5.7% 2012/9/1                -                               "                              5,000        180,252            -                    163,436              "
              "                  Goldman Sachs 6.5% 2009/2/25               -                               "                              5,000        180,841            -                    166,768              "
              "                  Goldman Sachs 5.25% 2013/4/1               -                               "                              4,000        140,347            -                    126,974              "
              "                  AIG 6.3% 2011/5/10                         -                               "                              3,000       105,350             -                    101,068              "
              "                  AIG 4.25% 2013/5/15                        -                               "                             13,000       434,741             -                    394,436              "
              "                  Household Finance 6.375% 2011/10/15        -                               "                              6,000       213,008             -                    200,154              "
              "                  Household Finance 6.75% 2011/5/15          -                               "                              2,191        78,728             -                     74,433              "
              "                  GE 6.125% 2011/2/22                        -                               "                              7,452       271,143             -                    248,657              "
              "                  GE 6% 2013/8/6                             -                               "                              5,000       182,952             -                    167,682              "
              "                  GE 5.45% 2013/1/15                         -                               "                              9,000       319,026             -                    279,813              "
              "                  GE 6% 2012/6/15                            -                               "                              4,000       142,725             -                    133,513              "
              "                  WMT 7.25% 2013/6/1                         -                               "                              1,250        46,955             -                     44,131              "
              "                  WMT 4.55% 2013/5/1                         -                               "                              9,000       300,862             -                    290,700              "

