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FUHWA FINANCIAL HOLDING CO._ LTD. FINANCIAL STATEMENTS AND REPORT

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FUHWA FINANCIAL HOLDING CO._ LTD. FINANCIAL STATEMENTS AND REPORT Powered By Docstoc
					FUHWA FINANCIAL HOLDING CO., LTD.

FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT
  ACCOUNTANTS

FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006
(96)PWCR06003294

                 REPORT OF INDEPENDENT ACCOUNTANTS



To: The Board of Directors and Stockholders of Fuhwa Financial Holding Co., Ltd.

We have audited the accompanying consolidated balance sheet of Fuhwa Financial
Holding Co., Ltd. (the “Company”) and its subsidiaries (collectively the “Fuhwa
Group”) as of June 30, 2007, and the related consolidated statements of income, of
changes in stockholders’ equity and of cash flows for the six months then ended.
These consolidated financial statements are the responsibility of the Fuhwa
Group’s management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. The consolidated financial
statements of the Fuhwa Group for the six months ended June 30, 2006 were
audited by other independent accountants whose report dated August 8, 2006
expressed a modified unqualified opinion.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Fuhwa
Financial Holding Co., Ltd. and its subsidiaries as of June 30, 2007, and the results
of its consolidated operations and its consolidated cash flows for the six months
then ended in conformity with the “Guidelines Governing the Preparation of
Financial Reports by Financial Holding Companies”, “Guidelines Governing the
Preparation of Financial Reports by Securities Issuers” ,“Guidelines Governing the
Preparation of Financial Reports by Public Banks”, “Guidelines Governing the
Preparation of Financial Reports by Securities Firms”, “Guidelines Governing the
Preparation of Financial Reports by Futures Commission Merchants”, “Business
Entity Accounting Act”, “Regulation on Business Entity Accounting Handling”
and generally accepted accounting principles in the Republic of China.
On April 10, 2007, the Board of Directors of Yuanta Core Pacific Securities Co.,
Ltd. resolved to merge with Fuhwa Securities Co., Ltd. (renamed as Yuanta
Securities Co., Ltd.) on behalf of the Stockholders’ Meeting. After merger, Yuanta
Core Pacific Securities Co., Ltd. will be the dissolved company and Fuhwa
Securities Co., Ltd. will be the surviving company, tentative effective date will be
September 23, 2007. Please refer to Note 7(7) for details.

Yuanta Core Pacific Securities Co., Ltd. has entered margin loans and stocks loans
assignment contract with Fuhwa Securities Finance Co., Ltd., effective on July 1,
2007. Yunata Core Pacific Securities Co., Ltd. has assigned margin loans and stock
loans amounted to $35,923,470 to Fuhwa Securities Finance Co., Ltd. Please refer
to Note 5(2)H for details.

On April 10, 2007, the Board of Directors of Fuhwa Futures Co., Ltd. resolved to
merge with Yuanta Futures Co., Ltd. (formerly named as Yuanta Core Pacific
Futures Co., Ltd.) on behalf of the Stockholders’ Meeting, effective on September
23, 2007. After merger, Fuhwa Futures Co., Ltd. will be the dissolved company.
Please refer to Note 7(7) for details.




August 21, 2007




-----------------------------------------------------------------------------------------------------------------------------------------------------------
The accompanying consolidated financial statements are not intended to present the consolidated financial position and results of
operations and cash flows in accordance with accounting principles and practices generally accepted in countries and
jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the
audit of such consolidated financial statements may differ from those generally accepted in countries and jurisdictions other than
the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants
are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted
in the Republic of China, and their application in practice.
                                                                                Fuhwa Financial Holding Co., Ltd. And Its Subsidiaries
                                                                                           Consolidated Balance Sheets
                                                                                              June 30, 2007 And 2006
                                                                                        (Expressed In Thousands of New Taiwan Dollars)

                                                                        June 30, 2007            June 30, 2006                                                                               June 30, 2007            June 30, 2006
                                                                          Amount                   Amount                                                                                      Amount                   Amount
ASSETS                                                                                                               LIABILITIES AND STOCKHOLDERS’ EQUITY
Cash and cash equivalents (Note 4(1))                               $          8,455,397    $          5,047,970     Due to Central Bank and other banks (Notes 4(15) and 5)             $         20,659,888     $         33,136,229
Due from Central Bank and call loans to banks (Notes4(2) and 5)               64,288,979              35,709,033     Commercial paper payable--net (Note 4(16))                                    18,275,844               17,378,793
Financial assets at fair value through profit or loss– net (Notes                                                    Financial liabilities at fair value through profit or loss – net
   4(3), 5 and 6)                                                             73,549,556              30,779,090       (Note 4(3))                                                                  7,683,614                3,944,899
Investments in bills and bonds under resale agreements (Note                                                         Bills and bonds payable under repurchase agreements (Note
   4(4))                                                                      10,257,080               9,213,982        4(17))                                                                    55,067,060                35,221,263
Receivables – net (Notes 4(5) and 6)                                         106,971,078              46,973,957     Payables (Notes 4(18) and 5)                                                 38,470,194                15,456,313
Loans– net (Notes 4(6) and 5)                                                227,515,376             227,960,673     Deposits(Notes 4(17) and 5)                                                 275,681,287               231,603,761
Available-for-sale financial assets – net (Notes 4(7) and 6)                  23,027,806              15,255,289     Financial bonds payable (Note 4(19))                                         19,101,902                 8,513,484
Held-to-maturity financial assets – net (Notes 4(8) and 6)                     9,079,034               6,255,880     Other borrowings (Note 4(20))                                                26,830,361                12,525,000
Equity investments accounted for under the equity method (Note                                                       Accrued pension liabilities (Note 4(22))                                        832,947                   307,678
   4(9))                                                                       5,674,842                       -     Other financial liabilities                                                   1,021,133                   131,029
Other financial assets – net (Note 4(10))                                      8,925,716               5,876,272     Reserves for operation and liabilities                                        1,003,383                   472,974
Fixed assets– net (Notes 4(11) and (14))                                      13,070,953               5,506,388     Other liabilities (Note 4(21))                                                6,137,055                   681,063
Intangible assets—net (Note 4(12))                                             9,854,535               1,967,714     TOTAL LIABILITIES                                                           470,764,668               359,372,486
Other assets (Notes 4(13) and 6))                                             14,152,472               7,402,552     STOCKHOLDERS’ EQUITY
Deferred income tax assets (Note 4 (23))                                       2,483,321               1,305,240     Common stock (Note 4(24))                                                     83,121,145               31,617,616
                                                                                                                     Additional paid-in Capital (Note 4(26))                                       23,832,730                8,300,878
                                                                                                                     Retained earnings
                                                                                                                       Unappropriated earnings (Notes 4(28) and (29))                               4,327,013                   92,929
                                                                                                                     Other stockholders’ equity
                                                                                                                      Cumulative translation adjustments                                 (            49,573) (                 61,631)
                                                                                                                      Unrealized profit or loss on available-for-sale financial assets   (           164,313) (                 40,504)
                                                                                                                       Treasury stocks (Note 4(25))                                      (         4,728,444)                        -
                                                                                                                       Unrealized net loss on accrued pension cost                       (            39,660) (                 59,292)
                                                                                                                     Minority interest                                                               242,579                    31,558
                                                                                                                     TOTAL STOCKHOLDERS’ EQUITY                                                  106,541,477                39,881,554
TOTAL ASSETS                                                        $        577,306,145    $        399,254,040     TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                          $       577,306,145      $        399,254,040



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

                                                                               See PricewaterhouseCoopers audit report dated August 21, 2007.
                               Fuhwa Financial Holding Co., Ltd. And Its Subsidiaries
                                        Consolidated Statements of Income
                                For The Six Months Ended June 30, 2007 And 2006
                    (Expressed In Thousands of New Taiwan Dollars, Except For Earnings Per Share)


                                                                         For The Six Months Ended June 30,
                                                                           2007                      2006
                                                                          Amount                    Amount

Interest income                                                   $                   8,019,842 $                       6,549,940
Less: Interest expenses                                       (                       3,449,112 ) (                     2,734,337)
Net interest income                                                                   4,570,730                         3,815,603
Net non-interest income
Net service fee and commission income                                                 3,718,065                         1,821,074
Gain or loss on financial assets and financial liabilities
  at fair value through profit or loss                                                2,429,334                          131,899
Realized gain or loss on available-for-sale financial
  assets                                                                                 23,819                           95,110
Income or loss from equity investments accounted for
  under the equity method – net (Note 4(9))                                             367,579                               326
Foreign exchange gain or loss                                                            72,953                           228,688
Impairment losses                                             (                         711,128 ) (                       121,231)
Net other non-interest income or loss                                                   964,706                           354,071
Net non-interest income                                                               6,865,328                         2,509,937
Net profits                                                                          11,436,058                         6,325,540
Provision for credit losses                                   (                       1,020,670 ) (                     2,276,638)
Operating expenses
   Personnel expenses (Note 4(30))                            (                       4,505,929 ) (                     2,183,974)
   Depreciation and amortization expenses (Note 4(30))        (                         514,752 ) (                       336,412)
   Business expenses and general and administrative
      expenses                                                (                       1,174,447 ) (                     1,245,900)
                                                              (                       6,195,128 ) (                     3,766,286)
Consolidated income from continuing operations before
  income taxes                                                                        4,220,260                          282,616
Income tax benefit (expenses) (Note 4(23))                                              100,864 (                        355,069)
Consolidated net income before cumulative effect of
  changes in accounting principle                                                     4,321,124 (                         72,453)
Cumulative effect of changes in accounting principle
  (Net of income taxes of $18,567)                                                            -                          165,588
Total consolidated net income                                     $                   4,321,124       $                   93,135

Total consolidated net income belongs to:
 Parent company                                                   $                   4,312,340       $                   92,929
 Minority interest                                                                        8,784                              206
                                                                  $                   4,321,124       $                   93,135

Earnings per common share (Note 4(29))                            Before Taxes       After Taxes      Before Taxes   After Taxes
Consolidated net income before cumulative effect of
 changes in accounting principle                                  $       0.77 $            0.77      $       0.03 $        0.04
Cumulative effect of changes in accounting principle                                           -                  (         0.01)
Total consolidated net income                                                    $          0.77                    $       0.03
Diluted earnings per share (Note 4(29))
Consolidated net income before cumulative effect of
 changes in accounting principle                                  $       0.76 $            0.77      $       0.03 $        0.04
Cumulative effect of a change in accounting principle                                          -                  (         0.01)
Total consolidated net income                                                    $          0.77                    $       0.03
                       The accompanying notes are an integral part of these consolidated financial statements.

                                  See PricewaterhouseCoopers audit report dated August 21, 2007.
                                                                         Fuhwa Financial Holding Co., Ltd. And Its Subsidiaries
                                                                       Consolidated Statements of Changes in Stockholders’ Equity
                                                                          For The Six Months Ended June 30, 2007 And 2006
                                                                                  (Expressed In Thousands of New Taiwan Dollars)
                                                                                                    Retained Earnings
                                                                                                                                                     Unrealized
                                                                                                                                                    Profit / Loss                        Unrealized
                                                                                                                                                    On Available                          loss on
                                                                 Additional                                                             Cumulative    -for-sale                           accrued
                                                 Common           Paid-in             Legal           Special       Unappropriated      translation  Financial            Treasury        pension        Minority
                                                  Stocks          Capital             Reserve         Reserve         Earnings          adjustment     Assets              Stocks          cost          Interest          Total
For the six months ended June 30, 2006
 Balance, January 1, 2006                       $ 31,617,616 $ 8,553,292 $             591,428 $         95,561 ($        931,934) ($       50,484) $             - ($        73,779) ($     59,292) $      32,564 $ 39,774,972
 Recovery of loss                                          - (   244,945) (            591,428) (        95,561)          931,934                -                -                -              -              -            -
 Transfer treasury stocks to employees                     - (     7,469)                    -                -                 -                -                -           73,779              -              -       66,310
 Unrealized loss on financial assets
   accounted for under equity method                       -                  -                 -               -                -                 - (       40,504)                 -            -                 - (     40,504)
  Translation adjustments accounted for under
   equity method                                           -                  -                 -               -                - (         11,147)              -                  -            -              - (        11,147)
  Changes in minority interest                             -                  -                 -               -                -                -               -                  -            - (        1,212) (        1,212)
 Consolidated net income for the six months
   ended June 30, 2006                                     -           -                        -               -          92,929                 -               -                  -            -            206       93,135
 Balance, June 30, 2006                         $ 31,617,616 $ 8,300,878          $             - $             - $        92,929 ($         61,631) ($      40,504) $               - ($    59,292) $      31,558 $ 39,881,554
For the six months ended June 30, 2007
 Issuance of new shares to obtain ownership
   of subsidiary                                $ 31,617,616 $ 8,300,878          $             - $             - ($    3,311,655) ($        59,232) $       15,551 $                - ($    39,660) $      33,736 $ 36,557,234
 Recovery of loss                                 51,503,529  18,850,292                        -               -               -                 -               -                  -            -              -   70,353,821
 Parent company stocks ownership held by
   subsidiary                                              - (     3,326,328)                   -               -       3,326,328                  -              -                  -            -                 -              -
 Parent company stocks ownership sold by
   subsidiary                                              -                  -                 -               -                -                 -              - (      4,979,708)             -                 - (   4,979,708)
 Unrealized loss on financial assets
   accounted for under equity method                       -            5,392                   -               -                -                 -              -         251,264               -                 -      256,656
 Additional paid-in capital accounted for
   under equity method                                     -                  -                 -               -                -                 - (      179,864)                 -            -                 - (    179,864)
 Translation adjustments accounted for under
   equity method                                           -            2,496                   -               -                -                 -              -                  -            -                 -         2,496
 Changes in minority interest                              -                -                   -               -                -             9,659              -                  -            -                 -         9,659
 Consolidated net income for the six months
   ended June 30, 2007                                     -            -                       -               -               -                 -               -                -              -        200,059      200,059
 Balance, June 30, 2007                                    -            -                       -               -       4,312,340                 -               -                -              -          8,784    4,321,124
                                                $ 83,121.145 $ 23,832,730         $             - $             - $     4,327,013 ($        49,573) ($      164,313) ($    4,728,444) ($     39,660) $     242,579 $106,541,477
                                                                  The accompanying notes are an integral part of these consolidated financial statements.

                                                                              See PricewaterhouseCoopers audit report dated August 21, 2007.
                                  Fuhwa Financial Holding Co., Ltd. And Its Subsidiaries
                                          Consolidated Statements of Cash Flows
                                    For the Six Months Ended June 30, 2007 and 2006
                                        (Expressed in Thousands of New Taiwan Dollars)

                                                                                For The Six Months Ended June 30,
                                                                                  2007                    2006
Cash Flows From Operating Activities
  Total consolidated net income                                           $               4,312,340   $             92,929
  Minority interest income                                                                    8,784                    206
  Adjustments to reconcile consolidated net income to net cash
     provided by (used in) operating activities
  Profit or loss and other adjustments with no effect on cash flows
   Depreciation and amortization                                                            514,752             389,332
   Provision for credit losses                                                            1,020,670           2,276,638
   Recovery of doubtful debts and overdue loans                           (                  88,942) (           75,010)
   Gain on impairment loss recovery from foreclosed assets                (                  18,590)                  -
   Gains from sales of non-performing loans                               (                 184,767)                  -
   Impairment loss on available-for-sale financial assets                                     4,904                   -
   Realized loss (gain) on available-for-sale financial assets                                6,467 (            95,110)
   Amortization on available-for-sale financial assets                                       17,332 (            17,004)
   Impairment loss on available-for-sale financial assets stated at
      costs                                                                                 56,543              121,231
   Gains on disposal of financial assets stated at costs                  (                 45,017) (            13,291)
   Disposal of loss on long-term equity investments                                              -                1,371
   Loss (gain) from equity investments accounted for under equity
      method                                                                               367,579    (                326)
   Cash dividends accounted for under equity method                                        822,403                   6,848
   Impairment loss on fixed assets and other assets                                        668,271                       -
   Loss on sale or abandonment of fixed assets and other assets                             39,890                  33,240
   Loss on maturity of separate Trading of Registered Interest and
      Principal of Securities (STRIPS)                                                       5,248                       -
   Purchase of corporate bonds payable / amortization on redemption
     negotiation, effect of foreign exchange rate changes and interest
     compensation                                                         (                     28) (                5,939)
   Changes in assets and liabilities
   (Increase) decrease in operating assets
   Decrease (increase) in financial assets at fair value through profit
       or loss                                                                           11,015,249 (           228,517)
   Increase in receivables                                                (              16,276,690) (        4,587,520)
   Net increase in other financial assets                                 (                     420) (          682,450)
   (Increase) decrease in deferred income tax assets                      (                 112,810)            235,084
   Increase in other assets                                               (               4,449,750)                  -
   Increase (decrease) in operating liabilities
   Increase (decrease) in financial liabilities at fair value through
         profit or loss                                                                   1,972,609   (          88,294)
   Increase (decrease) in payables                                                        2,777,291   (       4,688,132)
   Increase (decrease) in accrued pension liabilities                                        13,557   (          38,837)
   Increase (decrease) in reserve for operating and liabilities                             108,507   (          82,207)
      Net cash provided by (used in) operating activities                                 2,555,382   (       7,445,758)
                                                                  7
                                  Fuhwa Financial Holding Co., Ltd. And Its Subsidiaries
                                          Consolidated Statements of Cash Flows
                                    For the Six Months Ended June 30, 2007 and 2006
                                         (Expressed in Thousands of New Taiwan Dollars)

                                                                                           For The Six Months Ended June 30,
                                                                                             2007                    2006
Cash Flows From Investing Activities
  Increase in due from Central Bank and call loans to banks                       ($                6,843,635) ($        6,395,551)
  (Increase) decrease in bills and bonds investments under resale
     agreements                                                                                     2,096,298 (          3,382,106)
  Proceeds from receivables                                                                                 -              138,471
  Increase in loans                                                               (                 1,458,920) (           633,024)
  Decrease in available-for-sale financial assets                                                     300,674            2,843,722
  Increase in held-to-maturity financial assets                                   (                   941,532) (           829,112)
  Proceeds from sales of long-term investments                                                              -                8,782
  Cash used in long-term equity investment accounted for under the
    equity method                                                                                   3,817,631                    -
  Long-term equity investment stated at costs                                     (                    21,814)                   -
  Purchase of fixed assets and non-operating assets                               (                   576,162) (           313,666)
  Proceeds from sales of fixed assets and other assets                                                620,221               13,616
  Increase in intangible assets                                                   (                     6,169)                   -
  Decrease in other assets                                                                          1,181,985            1,533,357
            Net cash used in investing activities                                 (                 1,831,423) (         7,015,511)

Cash Flows From Financing Activities
  (Decrease) increase in due to Central Bank and other banks                      (                 5,668,279)           7,036,968
  Increase (decrease) in commercial paper payable                                                   1,788,408            6,317,809
  Decrease (increase)in bills and bonds payable under repurchase
    agreements                                                                    (                 8,644,386)           6,218,047
  Increase (decrease) in deposits and remittances                                                   7,918,912 (          9,309,662)
  Increase in bonds payable                                                                         8,348,718            5,000,000
  Decrease in other borrowings                                                    (                11,373,559) (         2,424,794)
  Increase (decrease) in other liabilities                                                          8,889,508 (             99,310)
  Minority interest                                                                                     8,261                    -
  Transfer treasury stocks to employees                                                                     -               66,310
             Net cash provided by financing activities                                              1,267,583           12,805,368
 Net effect of foreign exchange rate changes on cash and cash
    equivalents                                                                                        49,027 (             13,043)
Increase (decrease) in cash and cash equivalents                                                    2,040,569 (          1,668,944)
Cash and cash equivalents at beginning of period                                                    6,414,828            6,716,914
Cash and cash equivalents at end of period                                         $                8,455,397 $          5,047,970
Supplemental Disclosures of Cash Flow Information
  Cash paid for interest during the period                                         $                3,680,831       $    2,969,165
  Cash paid for income tax during the period                                       $                  236,491       $      135,884
                          The accompanying notes are an integral part of these consolidated financial statements.
                                   See PricewaterhouseCoopers audit report dated August 21, 2007.




                                                                    8
              Fuhwa Financial Holding Co., Ltd. And Its Subsidiaries
                        Notes to The Financial Statements
                For The Six Months Ended June 30, 2007 And 2006
   (Expressed In Thousands of New Taiwan Dollars, Unless Otherwise Indicated)




1. Organization and business



  (1) Fuhwa Financial Holding Co., Ltd.



      Fuhwa Financial Holding Co., Ltd. (“Fuhwa Financial Holding” or the
      “Company”) was incorporated pursuant to the Financial Holding Company Act.
      In connection with the formation of the Company, the shares of Fuhwa
      Securities Finance Co., Ltd. (“Fuhwa Securities Finance”) and Fuhwa Securities
      Co., Ltd. (“Fuhwa Securities”) were exchanged for shares of the Company. The
      regulatory procedure for the share exchange was completed on the exchange
      date of February 4, 2002, and the Company was listed on the Taiwan Stock
      Exchange on the same date.



      On May 24, 2002, the shareholders' meetings of the Company and Asia Pacific
      Bank agreed that shares of Asia Pacific Bank would be exchanged for shares in
      the Company, and Asia Pacific Bank became a wholly owned subsidiary of the
      Company on August 1, 2002. Furthermore, Asia Pacific Bank was authorized to
      be renamed Fuhwa Commercial Bank (“Fuhwa Bank”) on September 17, 2002.
      Since 2002, the Company has acquired Fuhwa Futures Co., Ltd. (“Fuhwa
      Futures”), Fuhwa Capital Management Co., Ltd. (originally named Fuhwa
      Cheng Ching Capital Management Co., Ltd. and renamed Fuhwa Capital
      Management in November 2002, “Fuhwa Capital Management”), Fuhwa
      Securities Investment Trust Co., Ltd. (originally named Asia Pacific Securities
      Investment Trust and renamed Fuhwa Securities Investment Trust in September
      2002, “Fuhwa Securities Investment Trust”), Fuhwa Venture Capital Co., Ltd.
      (“Fuhwa Venture Capital”), Fuhwa Asset Management Co., Ltd. (“Fuhwa Asset
      Management”), and Fuhwa Finance Consulting Co., Ltd. (“Fuhwa Finance
      Consulting”) one after another in order to boost the competitive ability of the
      Company, follow government policies, and face the changes and developments
      in the prospective market. These companies became subsidiaries of the
      Company.