                                                                                                           - 57 -
                                                                                          FUBON LIFE ASSURANCE CO.,LTD.
                                                                                          NOTE TO FINANCIAL STATEMENT
                                                                                                    June 30,2007
                                                                                                                                                                          June 30, 2007
     Holding Company                    Type and name of security          Relationship                     Account                      Shares (in                                         Market price / Net            Note
                                                                                                                                                           Book Value      Percentage (%)
                                                                                                                                         thousands)                                          value of equity
                                                                                                                                            AUD
Fubon Life Assurance Co., Ltd.   GS 2009/10/21                                  -           Debts investment without active market-non            3,400         86,197             -                     95,372   Foreign Corporate Bonds
                                                                                                             current
                                                                                                                                            AUD
              "                  Morgan Stanley 2008/7/30                       -                               "                                 1,600         40,575             -                     44,832              "
                                                                                                                                            AUD
              "                  Bear Stearns 2008/9/11                         -                               "                                 5,000        127,978             -                    140,136              "
                                                                                                                                            AUD
              "                  Merrill Lynch 6.5% 2009/7/28                   -                               "                                 2,000         49,807             -                     55,770              "
                                                                                                                                            AUD
              "                  GS 6.195% 2009/10/21                           -                               "                                 8,000        198,233             -                    220,543              "
                                                                                                                                           AUD
              "                  Bear Stearns 2014/4/24                         -                               "                                18,000        480,753             -                    492,251              "
                                                                                                                                           AUD
              "                  Morgan Stanley 2013/3/1                        -                               "                                 10,000       273,483             -                    265,429              "
              "                  CSFB 6.125% 2011/11/15                         -                               "                                11,000        383,133             -                    370,005   Foreign Financial Bonds
              "                  CSFB 6.5% 2012/1/15                            -                               "                                 6,000        220,434             -                    196,123              "
              "                  Int'l Bank Reconstruction & Development        -                               "                                 1,000         40,481             -                     40,005              "
                                 8.625% 2016/10/15
              "                  Citi 6.5% 2011/1/18                            -                               "                                11,000         406,560            -                    370,563             "
              "                  Citi 6% 2012/2/21                              -                               "                                14,000         515,582            -                    466,484             "
              "                  Citi 6.125% 2036/8/25                          -                               "                                10,000         349,923            -                    318,652             "
              "                  BAC 6.25% 2012/4/15                            -                               "                                 9,000         335,787            -                    303,468             "
              "                  BAC 4.875% 2013/1/15                           -                               "                                 9,000         317,839            -                    279,973             "
              "                  BAC 4.875% 2012/9/15                           -                               "                                 3,000         105,198            -                     94,742             "
              "                  BAC 5.125% 2014/11/15                          -                               "                                 7,000         245,114            -                    218,552             "
              "                  BAC 6% 2036/10/15                              -                               "                                30,000       1,037,741            -                    941,295             "
              "                  Wells Fargo Financial 5.5% 2012/8/1            -                               "                                12,000         435,327            -                    391,594             "
              "                  AE 4.875% 2013/7/15                            -                               "                                14,000         474,849            -                    448,217             "
              "                  EIB 0% 2021/9/15                               -                               "                                 7,000          95,157            -                     60,586             "
              "                  Lloyds TSB Bank PLC 5.86% 2018/10/22           -                               "                                10,000         337,599            -                    311,441             "
              "                  Lloyds TSB Bank PLC 0% 2036/5/22               -                               "                                10,000         343,049            -                    343,718             "
              "                  Lloyds TSB Bank PLC 0% 2036/11/28              -                               "                                10,000         342,783            -                    310,983             "
              "                  Lloyds TSB Bank PLC 0% 2037/04/02              -                               "                                10,000         335,553            -                    310,983             "
              "                  NWB 0% 2019/1/16                               -                               "                                37,505         629,573            -                    572,858             "
              "                  KFW 0% 2024/4/21                               -                               "                                10,000         401,254            -                    367,221             "
              "                  KFW 0% 2035/2/2                                -                               "                                20,000         743,311            -                    561,014             "
              "                  Rabobank 0% 2024/11/19                         -                               "                                10,000         389,594            -                    353,538             "
              "                  Rabobank 0% 2024/11/23                         -                               "                                10,000         384,639            -                    353,898             "
              "                  Rabobank 0% 2035/2/2                           -                               "                                10,000         372,079            -                    339,069             "
              "                  Rabobank 7.23% 2035/3/10                       -                               "                                15,000         461,795            -                    451,006             "
              "                  Rabobank 7.275% 2035/3/12                      -                               "                                15,000         461,795            -                    461,711             "
              "                  Depfa Pfandbriefbank 0% 2024/11/23             -                               "                                20,000         768,561            -                    719,993             "
              "                  Kommunalbaken 0% 2024/11/25                    -                               "                                10,000         384,154            -                    351,901             "
              "                  Kommunalbaken 0% 2035/2/3                      -                               "                                10,000         371,456            -                    337,465             "
              "                  RBS 0% 2024/12/24                              -                               "                                10,000         376,300            -                    351,492             "
              "                  RBS 0% 2024/12/30                              -                               "                                10,000         376,389            -                    348,219             "
              "                  RBS 0% 2035/11/21                              -                               "                                15,000         564,043            -                    520,487             "
              "                  Dexia BIL 0% 2025/1/27                         -                               "                                10,000         372,411            -                    352,589             "
              "                  Dexia BIL 0% 2036/4/25                         -                               "                                10,000         354,054            -                    344,945             "
              "                  Dexia BIL 0% 2036/10/10                        -                               "                                10,000         349,167            -                    336,493             "
              "                  Dexia BIL 0% 2036/11/27                        -                               "                                10,000         343,011            -                    325,124             "
              "                  Dexia BIL 0% 2036/12/19                        -                               "                                10,000         336,518            -                    337,072             "
              "                  HBOS 0% 2025/1/28                              -                               "                                10,000         371,221            -                    347,286             "

                                                                                                               - 58 -
                                                                                          FUBON LIFE ASSURANCE CO.,LTD.
                                                                                          NOTE TO FINANCIAL STATEMENT
                                                                                                    June 30,2007
                                                                                                                                                                      June 30, 2007
     Holding Company                    Type and name of security          Relationship                     Account                      Shares (in                                     Market price / Net            Note
                                                                                                                                                       Book Value      Percentage (%)
                                                                                                                                         thousands)                                      value of equity
Fubon Life Assurance Co., Ltd.   HBOS 0% 2036/7/27                              -           Debts investment without active market-non        10,000       347,145             -                    338,382   Foreign Financial Bonds
                                                                                                             current
              "                  HBOS 0% 2037/4/4                               -                               "                             10,000        335,528            -                    327,350              "
              "                  Depfa Bank PLC 0% 2035/10/28                   -                               "                             15,000        563,212            -                    517,884              "
              "                  Depfa Bank PLC 0% 2036/4/27                    -                               "                             10,000        352,370            -                    335,861              "
              "                  Depfa Bank PLC 0% 2037/1/30                    -                               "                             10,000        336,714            -                    326,499              "
              "                  Citi 0% 2035/11/2                              -                               "                             20,000        753,098            -                    678,989              "
              "                  Citi 0% 2035/11/7                              -                               "                             15,000        563,411            -                    504,823              "
              "                  Citi 0% 2035/11/22                             -                               "                             10,000        377,181            -                    342,310              "
              "                  Citi 0% 2035/1/24                              -                               "                             15,000        531,650            -                    501,337              "
              "                  Citi 0% 2036/2/21                              -                               "                             10,000        356,823            -                    339,789              "
              "                  Barclays 0% 2035/11/2                          -                               "                             10,000        376,449            -                    351,548              "
              "                  Barclays 0% 2035/11/21                         -                               "                             10,000        377,247            -                    353,849              "
              "                  Barclays 0% 2035/12/5                          -                               "                             10,000        375,581            -                    353,761              "
              "                  Barclays 0% 2035/12/13                         -                               "                             10,000        373,416            -                    352,019              "
              "                  Barclays 0% 2036/10/10                         -                               "                             10,000        349,117            -                    335,769              "
              "                  HSBC 0% 2035/11/8                              -                               "                             15,000        563,488            -                    461,662              "
              "                  HSBC 0% 2035/12/16                             -                               "                             20,000        747,489            -                    637,154              "
              "                  HSBC 0% 2035/12/28                             -                               "                             10,000        370,686            -                    323,487              "
              "                  HSBC 0% 2036/2/27                              -                               "                             20,000        712,982            -                    647,629              "
              "                  Eksportfinans 0% 2035/12/28                    -                               "                             10,000        368,657            -                    332,162              "
              "                  SG 0% 2036/2/23                                -                               "                             10,000        357,572            -                    345,191              "
              "                  BNP 0% 2036/7/28                               -                               "                             10,000        347,312            -                    324,077              "
              "                  BNP 0% 2037/1/30                               -                               "                             10,000        336,491            -                    309,346              "
              "                  BNP 0% 2037/3/30                               -                               "                             10,000        335,692            -                    310,983              "
              "                  ABN 0% 2036/7/28                               -                               "                             10,000        346,898            -                    333,635              "
              "                  ABN 0% 2036/11/16                              -                               "                             20,000        686,666            -                    627,072              "
              "                  Calyon 0% 2037/04/02                           -                               "                             10,000        335,537            -                    307,873              "
              "                  Deutsche Bank 0% 2036/7/28                     -                               "                             10,000        347,057            -                    347,515              "
              "                  Pearl Finance Public Ltd 7.6% 2012/9/27        -                               "                             25,000        783,915            -                    718,124              "
              "                  Corsair(Jersey) No.3 Ltd 7.3% 2012/9/20        -                               "                             25,000        785,000            -                    776,229              "
              "                  Cloverie plc 7.2% 2010/6/20                    -                               "                             50,000      1,591,560            -                  1,604,015              "
              "                  Aria CDO Ⅱ 7.5% 2013/4/11                      -                               "                             50,000      1,609,930            -                  1,676,359              "
              "                  Morgan Stanley 7.75% 2012/6/20                 -                               "                             25,000        807,740            -                    783,840              "
              "                  Calyon Finance (Guernsey) Limited 7.1%         -                               "                             30,000        995,004            -                    942,375              "
                                 2012/12/30
              "                  Deutsche Bank 7% 2013/1/12                     -                               "                             25,000       799,230             -                    806,099              "
              "                  Connecticut 7.8% 2023/3/9                      -                               "                             10,000       323,484             -                    318,217              "
              "                  Ares VIR CLO, Ltd. 7.47% 2018/3/23             -                               "                              8,000       259,424             -                    246,167              "
              "                  Goldman Sachs 9.3% 2016/9/30                   -                               "                             18,000       584,629             -                    559,769              "
              "                  Citi 7.3% 2030/4/15                            -                               "                             12,500       405,375             -                    408,656              "
              "                  Babson CLO Ltd. 2006-I 7.63% 2018/7/15         -                               "                             10,000       313,325             -                    231,014              "
              "                  Atrium V 7.4% 2021/7/31                        -                               "                              8,000       253,759             -                    257,952              "
              "                  ABN AMRO FX NOTE II 0% 2013/4/30               -                               "                              1,000        34,935             -                     40,539      Structured Notes
              "                  Eksportfinans 8.25% 2019/12/28                 -                               "                             10,000       322,658             -                    311,408              "
              "                  Lloyds TSB Bank PLC 8.4% 2019/12/29            -                               "                             10,000       322,636             -                    312,934              "
              "                  Lloyds TSB Bank PLC 8.4% 2019/12/30            -                               "                             10,000       322,636             -                    296,972              "