                                        9
On December 28, 2006, both the Company and Yuanta Core Pacific Securities
Co., Ltd. (“Yuanta Core Pacific Securities) had resolved for Yuanta Core
Pacific Securities becoming the Company’s subsidiary by share exchange which
approved of the Explanatory Letter Jin-Guan-Yin (6) No. 0960022230 of the
FSC dated March 8, 2007, effective from April 2, 2007. The share exchange
ratio of Yuanta Core Pacific Securities to the Company is 1:1.615. The
Company had issued new common shares totaling 5,150,352,883 shares (with
par value of $10 New Taiwan dollars per share) in return of Yuanta Core Pacific
Securities’ common shares issued of 3,189,072,993 shares (with par value of
$10 New Taiwan dollars per share). Upon capital increase, the Company’s
authorized and issued capital was $83,123,145.



The Company engages in the business of a financial holding company, and the
operations of the Company are limited to the fields of investing and investment
management. According to the Financial Holding Company Act, the businesses
in which the Company can invest are securities, banking, bills finance, credit
cards, trusts, insurance, futures, venture capital, foreign financial institutions
that are authorized by the government authority, and other related financial
businesses that are recognized by the government authority.




                                   10
(2) The name, type of business, and percentage of shareholdings of subsidiaries
    invested in by the Company and its subsidiaries are as follows:

                                                                  Percentage of holding shares (%)
     Name of        Name of
      Investor      subsidiary           Nature of business       June 30, 2007     June 30, 2006     Note
   The Company   Fuhwa Bank         Commercial banking                 100              100
         "       Fuhwa Securities   Securities brokerage,              100              100
                                     dealing and underwriting
         "       Fuhwa Securities   Securities financing and           100               100
                  Finance            refinancing to securities
                                     firms and related business
         "       Fuhwa Asset        Providing monetary debt            100               100
                  Management         management services for
                                     financial institutions
         "       Fuhwa Venture      Venture capital investments        100               100
                  Capital
         "       Fuhwa Futures      Futures brokerage and              100               100
                                     futures-related services
         "       Fuhwa Securities   Raising and management             100               100
                  Investment         of securities investment
                  Trust              trust funds
         "       Fuhwa Capital      Securities investment               99                99         Note 1
                  Management         consulting and issuance of
                                     related publications
         "       Fuhwa Finance      Operation and management           100               100
                  Consulting         of corporation and
                                     investment consulting
                                     services
         "       Yuanta Core        Underwriting, dealing,             100                 -
                  Pacific             brokerage and financing
                  Securities          of marketable securities,
                                      futures, warrants and
                                      derivative financial
                                      instruments.
   Fuhwa Bank    Fuhwa Lease        Purchase, sale and lease of         99                99
                  Co., Ltd.          various real estate and
                                     movable property
   Fuhwa Bank    Fuhwa Property     Property insurance agency          100               100         Note 2
    and Fuhwa     Insurance
    Asset         Agency Co.,
    Management    Ltd.
          "      Fuhwa Life         Life insurance agency              100               100
                  Insurance
                  Agency Co.,
                  Ltd.
   Fuhwa         Fuhwa Holding      Holding company                    100               100
    Securities    (BVI) Co., Ltd.
   Fuhwa         Fuhwa Futures      Futures management                    -              100         Note 1
    Securities    Management         business
    and Fuhwa     Co., Ltd.
    Futures       (Fuhwa Futures
                  Management)



                                             11
                                                                Percentage of holding shares (%)
   Name of        Name of
   Investor       subsidiary           Nature of business       June 30, 2007     June 30, 2006     Note
Fuhwa         Fuhwa Securities    Securities brokerage and           100              100          Note 1
 Holding       (H.K.) Co., Ltd.    related services
 (BVI) Co.,
 Ltd.
      "       Fuhwa               Consulting services                   -              100         Note 1
               Investment
               Management
               (BVI)
               Co., Ltd.
Fuhwa         Fuhwa I Venture     Venture capital investments         97                97
 Venture       Capital Co.,
 Capital       Ltd.
Yuanta Core   Yuanta Futures      Futures business (futures          100                 -
 Pacific       Co., Ltd.           merchant)
 Securities    (Yuanta
               Futures)
Yuanta Core   Yuanta Core         Marketable securities              100                 -         Note 2
 Pacific       Pacific Capital     investment consulting
 Securities    Management
               Co., Ltd.
               (Yunata Core
               Pacific Capital
               Management)
Yuanta Core   Yuanta              Investment holdings                100                 -
 Pacific       Securities Asia
 Securities    Finance Co.,
               Ltd. (Yuanta
               Securities Asia
               Finance)
Yuanta Core   Yuanta Core         Insurance brokerage                100                 -         Note 2
 Pacific       Pacific             services
 Securities    Securities
               Insurance
               Agency Co.,
               Ltd. (Yuanta
               Core Securities
               Insurance
               Agency)
Yuanta Core   Yuanta              Investment Trust                 83.19                 -
 Pacific       Securities
 Securities    Investment
               Trust Co., Ltd
               (Yuanta
               Securities
               Investment
               Trust)
Yuanta Core   Yuanta Futures      Futures management                 100                 -
 Pacific       Management          services
 Securities    Co., Ltd.
 and Yuanta    (Yuanta Futures
 Futures       Management)



                                           12
                                                             Percentage of holding shares (%)
  Name of            Name of
   Investor          subsidiary        Nature of business    June 30, 2007     June 30, 2006     Note
Yuanta          Yuanta Core       Securities brokerage and        100                 -
 Securities      Pacific           related services
 Asia Finance    Securities
                 (Hong Kong)
                 Limited
Yuanta          First Global      Investment holding                 -                -         Note 1
 Securities      International
 Investment      Asset
 Trust           Management
                 Limited

Note1: Fuhwa Capital Management was approved to dissolve on October 31,
       2006 by local authorities and had registration cancelled on November 30,
       2006. Fuhwa Capital Management is already in liquidation and prepared
       financial statements were not reviewed by the independent accountants
       for the six month ended June 30, 2007. Fuhwa Futures Management was
       approved to dissolve on December 25, 2006 by the local authorities and
       had registration cancelled on January 1, 2007. On June 27, 2007 Fuhwa
       Futures Management resolved by stockholders that liquidation date was
       effective from June 15, 2007. Fuhwa Securities (H.K.) was in liquidation
       before the year end of 2005. Fuhwa Investment Management (BVI)
       completed the dissolution process on November 21, 2006. First Global
       International Asset Management Limited was in liquidation on the year
       2007.

Note 2: As not reaching certification requirements, the financial statements of
       such subsidiaries which are consolidated in the Company’s semi-annual
       consolidated financial statements were not audited by the independent
       accountants as of and for the six months ended June 30, 2007 and 2006.




                                          13
(3) Movement of consolidated entities.

    Increase in consolidated entities

                                                                       Percentage of the Company
                                                                    direct/indirect holding shares (%)
           Name         Relationship    Major business activities    June 30, 2007 June 30, 2006           Note
     Yuanta Core      Subsidiary       Securities brokerage,               100                 -         Adopted in
      Pacific                           dealing and underwriting                                          Fuhwa
      Securities                                                                                          Financial
                                                                                                          Holding,
                                                                                                          effective
                                                                                                          from
                                                                                                          April 2,
                                                                                                          2007
     Yuanta Futures   Indirect         Futures services (futures          100                 -          Note 2
                       subsidiary      merchant)
     Yuanta Core      Indirect         Marketable securities              100                 -          Note 3
      Pacific          subsidiary       investment consulting
      Capital
      Management
     Yuanta           Indirect         Investment holding                 100                 -          Note 2
      Securities       subsidiary
      Asia Finance
     Yuanta Core      Indirect         Insurance brokerage                100                 -          Note 3
      Securities       subsidiary       services
      Insurance
      Agency
     Yuanta Futures   Indirect         Futures management                 100                 -          Notes 1
      Management       subsidiary       services                                                         and 2
     Yuanta           Indirect         Investment trust                 83.19                 -          Note2
      Securities       subsidiary
      Investment
      Trust
     Yuanta Core      Indirect         Securities brokerage, and          100                 -          Note 2
      Pacific          subsidiary’s     related services
      Securities       subsidiary
      (Hong Kong)
      Limited
     First Global     Indirect         Investment holding                    -                -          Note 4
      International    subsidiary’s
      Asset            subsidiary
      Management
      Limited

    Note 1: Yuanta Core Pacific Securities and its subsidiaries – Yuanta Futures hold 100%
            of ownership of Yuanta Futures Management.

    Note 2: The financial statements of such subsidiaries which are consolidated in the
            Company’s semi-annual consolidated financial statements were audited by the
            independent accountants as of and for the six months ended June 30, 2007 and
            2006.


                                             14
    Note 3: As not reaching certification requirements, the financial statements of
            such subsidiaries which are consolidated in the Company’s
            semi-annual consolidated financial statements were not audited by the
            independent accountants as of and for the six months ended June 30,
            2007 and 2006.

    Note 4: First Global International Asset Management Limited was in liquidation
             on the year 2007.

(4) The investees are accounted as subsidiaries by the Company even the investees
    whose voting stock interests are not held over 50% either directly or indirectly
    by the Company: None.

(5) The Company does not have control interests over the investee company even
    the investees whose voting stock interests or potential voting stock interests are
    held over 50% either directly or indirectly by the Company:

     Even though Yuanta Core Pacific Securities’ subsidiary - Yuanta Securities
     Asia Finance holds 50% of ownerships of Ding Hwa Securities Investment
     Management Co., Ltd., Yuanta Securities Asia Finance does not have more
     than half number of independent directors and does not have control interests
     over the investee company, hence, Ding Hwa Securities Investment
     Management Co., Ltd. is not included in the consolidated financial statements.

(6) Name, percentage of ownership, and reasons for unconsolidated of subsidiaries
    are not consolidated in the financial statements: None.

(7) In accordance with the effective date of consolidated financial statements,
    adjustment on different accounting periods of the subsidiaries, handling method
    and reasons of difference: None.

(8) Specific operation risk of the foreign subsidiaries: None.

(9) Information with respect to the subsidiary’s significant restriction to transfer its
    funds to the parent company: None.

(10) Information with respect to the subsidiaries’ holding of the securities issued by
     the parent company:

     As of June 30, 2007, Yuanta Core Pacific Securities holds the Company’s
     shares amounted to 295,528 thousand shares which based on fair value of the
     share exchange date transferred to treasury stocks amounted to $4,728,444.




                                        15
(11) Information with respect to the subsidiaries’ issuance of the convertible bonds
     and new capital stock:

     For the six months ended June 30, 2007 and 2006, the subsidiaries of the
     Company did not issue any convertible corporate bonds nor issue any new
     shares. Except for the followings:

     A. On January 17, 2006, Fuhwa Securities' board of directors resolved to
        increase capital for cash in the amount of $1,500,000 by issuing an
        additional 150,000 thousand new shares at $10 per share, resulting in total
        authorized and issued capital of $10,402,938. The date of capital increase
        was designated as March 31, 2006, and the related registration was
        completed on May 2, 2006. These new shares are subject to the rights
        same as other common shares issued, except for the restriction of
        non-negotiable prescribed in the Securities and Exchange Law.

         In order to integrate securities business and leverage the synergies of the
         Company, Fuhwa Securities resolved to merge with Yuanta Core Pacific
         Securities on April 2007. Both parties agreed with the share exchange
         ratio of 0.538 shares of Yuanta Core Pacific Securities to 1 share of
         Fuhwa Securities, effective on September 23, 2007. Fuhwa Securities will
         be the surviving company and Yuanta Core Pacific Securities will be the
         dissolved company.

     B. On April 10, 2007, Yuanta Futures’ Board of Directors exercise the
        authority on behalf of the Stockholders’ Meeting resolved to merge with
        Fuhwa Futures, that is in the compliance with the Explanatory Letter
        Jin-Guan-Jen (7) No. 0960023980 of the FSC dated May 31, 2007,
        effective on September 23, 2007. The share exchange ratio is 1.4154
        shares of Fuhwa Futures to 1 share of Yuanta Futures. After merger,
        Yuanta Futures will be the surviving company.

     C. In order to simplify organizational chart of overseas branches, Yuanta
        Securities Asia Finance issued new shares in order to exchange for shares
        of Yuanta Securities Holding (BVI) Co., Ltd. and merged with Yuanta
        Securities Holding (BVI) Co., Ltd. Yuanta Securities Asia Finance are as
        the surviving company and effective on August 31, 2006. This is in the
        compliance with the Explanatory Letter Jin-Guan-Jen (2) No. 0950132695
        of the FSC dated August 11, 2006. Yuanta Securities Asia Finance has
        modifies the registration of issuing new shares on September 1, 2006.




                                      16
(12) Notes to financial statements of acquirers and acquisition period

     A. Introduction of acquires

         (A) Yuanta Core Pacific Securities was incorporated as a company limited
             by shares under the provisions of the Company Law of the Republic
             of China (R.O.C.) and commenced commercial operations in 1961.
             Yuanta Core Pacific Securities is mainly engaged in the underwriting,
             dealing, brokerage and financing of marketable securities, futures,
             warrants, and derivative financial instruments.

         (B) On July 1, 2000, Yuanta Core Pacific Securities merged with Core
             Pacific Securities Co., Ltd. and TaFa Securities Co., Ltd. with Yuanta
             Core Pacific Securities as the surviving company. To further expand
             its business, Yuanta Core Pacific Securities acquired Sampo Securities
             and Compass Securities on April 7, 2002, and Asia Securities Co., Ltd.
             on October 24, 2004. On April 10, 2007, Yuanta Core Pacific
             Securities’ Board of Directors exercise the authority on behalf of the
             Stockholders’ Meeting resolved to merge with Fuhwa Securities
             (renamed as Yuanta Securities Co., Ltd.), effective date will be
             September 23, 2007. Relevant legal procedures are under the process.

         (C) As of June 30, 2007, Yuanta Core Pacific Securities had 95 branches.

         (D) As of June 30, 2007, Yuanta Core Pacific Securities had 3,500
             employees or so.

         (E) Effective July 19, 2004, Yuanta Core Pacific Securities’ shares were
             listed on the Taiwan Stock Exchange. The share exchange of Yuanta
             Core Pacific Securities and Fuhwa Financial Holding had approved by
             the authorities on March 8, 2007, effective on April 2, 2007 and
             Yuanta Core Pacific Securities delisted on the same date.

     B. Accounting treatment for acquisition date , acquisition percentage and
        acquisition method

          On December 28, 2006, both the Company and Yuanta Core Pacific
          Securities Co., Ltd. had resolved for Yuanta Core Pacific Securities
          becoming the Company’s subsidiary by share exchange which approved
          of the Explanatory Letter Jin-Guan-Yin (6) No. 09600022230 of the FSC
          dated March 8, 2007, effective from April 2, 2007. The share exchange
          ratio of Yuanta Core Pacific Securities to the Company is 1:1.615. This
          merger was recognized in accordance with purchase accounting.




                                       17
C. Accounting period of operation outcome of acquired which is included in
   the consolidated profit or loss

   As effective date is April 2, 2007, Yuanta Core Pacific Securities and its
   subsidiaries are included in the consolidated profit or loss from April to
   June 2007.

D. Acquisition costs and types, numbers and amounts of securities issued due
   to acquisition

   The Company issued new common shares totaling 5,150,352,883 shares
   (with par value of $10 New Taiwan dollars per share). The acquisition cost
   was $70,353,820 which was calculated based on average closing price of
   $13.66 per share prior to 180 days of November 9, 2006. Upon capital
   increase, the Company’s authorized and issued capital was $83,121,145.

E. Goodwill’s original cost, accumulated impairment loss at beginning period
   and impairment loss recognized at current period

    The recognition for goodwill was $7,776,459 for the current period and
    there was no impairment loss.

F. Extraordinary gain from the difference of fair value of identifiable net
   asset more than acquisition cost and then deducts non-current assets: None

G. Premium, warranty or commitment and its accounting treatment stipulated
   in contract: None

H. Significant asset disposition due to acquisition:

    In accordance with the regulations, Fuhwa Securities Investment Trust and
    Yuanta Securities Investment Trust will be merged within one year of
    effective date. Yuanta Securities Investment Trust is the surviving
    company.




                                 18
        I.   Supplementary information of pro-forma operation outcome:

                                                    June 30, 2007       June 30, 2006

              Net interest income               $       5,244,784   $       4,972,621

              Net non-interest income                   9,469,960           6,181,293

              Net income                               14,714,744          11,153,914

              Provision for credit loss         (         664,767) (         866,543)

              Operating expenses                (       8,273,064) (        7,061,032)

              Net income from continuing
               operations before income
               taxes                                    5,776,913           3,226,339

              Income tax                        (         606,722) (        1,390,323)

              Cumulative effect of changes in
               accounting principles                            -              88,635

              Net income from continuing        $       5,170,191   $       1,924,651
               operations after income taxes



2. Summary of significant accounting policies

   The consolidated financial statements are prepared in conformity with the
   "Guidelines Governing the Preparation of Financial Reports by Financial Holding
   Companies", "Guidelines Governing the Preparation of Financial Reports by
   Securities Issuers", "Guidelines Governing the Preparation of Financial Reports by
   Public Banks", "Guidelines Governing the Preparation of Financial Reports by
   Securities Firms", “Guidelines Governing the Preparation of Financial Reports by
   Futures Commission Merchants”, "Business Entity Accounting Act", “Regulation
   on Business Entity Accounting Handling” and generally accepted accounting
   principles in the Republic of China. Historical cost is the basis of measurement in
   the consolidated financial statements except as otherwise stated. The significant
   accounting policies are summarized as follows:




                                          19
(1) Principles for preparation of the consolidated financial statements

     The investees whose voting stock interests are held over 50% either directly or
     indirectly by the Company are included in the consolidated financial
     statements. The Company shall include the subsidiaries’ revenues and
     expenses in the consolidated financial statements from the date of obtaining the
     control. All significant inter-office accounts and transactions have been
     eliminated in the consolidated financial statements.

(2) Foreign currency transactions

     A. Except for accounts in the Offshore Banking Unit of Fuhwa Bank, the
        Company's overseas affiliates, and overseas long-term equity investments
        under the equity method that are maintained in US dollars, accounts in all
        other subsidiaries are maintained in New Taiwan dollars. Those
        transactions denominated in foreign currencies are recorded in their
        original foreign currencies, and all income and expense accounts
        denominated in original foreign currencies are translated into New Taiwan
        dollars at the exchange rate assigned on that date.

     B. The Company's overseas affiliates and overseas long-term investments
        under the equity method, and the Offshore Banking Unit of Fuhwa Bank
        included in the consolidated financial statements use their local currencies
        as their functional currencies. Foreign financial statements are translated
        into New Taiwan dollars. The resulting translation differences are
        accounted for as translation adjustments, and are included in the
        consolidated financial statements as a component of stockholders' equity.
        Assets and liabilities are translated at the current exchange rate prevailing
        at the balance sheet date. Stockholders' equity is translated at the historical
        rate with the exception of the beginning retained earnings in New Taiwan
        dollars, which are brought forward. Dividends are translated at the
        exchange rate prevailing at the declaration date. Income statement
        accounts are translated at the average exchange rate of the year involved.
        The foreign currency translation from financial statements of the
        Company's overseas subsidiaries are recorded as cumulative foreign
        currency translation adjustments under the statement of stockholders'
        equity and will be recognized as gain or loss only upon the sale or
        liquidation of the company.




                                       20
     C. In accordance with SFAS No. 14 "The Effects of Changes in Foreign
        Exchange Rates", monetary assets and liabilities denominated in foreign
        currencies are translated at the spot exchange rates prevailing at the
        balance sheet date. Exchange gains or losses are recognized in profit or
        loss. When a gain or loss on a non-monetary item is recognized directly
        in equity, any exchange component of that gain or loss shall be recognized
        directly in equity. Conversely, when a gain or loss on a non-monetary
        item is recognized in profit or loss, any exchange component of that gain
        or loss shall be recognized in profit or loss. However, non-monetary
        items that are measured on a historical cost basis are translated using the
        exchange rate at the date of the transaction.

(3) Cash and cash equivalents

    The Fuhwa Group considers cash in banks and short-term investments that are
    readily convertible to cash and for which interest rate fluctuations have little or
    no effect on the value to be cash equivalents. The consolidated financial
    statements of cash flows were prepared based on cash and cash equivalents.

(4) Deposit reserve

    Deposit reserve is calculated based on the monthly average balance of the
    various deposit accounts, using specific reserve ratios as promulgated by the
    Central Bank of China. The deposit reserve - demand account is placed with the
    Central Bank of China and is subject to change only when the monthly reserve
    requirement is adjusted.

(5) Financial Assets at Fair Value through Profit or Loss

     A. Starting from January 1, 2006, the Fuhwa Group accounts for financial
        assets in accordance with Statement of Financial Accounting Standards
        (SFAS) No. 34, "Financial Instruments: Recognition and Measurement".
        The Fuhwa Group recognizes the purchases or sales of stocks, funds and
        beneficiary certificates using trade date accounting and of other financial
        assets using settlement date accounting. These financial instruments are
        initially recognized at fair value, including acquisition or issuance cost.

     B. Financial assets whose changes in fair value are recognized in profit or
        loss include debt, equity and derivative instruments held or issued by the
        Fuhwa Group. These financial assets can be classified into two
        subcategories: financial assets held for trading purposes and financial
        assets that are designated on initial recognition as ones to be measured at
        fair value, with fair value changes recognized in profit or loss.




                                       21
C. Financial instruments with fair value changes recognized in profit or loss
   should be measured at fair value. The fair value of an asset is the amount
   at which the asset could be purchased or sold in a current arm's-length
   transaction between willing parties. A quoted market price, if available, in
   an active market is the best evidence of fair value; however if a quoted
   market price is not available, fair value should be estimated using the best
   information available in the circumstances or estimated using pricing
   models. Estimation of fair value is usually based on recent trading prices
   of such financial instruments and supplemented by related valuation
   techniques available.

D. The realized and unrealized gain or loss, including the amortization of
   discount and premium, of financial assets whose changes in fair value are
   recognized in earnings should be recognized in current year's net income
   or loss. Interest income (expense) and cash dividend received during the
   holding period are recorded under "interest income (expense)" and "gain
   (loss) on financial instruments at fair value through profit or loss",
   respectively. Stock dividends are not recognized as income but treated as
   increases in the number of shares held.

E. Financial assets at fair value through profit or loss which the Company
   classified on January 1, 2006, in compliance with SFAS No. 34,
   "Financial Instruments: Recognition and Measurement", cannot be
   reclassified again thereafter. Similarly, those that do not belong to
   financial assets at fair value through profit or loss cannot be reclassified to
   this category either. In accordance with explanatory letter Ji-Mi-Zih No.
   296 issued in 2006 by the Accounting Research and Development
   Foundation, after adopting ROC Statement of Financial Accounting
   Standards No. 34 "Financial Instruments: Recognition and Measurement",
   businesses should reclassify financial assets held for trading purposes as
   financial assets designated to be valued at fair value with changes in fair
   value recognized in profit or loss if financial assets held for trading
   purposes are provided as collateral for loans or refundable deposits.

F. The main purposes of designate financial assets and financial liabilities at
   fair value through profit or loss are to sell in short-term or repurchase.
   Criteria to designate financial assets and financial liabilities at fair value
   through profit or loss are as follows:

   (A) Hybrid instruments;

   (B) The designation can eliminate or significantly reduce a measurement or
      recognition inconsistency; or

   (C) The designation is in compliance with a documented risk management
      or investment strategy of the Company and its subsidiaries to evaluate
      the performance of assets or liabilities based on a fair value basis.


                                  22
(6) Derivative Financial Instruments

     A. Derivative financial instruments are foreign exchange forward contracts,
        currency swaps, interest rate swaps, currency and interest rate swaps,
        options, structured notes, stock warrant liabilities, and margin deposits for
        futures contracts, which are entered into by the Consolidated Company in
        foreign exchange, interest rate and capital markets. Derivative financial
        instruments are for trading purposes except those accounted for under
        hedge accounting. Trading purposes include market creation, customer
        services and other relevant activities.

     B. Derivative financial instruments held for trading purposes are evaluated at
        fair value. Changes in fair value are recorded as current period income or
        loss. Fair value is the amount at which the asset could be purchased or
        sold in a current arm's-length transaction between willing parties. A
        quoted market price, if available, in an active market is the best evidence
        of fair value; however if a quoted market price is not available, fair value
        should be estimated using the best information available in the
        circumstances or using pricing models. Estimation of fair value is usually
        based on recent trading prices of similar financial instruments and
        supplemented by related valuation techniques available.

     C. Derivative financial instruments measured at fair value whose offsetting
        right has legal effect and are intended to be settled by net balance should
        be recorded as financial assets and liabilities at their net value.

     D. In compliance with SFASs, an embedded derivative should be recognized
        separately as a derivative and the host contract is recognized based on the
        related accounting standards depending on the nature of the host contract
        in the category of financial instruments or non-financial instruments.

(7) Bills and bonds under repurchase or resale agreements

    Bills and bonds under resale or repurchase agreements are accounted for under
    the financing method. Bills and bonds sold under repurchase agreements are
    recorded as “Bills and bonds payable under repurchase agreements” at the sale
    date. Bills and bonds invested under resale agreements are recorded as
    “Investments in bills and bonds under resale agreements” at the purchase date.
    The difference between the cost and the repurchase price is recorded as interest
    expenses between the sale date and the repurchase date. The difference between
    the cost and the resale price is recorded as interest income between the purchase
    date and the resale date.




                                       23
(8) Accounts Receivable – margin loans, stock loans and allowance for bad debts

     A. According to the Rules Governing Securities Finance Enterprises
        (RGSFE), margin loans primarily represent pecuniary financing to
        investors or refinancing to securities firms. Such loans are secured by the
        securities purchased by the investors, and the Consolidated Company
        records these securities at par value under the memorandum accounts
        "securities held for collateral" and "liability for holding collateral
        securities", and they are not included in the balance sheets.

     B. According to Article 10 of the RGSFE, margin loan investors must pay a
        certain percentage of the related stock market price themselves.

     C. Short sale stock loans represent securities financing affected by lending
        securities in custody that are received from margin loans, guarantee effects
        or borrowed securities, to investors. When the securities are lent to
        investors, the Consolidated Company records the par value of the
        securities lent under the memorandum account "short sale stock loans".
        Additionally, according to Article 10 of the RGSFE, the investors need to
        deposit an amount equal to a certain percentage of the proceeds from short
        sale stock financing as collateral with the Consolidated Company. The
        proceeds are accounted for as "stock deposits". The Consolidated
        Company deals with these securities at par value under the memorandum
        account "guarantee deposits". The proceeds from sale of securities loaned,
        less any dealer's commission, financing commission and securities
        exchange tax, are held by the Consolidated Company as collateral and
        recorded under "short sale proceeds payable".

     D. In accordance with the Explanatory Letter Tai-Tsai-Jen (4) No.03452 of
        the SEC in 1999, when the securities financed by borrowers terminate
        trading, are delisted from the stock market, or are the securities of the
        borrowers' credit accounts which are unable to be disposed of, these
        margin loans will be recorded as “other receivables” or “overdue
        receivables” according to the results of negotiation or collection. When the
        maintenance of secured accounts is less than the regulatory standard and
        the borrower does not pay a portion of the remaining loans after offsetting
        the proceeds from disposal of securities, the related margin loans shall be
        recorded as overdue receivables.

     E. Allowance for bad debts is based on the past experience in collection,
        margin loans and pecuniary transaction, considering the value of collateral
        and the collectibility of margin loans.




                                      24
(9) Debit (credit) items for securities receivable

     A. When engaging debit (credit) items for securities business, the Company
        shall record customers’ debit (credit) items in next two working days as
        “Debit (credit) items receivables – collateralized by the securities that the
        customers purchase” or “Debit (credit) items receivables – collateralized
        by the securities that the customers hold” and according to the collectibilty
        of ending balance estimates and records as “ Provision for bad debts -
        debit (credit) items receivables – collateralized by the securities that the
        customers purchase” or “Provision for bad debts - debit (credit) items
        receivables – collateralized by the securities that the customers hold”.

     B. When engaging debit (credit) items for securities business, the Company
        is eligible to collect interests and handling fees from customers. Interests
        receivable from debit (credit) items for securities business are accrued
        from the next two working days of transaction date and recorded as
        interest income. The handling fees from debit (credit) items for securities
        business are recorded as handling fees income from debit (credit) items for
        securities business. In accordance with Article 28 of “Regulations
        Governing Borrowing or Lending Money in Connection with Securities
        Business by Securities Firms”, the Company collects financing margin
        penalty and records as “other operating income – others”.

(10) Loans and Allowance for Doubtful Accounts

     A. Credit terms are decided by the term to maturity of loans. The loan period
        of short-term loans is within one year, the loan period of medium-term
        loans is one to seven years, and the loan period of long-term loans is more
        than seven years. Loans with pledged assets, and qualified guarantees are
        recorded as secured loans.

     B. All loans are recorded initially as the actual amount lent out and reported
        at their outstanding principal balances net of any provisions for doubtful
        accounts. An allowance for doubtful accounts is determined by an
        evaluation of the collectibility of loans and age of receivables (including
        non-performing loans and overdue receivables and interest receivables)
        and advance accounts. Doubtful accounts are written off when the
        recovery possibility is remote.

     C. Principal or interest overdue over three months is categorized as overdue
        accounts. Interest overdue over six months is categorized as overdue
        before June 30, 2005. When principal or interest has not been paid for
        over expiration date, the said principal and interest will be transferred to
        non-performing loans in six months. When this event occurs, interest will
        not be calculated and booked to the memo account accordingly.




                                       25
     D. In accordance with the Ruling Tai-Tsai-Rong No. 88733168, banks should
        provide 3% of operating revenue as allowance for bad debts to write off
        default accounts from July 1, 1999, and for the following four years.
        Moreover, in accordance with the Ruling Wa-Chung-Yi-Yi No.
        09200114870, the aforementioned provision is still valid until the ratio of
        overdue accounts is lower than 1%. The aforementioned allowance is
        recognized as operating cost for bad and doubtful accounts of loans, and
        charged to current operations.

(11) Available-for-sale Financial Assets

     A. Starting from January 1, 2006, the Fuhwa Group adopted SFAS No. 34
        "Financial Instruments: Recognition and Measurement". The Fuhwa
        Group recognizes the purchase or sale of stocks, funds and beneficiary
        certificates by using trade date accounting and of other financial assets by
        using settlement date accounting. These financial instruments are initially
        recognized at fair value. The amount recognized includes acquisition or
        issuance cost.

     B. Available-for-sale financial assets are recorded at fair value, and the
        change in market value will be recorded in the shareholders' equity
        adjustment account. Fair value is based on the quoted market price or
        estimated amount if the quoted market price is not available. When there
        is an indication of impairment, impairment loss should be recognized. If
        there is an indication that the impairment loss recognized has decreased in
        a subsequent period, it should be recorded as gains or losses. Cost is
        determined by the weighted-average method, and accumulated unrealized
        gain or loss recorded under the equity account is recognized in current
        year's income or loss when the Fuhwa Group disposes of those financial
        assets. Interest income and cash dividend are recorded under "interest
        income" and "realized gain on available-for-sale financial assets",
        respectively. Cash dividends are recognized as revenue on the ex-dividend
        date or the date of the board of directors meeting. However, the dividend
        amount, if announced before the investment date, will be deducted from
        the investment cost. Stock dividends are not recognized as income but
        treated as increases in the number of shares held.

(12) Held-to-maturity Financial Assets

     A. Starting from January 1, 2006, the Fuhwa Group adopted SFAS No. 34
        "Financial Instruments: Recognition and Measurement". The Fuhwa
        Group recognizes the purchase or sale of the financial assets by using
        settlement date accounting. These financial instruments are initially
        recognized at fair value. The amount recognized includes acquisition or
        issuance cost.




                                      26
     B. Amortized cost and interest income or interest expense of held-to-maturity
        financial assets is evaluated using the effective interest rate.
        Held-to-maturity financial assets are recorded at amortized cost. If there is
        objective evidence that a financial asset is impaired, a loss is recognized.
        If, in a subsequent period, the amount of the impairment loss decreases
        and the decrease is clearly attributable to an event which occurred after the
        impairment loss was recognized, the previously recognized impairment
        loss is reversed to the extent of the decrease. The reversal may not result
        in a carrying amount of the financial asset that exceeds the amortized cost
        that would have been determined if no impairment loss had been
        recognized.

(13) Long-term equity investments accounted for under equity method

     A. Long-term equity investments in which the Company holds more than
        20% of the investee company’s voting shares or has the ability to exercise
        significant influence on the investee’s operational decisions are accounted
        for under the equity method. The excess of the initial investment cost over
        the acquired net asset value of the investee attributable to goodwill is no
        longer amortized, effective January 1, 2006. Retrospective adjustment of
        the amount of goodwill amortized in previous year(s) is not required. The
        excess of acquired net asset value of investee over the initial investment
        cost is allocated proportionately and applied as a reduction to the book
        values of identifiable non-current assets, and any remaining amount of
        such excess after this allocation is credited to extraordinary gains.
        However, negative goodwill occurred prior to December 31, 2005 is
        continuously amortized.

     B. As investee company does not subscribe new shares based on the
        percentage of ownership and this causes increase or decrease net value of
        investment shares that adjust “additional paid-in capital”. If the balance of
        additional paid-in capital from long-term investments is sufficient,
        recorded the difference as “retained earnings”.

     C. The cumulative translation adjustment resulted from the financial
        statement translation of foreign equity investments accounted for under
        the equity method is recognized proportionally in the stockholders’ equity
        account based on the percentage of the investees’ ownership held by the
        Company.




                                      27
     D. Long-term equity investments accounted for under the equity methods are
        highly expected to be on sale within twelve months of balance sheets date
        are recorded under “Held for sale long-term equity investments”. As the
        Company has lost the influence over such long-term equity investments,
        the equity method is no longer accounted for and shall be valued at the
        lower of book value or net fair value. The loss due to valuation or gain
        from reversal shall be recognized current profit or loss. The
        abovementioned “highly expected to be on sale” shall meet all the
        following requirements:

         (A) Management commits to a plan to sell;

         (B) An active program to allocate a buyer has been initiated;

         (C) An entity has actively negotiated trading based on the fair value of
             held for sale long-term equity investments;

         (D) The sale is expected to be completed within one year, and

         (E) Actions required to complete the sale make it unlikely that significant
             changes to the plan will be made or that the plan will be withdrawn.

     E. The mergers among subsidiaries are organizational restructure. In
        compliance with the Explanatory Note (92) No. 244 of the Accounting
        Research and Development Foundation of the R.O.C., records the
        dissolved company’s book value of net assets and stockholders’ equity
        which is related to net asset accounts are recorded at original costs. The
        Company transferred from book value of the dissolved company to
        investment cost of the surviving company on the effective date. These
        swaps did not affect the Company’s profit or loss at the current period.

(14) Futures brokerage business / futures trading

     A. Futures commission income resulted from engaging in futures introducing
        broker business and received from the futures commission merchants is
        recognized as “futures commission income (expenses)” on the transaction
        date.

     B. Futures dealing department deposits future margin deposits when
        performing future business and records as “Financial assets at fair value
        through profit or loss – current - futures margin deposits – self-own
        capital” and adjusts future margin deposits – self-own capital according to
        the difference of futures index on cover date and the closing futures index
        at balance sheet date. At cover date, the Company recognizes realized
        profit or loss on futures transactions, valuates uncover positions at every
        period end and records as “Gain (loss) on derivative financial
        instruments – futures – gain (loss) on futures contracts.”



                                       28
(15) Property, equipment, non-operating assets and related depreciation

     A. Fixed assets are stated at cost, and major purchases, renewals and
        improvements are capitalized. Interest expense on acquisition of assets is
        capitalized and is categorized in related asset accounts. Apart from land,
        depreciation of fixed assets is calculated on a straight-line basis over the
        estimated useful lives of the respective assets. Leasehold improvements
        are amortized over the terms of the leases or useful lives of such
        improvements. Gains or losses on the disposal of fixed assets are recorded
        as other non-interest income or losses.

     B. Property and equipment under operating leases have been reclassified as
        non-operating assets – other assets and recorded at cost. Depreciation is
        provided on a straight-line basis over the estimated useful lives of the
        lease assets, and is recorded as other non-interest losses. Idle assets that
        are not utilized for operating or any other purpose are transferred as
        non-operating assets - other assets, and are stated at their net fair value.

     C. Securities foreclosed are recorded under non-operating assets - other
        assets, and are stated at their net fair value. Any difference from the
        original value of the loans and advances is recognized as bad debts.

     D. Useful lives for depreciation, which is calculated using the straight-line
        method, are as follows:

         Buildings                                                  3 ~ 60 years

         Machinery and computer equipment                             1 ~8 years

         Transportation equipment                                     2 ~5 years

         Others                                                     1 ~ 20 years




                                      29
(16) Other financial assets

     A. Financial assets carried at cost include un-listed stocks. The Consolidated
        Company has no significant influence over the investee. Those financial
        assets are recorded at cost as their fair values are not measurable. If there
        is an indication of impairment, impairment loss should be recognized, and
        this recognized amount is non-reversible.

     B. Bond investments in a non-active market are recorded at amortized cost,
        and are those that do not have public quotes in an active market. If there is
        objective evidence that a financial asset is impaired, a loss is recognized.
        If, in a subsequent period, the amount of the impairment loss decreases
        and the decrease is clearly attributable to an event which occurred after the
        impairment loss was recognized, the previously recognized impairment
        loss is reversed to the extent of the decrease. The reversal may not result
        in a carrying amount of the financial asset that exceeds the amortized cost
        that would have been determined if no impairment loss had been
        recognized.

     C. Cash dividends acquired from the aforementioned financial assets are
        recorded under "other non-interest income, net". Cash dividends are
        recognized as revenue on the ex-dividend date or the date of the board of
        directors meeting. However, the dividend amount, if announced before the
        investment date, will be deducted from the investment cost. Stock
        dividends are not recognized as income but treated as increases in the
        number of shares held. In addition, if fair value is available and reliably
        measurable, the aforementioned financial assets should be evaluated by
        using fair value and reclassified as "available-for-sale financial assets".

(17) Intangible assets

     A. Effective January 1, 2007, the Fuhwa Group adopted SFAS No. 37
        “Accounting Treatment for Intangible Assets”. In accordance with this
        standard, the Company initially recognizes intangible assets at costs.
        Subsequently, cost plus appraisal increment stipulated in the standards and
        deducts accumulated amortization and accumulated impairment losses,
        and this residual amount is regarded as book value.

     B. Intangible assets include goodwill, computer software and operating
        rights.

         (A) Goodwill was carried forward from the acquisition of The Credit
             Cooperative of Douliou, The Credit Cooperative of Taidong, The
             Tainan Seventh Credit Cooperative and The Tainan Sixth Credit
             Cooperative and was recognized as the purchase price less the market
             value of tangible assets obtained.




                                      30
        (B) The difference between the cost of investing in Fuhwa Investment
            Trust by the Company and the pro-rata share of the investee's net
            assets was recognized as goodwill, and it was previously amortized
            over 20 years using the straight-line method.

        (C) The Company merged with Yuanta Core Pacific Securities by share
            exchange on April 2, 2007. The amount which acquisition cost is more
            than the fair value of tangible and identifiable intangible assets deducts
            net value after purchase; the Company recognized this amount as
            goodwill which is in compliance with the accounting treatment of
            business combination.

        (D) The difference of the investment cost that Yuanta Core Pacific
            Securities invested in Yuanta Securities Investment Trust and the net
            value of investee company accounted for under the percentage of
            ownership are recorded as goodwill.

             Operating rights are the rights assign to other securities firms’ asset
             amounts paid are more than net asset book value and are amortized
             over ten years. In addition, the operating rights incurred from foreign
             branches and local trading organizations are amortized over ten years.

     C. Except for goodwill, original cost less residual value is amortizable
        amount, starting from held for use status and amortized at straight line
        method over the useful lives. Effective 2006, the Company adopted the
        amendments of R.O.C SFAS No. 1 ”Financial Accounting Conceptual
        Framework and the Preparation of Financial Statements” and No. 5
        “Accounting Treatments for Long-Term Equity Investment Under the
        Equity Method” which discontinued amortization of goodwill.

(18) Other assets

     A. Other assets have material amounts and have prospective economic
        benefits. Such deferred charges include corporate bond and convertible
        bond issuance expense, costs of leasehold improvements, and expense for
        enterprise resource planning system installation and telephone installation.
        The corporate bond issuance expense was amortized over the issuance
        period. The convertible bond issuance expense was amortized over the
        period between the issuance date and the expiration date of the repurchase
        agreement. The other accounts are amortized over the prospective benefit
        periods, from three to five years. Under the circumstances where
        bondholders redeemed or the Company repurchased convertible bonds
        from the market before the expiration dates, the remaining deferred
        charges would be reversed as of the redemption date or the purchase date.




                                      31
     B. Starting from January 1, 2006, the accounting for bond issuance expense
        should be in accordance with ROC SFAS No. 34 "Financial Instruments:
        Recognition and Measurement".

     C. The Company conducts futures brokerage business and requires customers
        to open margin accounts to receive margin deposits and premiums and to
        reflect the mark-to-market adjustment.

(19) Non-financial asset impairment

     A. The Fuhwa Group adopted Statement of Financial Accounting Standards
        No. 35 (SFAS 35) "Impairment of Assets". In accordance with SFAS No.
        35, the Fuhwa Group assesses at each balance sheet date whether there is
        any indication that an asset other than goodwill may have been impaired.
        If any such indication exists, the Fuhwa Group estimates the recoverable
        amount of the asset, and recognizes impairment loss for an asset whose
        carrying value is higher than the recoverable amount. The Fuhwa Group
        assesses the cash-generating unit to which goodwill is allocated on an
        annual basis and recognizes an impairment loss on the carrying value in
        excess of the recoverable amount.

     B. The Fuhwa Group may reverse an impairment loss recognized in prior
        periods for assets other than goodwill if there is any 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. Recognized impairment
        loss for goodwill is not allowed to be reversed.

(20) Financial debentures

    Financial debentures are issued and stated at face value, and the interest
    expenses are computed and recorded at face value multiplied by the stated
    interest rate every month. The annual fee paid to the Gretai Securities Market
    is recognized as operating expense.




                                      32
(21) Convertible corporate bonds payable

     A. The convertible bonds with put options are issued by the Consolidated
        Company, and the total amount of bonds is calculated based on the issuing
        price and recorded as liabilities before 2005 (including 2005). The
        premium, which is the spread between the issuing price and par value, is
        amortized using the straight-line method from the date of issuance to the
        expiry date of the put options. The redemption premium, which is the
        specified put price in excess of par value, is amortized using the interest
        method over the period from the issuance date of the bonds to the expiry
        date of the put option and is recognized as interest expense and
        redemption premium payable. If redemption occurs prior to the expiry
        date, the remaining redemption premium would be recognized as interest
        expense at once on the redemption date.

     B. When bondholders exercise their conversion rights, the number of shares
        converted is calculated using the par value of the convertible bonds and
        conversion price at the conversion date. A common stock exchange
        certificate will be issued. The convertible bonds in excess of the par value
        of the convertible common stock, the related redemption premium payable,
        and the unamortized issuance cost is recognized as capital surplus - stock
        issuance premium.

     C. Whenever corporate bonds are repurchased from the market before expiry,
        related gain or loss will be recorded in the current period.

     D. Starting from January 1, 2006, the Fuhwa Group adopted SFAS No. 36 "
        Financial Instruments: Presentation and Disclosure". However, for the
        corporate bonds payable of the Fuhwa Group issued before January 1,
        2006, the original principle shall be followed.

(22) Reserve for guarantee liabilities

     Reserve for guarantee liabilities is the estimated potential losses based on   the
     ending balances of guarantees and acceptances. According to                    the
     abovementioned regulation, the Fuhwa Group records reserve (reversal)          for
     guarantee liabilities as other non-interest income, net, and reserve           for
     operations and liabilities.

(23) Reserve for default

     A. A securities firm should allocate 0.0028% of the amounts of monthly
        securities consignment trading as the reserves for losses from default, and
        such reserves are recorded as other liabilities. When the accumulated
        reserve balances reach $200,000, no further reserve provision is required.
        The futures commission merchants are required to set aside 2% of
        monthly commission revenues of consignment trading.



                                         33
     B. The reserves should only be used for recovering the losses caused by
        default on such consignment trading or for other purposes as approved by
        the SFB. Under the Explanatory Letter Tai-Tsai-Jeng (7) No.108957 of the
        SFB in 1999, no reserve provision was required from July 1, 1999 to June
        30, 2003. However, reserve for default was restored effective from July 1,
        2003.

(24) Reserve for trading losses

     A. According to the RGASF, 10% of the monthly securities trading gains in
        excess of losses must be provided as a reserve by utilizing the total
        amount method until the accumulated balance of such provision reach
        $200,000 thousand. Such reserve can only be used to offset a loss from
        trading securities.