                                                                                                               - 59 -
                                                                                                FUBON LIFE ASSURANCE CO.,LTD.
                                                                                                NOTE TO FINANCIAL STATEMENT
                                                                                                          June 30,2007
                                                                                                                                                                            June 30, 2007
     Holding Company                    Type and name of security              Relationship                       Account                      Shares (in                                        Market price / Net             Note
                                                                                                                                                             Book Value      Percentage (%)
                                                                                                                                               thousands)                                         value of equity
Fubon Life Assurance Co., Ltd.   Depfa Pfandbriefbank 8.35% 2019/12/30               -            Debts investment without active market-non        10,000       322,636             -                       296,939      Structured Notes
                                                                                                                   current
              "                  BNP 8.45% 2020/1/28                                   -                               "                            15,000        478,698            -                       422,282              "
              "                  RBS 9.9% 2020/3/4                                     -                               "                            10,000        311,360            -                       298,674              "
              "                  BNP 9.1% 2020/3/4                                     -                               "                            10,000        311,360            -                       292,569              "
              "                  DB 9.15% 2015/3/4                                     -                               "                            10,000        311,360            -                       310,478              "
              "                  ING Bnak 9.75% 2020/3/16                              -                               "                            10,000        307,951            -                       296,514              "
              "                  BNP 9.28% 2025/6/16                                   -                               "                            10,000        313,300            -                       288,068              "
              "                  Lloyds TSB Bank PLC 9.15% 2025/6/16                   -                               "                            10,000        313,300            -                       291,963              "
              "                  Lloyds TSB Bank PLC 9.2% 2025/6/20                    -                               "                            10,000        313,616            -                       293,862              "
              "                  Dexia BIL 9.2% 2025/6/28                              -                               "                            10,000        313,551            -                       284,467              "
              "                  HBOS 9.25% 2020/8/4                                   -                               "                            20,000        636,624            -                       599,051              "
              "                  HBOS 8.6% 2025/9/19                                   -                               "                            15,000        491,539            -                       429,647              "
              "                  RBS 9.17% 2025/9/22                                   -                               "                            10,000        327,877            -                       315,958              "
              "                  BNP 8.5% 2037/5/10                                    -                               "                            10,000        330,228            -                       327,350              "
              "                  HBOS 8.65% 2037/5/14                                  -                               "                            10,000        330,242            -                       327,350              "
              "                  HBOS 8.6% 2037/5/24                                   -                               "                            10,000        331,932            -                       327,350              "
              "                  DB 8.6% 2037/5/24                                     -                               "                            10,000        331,932            -                       319,003              "
              "                  Barclays 8.4% 2037/5/24                               -                               "                            10,000        331,932            -                       327,350              "
              "                  DB 8.65% 2037/6/8                                     -                               "                            10,000        330,731            -                       327,350              "
              "                  BNP 8.65% 2037/6/8                                    -                               "                            10,000        330,731            -                       327,350              "
              "                  HBOS 8.65% 2037/6/11                                  -                               "                            10,000        330,731            -                       327,350              "
              "                  Taiwan High Speed Rail, Co., Ltd.(A)                  -                               "                           100,000      1,000,000            -                     1,000,000      Preferred Stock
              "                  Taiwan High Speed Rail, Co., Ltd.(C)                  -                               "                           112,821      1,049,235            -                     1,049,235              "
              "                  Chinatrust Financial Holding Co., Ltd(B)              -                               "                           105,000      4,200,384            -                     4,200,384              "
              "                  01005P                                                -                               "                           150,000        127,665            -                       150,006   Property securitizations
              "                  An-Shin Credit Card securitization 2005-1A            -                               "                           400,000        400,000            -                       400,000              "
              "                  01036S                                                -                               "                            70,000         70,000            -                        70,011              "
              "                  Dun-Feng Time Finance square securitization           -                               "                            40,000         40,000            -                        40,000              "
              "                  Chinatrust bank 2005-1                                -                               "                           500,000        500,969            -                       500,000              "
              "                  ABN AMRO Bank                                         -               Other financial asset-non current         1,341,790      1,382,050            -                     1,382,050     Structured Deposit
              "                  Calyon Bank                                           -                               "                         1,110,105      1,145,725            -                     1,145,725              "
              "                  Deutche Bank                                          -                               "                         3,940,695      4,059,825            -                     4,059,825              "
              "                  Chinatrust Bank                                       -                               "                         5,130,000      5,130,000            -                     5,130,000              "
              "                  Bank SinoPac Company Limited                          -                               "                         2,000,000      2,000,000            -                     2,000,000              "
              "                  Fubon Venture Capital Co., Ltd                  The investee     Long-term Investment under Equity method           4,000         53,634                20.00                53,634       Unlisted Stock
                                                                                  recognized
                                                                                  investment
                                                                               income/loss by
                                                                                equity method




                                                                                                                     - 60 -
Form 2                                                                                                                                                                                                                                                                                               (NT$’000)
                                                                                                            December 31,2006                          Purchase                                            Disposal                                                                June 30,2007
 Holding                                                                                                                                                                                                                         Gain(Loss) on            Gain(Loss)
                   Type and Name of Security              Account               Party   Relationship         Shares                               Shares                            Shares          Selling                                                                      Shares
Company                                                                                                                      Amount                               Amount                                          Book Value      disposal of            on valuation                                 Amount
                                                                                                        (in thousands)                       (in thousands)                    (in thousands)        Price                                                                  (in thousands)
                                                                                                                                                                                                                                   securties
           Convertible Bonds:
Fubon Life PSC 1                                 Financial assets measured        -          -                      1,500     171,375                         -            -             1,500       171,375          171,375                    -                   -                       -                 -
Assurance                                        at fair value through profit
 Co., Ltd.                                           or loss-non current
                        :
           Listed Stocks:
     "     China Motors Co., Ltd.                Available-for-sale financial     -          -                      5,872     298,219                  5,872       185,291               5,872       184,356          298,208          (113,852)                1,141                 5,872             186,443
                                                     assets-non current
    "      Hsinchu International Bank                         "                   -          -                      8,461     146,878                         -            -             8,461       207,294          146,878            60,416                      -                       -                 -
           Government Bonds
    "      A93107                                Available-for-sale financial     -          -                2,000,000      2,017,426                        -            -         1,600,000       1,609,648       1,613,941           (4,293)                (3,922)             400,000             399,563
                                                     assets-non current
    "      A94104                                             "                   -          -                3,100,000      3,169,043              2,500,000      2,474,023         3,100,000       3,072,805       3,169,043          (89,248)               (13,537)           2,500,000           2,460,486
    "      A95101                                             "                   -          -                  800,000        795,501                     -               -            800,000        795,777         795,501               196                     -                    -                   -
    "      A95106                                             "                   -          -                  400,000        394,524                     -               -            400,000        395,027         394,524               503                     -                    -                   -
    "      A96103                                             "                   -          -                        -              -             1,400,000      1,365,673             900,000       876,220         889,205           (12,985)                (3,528)             500,000             472,940
           Financial Bonds
    "      G13999                                Available-for-sale financial     -          -                           -            -              500,000       500,000                      -             -              -                   -                   -              500,000             500,000
                                                     assets-non current
    "      G12404                                             "                   -          -                           -            -              800,000       800,000                      -             -              -                   -                   -              800,000             800,000
           Property securitizations
    "      01078S                                Available-for-sale financial     -          -                           -            -            2,730,000      2,730,000                     -             -              -                   -             (27,161)           2,730,000           2,702,839
                                                     assets-non current
    "      01079S                                             "                   -          -                           -            -            1,430,000      1,430,000                     -             -              -                   -             (16,692)           1,430,000           1,413,308
    "      961Capital Securities D                            "                   -          -                           -            -            2,192,700      2,192,700                     -             -              -                   -                   -            2,192,700           2,192,700
           Unlisted stock
    "      Taiwan fixed Network Corp             Financial assets measured        -          -                   98,230       474,844                 75,340       599,018             173,570      1,436,305        1,073,862          362,443                      -                       -                 -
                                                           at cost
           Foreign Corporate Bonds
    "      FHR 3224 TB 8.4% 2036/9/15             Debts investment without        -          -                   22,834       751,038                                                    4,268       140,392          140,392                        -               -               18,566             610,646
                                                  active market-non current
    "      FHR 3223 YN 8.4% 2036/10/15                        "                   -          -                   24,893       818,755                                                    4,203       138,255          138,255                   -                    -               20,690             680,500
    "      AIG 5.625%                                         "                   -          -                    5,000       174,855                                                    5,000       173,912          174,855                (6)                     -                    -                   -