     B. According to the RGAFF, 10% of the monthly net income of the trading
        business must be provided as a reserve until the accumulated balance of
        such provision reaches the amount of minimum capital or the amount of
        the funds for management and operation. Such reserve can only be used to
        offset a loss from trading securities.

(25) Reserve for bad debt

     A. In accordance with an SFB ruling, the subsidiaries of the Company that
        engage in securities, futures, and securities investment trust business must
        provide 3% of operating revenue as reserve for doubtful accounts. The
        reserve can be used to write off overdue debt; to write off allowance for
        devaluation, which is reserved for irregular significant loss caused by
        holding unprofitable company bonds or other types of investments; or for
        other situations approved by the SFB for the four consecutive years
        beginning July 1, 1999. If the aforementioned situations do not occur, the
        allowance provided is recorded as reserve for bad debt.

     B. Effective on July 1, 2003, the abovementioned regulation did not apply to
        the Fuhwa Group, and the balance of allowance for doubtful accounts or
        reserve for bad debt as of June 30, 2003, was required to be retained for
        writing off nonperforming loans or overdue receivables in the future.

(26) Pension Plan

     A. Payment of retirement benefits to employees is charged to the pension
        fund. On July 1, 2005, the Labor Pension Act (the New System), which
        has a defined contribution scheme, became effective. Under the New
        System, the Company has an obligation to contribute no less than 6% of
        monthly paid salary to the pension accounts in the Labor Insurance Bureau
        individually owned by the Company's existing employees who choose to
        join the New System and employees hired after the effective date. The
        contributions are recognized as pension expenses in the current period.


                                      34
     B. The ending date of the year is the measurement date of the actuarial report
        for the defined benefit plan. A minimum pension liability is recognized
        when the accumulated benefit obligation exceeds the fair value of
        retirement plan assets. According to the regulations, net periodic pension
        costs are recognized including current service cost, net transaction
        obligation, the prior service cost and pension gain or loss based on
        employees’ average residual service years over the straight line method.
        Minimum pension liability usually occurs due to the existence of
        unrecognized prior service cost and unrecognized transitional net assets or
        net benefit obligation. If the amount of minimum pension liability does not
        exceed the sum of unrecognized prior service cost and unrecognized
        transitional net assets or net benefit obligation, then the difference would
        be charged to the deferred pension cost account; otherwise, the difference
        shall be charged to the account "net loss not yet recognized as net pension
        cost". Deferred pension cost is classified as an intangible asset; net loss
        from unrecognized net pension cost is classified as a reduction of
        stockholders' equity.

(27) Treasury stocks

    In accordance with the Statement of Financial Accounting Standards (SFAS)
    No. 30, "Accounting for Treasury Stock", the treatment of treasury stocks
    transaction are as follows:

     A. When the Fuhwa Group buys back issued stock, debit the stockholders’
        equity account in the amount of cost paid.

     B. When the disposal price of treasury stock is greater than the cost, the
        difference is credited to capital surplus - treasury stock; otherwise, the cost
        in excess of the price is debited to capital surplus generated from the same
        type of treasury stock transactions. If the capital surplus - treasury stock
        account is insufficient to cover the cost in excess of the price, retained
        earnings should be debited for the remaining amount.

     C. The book value of each share of treasury stock is calculated by its
        weighted-average cost.

     D. The Company’s stocks held by the subsidiaries are regarded as treasury
        stocks.




                                       35
(28) Financial institution asset securitization

     A. According to the “Statute for Financial Asset Securitization” and the
        “Trust Law”, in using special purpose trusts, the Company transfers bonds
        held as well as related rights and obligations to trustees as the basis for the
        issuance of beneficiary certificates, and accordingly receives funds
        raised thereon. Under the transaction structure, the transaction is deemed
        as a sale since the Company loses control over the transferred assets. On
        the other hand, the transfer of subordinated bonds is not dealt with as a
        sale and instead as a long-term investment since those bonds are held for
        the purpose of assuming the risk for all beneficiary certificates.

     B. Due to the lack of market quotes for subordinated bonds or seller-side
        beneficiary certificates, the Company adopts the expected reset interest
        rates and residual cash flow discount rate as the basis for estimating fair
        market values.

     C. Seller-side beneficiary certificates are evaluated based on the discounted
        future cash flows at the balance sheet date. The loss from revaluation is
        charged against the book value of available-for-sale financial assets.

(29) Revenue Recognition

     A. Revenue from trading securities and rendering services, such as brokerage
        fees, underwriting commissions and futures commissions, is recognized on
        the trading date. Profit (loss) from futures contracts and option
        transactions is recognized through daily evaluation, reversing write-offs,
        or exercising contracts on the settlement date. Interest revenue and fees
        and commissions are recognized as income on an accrual basis.

     B. The Fuhwa Group engaged in installment sales transactions and calculated
        gross profit from installment sales based on the regular accounting method
        for sales. The regular accounting method for sales recognizes all the gross
        profit, which is the difference between current selling price of installment
        sales goods and their costs, immediately at the time of sale. When the
        selling price of goods sold under installment sales is higher than its current
        selling price, the difference is recorded as unrealized interest income at the
        time of sale and recognized periodically as realized interest income based
        on the interest method. The Fuhwa Group set the current selling price
        equal to the cost of goods sold. The difference between the selling price
        and the cost of goods sold was recorded as unrealized interest income, and
        the realized portion was transferred to interest income - installment sales.




                                        36
(30) Income Tax

    A. Estimation of income tax expense is based on accounting income.
       Deferred income tax is determined based on differences between the
       financial statements and tax basis of assets and liabilities, using enacted
       tax rates in effect during the years in which the differences are expected to
       reverse. The income tax effects due to taxable temporary differences are
       recognized as deferred income tax liabilities. The income tax effects due
       to deductible temporary differences, utilization of loss carryforwards, and
       income tax credits are recognized as deferred income tax assets. The
       realization of deferred income tax assets is evaluated, and a valuation
       allowance is recognized accordingly.

    B. For the Company and its subsidiaries located in the R.O.C., the 10%
       surtax on undistributed earnings, computed according to the ROC Income
       Tax Law, is charged to current income tax expense in the year of earnings
       distribution following a resolution at the shareholders' meeting.

    C. Effective on January 1, 2006, in accordance with the Alternative
       Minimum Tax Act, the Company should calculate the alternative
       minimum tax in addition to the regular income tax. If the regular income
       tax is lower than the alternative minimum tax, the differences should be
       accrued as an income tax adjustment.

    D. Income tax credits resulting from research and development expenditures
       and employee trainings are recognized as incurred.

    E. In accordance with the Financial Holding Company Act, Article 49, the
       Fuhwa Group has adopted the Company as the taxpayer to file a
       consolidated corporate income tax return and pay the 10% surtax on
       undistributed earnings from 2003. When the Fuhwa Group prepared its
       financial statements for the year ended December 31, 2004, the Fuhwa
       Group accounted for its income tax in conformity with SFAS No. 22,
       "Income Taxes". However, the Fuhwa Group also adjusted the related
       income tax balance in a reasonable and systematic way to reflect the
       differences computed under filing a consolidated corporate income tax
       return with the Company as the taxpayer. The adjustments resulting from
       using the Company as the taxpayer to file a consolidated corporate income
       tax return are recorded under receivable from (payable to) related parties.




                                     37
  (31) Earnings Per Share of Common Stock

        A. Earnings per share are computed as net income divided by the
           weighted-average number of issued shares of common stock. The increase
           in number of issued shares resulting from issuance of stock dividends
           from retained earnings or capital surplus before the financial statement
           report date is adjusted retroactively.

        B. The convertible bonds issued by the Consolidated Company are potential
           common shares. Where the potential common shares have a dilutive effect
           on earnings per share, both basic earnings per share and diluted earnings
           per share need to be disclosed, otherwise only basic earnings per share
           need to be disclosed. Where a company has potential common shares, then
           the diluted earnings per share need to consider the effect on earnings and
           on the number of shares issued if the potential common shares are
           converted into ordinary common shares.

  (32) Use of estimates

      In preparing the consolidated financial statements in conformity with generally
      accepted accounting principles in the R.O.C., the management is required to
      make estimates and assumptions that affect the reported amounts of assets and
      liabilities and disclosures of contingent assets and liabilities as of the date of the
      consolidated financial statements, and the reported amounts of revenues, costs
      of revenues, and expenses during the reporting period. Therefore, actual results
      could differ from those estimates.

3. Changes in accounting principles

  (1) Goodwill

      Effective January 1, 2006, pursuant to the recently revised ROC Statements of
      Financial Accounting Standards No. 1 "Conceptual Framework for Financial
      Accounting and Preparation of Financial Statements" and No. 5 "Long-term
      Investments under Equity Method", investment premiums, representing
      goodwill, are no longer being amortized. Goodwill and the difference between
      the cost of investment and the Fuhwa Group share of the investee's net equity
      were previously amortized using the straight-line method over ten and twenty
      years, respectively, and were also recorded in the "investment income under
      equity method" account. As a result, total assets as of June 30, 2006 increased
      $59,260 and net gains before the cumulative effect of changes in accounting
      principle and basic earnings per share for the six months ended June 30, 2006
      increased by $59,260 and $0.02 (dollars), respectively.




                                          38
(2) Financial instruments

     A. Starting from January 1, 2006, the Fuhwa Group adopted ROC Statement
        of Financial Accounting Standard No. 34 "Financial Instruments:
        Recognition and Measurement" and No. 36 "Financial Instruments:
        Presentation and Disclosure". As of result, net loss before the cumulative
        effect of changes in accounting principle and basic earnings per share
        decreased by $57,855 and $0.02 (dollars), respectively. In accordance with
        SFAS No. 34, the beginning balances of financial assets and liabilities
        should be reclassified and re-measured at fair value. For the six months
        ended June 30, 2007, the resulting cumulative effect of changes in
        accounting principle and stockholders' equity adjustments resulting from
        changes in accounting principle amounted to $165,588 and $8,461
        thousand, respectively, and the effect of changes in accounting principle
        on basic earnings per share amounted to $0.05 (dollars).

     B. The Fuhwa Group overseas long-term equity investments under the cost
        method are translated at the current exchange rate prevailing on the
        balance sheet date. If the translated amounts are less than the original costs,
        the translation differences are accounted for as translation adjustments and
        are included in the financial statements as a component of stockholders'
        equity. Starting from January 1, 2006, the Consolidated Company adopted
        ROC Statement of Financial Accounting Standards No. 34 "Financial
        Instruments: Recognition and Measurement". In accordance with SFAS
        No. 34, non-monetary financial assets denominated in foreign currencies
        should be re-measured at the historical exchange rates instead of being
        evaluated by using the cost method. The related cumulative translation
        adjustments recording the decrease in stockholders' equity should be
        reversed and entered as an adjustment to those assets. As a result, the
        Fuhwa Group reversed the decrease in stockholders' equity by $2,856 and
        increased financial assets carried at cost by $2,856. The changes did not
        affect the net income for the six months ended June 30, 2007.




                                       39
   The effect of adopting these accounting standards for the six months ended June 30,
   2007, was as follows:
                                            Cumulative                            Increase (decrease) in
                           Character of      effect of                            net income before the
                            changes in      changes in         Stockholders'       cumulative effect of
                            accounting      accounting             equity        changes in accounting
           Items              principle       Principle          adjustment              principle
    Financial assets      Accounting      $      165,588      $             -   ($                69,076)
     and liabilities at    policy for
     fair value            financial
     through profit or     assets
     loss
    Available-for-sale    Accounting                     -             8,461                     11,221
     financial assets      policy for
                           financial
                           assets
    Financial assets      Accounting                     -             2,856                           -
     carried at cost       policy for
                           financial
                           assets
    Goodwill              No more                        -                  -                    59,260
                           amortization
                           of goodwill
                                          $     165,588       $       11,317    $                 1,405

4. Summary of significant accounts

  (1) Cash and cash equivalents

                                                             June 30, 2007     June 30, 2006
         Cash                                        $             2,351,816 $       2,054,350
         Deposits in bank                                          3,237,368         1,944,156
                                                                   5,589,184         3,998,506
         Cash equivalents:
         Checks for clearing                                       2,866,213                1,049,464
                                                     $             8,455,397 $              5,047,970

  (2) Due from Central Bank and call loans to banks

                                                             June 30, 2007          June 30, 2006
         Reserve for deposits:
          Reserve for deposits - account A           $             1,685,276 $              2,814,492
          Reserve for deposits - account B                         7,045,623                6,171,415
                                                                   8,730,899                8,985,907
         Deposits in foreign currency                              1,072,072                   17,820
          account with the Central Bank
         Inter-bank clearing fund                                    206,895                 201,900
         Transfer to deposit with Central                         50,805,000              24,300,000
          Bank
         Call loans to banks                                       3,474,113               2,203,406
                                                     $            64,288,979 $            35,709,033


                                               40
(3) Financial assets at fair value through profit or loss

                                                   June 30, 2007      June 30, 2006
      Financial assets held for trading
       purposes:
       Commercial paper                    $            1,914,574 $        5,011,677
       Beneficiary certificates /                       9,718,124          5,116,895
         beneficiary securities
       Listed stocks                                   12,439,840          1,624,201
       Government bonds                                10,842,057         13,407,684
       Financial bonds                                  2,920,696                  -
       Corporate bonds                                 25,409,209                  -
       Convertible corporate bonds                      2,830,955                  -
       Negotiable certificates of deposits                250,001            737,930
       Derivative financial instruments                 1,423,247             92,145
       Other marketable securities                          6,021                  -
       Valuation adjustment for financial                 755,047            291,509
         assets for trading purposes
                                                       68,509,771         26,282,041
      Designated financial assets at fair
       value through profit or loss:
       Hybrid financial instruments                     5,039,785          3,084,328
       Beneficiary certificates                                 -          1,412,721
                                                        5,039,785          4,497,049
                                               $       73,549,556 $       30,779,090

                                                   June 30, 2007      June 30, 2006
      Financial liabilities held for trading
       purposes:
       Securities lending transactions         $          957,410 $                -
       Derivative instruments                           3,213,534            475,074
       Valuation adjustment for financial                   9,798                  -
        liabilities for trading purposes
                                                        4,180,742            475,074
      Designated financial liabilities at
       fair value through profit or loss:
       Financial bonds                                  2,096,023          2,057,727
       Corporate bonds                                  1,406,849          1,412,098
                                                        3,502,872          3,469,825
                                               $        7,683,614 $        3,944,899




                                         41
A. For the six months ended June 30, 2007 and 2006, the net gains on
   financial assets and financial liabilities for trading purposes and the net
   realized and unrealized gains on designated financial assets and financial
   liabilities at fair value through profit or loss amounted to $2,429,334 and
   $131,899, respectively.

B. Financial instruments designated at fair value through profit or losses are
   to eliminate the accounting measurement or recognition inconsistency and
   to evaluate the performance of assets on a fair value basis.

C. The warrants carry an American-option and have six months to one year
   exercise period from the date of issuance. When the Company issued, the
   issuance price prior the maturity of the warrants or default were
   recognized as “Liabilities for issuance of call (put) warrants”. When
   warrants were repurchased from the market, the aggregate costs of
   repurchase were accounted for as “Repurchase of issued call (put)
   warrants”, a contra-account of “Liabilities for issuance of call (put)
   warrants”. The issuer has the option to settle either by cash or stock
   delivery. The details of warrants as of June 30, 2007 are as follows:




                                42
                                                                       Warrants (in NT dollar)
                                 Underlying     Issuance    Issuance         Strike          Market
   Warrants      Units issued     securities      date       price            price          value
Yuanta Core CF   PTI                 20,000    2006.12.15       1.595          177.00          0.13
Yuanta Core CQ   FRG                 20,000    2007.01.05      2.862             35.25         0.33
Yuanta Core CR   IST                 20,000    2007.01.05      3.231             43.27         1.40
Yuanta Core CS   INNOLUX             20,000    2007.01.05      0.857            101.55         4.75
Yuanta Core CT   SONIX               20,000    2007.01.05      1.465            133.65         1.01
Yuanta Core CU   CEC                 20,000    2007.01.08      2.552             39.82         0.47
Yuanta Core CV   Feds                20,000    2007.01.08      1.964             29.70         2.36
Yuanta Core CW   CHONG HONG          20,000    2007.01.08      1.226            127.20         0.19
Yuanta Core CX   Holtek              20,000    2007.01.08      0.957             96.45         0.11
Yuanta Core CY   HNFHC               30,000    2007.01.25      0.588             34.93         0.20
Yuanta Core CZ   Mega                30,000    2007.01.25      0.907             32.97         0.07
Yuanta Core DA   FCB                 30,000    2007.01.26      0.588             33.81         0.11
Yuanta Core DB   TCB                 30,000    2007.01.26      0.708             33.81         0.14
Yuanta Core DC   USI                 20,000    2007.03.30      1.804             29.62         3.74
Yuanta Core DD   Transcend           20,000    2007.03.30      1.206            188.25         1.27
Yuanta Core DE   Tung Ho Steel       20,000    2007.04.09      3.230             57.00         1.44
Yuanta Core DF   Merry               20,000    2007.04.09      1.366            168.00         0.87
Yuanta Core DG   Zinwell             20,000    2007.04.09      0.698             95.25         1.79
Yuanta Core DH   Infortrend          20,000    2007.04.09      0.598             79.50         0.45
Yuanta Core DJ   TFC                 20,000    2007.04.10      4.087             89.85         5.00
Yuanta Core DK   YCI                 20,000    2007.04.10      5.114             83.55         0.85
Yuanta Core DL   NK                  20,000    2007.04.10      0.877             92.40         0.69
Yuanta Core DM   G-SHANK             20,000    2007.04.10      0.917             93.90         1.18
Yuanta Core DN   FATC                20,000    2007.04.11      2.303             47.02         2.97
Yuanta Core DP   MXIC                20,000    2007.04.11      1.735             21.00         1.74
Yuanta Core DQ   TOPCO               20,000    2007.04.11      0.798            121.95         0.40
Yuanta Core DR   SITRONIX            20,000    2007.04.11      1.147            165.00         2.65
Yuanta Core DS   NFTC                20,000    2007.04.12      1.396             16.80         1.54
Yuanta Core DT   OUCC                20,000    2007.04.12      2.164             41.70         1.90
Yuanta Core DU   AUO                 20,000    2007.04.12      1.885             78.30         1.57
Yuanta Core DV   Asia Cement         20,000    2007.04.20      1.366             52.57         2.72
Yuanta Core DW   ASE                 20,000    2007.04.20      2.821             61.50         2.68
Yuanta Core DX   KYE                 20,000    2007.04.20      2.103             39.45         1.73
Yuanta Core DY   WPG                 20,000    2007.04.20      1.346             29.85         1.77
Yuanta Core DZ   FTC                 20,000    2007.04.24      4.206            522.75         5.25
Yuanta Core EA   ZyXEL               20,000    2007.04.24      2.452             73.87         3.50
Yuanta Core EB   Spring Soft         20,000    2007.04.24      1.296             85.50         1.70
Yuanta Core EC   Kinsus              20,000    2007.04.24      2.792            189.00         2.58
Yuanta Core ED   SY                  20,000    2007.05.02      1.276             30.90         2.18
Yuanta Core EE   ASUSTEK             20,000    2007.05.02      2.721            114.60         2.28
Yuanta Core EF   GCE                 20,000    2007.05.02      2.063             38.47         1.72
Yuanta Core EG   Mtk                 20,000    2007.05.08      5.781            705.00         4.30
Yuanta Core EH   GEMTEK              20,000    2007.05.08      1.605            130.95         0.63
Yuanta Core EJ   Compan              20,000    2007.05.16      2.601             43.95         4.59
Yuanta Core EK   ASIA                20,000    2007.05.16      1.286            212.25         1.51
Yuanta Core EL   SEEC                20,000    2007.05.22      3.398             47.77         2.54
Yuanta Core EM   RUENTEX             20,000    2007.05.22      1.754             30.60         2.51
Yuanta Core EN   MSI                 20,000    2007.05.29      1.555             35.70         1.00
Yuanta Core EP   QCI                 20,000    2007.05.29      2.780             75.90         2.18
Yuanta Core EQ   UNIMICRON           20,000    2007.06.05      3.040             71.55         3.14
Yuanta Core ER   N.P.C               20,000    2007.06.05      1.904            282.00         2.15



                                       43
Yuanta Core ES   Kinik         20,000   2007.06.06   1.883   180.75    1.67
Yuanta Core ET   CATCHER       20,000   2007.06.06   3.560   480.75    4.39
Yuanta Core EU   LARGAN        20,000   2007.06.08   0.648   631.50    0.62
Yuanta Core EV   TXC           20,000   2007.06.08   0.797    98.70    0.81
Yuanta Core EW   EVERLIGHT     20,000   2007.06.13   1.734   192.75    1.26
Yuanta Core EX   SUNPLUS       20,000   2007.06.13   1.206   116.10    1.37
Yuanta Core EY   CTK           20,000   2007.06.13   2.791    81.75    4.28
Yuanta Core EZ   ATEN          20,000   2007.06.13   1.963   204.00    1.83
Yuanta Core FA   Clevo         20,000   2007.06.14   2.981    55.57    2.30
Yuanta Core FB   Foxlink       20,000   2007.06.14   1.315   158.25    1.30
Yuanta Core FC   ALPHA         20,000   2007.06.14   2.612    64.05    2.65
Yuanta Core FD   AV Tech       20,000   2007.06.14   2.970   336.75    1.84
Yuanta Core FE   TCCI          20,000   2007.06.20   2.951    51.15    2.55
Yuanta Core FF   CHC           20,000   2007.06.20   1.166    31.80    1.16
Yuanta Core FG   Wei Chuan     20,000   2007.06.20   3.319    39.45    3.59
Yuanta Core FH   Tainanspin    20,000   2007.06.20   0.867    21.90    1.05
Yuanta Core FJ   Kinpo         20,000   2007.06.20   1.136    19.65    1.17
Yuanta Core FK   CMO           20,000   2007.06.20   2.173    58.80    2.10
Yuanta Core FL   UNI-PRESIDE   20,000   2007.06.20   1.156    19.50    1.18
                 NT
Yuanta Core FM   CTCI          20,000   2007.06.20   1.156    40.05    1.19
Yuanta Core FN   CMC           20,000   2007.06.21   1.076    16.05    1.04
Yuanta Core FP   ChinaLife     20,000   2007.06.21   1.694    25.50    1.69
Yuanta Core FQ   WAH LEE       20,000   2007.06.21   1.186   110.40    1.17
Yuanta Core FR   PCM           20,000   2007.06.21   1.545    94.80    1.37
Yuanta Core FS   Arima Comm    20,000   2007.06.21   4.924    60.00    4.61
Yuanta Core FT   DCM           20,000   2007.06.22   2.830    73.05    2.74
Yuanta Core FU   LTC           20,000   2007.06.22   1.595    63.82    1.35
Yuanta Core FV   MIC           20,000   2007.06.22   1.953    61.50    2.23
Yuanta Core FW   Holy Stone    20,000   2007.06.22   0.498    88.50    0.53
Yuanta Core U7   YCTC          20,000   2007.04.04   3.808    49.27    6.00
Yuanta Core U8   CHIPBON       20,000   2007.04.04   3.848    59.32    5.00
Yuanta Core U9   WWX           10,000   2007.04.04   1.655   166.50    1.74
Yuanta Core V1   TSMT          10,000   2007.04.04   0.887   134.55    0.94
Yuanta Core V2   PSC           20,000   2007.04.12   0.698    30.67    0.28
Yuanta Core V3   SERCOMM       10,000   2007.04.19   2.363    54.45    2.60
Yuanta Core V4   PTC           10,000   2007.04.19   3.020    50.70    9.35
Yuanta Core V5   ANPEC         10,000   2007.04.19   3.230    76.95   10.70
Yuanta Core V6   TLC           20,000   2007.04.25   1.366    40.87    0.71
Yuanta Core V7   Soft-World    20,000   2007.04.25   2.591   112.80    3.85
Yuanta Core V8   PVI           20,000   2007.04.25   1.366    32.85    5.10
Yuanta Core V9   APEC          20,000   2007.04.25   1.356    75.00    2.72
Yuanta Core W1   ENFIELD       10,000   2007.05.04   1.993    97.95    2.32
Yuanta Core W2   KSECO         10,000   2007.05.04   1.436    30.22    1.30
Yuanta Core W3   GBM           10,000   2007.05.04   2.941    85.05    1.76
Yuanta Core W4   EVERSKILL     20,000   2007.05.04   2.313    26.77    2.85
Yuanta Core W5   Fortunegine   15,000   2007.05.10   1.665   142.65    2.58
Yuanta Core W6   APACOE        10,000   2007.05.10   2.143   168.75    2.17
Yuanta Core W7   WALTON        10,000   2007.05.10   1.615    28.72    1.61
Yuanta Core W8   LIGITEK       10,000   2007.05.10   3.419    65.55    1.73
Yuanta Core PA   Shi Jie        8,000   2007.05.18   1.823    45.00    1.70
Yuanta Core W9   FFG            5,000   2007.05.18   1.654    37.50    1.90
Yuanta Core PB   FFG           10,000   2007.06.01   1.744    39.00    2.05
Yuanta Core PC   GPM           10,000   2007.06.01   2.631    45.00    1.36



                                44
     Yuanta Core PD   Coretronic     20,000   2007.06.07    3.648      80.25        3.08
     Yuanta Core PE   QSI            20,000   2007.06.07    3.549      80.10        3.35
     Yuanta Core PF   DynaPack       20,000   2007.06.12    1.793     104.25        3.42
     Yuanta Core PG   Motech         20,000   2007.06.12    6.131     621.00        5.95
     Yuanta Core PH   Foxlinkimage   20,000   2007.06.12    4.128      79.20        4.19
     Yuanta Core PJ   E-TON          20,000   2007.06.15    0.957     870.00        0.85
     Fuhwa 56         CMO            20,000   2006.12.27    1.883      40.68        0.88
     Fuhwa 57         NTC            20,000   2006.12.26    1.883      34.06        0.10
     Fuhwa 58         KINSUS         20,000   2006.12.26    0.988     136.56        0.72
     Fuhwa 59         CPDC           20,000   2006.12.28    1.030      11.12        0.84
     Fuhwa 60         WEC            20,000   2006.12.28    1.169      15.60        0.15
     Fuhwa P8         PSC            20,000   2006.12.27    1.277      26.16        0.03
     Fuhwa P9         Ardentec       12,000   2007.12.27    2.010      33.71        1.74
     Fuhwa Q1         CHIPBON         5,000   2007.03.29    1.129      48.69        1.63
     Fuhwa Q2         Tai Ban         5,000   2007.03.29    1.120      40.44        5.50
     Fuhwa Q3         Wahhong         5,000   2007.04.24    1.317     169.50        0.41
     Fuhwa Q4         Coretronic      5,000   2007.04.24    1.066      67.50        0.61
     Fuhwa Q5         DynaPack        5,000   2007.06.14    1.008      94.50        1.50
     Fuhwa Q6         EPISIL          6,000   2007.06.14    1.119      40.45        1.25


(4) Investments in bills and bonds under resale or bills and bonds payable under
    repurchase agreements

                                                  June 30, 2007       June 30, 2006
     Investments in bills and bonds under $            10,257,080 $            9,213,982
      resale agreement
     Interest rate (%)                             -8.00%~ 3.1%       1.44%~ 1.85%
     Contract resale amount                   $        10,267,584 $            1,555,100
     Bills and bonds payable under
      repurchase agreement
                                              $        55,067,060 $    35,221,263
     Interest rate (%)                               -1.5%~ 5.7%    0.00%~ 5.64%
     Contract repurchase amount               $        55,128,048 $        16,147,436

   Note: To comply with the GreTai Securities Market (GTSM)’s automatic bills
         and bonds under repurchase agreement (RP) trading of excess long
         positions by the computerized negotiation trading system, the Bank
         engaged in relevant transactions and generated negative interest rate.




                                      45
(5) Accounts receivable – net

                                                 June 30, 2007          June 30, 2006
     Credit card receivable                 $         3,015,598       $      4,569,006
     Interest receivable                              1,779,138              1,623,949
     Acceptances receivable                           1,181,798               747,088
     Tax-refund receivable                              564,166               529,220
     Margin loans                                    84,232,466            30,370,286
     Spot exchange receivable                         7,331,909             3,996,421
     Factoring receivable and other                  10,084,460             6,034,703
      receivables
     Subtotal                                       108,189,535            47,870,673
     Less: allowance for doubtful           (         1,218,457 ) (           896,716)
      accounts
                                             $      106,971,078       $    46,973,957

     A. For the six moths ended June 30, 2007 and 2006, the percentage of margin
        loans for listed stocks ranged from 20% to 60%. Interest rates for
        pecuniary financing to securities firms ranged from 3.00% to 5.00% and
        3.40% to 5.00% per annum for the six months ended June 30, 2007 and
        2006, respectively. Interest rates for pecuniary financing to investors
        ranged from 6.65% to 6.90% and 6.00% to 6.65% per annum for the six
        months ended June 30, 2007 and 2006.

     B. The stipulated percentage of deposits from the proceeds of short sale stock
        financing was 90% for the six months ended June 30, 2007 and 2006. As
        of June 30, 2007 and 2006, the balance of stock deposits was $2,319,127
        and $1,874,039, respectively. The interest rates on the short sale proceeds
        payable and deposits from investors were 0.30% to 0.50% and 0.3% per
        annum for the six months ended June 30, 2007 and 2006, respectively.




                                      46
C. The memorandum accounts for pecuniary and securities financing
   transactions recorded by face value were as follows:

                                             June 30, 2007      June 30, 2006
   Memorandum account
   Securities held for collateral        $       23,906,163 $       21,811,242
   Short sale stock loans                           943,120            780,860
                                         $       24,849,283 $       22,592,102
   Liabilities for holding collateral    $       24,381,838 $       21,816,910
    securities
   Guarantee effects                                467,085            775,192
   Securities borrowed                                  360                     -
                                         $       24,849,283 $       22,592,102
  The approximate market values of the above memorandum accounts were
  as follows:

                                             June 30, 2007      June 30, 2006
   Memorandum account
   Securities held for collateral        $       77,526,150 $       47,261,727
   Short sale stock loans                         2,944,003          2,229,835
                                         $       80,470,153 $       49,491,562
   Liabilities for holding collateral
    securities                           $       80,125,300 $       48,722,006
   Guarantee effects                                343,192            769,556
   Securities borrowed                                1,661                  -
                                         $       80,470,153 $       49,491,562




                                    47
(6) Loans - net

                                                 June 30, 2007        June 30, 2006

     Negotiation and bills discounted        $          384,204 $            337,763
     Short-term loans and overdrafts                 27,662,158           25,548,868
     Short-term secured loans and                    14,893,028           14,474,095
      overdrafts
     Medium-term loans                               46,446,317           57,144,454
     Medium-term secured loans                       41,380,915           35,385,714
     Long-term loans                                  8,618,640            5,741,818
     Long-term secured loans                         88,389,439           86,480,337
     Accounts receivable financing                      527,207              345,523
     Non-performing loans                             2,969,569            4,337,215
     Subtotal                                       231,271,477         229,795,787
     Less: allowance for doubtful
      accounts                               (        3,756,101 ) (        1,835,114 )
                                             $      227,515,376 $       227,960,673


     A. The Bank provided allowance for doubtful accounts by considering
        unrecoverable risks for the specific loans which is evaluated by the
        expected possibility of default. To consolidate the Fuhwa Group financial
        structure, enhance the ability to accept risk, and reinforce the quality of
        assets, the Fuhwa Group evaluated and reserved allowance for bad debts
        for expired loans and advances to customers this year.




                                        48
B. For the six months ended June 30, 2007 and 2006, movements of
   allowance for doubtful accounts were as follows:

                                                  For the six months ended June 30, 2007

                                     Unrecoverable risks         Inherent risks for the
                                      for the specific loans     overall loan portfolio             Total
                                    $            4,078,827      $           1,313,653         $      5,392,480
  Beginning balance
  Add: Provision for doubtful                     1,018,651                     2,019                1,020,670
    accounts
  Recovery of doubtful                             280,088                      6,608                  286,696
    accounts
  Foreign exchange                                       49                          -                      49
    translation adjustment
    and others
  Less: Write-offs              (                   955,730 ) (               214,225 )       (      1,169,955)
  Ending balance                 $                4,421,885 $               1,108,055          $     5,529,940


                                                  For the six months ended June 30, 2006
                                     Unrecoverable risks         Inherent risks for the
                                      for the specific loans     overall loan portfolio            Total
                                    $            2,742,895      $                     -   $           2,742,895
  Beginning balance
  Add: Provision for doubtful                     2,276,638                          -               2,276,638
    accounts
  Recovery of doubtful                             241,041                           -                 241,041
    accounts
  Less: Write-offs              (                 2,866,777 )                        -    (          2,866,777)

  Foreign exchange
    translation adjustment      (                     1,149 )
                                                                                     -    (              1,149)
    and others
  Ending balance                    $             2,392,648     $                    -    $          2,392,648




C. For the six months ended June 30, 2007 and 2006, the provisions for loans
   were $664,767 and $866,543, the provisions for credit card receivables
   were $146,000 and $1,334,534, and the other credit losses were $209,903
   and $75,561, respectively. For the six months ended June 30, 2007, other
   credit losses were Bank’s other provisions amounted to $207,884 and
   Fuhwa Securities’ other credit loss receivables amounted to $2,019.

D. As of June 30, 2007 and 2006, non-accrued loans and other credit
   extensions where interest accruals had been ceased were $2,969,569 and
   $4,337,215, respectively, and interest that were not accrued were $52,339
   and $45,898, respectively.




                                             49
    (7) Available-for-sale financial assets – net


                                                     June 30, 2007
                                                Valuation          Accumulated
                      Amortized Cost           adjustment           impairment       Fair value
Listed stocks         $        34,354    $            13,272     $             - $        47,626
Government bonds            7,433,175    (            94,486 )                 -       7,338,689
Corporate bonds             7,616,750    (            50,698 )                -        7,566,052
Financial                   4,131,506    (             5,601 ) (        176,017)       3,949,888
debentures
Other bonds                   867,115    (             5,873 ) (        113,464)         747,778
Convertible                   500,000                      -                  -          500,000
  corporate bonds
Asset backed                1,221,374    (            20,110 )                 -       1,201,264
securities
Beneficiary                 1,846,825    (           154,387 ) (         15,929)       1,676,509
  certificates /
  securities
                      $    23,651,099    ($          317,883 ) ($       305,410) $ 23,027,806


                                                     June 30, 2006
                                                   Valuation     Accumulated
                       Amortized Cost             adjustment         impairment      Fair value
Listed stocks          $        18,828    ($           13,410 ) $              - $         5,418
Government bonds             6,407,834    (            67,328 )                -       6,340,506
Corporate bonds              8,539,041                 14,951                  -       8,553,992
Financial                        2,827                     16                  -           2,843
debentures
Beneficiary                    352,268                    262                  -         352,530
  certificates /
  securities
                       $    15,320,798    ($          65,509 ) $               - $ 15,255,289




                                             50
(8) Held-to-maturity financial assets – net

                                                      June 30, 2007        June 30, 2006
     Government bonds                     $                  1,317,156 $              117,664
     Bonds (financial bonds and corporate                    7,507,300              6,138,216
      bonds)
     Asset backed securities                                   155,998                        -
     Principal guaranteed notes                                 98,580                        -
                                                  $          9,079,034 $            6,255,880


(9) Equity investments under equity method – net

     As of June 30, 2007 and 2006, details of equity investments under equity method were
     as follows:

                                           June 30, 2007                  June 30, 2006

                                              Percentage of                       Percentage of
                                      Amount ownership (%)   Amount               ownership (%)
     Ding Hwa Securities            $  27,625       50.00% $      -                            -
       Investment Co., Ltd.
     KIM ENG HOLDINGS                 5,647,217             28.63%            -                -
       LIMITED
                                    $ 5,674,842                      $        -


    The investment income under the equity method from The Company and its
    subsidiaries were $367,579 and $326, respectively, which were based on the
    respective audited financial statements for the six months ended June 30, 2007
    and 2006.

(10) Other financial assets – net

                                                          June 30, 2007     June 30, 2006
    Financial assets carried at cost               $           7,441,614 $       2,915,029
    Less: accumulated impairment losses           (               23,061) (           8,194)
                                                               7,418,553         2,906,835
    Bond investments with no active                            1,402,707         2,694,613
      market
    Redeemable certificate of deposits                                -                161,851
    Overdue receivables not transferred                         572,483              1,627,425
      from loans
    Less: Allowance for bad debt                  (              555,382) (          1,514,452)
                                                               1,419,808             2,969,437
    Others                                                        87,355                     -
                                                      $        8,925,716 $           5,876,272


                                         51
(11) Properties, plants and equipments

                                                       June 30, 2007
                                                     Appraisal          Accumulated
                                Cost                 increments         depreciation      Book value
 Land                      $     6,832,332 $                      - $               - $    6,832,332
 Buildings                       3,226,968                        - (       590,663)       2,636,305
 Machinery and                   2,306,015                        - (      1,305,610 )     1,000,405
  computer equipment
 Transportation                     55,675                        - (         40,577 )        15,098
   equipment
 Miscellaneous                   1,319,409                        - (       627,801 )        691,608
   equipment
 Leasehold                         158,690                        - (        111,423 )        47,267
   improvements
 Construction in process         2,001,877                        -                 -      2,001,877
   and prepayments for
   equipment
 Less: accumulated                          -                     -                 - (      153,939)
   impairment losses

                           $    15,900,966 $                      - ($     2,676,074) $ 13,070,953


                                                       June 30, 2006
                                                     Appraisal          Accumulated
                                Cost                 increments         Depreciation    Book value
 Land                      $    2,786,174        $                -     $           - $   2,786,174
 Buildings                      1,652,460                         - (        294,241)       1,358,219
 Machinery and                  1,324,745                         - (        613,330)         711,415
  computer equipment
 Transportation                    63,896                         - (         43,192)          20,704
   equipment
 Miscellaneous                   722,322                          - (        395,025)         327,297
   equipment
 Construction in process
   and prepayments for           302,579                          -                 -         302,579
   equipment
                           $    6,852,176        $                - ($     1,345,788) $     5,506,388




                                                52
(12) Intangible assets

                                                  June 30, 2007        June 30, 2006
    Goodwill                                  $         9,311,063 $         1,534,596
    Operating rights                                      379,460             433,118
    Computer software                                     164,012                      -
                                              $         9,854,535 $         1,967,714


(13) Other assets

                                                June 30, 2007     June 30, 2006
    Miscellaneous deposits                    $        4,121,007 $      2,541,181
    Non-operating assets
    Leased assets                                       3,110,436           1,559,704
    Less: accumulated impairment losses       (           555,451)                  -
    Less: accumulated depreciation            (           279,656) (          171,264)
       Subtotal                                         2,275,329           1,388,440
    Idle assets                                           577,936             547,501
    Less: accumulated impairment losses       (            24,446) (           66,636)
    Less: accumulated depreciation            (           173,946) (          114,969)
       Subtotal                                           379,544             365,896
    Foreclosed assets                                     139,047             347,111
    Less: accumulated impairment losses       (             4,660) (           43,587)
      Subtotal                                            134,387             303,524
    Restricted assets                                     773,505             494,974
    Credit items for securities consignment               235,915              18,288
      trading
    Customer margin deposit accounts                    5,744,487           1,433,574
    Others                                                488,298             856,675
                                              $        14,152,472 $         7,402,552




                                     53
(14) Non-financial asset impairment losses

                                         June 30, 2007
                        Beginning                                      Ending
                         balance   Increase     Decrease   Transfer    balance
     Consolidated      $ 284,527 $          - $         - $         - $ 284,527
      credit items
     Fixed assets –           270      145,852 (       176)       7,993       153,939
      land
     Leased assets –       372,992     260,592 (    70,140) (     7,993)      555,451
      land, house
      and buildings
     Idle assets             5,593     168,353           -             -      173,946
     Foreclosed             17,860       5,390 (    18,590)            -        4,660
      assets
                       $   681,242 $   580,187 ($   88,906) $          - $ 1,172,523

(15) Due to Central Bank and other banks

                                                 June 30, 2007       June 30, 2006
     Due to Central Bank                     $           17,923 $             13,669
     Due to other banks                               5,000,618             3,017,027
     Overdrafts from other banks                        821,529              959,506
     Call loans from other banks                      1,605,667            14,422,315
     Transfer deposits from Chunghwa                 13,214,151            14,723,712
       Post Co.
                                             $       20,659,888 $          33,136,229

(16) Commercial paper payable - net

                                                 June 30, 2007        June 30, 2006
     Commercial paper payable                $       18,300,000 $          17,395,000
     Less: discount on commercial paper      (           24,156) (             16,207)
              payable
                                             $       18,275,844 $          17,378,793

    The interest rates on commercial paper were 1.64% to 3.65% and 1.13% to
    2.22% per annum for the six months ended June 30, 2007 and 2006,
    respectively.




                                       54
(17) Payables

                                                June 30, 2007       June 30, 2006
    Accounts payable                       $         2,812,967 $          592,999
    Spot exchange payable                            7,322,280          3,995,451
    Bankers’ acceptances                             1,186,171            754,447
    Interests payable                                1,099,049            992,183
    Accrued expenses                                   563,525          1,430,305
    Warrants taxes payable payable                   9,708,531            640,727
    Tax refund                                         374,841                     -
    Collections payable for customers                  453,005             90,649
    Collateralized proceeds payable from             5,500,576          2,137,490
      securities lending
    Deposits received on securities                  4,594,945          1,874,039
      lending
    Other payables                                   4,854,304          2,948,023
                                           $        38,470,194 $       15,456,313

(18) Deposits

                                               June 30, 2007       June 30, 2006
    Checking deposits                      $         2,143,074 $        2,068,600
    Demand deposits                                 22,233,244         21,042,492
    Time deposits                                   71,787,060         67,043,763
    Demand savings deposits                         83,453,115         59,068,806
    Time savings deposits                           96,050,745         82,366,644
    Remittances                                         14,049             13,456
                                           $       275,681,287 $      231,603,761

     As of June 30, 2007 and 2006, the maturity date for the above time deposits
     and savings deposit, except for demand savings deposits, was within three
     years.




                                     55
(19) Bonds payable

                                                 June 30, 2007       June 30, 2006
    Subordinate financial debentures         $       11,200,000 $        6,400,000
    Corporate bonds                                     725,000          1,450,000
    Unsecured corporate bonds                         6,500,000                    -
    Convertible corporate bonds                         676,902            663,484
                                             $       19,101,902 $        8,513,484


     A. Subordinate Financial Debentures

        In order to increase the regulatory capital ratio and raise medium- and
        long-term operating funds, the board of Directors of the Fuhwa Bank
        decided to issue subordinate financial debentures on August 22, 2002,
        December 22, 2005, and September 21, 2006. The issuances of subordinate
        financial debentures were approved by the Bureau of Monetary Affairs in
        Ministry of Finance Ruling Tai-Tsai-Rong No. 0910042863 on September
        24, 2002, the Financial Supervisory Commission in Executive Yuan Ruling
        Jin-Guan-Yin (6) No. 09500034970 on February 15, 2006, and the
        Financial Supervisory Commission in Executive Yuan Ruling Jin-
        Guan-Yin (6) No. 09500480850 on November 2, 2006. In accordance with
        the original issuance plan, the Bank issued the 2002 and 2006 first series of
        subordinate financial debentures on November 4, 2002, and February 24,
        2006, which were issued at the par value. The second series of general
        financial debentures and subordinate financial debentures both within the
        quota of $5,000,000 was approved on November 2, 2006. The first issuance
        of the second series of subordinate financial debentures and the second
        issuance of the second series of accumulated subordinate financial
        debentures with no maturity date were made on December 22 and 27, 2006,
        respectively. The total issued amounts were $1,800,000 and $3,000,000,
        respectively, which were also issued at the par value.




                                       56
The details were as follows:

First series of subordinate financial debentures in 2002

                                  Floating interest rate               Fixed interest rate
Par value                      $       3,100,000                $           1,400,000
Stated interest rate           6.15% less Libor (Note1)                          3.5%
Period                         Five years and three months Five years and three months
Interest payment date          Payable every half-year          Payable every half-year
Term of principal payment      Repaid on maturity               Repaid on maturity
Issued price                   Priced at face value on          Priced at face value on
                                issuing date                     issuing date

First series of subordinate financial debentures in 2006

                                                    Fixed interest rate
Par value                                           $      5,000,000
Stated interest rate                                          2.55%
Period                                         Five years and six months
Interest payment date                             Payable every year
Term of principal payment                          Repaid on maturity
Issued price                               Priced at face value on issuing date

First issuance of second series of subordinate financial debentures in 2006, first
series

                                                    Fixed interest rate
Par value                                           $      1,800,000
Stated interest rate                                          2.50%
Period                                                     Six years
Interest payment date                              Payable every year
Term of principal payment                     Repaid on maturity (Note 2)
Issued price                               Priced at face value on issuing date

Second issuance of second series of subordinate financial debentures in 2006,
second series




                                   57
                                                  Fixed interest rate
Par value                                         $   3,000,000
Stated interest rate         3.25%, the interest rate will rise to 4.25% if the Bank does
                                             not call back after five years
Period                                            No maturity date
Interest payment date                            Payable every year
Term of principal payment                             (Note 3)
Issued price                             Priced at face value on issuing date

Note 1: The stated interest rates are recalculated every half-year according to the
        average six-month US dollar Libor rate.