    "      Bear Stearns 6.9433% 2014/4/24                     "                   -          -                        -             -                 18,000       480,753                   -             -                -                 -                      -               18,000             480,753
    "      Morgan Stanley 6.74% 2013/3/1                      "                   -          -                        -             -                 10,000       273,483                   -             -                -                 -                      -               10,000             273,483
           Foreign Financial Bonds
    "      Lloyds TSB Bank PLC 0% 2037/04/02      Debts investment without        -          -                           -            -               10,000       335,553                      -             -              -                   -                   -               10,000             335,553
                                                  active market-non current
    "      HBOS 0% 2037/4/4                                   "                   -          -                           -            -               10,000       335,528                      -             -              -                   -                   -               10,000             335,528
    "      Depfa Bank PLC 0% 2037/1/30                        "                   -          -                           -            -               10,000       336,714                      -             -              -                   -                   -               10,000             336,714
    "      BNP 0% 2037/1/30                                   "                   -          -                           -            -               10,000       336,491                      -             -              -                   -                   -               10,000             336,491
    "      BNP 0% 2037/3/30                                   "                   -          -                           -            -               10,000       335,692                      -             -              -                   -                   -               10,000             335,692
    "      Calyon 0% 2037/04/02                               "                   -          -                           -            -               10,000       335,537                      -             -              -                   -                   -               10,000             335,537
           Structured Notes
    "      FHLB 9.1% 2024/3/22                    Debts investment without        -          -                   10,000       333,430                         -            -            10,000       333,430          333,430                    -                   -                       -                 -
                                                  active market-non current
    "      Rabobank 9.3% 2024/3/22                            "                   -          -                   10,000       333,430                      -             -              10,000       333,430          333,430                    -                   -                    -                   -
    "      Depfa Pfandbriefbank 9.8% 2024/4/15                "                   -          -                   10,000       329,480                      -             -              10,000       329,480          329,480                    -                   -                    -                   -
    "      ABN 9.5% 2020/5/11                                 "                   -          -                   10,000       312,827                      -             -              10,000       312,827          312,827                    -                   -                    -                   -
    "      HBOS 9.92% 2020/5/18                               "                   -          -                   10,000       313,692                      -             -              10,000       313,692          313,692                    -                   -                    -                   -
    "      Calyon 9.55% 2020/5/18                             "                   -          -                   10,000       313,692                      -             -              10,000       313,692          313,692                    -                   -                    -                   -
    "      Dexia BIL 9.35% 2025/5/31                          "                   -          -                   10,000       313,987                      -             -              10,000       313,987          313,987                    -                   -                    -                   -
    "      BNP 9.51% 2025/5/31                                "                   -          -                   10,000       313,987                      -             -              10,000       313,987          313,987                    -                   -                    -                   -
    "      ABN 9.65% 2025/6/3                                 "                   -          -                   10,000       313,614                      -             -              10,000       313,614          313,614                    -                   -                    -                   -
    "      BNP 8.5% 2037/5/10                                 "                   -          -                        -             -                 10,000       330,228                   -             -                -                    -                   -               10,000             330,228
    "      HBOS 8.65% 2037/5/14                               "                   -          -                        -             -                 10,000       330,242                   -             -                -                    -                   -               10,000             330,242
    "      HBOS 8.6% 2037/5/24                                "                   -          -                        -             -                 10,000       331,932                   -             -                -                    -                   -               10,000             331,932
    "      DB 8.6% 2037/5/24                                  "                   -          -                        -             -                 10,000       331,932                   -             -                -                    -                   -               10,000             331,932
    "      Barclays 8.4% 2037/5/24                            "                   -          -                        -             -                 10,000       331,932                   -             -                -                    -                   -               10,000             331,932
    "      DB 8.65% 2037/6/8                                  "                   -          -                        -             -                 10,000       330,731                   -             -                -                    -                   -               10,000             330,731
    "      BNP 8.65% 2037/6/8                                 "                   -          -                        -             -                 10,000       330,731                   -             -                -                    -                   -               10,000             330,731
    "      HBOS 8.65% 2037/6/11                               "                   -          -                        -             -                 10,000       330,731                   -             -                -                    -                   -               10,000             330,731
           Unlisted Stock
    "      MetLife Fubon Limited                   The investee recognized        -          -         HK 240,000              733,299                        -            -           240,000       1,839,040         733,299         1,025,192                        -                        -             -
                                                 investment income/loss by
                                                        equity method