Note 2: The redemption right of the issuer: If its post-redemption capital adequacy ratio
        meets the minimum required consolidated capital adequacy ratio and is
        approved by the supervising authority, the Bank may redeem the debentures in
        whole at par value on the second anniversary after the issue date or on every
        subsequent anniversary until maturity. Purchasers or holders of the debentures
        cannot raise any objection to this resolution. The Bank will announce the
         resolution 15 days prior to redemption date, and the debentures will stop
         accruing interest on and after the declaration date.

Note 3: The redemption right of the issuer: If its post-redemption capital adequacy ratio
         meets the minimum required consolidated capital adequacy ratio and is
         approved by the supervising authority, the Bank may redeem the debentures in
         whole or in part at par value plus accrued and unpaid interest on the fifth
         anniversary after the issue date or on every subsequent anniversary. Purchasers
         or holders of the debentures cannot raise any objection to this resolution. The
         Bank will announce the resolution 15 days prior to redemption date, and the
         debentures will stop accruing interest on and after the declaration date.




                                 58
   (A) As of June 30, 2007 and 2006, the financial bonds payable prior to
       consolidated write-offs amounted to $12,166,000 and $7,366,000,
       respectively. Among these, Fuhwa Securities Finance purchased Fuhwa
       Bank’s financial bonds amounted to $966,000 eliminated which has
       been in the consolidated financial statements.

   (B) For the six months ended June 30, 2007 and 2006, the fair value of
       subordinate financial debentures recorded as designated financial
       liabilities at fair value through profit or loss was $2,096,023 and
       $2,057,727, respectively.

   (C) For the six months ended June 30, 2007 and 2006, the difference of
       $966,000 between the issued amounts of $12,166,000 and $7,366,000,
       respectively, and the book values of $11,200,000 and $6,400,000,
       respectively, was the amount of subordinated financial debentures
       which Fuhwa Securities Finance purchased from Fuhwa Bank. The
       aforementioned inter-company transaction was eliminated in the
       consolidated financial statements.

B. Secured Corporate Bonds Payable

   The Fuhwa Group issued secured corporate bonds (first issue) totaling
   $2,900,000 at par on October 1, 2003, with the approval of SFB Ruling
   Tai-Tsai-Cheng (4) No. 0920146322. The different categories were due to
   the different issuance dates. The issuance amount of categories A1, A2, A3,
   A4, B1 and B2 were $300,000. The issuance amount of categories A5, B4,
   and B5 were $250,000. The issuance amount of category B3 was $350,000.
   The total amount was $2,900,000, and the bonds were stated at face value
   $1,000 each. According to the rule governing first issuance of secured
   corporate bonds of the Consolidated Company, the 50% repayment of
   principal of the bonds in category A was in the third year, and the repayment
   amount was $725,000 in October 2006. The details of the aforementioned
   issuance of corporate bonds were as follows:




                                 59
                                                                Maturity
                       June 30,      June 30,        Issued       date        Coupon       Interest payment
    Category             2007          2006           date      (Note 1)      rate (%)           terms
      A1              $ 150,000     $ 300,000       October    October 24,      1.55     Starting from the
                                                    24, 2003      2007                    issue date, simple
                                                                                          interest is accrued
                                                                                          annually
       A2                 150,000       300,000     October    October 27,     1.55      Starting from the
                                                    27, 2003      2007                    issue date, simple
                                                                                          interest is accrued
                                                                                          annually
       A3                 150,000       300,000     October    October 28,     1.55      Starting from the
                                                    28, 2003      2007                    issue date, simple
                                                                                          interest is accrued
                                                                                          annually
       A4                 150,000       300,000     October    October 29,     1.55      Starting from the
                                                    29, 2003      2007                    issue date, simple
                                                                                          interest is accrued
                                                                                          annually
       A5                 125,000       250,000     October    October 30,     1.55      Starting from the
                                                    30, 2003      2007                    issue date, simple
                                                                                          interest is accrued
                                                                                          annually
        B1                300,000       300,000     October    October 24,    (Note 2)          (Note 4)
                                                    24, 2003      2007
        B2                300,000       300,000     October    October 27,    (Note 2)         (Note 4)
                                                    27, 2003      2007
        B3                350,000       350,000     October    October 28,    (Note 2)         (Note 4)
                                                    28, 2003      2007
        B4                250,000       250,000     October    October 29,   4.46%~6M          (Note 4)
                                                    29, 2003      2007         LIBOR
        B5                250,000       250,000     October    October 30,    (Note 3)         (Note 4)
                                                    30, 2003      2007
                        2,175,000     2,900,000
Less: designated      ( 1,450,000 ) ( 1,450,000 )
financial
liabilities at fair
value through
profit or loss
                      $   725,000   $ 1,450,000


Note 1: The principal of category A bonds will be repaid 50% each in the third and
        fourth years starting from the issue date; the principal of Category B bonds
        will be repaid in a lump sum at maturity.

Note 2: 3.5% for the first year; 6 Month LIBOR (if 6 Month LIBOR is below 0.7%),
        3% (if 6 Month LIBOR is equal to or above 0.7% and equal to or below 2.5%),
        or 4% less 6 Month LIBOR (if 6 Month LIBOR is above 2.5%) for the second
        year to fifth year.

Note 3: 3.5% for the first year; 6 Month LIBOR (if 6 Month LIBOR is below 0.7%) or
        4.40% less 6 Month LIBOR (if 6 Month LIBOR is equal to or above 0.7%)
        for the second year to fifth year.




                                                      60
Note 4: The first interest fixing date will be two business days prior to the issue date.
        The reset date will be two business days prior to the first date of each
        calculation period, subject to adjustment in accordance with 6 Month LIBOR.
        Simple interest is accrued semi-annually, and the coupon rate shall not be
        below 0%. (Business days refers to business days in London. If the date falls
        on a holiday or nonworking day, the date shall be advanced to the preceding
        business day.)

        For the six months ended June 30, 2007 and 2006, the fair value of corporate
        bonds payable recorded as designated financial liabilities at fair value through
        profit or loss was $1,406,849 and $1,412,098, respectively.

        C. Convertible Bonds

           For the purpose of improving the financial structure and debt ratio, the
           Fuhwa Group issued, for the first time, zero coupon convertible bonds. The
           issuance was approved by the Financial Supervisory Commission,
           Executive Yuan, on January 14, 2005, and the first issuance was completed
           on January 24, 2005.

           On June 29, 2005, the Company held the annual stockholders' meeting,
           during which a reelection of the board of directors took place. According to
           the contract, whenever a change in control with respect to the Company
           takes place, an early redemption shall result. Thus, letters were sent out to
           stockholders informing them of such fact. During 2005, the Company
           repurchased from the market convertible bonds with face value of
           US$80,000 upon requisition by investors.

           As of June 30, 2007 and 2006, the details of the convertible bonds were as
           follows:

                                              June 30, 2007    June 30, 2006
            Issuing amount (US$20,000 as of $        636,600 $       636,600
             June 30, 2007 and 2006,
             respectively)
            Loss on foreign exchange                         18,100              11,380
            Premium on convertible bonds                      2,497               4,087
            Accrued interest premium                         19,705             11,417
                                                 $          676,902 $          663,484




                                          61
The major issuing clauses of the aforementioned convertible bonds are as
follows:

(A) Issuing amount:

     US$100 million, equivalent to $3,183,000.

(B) Issuing period:

     January 24, 2005~January 24, 2010, for the duration of five years.

(C) Denomination:

     US$1,000.

(D) Issue price:

     Issued at 101.0% of the principal amount, totaling $3,214,830.

(E) Conversion subject:

     The bondholder will have the right to convert the bonds into common
     shares newly issued by Fuhwa Financial Holding.

(F) Rate of interest:

     0% per annum.

(G) Redemption at the option of the bondholders:

    a. Unless the bonds have been previously redeemed, converted, or
       repurchased and canceled, each bondholder shall have the right, at
       such bondholder's option, on each of January 24, 2007, January 24,
       2008, and January 24, 2009, to require Fuhwa Financial Holding to
       redeem all or some of the bonds held by such bondholders at 104%
       of the principal amount thereof.

    b. Whenever there is a change in control with respect to Fuhwa
       Financial Holding as prescribed in the contract, the bondholder shall
       have the right, at such bondholder's option, to require Fuhwa
       Financial Holding to redeem all, or some only, of such bondholder's
       bonds at 104% of the principal amount.

    c. If Fuhwa Financial Holding becomes delisted or ceases to exist as
       the result of business combinations or other reasons, the bondholder
       shall have the right, at such bondholder's option, to require Fuhwa
       Financial Holding to redeem all, or some only, of such bondholder's
       bonds at 104% of the principal amount during a specified period
       after the shareholders' resolution or before delisting of the stock.


                             62
   d. During the period from the issuance date to June 30, 2005, when
      there is a takeover by Fuhwa Financial Holding of any target entity
      as prescribed in the contract, the bondholder shall have the right, at
      such bondholder's option, to require Fuhwa Financial Holding to
      redeem all, or some only, during a specified period after the
      shareholders' resolution, of such bondholder's bonds at 104% of the
      principal amount.

(H) Redemption at maturity:

    Unless previously redeemed, converted, or repurchased and canceled,
    the bonds will be redeemed on the maturity date at 100% of their
    principal amount.

(I) Conversion period:

   The bondholder will have the right to convert the bonds into common
   shares of Fuhwa Financial Holding at any time from the later of July 1,
   2005, or the date of the 2005 shareholders' meeting for re-election of
   the board of directors of Fuhwa Financial Holding and until 30 days
   prior to the maturity date. No bonds may be converted during the
   following closed periods:

   a. the 5-day period prior to the record date set for any distribution of
      dividends, bonuses or other benefits with respect of Fuhwa
      Financial Holding; the 60-day period prior to the date of any general
      shareholders' meeting of Fuhwa Financial Holding; the 30-day
      period prior to the date of any special shareholders' meeting of
      Fuhwa Financial Holding; and

   b. the period beginning on the third trading day prior to Fuhwa
      Financial Holding's notification to the Taiwan Stock Exchange of a
      record date for the determination of the identity of shareholders
      entitled to receive dividend distributions, to subscribe for shares due
      to a capital increase, or to receive other benefits and bonuses in any
      one year to the date ending on such record date for the year.

(J) Conversion price:

   21.12 per share (NTD/USD=1/31.802); the conversion price will be
   subject to adjustments upon the occurrence of certain changes relating
   to Fuhwa Financial Holding's common shares, including the
   declaration of cash dividend or distribution of shares. As of September
   5, 2005, the conversion price had been adjusted from $21.12 per share
   to $19.42 per share. Starting from January 24, 2006, the conversion
   price will be changed from $19.42 to $15.54 per share.




                              63
   (K) Redemption at the option of the issuer:

       a. The Company may, at its option, at any time on or after January 24,
          2007, and prior to January 24, 2010, redeem the bonds, in whole but
          not in part, at the principal amount thereof, if the closing price of the
          underlying shares of Fuhwa Financial Holding, translated into US
          dollars at the prevailing rate, for a period of 20 consecutive trading
          days, the last of which occurs not more than five days prior to the
          date of such redemption notice, exceeds 125% of the conversion
          price then in effect, translated into US dollars at a fixed exchange
          rate of NT$31.802=US$1.00.

       b. The Company may, at its option at any time, redeem the bonds, in
          whole but not in part, at the principal amount thereof if at least 95%
          of the aggregate principal amount of the bonds has already been
          redeemed, converted, or repurchased and canceled.

       c. The Company may at any time redeem the bonds, in whole but not
          in part, at 104% of the principal amount thereof in the event of
          certain changes in ROC taxation that would increase the tax burden
          of Fuhwa Financial Holding due to the issuance of the underlying
          bonds.

D. Unsecured corporate bonds

   For the business needs, Fuhwa Securities Finance raises domestic
   unsecured corporate bonds on May 30, 2007, the main issuance clauses of
   this placement are as follows:

   (A) Issuing amount:

       $7,500,000, issuing Bond A and Bond B based on issuing periods.

   (B) Issue price:

       Issued at par, $1,000 per share

   (C) Rate of interest:

       Bond A: 2.05% per annum and at fixed interest rate

       Bond B: 2.13% per annum and at fixed interest rate

   (D) Repayment terms:

       Bond A: The principal is paid pursuant to face value at maturity.

       Bond B: 50% is repaid at the 4th and 5th years, respectively.



                                 64
(E) Maturity period:

    Bond A: 3 years

    Bond BL: 5 years

(F) Interests

    Interest is based on rate of interest from the issuance date and interest
    is paid annually. Interest is paid on every one million and NT 1 dollar
    is the basis unit, less than 1 dollar is to round up or down.

    As of June 30, 2007, the difference of $1,000,000 from the issuing
    amount of $7,500,000 and the recorded amount of 6,500,000 was
    unsecured corporate bonds that Fuhwa Securities purchased from
    Fuhwa Securities Finance and this was eliminated in the consolidated
    financial statements.




                             65
(20) Other borrowings

                                                 June 30, 2007       June 30, 2006
      Short-term loans and overdrafts
       Unsecured bank loans                  $       23,580,000 $       11,055,000
       Secured bank loans                             2,940,000          1,170,000
       Bank overdrafts                                   10,361                     -
                                             $       26,530,361 $     12,225,000
       Interest rate (%)                         1.86%~3.5%       1.42%~2.30%

                                                 June 30, 2007       June 30, 2006
      Long-term loans
       Unsecured bank loans                  $          300,000 $          300,000
       Interest rate (%)                         2.14%~3.59%        2.14%~2.51%
      Total other borrowings                 $       26,830,361 $       12,525,000

(21) Other liabilities

                                                 June 30, 2007      June 30, 2006
      Reserve for land appraisal             $           32,473 $           32,473
        incremental taxes
      Guarantee deposit-in and margin                    94,007            123,103
        deposits
      Collections in advance                            220,849            181,041
      Futures trader’s equity                         5,659,895            309,459
      Others                                            129,830             34,987
                                             $        6,137,054 $          681,063




                                        66
(22) Accrued pension liabilities

     A. The Bank has a defined benefit pension plan set up in accordance with the
        Labor Standards Law of the R.O.C., covering all regular employees whose
        services are prior to the implementation of the Labor Pension Act on July
        1, 2005 and are after the implementation of the Labor Pension Act that
        employees choose to be continuously applicable to the Labor Standards
        Law. The payment of pension benefits is based on the length of the service
        period and average monthly compensation in the last six months prior to
        retirement. Under the defined benefit plan, employees are granted two
        points for each year of service for the first 15 years and are granted one
        point for each additional year of service from the 16th year, but it is
        subject to a maximum of 45 points.

     B. Except for Fuhwa Venture Capital, Fuhwa Asset Management, Fuhwa
        Finance Consulting, Fuhwa I Venture Capital, Fuhwa Lease, Fuhwa
        Property Insurance Agency, Fuhwa Futures Management, Fuhwa
        Securities (H.K.) Co., Ltd., Fuhwa Holding (BVI), and Fuhwa Investment
        Management (BVI), the Consolidated Company has established a defined
        benefit retirement plan providing for lump-sum retirement benefits to
        employees who meet retirement requirements. For Fuhwa Financial
        Holding's pension plan, contributions to the retirement fund equal to 2%
        of salaries and wages paid have been deposited in the Central Trust of
        China. The plan is funded by Fuhwa Securities Finance at 8% of basic
        salaries, and the contribution is deposited with the Central Trust of China
        and China United Trust Investment Co. Payments of retirement benefits to
        employees are charged to the pension fund. The plan is funded by Fuhwa
        Securities, Fuhwa Futures and Fuhwa Capital Management at 2% of
        monthly salaries, and the contribution is deposited in a designated account
        with the Central Trust of China. The plan is funded by Fuhwa Bank at
        6.9% of salaries, and the contribution is deposited in a designated account
        with the Central Trust of China. The plan was funded by Fuhwa Securities
        Investment Trust at 6% of monthly salaries, and the contribution was
        deposited in a designated account with the Central Trust of China.
        However, from January 12, 2006, Fuhwa Securities Investment Trust has
        suspended funding the plan. The pension plan is funded by Fuhwa Life
        Insurance Agency at 6% of basic salaries from July, 2006, and
        contribution is deposited in the designated account with the Central Trust
        of China. Payment of retirement benefits to employees is charged to the
        pension fund. The plan is funded by Yuanta Core Pacific Futures and
        Yuanta Core Pacific Futures Management at 2.55% of monthly salaries
        and Yuanta Core Pacific Securities and its other subsidiaries at 2% of
        monthly salaries and wages paid have been deposited in the Central Trust
        of China. The pension plans for Fuhwa Securities (H.K.) and Yuanta Core
        Pacific Securities (H.K) are defined contribution pension plans and are in
        compliance with Hong Kong’s regulations. As of June 30, 2007 and 2006,
        the Consolidated Company adopted the abovementioned pension plans
        and has recognized net pension cost of $69,857 and $11,543, respectively.

                                     67
C. Effective from July 1, 2005, the Company has established a defined
   contribution plan pursuant to the Labor Pension Act, which covers the
   employees whose nationalities are the R.O.C. and whose choices are
   voluntary to or are required to apply the Labor Pension Act. The
   contributions are made monthly based on not less than 6% of the
   employee's salaries and are deposited in the labors’ individual pension
   fund accounts at the Bureau of Labor Insurance. The payment of pension
   benefits is based on the labors’ individual pension fund accounts and the
   cumulative profit in such accounts, and the employees can choose to
   receive such pension benefits monthly or in one time. According to the
   above defined contribution plan, the Company had recognized pension
   expenses of $118,013 and $63,161 for the six months ended June 30, 2007
   and 2006, respectively.

D. The pension plans for the consolidated foreign subsidiaries:

    (A) The pension plan for Fuhwa Securities (H.K.) is defined contribution
        pension plans and is in compliance with Hong Kong’s regulations.

    (B) Fuhwa Securities (H.K.) has recognized pension cost of $329 based
        on the abovementioned pension plan for the six months ended June
        30, 2007.

    (C) Except for the abovementioned a and b, others do not have pension
        plans.




                                68
(23) Income tax

     A. Income tax expense

                                                  June 30, 2007          June 30, 2006
     Income tax expenses (benefits)          ($          100,864) $             355,069
     Add: Net changes in deferred income                 238,086 (              239,777)
            tax assets
          Income taxes levied separately (                16,701) (               9,892)
           Prior years' payable                        6,862,593 (              562,599)
             (refundable) income tax, net
           Prior years' income tax payable                        -             543,657
             - warrants and others
           Adjustments for over (under)                  497,782                 12,852
             provisions of prior years’
             income tax expenses
           Adjustments for over (under)                   35,708                         -
             provisions of deferred
             income tax expenses
           Prior years' income tax payable               707,102                         -
           Income tax paid by subsidiaries (              49,625)                        -
          Net effect of foreign exchange                     219                         -
            rate changes
          Others                                             147                         -
          Prepaid and withheld income        (                    8) (           46,354)
            taxes
     Income tax expense payable              $         8,174,439 $               52,956


     B. Deferred income tax assets (liabilities):

         As of June 30, 2007 and 2006, deferred income tax assets and liabilities
         resulting from income tax effects of temporary differences, investment tax
         credits, and loss carry forwards are as follows:




                                      69
                                     June 30, 2007                 June 30, 2006
                                 Amount       Tax effect         Amount     Tax effect
Deferred income tax assets
Temporary differences
Over-limited of provision   $ 2,778,405 $         694,602 $ 1,421,527 $           356,133
  for credit loss
Loss carry forwards           9,341,105          2,335,276       6,074,576       1,518,644
Impairment losses               665,794            166,449         323,575          80,894
Reserve for trading,            592,048            148,012         226,743          56,686
  default and bad debts
  losses
Deferred pension cost           165,578             41,395        314,707          78,677
   recognized in the future
   years
Unrealized valuation            233,125             58,281         39,960           9,990
  losses on derivatives and
  FX losses
Recignition of decrease in       51,699             12,924               -               -
 capital on investees
Employee welfare expense          1,500                375          2,700             675
    in excess of legal
    limitation
Difference of pension cost      701,113           175,279                -               -
 and tax
Effect of goodwill            1,101,787           275,447                -               -
  amortization
Unrealized expenses              78,855             19,714              -               -
Cumulative effect of                  -                  -         74,267          18,567
  changes in accounting
  principle
Loss on maturity of              15,089              3,772               -               -
 interest divided bonds
 Others                          18,768              4,692           6,608           1,514
                             15,744,866          3,936,218       8,484,663       2,121,780

Deferred income tax
 liabilities
Temporary differences
Recignition of decrease in               -                 - (     11,891) (        2,973 )
   capital on investees
Unrealized FX gains          (     39,876 ) (        9,969 ) (    173,820) (       43,456 )
Unrealized valuation gains               -                 - (     14,085) (        3,521 )
  on derivatives
Difference of fixed assets   (    424,081 ) (     106,020 )              -               -
 and tax
                             (    463,957 ) (     115,989 ) (     199,796) (       49,950 )
Allowance for loss on                               15,291                         10,834
 investments
Allowance for valuation                      (   1,352,199 )                 (    777,424 )
Deferred income tax assets   $15,280,909     ($ 1,336,908 ) $ 8,284,867 ($        766,590 )




                                        70
C. According to the Income Tax Law, the losses could be carried forward for
   5 years to deduct the future years’ taxable income. As of June 30, 2007,
   the details of the Company’s losses available were as follows:

                         Declared               Year of         Assessed by
     Year of losses   amount of losses         expiration      tax authorities
       2002           $    3,410,320            2007              Assessed
       2003                1,107,079            2008          Not yet assessed
       2006                5,075,756            2011          Not yet assessed
       2007                  210,824            2012          Not yet assessed
                      $     9,803,979

D. The Company is eligible for investment tax credits under the Statute for
   Upgrading Industry. Details as of June 30, 2007 are as follows:

           Years            June 30, 2007       Final year tax credits are due
           2003         $              1,300                2008
           2004                        2,637                2009
           2005                        4,640                2010
           2006                        6,714                2011
                        $             15,291
  Fuhwa Finance Consulting was established in April 2003. Therefore, the tax
  authority did not examine the declaration of income taxes. The income tax
  returns for all fiscal years through 2004 of Yuanta Futures, Yuanta Futures
  Management, Yuanta Trust, Yuanta Investment Consulting, Fuhwa Lease,
  Fuhwa Life Insurance Agency, Fuhwa Property Insurance Agency, Fuhwa
  Futures Management, and Fuhwa I Venture Capital have been examined by
  the tax authority. Moreover, the income tax returns for all fiscal years
  through 2003 of Fuhwa Financial Holding, Fuhwa Bank, Fuhwa Securities,
  Yuanta Core Pacific Securities, Fuhwa Securities Finance, Fuhwa Asset
  Management, Fuhwa Venture Capital, Fuhwa Futures, Fuhwa Securities
  Investment Trust, Fuhwa Securities and Fuhwa Capital Management have
  been examined by the tax authority.