                                                                                                                                          - 61 -
                                                                         FUBON LIFE ASSURANCE CO., LTD.
                                                                        NOTES TO FINANCIAL STATEMENTS
                                                                              JUNE 30, 2007 AND 2006


Form 3                                                                                                                                                                          (NT$’000)

                                                                                                                                                                  P urchasing
                                                                                   T rading      P ayable         T rading
   H olding C om pany          N am e of P roporties          T rading D ate                                                      R elationship     R eferral     purpose &     O thers
                                                                                   A m ount      A m ount        C om pany
                                                                                                                                                                    situation

                         N o.0485-0002 Land and
 Fubon Life A ssurance                                                                                       Fubon C onstructer                   Accreditation
                         building,Linyi St, Sec.1,              2007.3.8       $     737,857       737,857                          A ffiliate                    Investm ent      -
 C o., Ltd.                                                                                                        C o.                             R eport
                         Zhongzheng D istrict , Taipei city

                         N o. 9454 Land and building,
           〞             C hang chun Sec.3, Z hongshan          2007.3.8           1,900,672     1,900,672            〞                〞               〞              〞            -
                         D istrict, T aipei city

                         N o.193 Land and building, Sihu                                                     W inbond
                                                                                                                                   N ot related
           〞             V illage Sec., N eihu D istrict,       2006.9.14          1,898,544     1,898,544 E lectronics                                〞              〞            -
                                                                                                                                      party
                         Taipai C ity                                                                        C orp.
                         N o.252-1, 252-3, 252-4, 253,
                         257, 258, 259, 260, 261, 262                                                      C heng C hen
           〞             ,245-2, 245-5, 246-2, 246-5            2006.3.6           1,563,934     1,563,934 D evelopm ent and           〞               〞              〞            -
                         Land, N o.6, R en-ai Sec., D a-an                                                 T he First Insurance
                         D istrict, T aipei C ity




                                                                                               - 61 -
                                                                     FUBON LIFE ASSURANCE CO., LTD.
                                                                    NOTES TO FINANCIAL STATEMENTS
                                                                          JUNE 30, 2007 AND 2006


Form 4
                                                                                                                                                                            (NT$’000)

                                                                                                                                              Purchasing
 Disposing                             Trading     Acquisition               Trading      Received    Gain (loss)   Trading
              Name of Proporties                               Book value                                                      Relationship   purpose &       Referral      Others
 Company                                Date          date                   Amount       amount      on disposal   Company
                                                                                                                                               situation
             No.43 Land & building,
Fubon Life                                                                                                       Land Bank                   Real estate
             No.5 Wende Sec.,                                                                                                 Trustee of                    Accreditation
Assurance
             Neihu District, Taipei
                                       2006.4.28   2001.4.23    $ 154,465     176,600       176,600        5,663 of Taiwan
                                                                                                                              Fubon REITs II
                                                                                                                                             investment
                                                                                                                                                              Report          -
Co., Ltd.                                                                                                        Co., Ltd                    trust
             City
             No.7, 10-1, 11, 12, 13,
             14-2 Land, No.2                                                                                                                  Disposal of
    〞
             Tianmu Sec., Shihlin
                                       2006.6.30   2004.12.31    1,414,646   1,713,000    1,713,000      295,898 Fubon Land   An affiliate    investment
                                                                                                                                                                 〞            -
             District, Taipei City




                                                                                         - 62 -
                                                             FUBON LIFE ASSURANCE CO., LTD.
                                                            NOTES TO FINANCIAL STATEMENTS
                                                                  JUNE 30, 2007 AND 2006


Form 5                                                                                                                                                  (NT$’000)

                                                                                              Account receivable
                                                                                                                  Amount that
                                                                                             overdue with related              Allowance
  Holding Company              Related parties           Relationship       Amount Turnover                       subsequent
                                                                                                    party                     for bad debt
                                                                                                                   collection
                                                                                            Amount Book value
Fubon Life Assurance Fubon Finance Holding
                                           Parent Company $ 448,084                             -           -               -                 -                -
Co., Ltd.            Co., Ltd.



The Company has been combined into Fubon Finance Holding Co., Ltd., and the declaration of income tax would be declared by the parent company. In filing income tax
returns, the balance of income tax receivable and the income tax benefit was reclassified as receivable from affiliated parties (recorded under other receivable).




                                                                              - 63 -
                                                                    FUBON LIFE ASSURANCE CO., LTD.
                                                                   NOTES TO FINANCIAL STATEMENTS
                                                                         JUNE 30, 2007 AND 2006


Form 6                                                                                                                                                                         (NT$’000)

                                                                                                                                                                              Income
                                                                                             Original Investment            Holding by the Company
                                                                                                                                                            Income             (losses)
                                                                                                                                                          (losses) of       recognized
 Investee Company           Address                       Major Business                                                 Shares
                                                                                            June 30,       December                                        investee              from
                                                                                                                           (in    Percentage Book Value   company             investee
                                                                                             2007           31,2006
                                                                                                                       thousands)                                            company

                                              1. Investing in venture capital enterprise
                    13F No.108, Sec. 1, Tun
Fubon Venture                                   (Do not operate finance,
                    Hua S. Road, Taipei,                                                    $   40,000      100,000        4,000      20.00%     53,634      (24,460)           (4,892)
Capital Co., Ltd.                                insurance, trust investment
                    Taiwan
                                                 and security.)

                                              2. Provides planning, consulting,
                                                 operating and managing services
                                                 for investee company.

                                              3. Provides operating, consulting, and
                                                 managing services for other venture
                                                 capital company.

                                              4.Other businese allowed by the
                                              government

                    9F Two Harbour Front
MetLife Fubon
                    22 Tak Fung Street,       Life and annuity, linked long-term
Limited                                                                                     $          -   1,057,418           -           -          -                 -       12,000
                    Hung Kom                  and permanent health insurance.
                    Kowloon, Hong Kong




                                                                                           - 64 -
                                                              FUBON LIFE ASSURANCE CO., LTD.
                                                             NOTES TO FINANCIAL STATEMENTS
                                                                   JUNE 30, 2007 AND 2006


Form 7                                                                                                                                                          (NT$’000)


                                                                Beginning Balance       Purchase                                Sell                           Ending Balance
             Marketable
Buyer/seller            Account   Counterparty Related party
             securities
                                                                                                                                                  Gain/loss
                                                                Share     Amount      Share       Amount   Share     Selling price     Cost                    Share       Amount
                                                                                                                                                 on disposal

                      Long-term
Fubon Life Met Life   investment MetLife
                                               Not related
Assurance Fubon       under the Group Co.,                     $240,000   733,299             -        -   240,000    1,839,040        733,299   1,025,192             -        -
                                               party
Co., Ltd   Limited    equity     Ltd
                      method




                                                                             - 65 -

				
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