                                 71
Income tax lawsuits of the Fuhwa Group are as follows:

(A) Fuhwa Financial Holding:

    Fuhwa Financial Holding's ROC income tax return for 2002 was
    examined by the National Tax Administration of Taipei (NTAT) in
    November 3, 2006. NTAT decided that the securities trading expense
    and the amortization of interest expense amounting to $89,119 should
    be adjusted as investment revenue and decreased Fuhwa Financial
    Holding’s accumulated deficit by $89,119. As a result, Fuhwa Financial
    Holding applied for a recheck on January 2006.

    Fuhwa Financial Holding's ROC income tax return for 2003 was
    examined by the National Tax Administration of Taipei (NTAT) in
    December 12, 2006. NTAT decided to increase the investment revenue
    of $182,212, and reduce the loss due to the capital reduction of Fuhwa
    Bank of $1,615,136 and insurance expense of unqualified insured of
    $113. The total deficit was decreased by $1,797,461. The investment
    tax credit of $1,394 was deducted because the training organization and
    objective did not fit the tax requirement. In addition, dividends of
    $1,222,294 distributed from capital surplus was deducted from the form
    of undistributed earnings, and caused the increase of undistributed
    earnings amounting to $684,865. Fuhwa Financial Holding applied for
    a recheck on March 2007 and did not record the income tax payable
    due to the high possibility of prevailing.

(B) Fuhwa Securities Finance

    With respect to the income tax returns for the fiscal years from 2000 to
    2003, and the tax authorities assessed to increase tax amounts payable
    of $28,498. However, Fuhwa Securities Finance disagreed with the
    assessments and had filed the recheck, petition, and administrative
    litigation. Under the convention of conservatism, Fuhwa Securities
    Finance had recognized the income tax expenses relating to the above
    increase in tax amounts payable.

(C) Fuhwa Securities

    With respect to the income tax returns of Fuhwa Securities for the fiscal
    years from 2000 to 2003 and Yong Xin Securities Co., Ltd. for the
    fiscal years 1999 to 2000 and the tax authorities assessed to increase tax
    amounts payable of $139,854. However, Fuhwa Securities disagreed
    with the assessments and had filed the recheck, petition, and
    administrative litigation. Under the convention of conservatism, Fuhwa
    Securities Finance had recognized the income tax expenses relating to
    the above increase in tax amounts payable.




                               72
(D) Fuhwa Bank

    Fuhwa Bank's 10% surtax on undistributed earnings for the year 1998
    has been examined by the tax authorities. The ROC tax authorities
    determined that the unrealized exchange gains from 1997 accounted for
    in taxable income in 1998 cannot offset unappropriated earnings in
    1998.However, the Bank petitioned for a recheck of the above and
    accrued income tax payable amounting to $8,000.

    Fuhwa Bank’s annual income tax in 2003 is assessed by the tax
    authority on December 12, 2006, and the tax authority disallowed
    amortization of goodwill and premium on bond investments amounted
    to $70,836 and the related income tax expense effect amounted to
    $17,709. The Bank has provided an allowance for the above-mentioned
    petition for a recheck and appeal with the MOF on April 2, 2007. As of
    June 30, 2007, the Bank has accrued income tax payable amounting to
    $16,641.

(E) Yuanta Core Pacific Securities

    Yuanta Core Pacific Securities (1998 to 2003) merged with the
    dissolved company Core Pacific Securities Co., Ltd. (1999), TaFa
    Securities Co., Ltd. (1998), Sampo Securities (1997) and Compass
    Securities (1999 and 2000). With respect to the income tax returns for
    the fiscal year 1998 to 2003, and the tax authorities assessed to increase
    tax amounts payable of $3,705,885. However, Fuhwa Core Pacific
    Securities Finance disagreed with the assessments and had filed the
    recheck, petition, and administrative litigation. Under the convention of
    conservatism, Fuhwa Securities Finance had recognized the income tax
    expenses relating to the above increase in tax amounts payable.

    In accordance with Paragraph 2, Article 24 of Income Tax Law Act
    dated June 14, 2007; Yuanta Core Pacific Securities issued warrants
    with the approval by the authorities in charge of the relevant industries.
    In the period of issuing warrants, based on risk management, the gains
    or losses form trading marketable securities and derivative financial
    instruments which are approved by the authorities in charge of the
    relevant industries shall be levied taxes. For the six months ended June
    30, 2007, the income tax payables of Yuanta Core Pacific Securities are
    warrants matured in the year 2007 and the provisions are made in the
    financial statements based on the abovementioned amended Income
    Tax Law Act.




                              73
(24) Common stocks

    The Company mergerd with Yuanta Core Pacific Securities and had Yuanta
    Core Pacific Securities becoming the Company’s subsidiary by share exchange
    which approved of the Explanatory Letter Jin-Guan-Yin (6) No. 09600022230
    of the FSC dated March 8, 2007, effective from April 2, 2007. The share
    exchange ratio of Yuanta Core Pacific Securities to the Company is 1:1.615.
    The Company had issued new common shares totaling 5,150,353 thousand
    shares (with par value of $10 New Taiwan dollars per share) in return of
    Yuanta Core Pacific Securities’ common shares issued of 3,189,073 thousand
    shares (with par value of $10 New Taiwan dollars per share). Upon capital
    increase, the Company’s authorized and issued capital was $83,123,145.

(25) Treasury stocks

                                                 June 30, 2007
                                                                 Number of
                                                                 shares due
                                                                to change in
     Reason for     Beginning                                    reason for       Ending         Ending
       buyback      balance of     Share              Share       buyback        balance of     balance
      of shares       shares     increase            decrease     of shares        shares        amount
     The                     -     311,232             15,704                  -    295,528    $4,728,444
     Company’s
     stocks held
     by Yuanta
     Core
     Pacific
     Securities

    From April 2, 2007, Yuanta Core Pacific Securities adopted Fuhwa Financial
    Holding, the Company’s stocks held by Yuanta Core Pacific Securities are
    regared as treasury stocks. For the six months ended June 30, 2007, Yuanta
    Core Pacific Securities sold the Company’s shares totaling to 15,704 thosuand
    shares, gains on disposure amounted to $5,392 and recorded as additional
    paid-in capital – treasury stocks.

                                                 June 30, 2006
                                                              Number of
                                                             shares due to
                                                               change in
      Reason for    Beginning                                  reason for         Ending           Ending
       buyback      balance of    Share            Share        buyback          balance of        balance
       of shares      shares     increase        decrease       of shares          shares           amount
     Held by             7,300              -        7,300                -                -   $             -
     the
     Company
     for
     transferring
     to
     employees



                                                74
    During the six months ended June 30, 2006, the Company transferred to
    employees the Company's treasury stock which was bought back as an
    incentive for employees prior to share exchange, totaling 7,300 thousand shares
    in the amount of $73,779. The total transfer price was $66,310, and the
    difference of $7,469 was accounted for the deduction of capital surplus -
    treasury stock transaction.

    In accordance with the Securities and Exchange Law, a company's repurchase
    of its own shares cannot exceed 10% of its total issued outstanding shares, and
    the total amount of the repurchase cannot exceed the retained earnings plus
    paid-in capital in excess of par value and realized capital surplus. Based on the
    Company's financial statements as of March 31, 2006, the maximum number of
    shares that the Company could repurchase was 316,176 thousand shares and
    the maximum amount of the Company's repurchase was $8,560,670. For the six
    months ended June 30, 2006, the maximum number of shares the Company had
    repurchased was 7,300 thousand shares and the maximum amount of
    repurchase was $73,779 which complied with the Securities and Exchange
    Law.

    According to the Securities and Exchange Law, treasury stock held by the
    Company cannot be pledged, and cannot have any shareholders' rights until the
    treasury stock is transferred to employees.

(26) Capital Surplus

    The ROC Company Act requires that capital surplus only be used to offset an
    accumulated deficit or be transferred to capital and not be used to distribute
    cash dividends. Realized capital surplus mentioned above includes the proceeds
    received in excess of the par value of common stock issued and any amounts
    donated to the Company. The amount of capital surplus capitalized each year
    may not exceed a certain percentage of the Company's issued share capital.
    Issuance of new stock from capital surplus of cash subscription in excess of par
    value of common stock can be made only once per year, and cannot be made in
    the same year as cash subscription.

    However, according to SFB regulations, capital surplus resulting from
    undistributed earnings absorbed from subsidiaries after share exchange of the
    Company is permitted to be transferred to capital or used to distribute cash
    dividends in the current period. In addition, the amount of capital surplus to be
    transferred to capital or used to distribute cash dividends is not subject to the
    aforementioned limitations.




                                      75
(27) Legal reserve and special reserve

     In accordance with the ROC Company Act, 10% of annual net income after
     offsetting prior years' losses and paying tax liabilities must be retained as a
     legal reserve. Legal reserve can only be used to offset losses and cannot be
     distributed as cash dividends. Up to one-half of legal reserve can be converted
     to capital when it reaches an amount equal to one-half of issued capital.

     In accordance with SFB regulations, in addition to the legal reserve retained,
     the Company should provide a special reserve of equal amount for any current
     year shareholders' equity contra account from the current year's earnings after
     tax or prior years' unappropriated earnings. However, the special reserve of
     equal amounts for prior years' accumulated shareholders' equity contra
     accounts should only be provided from prior years' unappropriated earnings. If
     a reversal of shareholders' equity contra account occurs, the reversed portion of
     the special reserve could be distributed.

(28) Distribution of Retained Earnings

    According to the Company's articles of incorporation, the annual net income
    will be distributed as follows:

     A. Pay income tax.

     B. Offset prior years' deficits.

     C. Provide legal reserve.

     D. And then appropriate 1% as remunearion of directors and supervisors, 1‰
        to 5‰ as bonus to employees. The remaining amount and prior years’
        unappropriated earnings are decided by a stockholders' meeting. When
        distributed the bonus to employees by stocks, the distributable persons
        including employees satisfied certain conditions in the affiliated
        companies.

    In order to continuously expand its operations and increase earning capacity,
    and to maintain the capital adequacy ratio, the Company has adopted the
    following dividend policy: 80% of the Company's annual net income, after
    paying all taxes as required by the law, offsetting prior years' losses first, and
    retaining legal reserve and employees' bonus, is to be distributed as dividends.
    Cash dividends shall be no less than 50% of the distributed amount, while stock
    dividends shall be no greater than 50% of the distributed amount. Therefore, the
    Company will determine an appropriate dividend distribution policy for the
    current year based on the aforementioned principles. The appropriation of
    earnings is subject to the resolutions of directors' and stockholders' meetings.

    On June 29, 2007, the directors' and stockholders' meeting approved a
    resolution to offset 2006 losses by $3,326,328 of capital surplus.


                                         76
(29) Earnings per share

    The basic losses per share and diluted losses per share of the Consolidated
    Company were as follows (expressed in thousands of shares):

                                                 June 30, 2007                      June 30, 2006
                                              After tax     Pre tax            After tax      Pre tax
     Basic earnings per share
       Net profits before cumulative      $ 4,272,107      $ 4,312,340     $      81,829   $    118,132
         effect of changes in
         accounting principle
       Cumulative effect of changes in                                 -                   (     25,203)
         accounting principle
       Net profits from current period                     $ 4,312,340                     $      92,929
       Outstanding shares - weighted          5,583,475      5,583,475         3,155,232       3,155,232
         average
       Basic earnings per share
         (expressed in NT dollars)
       Net profits before cumulative      $         0.77            0.77   $        0.03            0.04
         effect of changes in
         accounting principle
       Cumulative effect of changes in                                 -                   (       0.01)
         accounting principle
       Net profits from current period                     $        0.77                   $        0.03
     Diluted earnings per share:
       Net profits before cumulative      $ 4,272,107      $ 4,312,340     $      81,829   $    118,132
         effect of changes in
         accounting principle
       Cumulative effect of changes in                 -               -                - (      25,203)
         accounting principle
       Potential common shares with                4,131          3,098            3,869          2,902
         dilutive Effects - convertible
         bonds
       Net profits for computing          $ 4,276,237      $ 4,315,438     $      85,698   $     95,831
         diluted earnings per share
       Outstanding shares- weighted           5,583,475        5,583,475       3,155,232       3,155,232
         average
       Convertible bonds                         40,929           40,929          39,918          39,918
       Outstanding shares - weighted          5,624,404        5,624,404       3,195,150       3,195,150
         average, for computing
         diluted earnings per share
       Diluted earnings per share
         (expressed in NT dollars)
       Net profits before cumulative      $         0.76            0.77   $        0.03            0.04
         effect of changes in
         accounting principle
       Cumulative effect of changes in                                 -                   (        0.01)
         accounting principle
       Net profits from current period                     $        0.77                   $        0.03




                                              77
(30) Personnel, depreciation, and amortization expenses

     Personnel, depreciation, and amortization expenses incurred for the six months
     ended June 30, 2007 and 2006 are summarized as follows:

                                                June 30, 2007       June 30, 2006
      Personnel expenses                      $     4,505,929      $ 2,183,974
      Salaries                                       3,969,836          1,895,613
      Labor and health insurance expenses              198,694            121,184
      Pension expenses                                 188,199             96,232
      Others                                           149,200             70,945
      Depreciation                                     405,587            208,520
      Amortization                                     109,165            127,892
      Non-operating assets depreciation                   12,943           12,951

(31) Asset securitization

     A. Summary of major terms

         On September 5, 2005, the Yuanta Core Pacific Securities sold bonds
         totaling $9,562,268 to a financial institution under asset securitization for
         issuance of beneficiary certificates in the amount of $10,000,000. Details
         of beneficiary certificates issued are as follows:

         (A) Principal only pass-through beneficiary certificates – type A: Par value
             of $7,300,000, with a maturity date of September 5, 2009.

         (B) Principal only pass-through beneficiary certificates – type B: Par value
             of $1,300,000, with a maturity date of September 16, 2010.

         (C) Principal only pass-through beneficiary certificates – type C: Par value
             of $1,000,000, with a maturity date of March 15, 2011.

         (D) Subordinated beneficiary certificates: Par value of $400,000, with a
             maturity date of March 15, 2011.

         (E) Seller’s beneficiary securities: the interests from the underlying bonds
             are sources of the interest of repayment, taking interests collected on
             every interest payment date and repaying to the investors, to eliminate
             possible interest rate risk. As of June 30, 2006, the amount recorded
             was $397,019.




                                       78
   The Company acquired a subordinated beneficiary certificate listed above
   at a cost of $366,107 to enhance the credit of the beneficiary certificates. In
   the event of default, the investors and the trustees have no recourse against
   the Company except for the bonds security. The principle repaid is order of
   the retained night after the investor’s night and its value is effected by the
   credit risk and interest risk of the transferred night.

B. Major assumptions used to measure rights retained:

   As of June 30, 2007, the major assumptions used to measure the rights
   retained are as follows:

                                                        June 30, 2007
                                               Subordinated          Seller’s
                                                beneficiary         beneficiary
                                                certificates       certificates
    Expected weighted-average years             3.71 years          1.55 years
    Expected credit loss rate                        -                    -
    Discount rate                                 2.42%               2.37%
C. Sensitivity analysis:

   As of June 30, 2007, the sensitivity of fair value of the residual cash flows
   is as follows if the discount rates change unfavorably:

                                                    June 30, 2007(per annum)
                                             Subordinated          Seller’s
                                              beneficiary         Beneficiary
                                              certificates        certificates
    Book value of right kept               $        366,040     $        63,537
    Expected weighted-average years              3.71 years         1.55 years
    Discount rate                                     2.42%              2.37%
    Impact results of 10%                  (          3,191)    (          244)
      unfavorable change
    Impact results of 20%                  (           6,347)      (            447)
      unfavorable change


D. Expected loss rates of static groups:

   During the period from January 1 to June 30, 2007, the expected and actual
   credit loss rates were 0%.

E. Cash flows

   The cash flows received from and used in securitization trust are
   summarized as follows:

                                                                June 30, 2007
    Cash received from securitization                    $                             -
    Cash received from other cash flows of rights
     retained                                                                   14,954
                                                         $                      14,954

                                  79
5. Related party transactions

  (1) Name and relationship of related party

                 Name of related party                           Relationship
      Bank of Taiwan Co., Ltd. (Bank of Taiwan) Director of the Consolidated Company
                                                 until June 29, 2007
      Land Bank of Taiwan (Land Bank)              Supervisor of the Consolidated Company
                                                    until June 29, 2007
      Chong Yang Investment Co., Ltd. (Chong       Investor and director in the Consolidated
       Yang Investment)                             Company by equity method
      Kuang Hwa Investment Co., Ltd. (Kuang        Investor in the Consolidated Company by
        Hwa Investment)                             equity method
      Yu Hwa Development Co., Ltd. (Yu Hwa         Investor in the Consolidated Company by
        Development)                                equity method (supervisor of the
                                                    Consolidated Company from June 29,
                                                    2005, to September 8, 2006)
      Jian Hua Investment Co., Ltd. (Jian Hua      Investor in the Consolidated Company by
         Investment)                                equity method (board member of the
                                                    Consolidated Company from June 29,
                                                    2005)
      Chiloo Industries Inc. (Chiloo Industries)   Director of the Consolidated Company as
                                                    of June 29, 2005 (board member of from
                                                    June 29, 2005, to September 8, 2006)
      Yuanta Core Pacific Securities (Yuanta       Starting from June 30, 2005, individuals
       Securities)                                  related within the second degree of such
                                                    company's President include the Vice
                                                    President of Fuhwa Bank and President
                                                    of Fuhwa Securities Finance
      Industrial Bank of Taiwan Co., Ltd.       The Bank’s president’s spouse is the
        (Industrial Bank of Taiwan)              company’s supervisor.
      Others (each related party's deposits and The Bank's affiliated companies and
        loans are not over 1% of total deposits  directors, supervisors, managers, and
        and loans)                               their relatives
      Funds managed by Yuanta Core Pacific Security investment trust fund raised by
        Securities                               the Consolidated Company
      Funds managed by Fuhwa Securities            Security investment trust fund raised by
                                                    the Consolidated Company




                                         80
(2) Significant transactions with related parties

     A. Deposits


                                            June 30, 2007
                                                            Percentage of
                      Name            Ending balance         deposits (%)   Interest rate (%)
        Deposits by each related party $      3,174,059              1.14      0.00~13.00
         not over 1% of total deposits


                                            June 30, 2006
                                                            Percentage of
                   Name               Ending balance         deposits (%)   Interest rate (%)
        Deposits by each related party $      4,786,772              2.07       0.00~13.00
         not over 1% of total deposits


        Apart from an interest rate limit on staff demand savings deposits of 13%,
        for the six months ended June 30, 2007 and 2006, the interest rate limit on
        other related parties' demand savings deposits was 0.00%~2.3% and
        0.00%~5.18%, respectively. The interest rates and other terms provided to
        the above related parties were the same as the terms offered to the general
        public.

        For the six months ended June 30, 2007 and 2006, interest expenses on the
        above deposits were $84,482 and $52,084, respectively.




                                       81
                  B. Loans

                                                                              June 30, 2007


                               Number of accounts or                                               Default possibility                                      Whether terms and
                               name of related party
              Types                                    Highest balance   Ending balance       Normal loans    Overdue accounts          Collateral          conditions of the related
                                                                                                                                                            party transactions are
                                                                                                                                                            different from those of
                                                                                                                                                            transactions with third
                                                                                                                                                            parties.
Consumer loans for employees                      2                185                    -              -                   -   None                       None

Home mortgage loans                              26            163,781           156,430          156,430                    -   Real estate                None

Other loans                    Ting Chang Chen                     900                    -              -                   -   Certificate of deposits    None

Other loans                    Guang Hwa Investment            324,000           324,000          324,000                    -   Real estate and unlisted   None
                                Co., Ltd                                                                                          stocks

Other loans                    Xian Chong Liao                  15,998            15,844           15,844                    -   Real estate                None

Other loans                    Zhi Qiang Zhang                  14,447            14,106           14,106                    -   Real estate                None

Total                                                                            510,380          510,380                    -




                                                                                      82
                                                                                   June 30, 2006



                               Number of accounts or                                               Default possibility                                      Whether terms and
                               name of related party                                                                                                        conditions of the related
              Types                                       Highest balance   Ending balance    Normal loans    Overdue accounts          Collateral
                                                                                                                                                            party transactions are
                                                                                                                                                            different from those of
                                                                                                                                                            transactions with third
                                                                                                                                                            parties.
Consumer loans for employees                          6            1,100              703              703                   -   None                       None

Home mortgage loans                                  29           97,785           77,028           77,028                   -   Real estate                None

Other loans                     Shu Zhen Zeng                      2,212            2,081            2,081                   -   Real estate                None

                                Xiu Yun Cai                       21,150           20,970           20,970                   -   Real estate                None

                               Yuanta Core Pacific                 6,688                  -               -                  -   Real estate                None
                                Securities

                               Hwa Xia Investment                300,000          300,000          300,000                   -   Real estate                None
                                Co., Ltd

                               Guang Hwa Investment              474,000          474,000          474,000                   -   Real estate and unlisted   None
                                Co., Ltd                                                                                          stocks

                               Zhi Qiang Zhang                    14,900           14,787           14,787                   -   Real estate                None

Total                                                                             889,569          889,569                   -




                                                                                     83
Loans to related parties are under the same terms as those to other
customers, except for interest rates on loans to affiliated companies,
ranging from 2.50% to 2.83% and 1.50% to 5.00%, and on loans to bank
staff, ranging from 2.26% to 3.59% and 2.05% to 3.95% for the six months
ended June 30, 2007 and 2006, respectively. Other terms and conditions of
the related party transactions are not significantly different from those of
transactions with third parties.

For the six months ended June 30, 2007 and 2006, interest income
resulting from the above loans was $6,250 and $10,185, respectively.

C. Interest receivable and interest income from bank deposits at Land
   Bank of Taiwan were as follows:



                                        June 20, 2007         June 30, 2006
   Ending balance of bank           $                   - $           23,097
    deposit
   Interest income                  $                   - $                50


D. For the six months ended June 30, 2007 and 2006, the Consolidated
   Company pledged its deposits to related parties as follows:

                            For the six months ended June 30, 2007
                                                Interest         Interest
                    Deposit                     revenue        receivable
   Bank of Taiwan $    200,000 $                       1,759 $            152


                            For the six months ended June 30, 2006
                                                Interest            Interest
                         Deposit                revenue           receivable
   Bank of Taiwan $           200,000 $                 4,099 $               112

   As of June 30, 2007 and 2006, the abovementioned deposits pledged as
   operating deposits were in the amounts of $100,000 and $130,000,
   respectively, recorded as other assets.




                               84
E.   Property transactions


     (A) For the six months ended June 30, 2007 and 2006, the details of the
         Fuhwa Group investments in open-end funds were as follows:

                                                            June 30, 2007
           Funds managed by Fuhwa Securities              $       2,587,368
            Investment Trust
           Funds managed by Yuanta Securities                      502,002
            Investment Trust
                                                          $      3,089,370


                                                            June 30, 2006
           Funds managed by Fuhwa Securities              $       3,146,261
            Investment Trust
           Funds managed by Yuanta Securities                       46,485
            Investment Trust
                                                          $      3,192,746


     (B) For the six months ended June 30, 2007 and 2006, the details of the
         Bank's engaging in purchase-without-recourse transactions with
         affiliates in the open market were as follows:

                                       For the six months ended June 30, 2007
                                                    Purchase
                                       Type            Price     Selling price
           Land Bank of Taiwan         Bond       $ 198,783 $          298,520
           Yuanta Core Pacific         Bond          1,543,588       1,690,965
            Securities
           Industrial Bank of          Bond          631,618          632,462
            Taiwan
           Bank of Taiwan              Bond          348,996          199,022
                                                 $ 2,722,985 $      2,820,969




                                  85
                                       For the six months ended June 30, 2006
                                                    Purchase
                                       Type           Price      Selling price
         Yuanta Core Pacific           Bond      $ 2,630,169 $ 2,406,307
          Securities
         Land Bank of Taiwan           Bond            146,357            48,420
         Bank of Taiwan                Bond            489,518           245,128
         Industrial Bank of            Bond             49,712            49,846
          Taiwan
                                                  $ 3,315,756      $ 2,749,701


   (C) For the six months ended June 30, 2007 and 2006, the details of the
       Bank's engaging in beneficiary securities transactions with affiliates
       in the open market were as follows: (no transaction for the six
       months ended June 30, 2006)

                                   For the six months ended June 30, 2007
                             Ending balance     Highest balance    Interest income
         Industrial Bank   $         356,439 $         391,906 $               3,731
         of Taiwan


F. Convertible bond asset swaps-fixed income (recorded as financial assets
   at fair value through profit or loss)

   For the six months ended June 30, 2007: None

   For the six months ended June 30, 2006, the convertible asset swap
   transactions with related parties were as follows:

                                    For the six months ended June 30, 2006
                                            Notional Interest rate Interest
    Name        Objective       Period        amount       (%)          income
  Yuanta        Taiflex 1     2004.5.30~ $ 60,000          2.10       $     469
   Securities                 2006.5.30




                                  86
G. As of June 30, 2007 and 2006, funds managed by Fuhwa Securities
   Investment Trust made refundable deposits to the Consolidated
   Company for conducting futures transactions. The resulting payable to
   customers recorded by the Fuhwa Group amounted to $0 and $7,981,
   respectively.

H. Others

    (A) In May 2005, Fuhwa Securities signed contracts with Yuanta Core
        Pacific Securities Co., Ltd. for the purchase of operating rights and
        partial assets of the Chang Hwa branch. The date of the operating
        rights transfer was designated as June 30, 2006. As of June 30,
        2006, the payment of $30,000 was made.

    (B) In June 2006, Fuhwa Securities Finance signed contracts entitled
        "Complementary agreements on purchase of operating rights -
        creditor's right of margin loans and short sale stock loans" with
        Fuhwa Securities and Yuanta Core Pacific Securities Co., Ltd. for
        acquisition of creditor's right of margin loans and short sale stock
        loans. The date of the operating rights transfer was designated as
        June 30, 2006. All of the debts, tax obligations, disagreements
        with clients, and compensation caused by lawsuits before the
        designated date are the responsibility of Yuanta Core Pacific
        Securities Co., Ltd.; those after the designated date are the
        responsibility of Fuhwa Securities Finance. As of July 4, 2006, the
        net payment of $118,086 for the purchase of operating rights -
        creditor's right of margin loans and short sale stocks loans was
        made accordingly.

    (C) In May 2007, Fuhwa Securities Finance entered the contract with
        Yuanta Core Pacific Securities for acquisition of creditor's right of
        margin loans and short sale stock loans. The date of the operating
        rights transfer was designated as July 1, 2007. All of the debts, tax
        obligations, disagreements with clients, and compensation caused
        by lawsuits before the designated date are the responsibility of
        Yuanta Core Pacific Securities; those after the designated date are
        the responsibility of Fuhwa Securities Finance. The purchase of
        $39,923,470 operating rights - creditor's right of margin loans and
        short sale stocks loans was sold for $36,160,570 which is paid by
        installment.




                               87
(3) As of June 30, 2007 and 2006, information regarding affiliates acting as
    borrowers, guarantors, and collateral providers of the Bank which are interested
    parties in accordance with Articles 32 and 33 of the Banking Law was as
    follows:


                                          June 30, 2007
                                                                          Default possibility
                                    Number of
                Type                                   Amount                     Overdue accounts
                                     accounts                       Normal loan
                                                                                       (Note 3)
    Consumer loans (Note 1)              77        $     17,416    $     17,416                 -
    Mortgage loans                       83             110,745         110,745                 -
    Other loans to interested
     parties (Note 2)                   636            3,783,233      3,783,233                -
    Loans to others with
     interested parties acting as
     guarantors                         282             560,253         560,253                -
    Secured loans with collateral
     from interested parties            452            3,553,088      3,553,088                -


                                          June 30, 2006
                                                                         Default possibility
                                    Number of
                Type                                   Amount                     Overdue accounts
                                     accounts                       Normal loan
                                                                                      (Note 3)
    Consumer loans (Note1)              110        $     30,945    $    30,945                 -
    Mortgage loans                       98             142,564        142,564                 -
    Other loans to interested
     parties (Note 2)                   653        3,203,620         3,203,620                  -
    Loans to others with
     interested parties acting as
     guarantors                         339             456,628        456,628                  -
    Secured loans with collateral
     from interested parties            425        2,848,841         2,848,841                  -


       Note: Interested party above is in accordance with Article 33. 1 of “Banking
             Law”.

       Note 1: Consumer loans are in accordance with Article 32 of “Banking
             Law”.

       Note 2: Other loans to interested parties are loans to interested parties except
               for consumer loans and mortgage loans for employees.

       Note 3: The amount recognized as non-performing loans (NPLs) is in
               compliance with the“Regulations Governing the Procedures for
                Banking Institutions to Evaluate Assets and Deal with
                Non-performing / Non-accrual Loans”.




                                              88
6. Pledged Assets

   As of June 30, 2007 and 2006, the details of pledged assets were as follows:

               Items                        June 30, 2007           June 30, 2006             Pledged purpose
 Short-term bills, beneficiary          $      46,336,781       $      34,270,457       Liabilities for bills and
   certificates, government bonds                                                         bonds sold under
   and financial bonds (recorded as                                                       agreement to repurchase
   financial assets at fair value               5,751,600               5,292,242       Credit lines of long-term
   through profit or loss - net,                                                          and short-term mortgage
   available-for sale financial                                                           loans
   assets –net, bills and bonds                             -              10,011       Bids for government bonds
   investment under resale                        231,228                 197,224       Provisional seizure
   agreements, held-to-maturity                             -              53,335       Trust custodian
   financial assets and other assets)             139,797                  82,178       Operating guarantee
                                                                                          deposits for bills and
                                                                                          bonds - proprietary
                                                1,438,829                 494,728       Operating guarantee
                                                                                          deposits
                                                  400,032                 400,103       Securities financing deposit
                                                                                          in CBC
                                                  180,053                 214,541       Stock borrowings
                                                   18,705                  18,903       Petition to the National Tax
                                                                                          Administration for a
                                                                                          certificate of
                                                                                          non-violation of tax
                                                                                          filing rules
                                                1,946,846                           -   Credit lines of settlement
                                                  418,223                           -   Guarantee on sales of assets
 Time deposits (recorded as other               1,395,092                 425,000       Operating guarantee
   assets – refundable deposits)                                                          deposits
                                                   95,700                           -   Stock borrowings
                                                   25,400                           -   Provisional seizure
                                                  209,000                           -   Settlement account
                                                    3,005                           -   Structured instruments
                                                                                           account
                                                   64,500                           -   Discretionary account
                                                                                          investment consigned by
                                                                                          clients


                                                   89
                                      $     561,500     $            -   Issuance of warrants
                                                                           deposits and credit lines
                                                                           overdraft
Restricted time deposits (recorded                  -         492,000    Short-term debts, notes
  as other assets)                                                         payable, bank overdrafts
                                                                           and collateralization for
                                                                           lawsuits
Impound account (recorded as other             2,095             2,974   Long-term and short-term
  assets)                                                                  debts
Bank promissory notes (recorded as                  -            2,000   Discretionary account
  other assets)                                                            investment consigned by
                                                                           clients
Land and buildings (recorded as            6,437,606         2,893,756   Credit lines of long-term
   property and equipment and                                              and short-term debts
  other assets)
Notes receivable (recorded as               370,892           125,127    Credit lines of long-term
   accounts receivable, net)                                               and short-term debts
                                          66,026,884        44,974,579
Shares of investee (the shares             5,589,304         5,694,084   Long-term and short-term
  issued by such subsidiary                                                debts
  originally were recorded as             11,564,457        11,360,159   Secured bonds
  longterm investments under
  equity method, and have been
  eliminated in the consolidated
  financial statements)
Negotiable certificates of deposit                500            1,500   Provisional seizure
  (recorded as accounts receivable,
  net; the balance has been
  eliminated in the consolidated
  financial statements due to their
  nature as related-party
  transactions)
Time deposits (recorded as other                    -          62,500    Discretionary account
  Assets - refundable deposits; the                                        investment consigned by
  balance has been eliminated in                                           clients
  the consolidated financial
  statements due to their nature as
  related-party transactions)


                                             90
Bonds purchased under agreements       $    5,925,685   $    5,249,049   Liabilities for bonds sold
  to resell (the balance has been                                          under agreement to
  eliminated in the consolidated                                           repurchase
  financial statements due to their
  nature as related-party
  transactions)
Financial debentures (recorded as
  held-to-maturity financial assets;
  the balance has been eliminated            966,000          966,000    Credit lines of short-term
  in the consolidated financial                                            debts
  statements due to their nature as
  related-party transactions)
                                           24,045,946       23,333,292
                                       $   90,072,830   $   68,307,871


     7. Commitments and Contingencies

        (1) Significant Purchase Agreements

            As of June 30, 2007 and 2006, the Fuhwa Group had significant purchase
            agreements for purchasing assets amounting to $771,559 and $477,347,
            respectively. The unpaid amounts of those agreements were $440,534 and
            $145,752, respectively.

        (2) Stocks Entrusted to Custody

            As of June 30, 2007 and 2006, the stocks entrusted to the custody of Fuhwa
            Securities Finance by clients totaled 7,498,000 shares. The market value of
            these entrusted stocks as of June 30, 2007 and 2006 was approximately
            $79,027 and $76,154, respectively.

        (3) Proxy Settlement

            In September 1998, Fuhwa Futures signed proxy futures settlement and
            clearing contracts with several futures companies. The agents must perform
            trade obligations in accordance with Taiwan Futures Exchange Corporation
            instructions on behalf of Fuhwa Futures in the event that Fuhwa Futures is
            not able to perform its obligations.




                                              91
(4) Operating Leases

    The Bank entered into certain operating leases for its branches. As of June
    30, 2007, the estimated future lease contract commitments were as follows:

                 Fiscal year                     Rental amount
        2007. 7.1 ~ 2007. 12.31              $               282,326
        2008                                                 437,834
        2009                                                 337,449
        2010                                                 219,428
        2011                                                 105,387
                                             $             1,382,424


(5) Agreements on Purchase of Operating Rights

    Fuhwa Securities Finance signed contracts with Global Securities Finance
    Corporation (Global Securities Finance) for the purchase of all operating
    rights and partial assets on October 20, 2005. The first payment of $120,000
    was made accordingly, and the documents related to the contract were
    submitted to the Securities and Futures Bureau for approval. However,
    Global Securities Finance did not subsequently perform the contract and sent
    a notice via Taiwan Post Co., Ltd. Taipei Branch informing Fuhwa
    Securities Finance of its intention to withdraw from the contract, and
    returned the payment. As a result, Fuhwa Securities Finance believed Global
    Securities Finance may have violated the contract and requesting a penalty
    of $120,000 within seven days of receipt of the petition letter. However, the
    penalty has not been paid so far. Therefore, Fuhwa Securities Finance
    submitted requests for provisional seizure which were approved on April 10
    and 25, 2006. Fuhwa Securities Finance did not enforce the provisional
    seizure. Furthermore, on April 28, 2006, Global Securities Finance
    submitted a disagreement with the order to pay. In accordance with the law,
    Global Securities Finance brought a lawsuit, which was examined by the
    Taipei District Court.

(6) Significant litigation and claims

    A. A stockholder of the Fuhwa Group, Chong Yang Investment Co., Ltd.
       (Chong Yang Investment), filed a lawsuit against the resolution passed
       by stockholders on April 28, 2006 and the incidental motion passed by
       the ordinary stockholders’ meeting on June 20, 2006, which was turned
       down by Taipei District Court and Taiwan High Court. Chong Yang
       Investment re-brought a lawsuit, which was examined by the Supreme
       Court of the R.O.C.




                                        92
   B. A stockholder of of the Consolidated Company, Chong Yang Investment
      filed a lawsuit against the re-election of the whole board and supervisors
      held on September 8, 2006, whcih was turned down by Taipei District
      Court and Taiwan High Court. Chong Yang Investment re-brought a
      lawsuit, which was examined by the Supreme Court of the R.O.C.

   C. Stockholders of of the Consolidated Company, Guang Hwa Investment
      Co., Ltd. and Yu Hwa Investment Co., Ltd. appealed to Taipei District
      Court for the selling price of their ownership which would like to sell to
      the Company. However, Guang Hwa Investment Co., Ltd. and Yu Hwa
      Investment Co., Ltd. disagreed with the selling price declared by the
      Taipei District Court and brought a lawsuit to Taiwan High Court. The
      Company had reached the agreement of the selling price with Guang
      Hwa Investment Co., Ltd. and Yu Hwa Investment Co., Ltd. and signed
      the official agreement.

(7) Group

   A. In order to integrate securities business and leverage the synergies of the
      Company, Fuhwa Securities resolved to merge with Yuanta Core Pacific
      Securities on April 2007. Both parties agreed with the share exchange
      ratio of 0.538 shares of Yuanta Core Pacific Securities to 1 share of
      Fuhwa Securities, effective on September 23, 2007. Fuhwa Securities
      will be the surviving company and Yuanta Core Pacific Securities will be
      the dissolved company.

   B. On April 10, 2007, Fuhwa Futures’ Board of Directors exercise the
      authority on behalf of the Stockholders’ Meeting resolved to merge with
      Yuanta Futures, that is in order to integrate resource, expand operation
      scale and promote overall operating competition. The Merger is effective
      on September 23, 2007. After merger, Fuhwa Futures will be the
      dissolved company. The share exchange ratio is 1.4154 shares of Fuhwa
      Futures to 1 share of Yuanta Futures.




                                    93
(8) Plan

    A. In order to build operations headquarter of the Company, Yuanta Core
        Pacific Securities purchased land located in Dun Hwa Rd. Song Shan
        District, Taipei City which owns by Taiwan Conference of Seventh-Day
        Adventists for the amount of $2,000,000. Both parties also contracted
        that Yuanta Core Pacific Securities resells the partial parking space in
        the underground of building built to Taiwan Conference of Seventh-Day
        Adventists for the amount of $420,000 and provides bonds amounted to
        $421,000 as a guarantee of sale of asset. The land was transferred the
        ownership on June 1, 2004 and Yuanta Core Pacific Securities entered
        contracts with Shimizu Construction Co., Ltd. Taipei Branch (Japan) and
        Yuan Ding International Construction Co., Ltd. for construction and
        operations headquarter project, and contract amounts totaling to
        $1,367,000 and $65,000, respectively. In addition, Yuanta Core Pacific
        Securities entered the contract with China Steel Structure Co., Ltd. for
        the building’s steel structure, and the estimated contract amounts
        totaling to $173,250. Both parties also agreed that China Steel Structure
        Co., Ltd is not allowed to request additional payment or alter contract
        unit price. As of June 30, 2007, Yuanta Core Pacific Securities has made
        advance payment of building’s steel structure amounted to $152,407.
        (Recorded as advance payment of building and land)

    B. In order to effectively monitor and ensure the speed and quality of
        building operations headquarter, Yuanta Core Pacific Securities entered
        the construction management contract with Yuanta Construction
        Development Co., Ltd. who deals with construction management and
        related services, takes charges of obtaining the license of usage, and
        completes the registration of transferring of ownership, trading and
        warranty on the behalf of Yuanta Core Pacific Securities. The service fee
        amounted to $43,000, as of June 30, 2007, $40,000 has made by Yuanta
        Core Pacific Securities. (Recorded as advance payment of building and
        land)

    C. As of June 30, 2007, because of the issuance of warrants, the banks
       provided letter of guarantee amounted to $1,240,000 which provides to
       Taiwan Stock Exchange Corporation and Gre Tai Securities Market as
       performance guarantee of warrants.




                                    94
(9) Others

                                      June 30, 2007          June 30, 2006
   Consignment collection for     $         19,878,372   $        22,415,536
    others
   Traveler's checks held on                  168,347                185,334
    consignment for sale
   Consignment securities,                  43,736,281            24,246,124
    custodial goods, and
    others
   Trust assets                             64,851,748            59,851,566
                                  $        128,634,748   $       106,698,560
   Lines of credit provided but   $          9,167,795   $        98,039,692
    not used
   Credit commitment on           $         49,939,657   $        49,646,631
    credit card
   Other guarantees               $          9,772,421   $         9,454,291
   Unused L/C balance             $          5,293,397   $         4,190,127
   Securities sold under          $         55,128,048   $        16,147,436
    purchase agreements
   Securities purchased under     $         10,267,584   $         1,555,100
     resell agreements




                                      95
    (10) In accordance with Article 17 of the Trust Enterprise Law, the disclosures
         of the trust balance sheet and trust property list are as follows:

                                 Trust Balance Sheet
                                    June 30, 2007
Trust assets                                 Trust liabilities
Bank deposits            $       504,557     Pecuniary trust             $   52,607,287
Short-term investments        53,101,219     Securities trust                  577,787
Long-term investments          9,846,732     Real estate trust                 649,583
Real estate                      510,874     Pecuniary creditor's            10,097,189
                                              right and its collateral
                                              right trust
Net assets of Co-Trust           888,366     Co-Trust Fund Retained            881,937
  Fund                                        earnings
                                             Total net income                   19,478
                                             Unappropriated earnings            18,487
Total trust assets       $    64,851,748     Total trust liabilities     $   64,851,748
                                 Trust Balance Sheet
                                    June 30, 2006
Trust assets                                 Trust liabilities
Bank deposits            $       465,357     Pecuniary trust             $   46,184,689
Short-term investments        39,982,210     Securities trust                  928,842
Long-term investments          8,866,480     Real estate trust                1,268,165
Real estate                    9,555,954     Pecuniary creditor's            10,488,305
                                              right and its collateral
                                              right trust
Net assets of Co-Trust                       Co-Trust Fund Retained
 Fund                            981,565      earnings                         981,565
Total trust assets       $    59,851,566     Total trust liabilities     $   59,851,566




                                        96
                                    Trust Income Statement
                             For the six months ended June 30, 2007
Trust revenue:
Interest revenue                                                      $   106,988
Property transactions gain                                                 16,263
Investment revenues                                                         1,914
                                                                          125,165
Trust expenses:
Management expenses                                                         4,163
Duties expenses                                                             2,213
Interest expenses                                                          84,463
Fee and commission                                                          7,827
Audit expense                                                                220
Investment loss                                                              489
Return of trust principal                                                   6,253
                                                                          105,628
Net income before income tax                                               19,537
Income tax expense                                                            59
Net income after income tax                                           $    19,478




                                             97
                                     Schedule of investment for trust business
                     June 30, 2007                                       June 30, 2006
    Invested items             Book value              Invested items            Book value
 Short-term                                          Short-term
 investments:                                        investments:
  Bonds                  $           20,100,591       Bonds               $              15,620,321
  Common stock                         1,277,448      Common stock                        1,556,296
  Funds                              32,611,546       Funds                              23,787,158
 Subtotal                            53,989,585 Subtotal                                 40,963,775
 Others:                                             Others:
  Bank deposits                          504,557      Bank deposits                           465,357
 Long-term                                           Long-term
 investments:                                        investments:
  Creditor's right                     9,846,732      Creditor's right                    8,866,480
    investment                                         investment
 Real estate:                                        Real estate:
  Land                                   510,874      Land                                9,555,954
                         $           64,851,748                           $              59,851,566


Foreign currency pecuniary trust operated by the Offshore Banking Unit (OBU) as of
June 30, 2007 and 2006 is included in the trust balance sheet and schedule of investment
for trust business.




                                                98
8. Significant losses from disasters

  (1) The Company: None.

  (2) Subsidiaries: None

9. Significant subsequent events

  (1) The Company was authorized to be renamed as “Yuanta Financial Holding Co., Ltd.”
      by the Ministry of Economic Affairs, R.O.C., effective on August 1, 2007.

  (2) Subsidiaries: None, except for the following:

       A. On July 24, 20097, with respect to the income tax returns for the fiscal year 2002,
          and the tax authorities assessed to increase tax amounts payable of $72,104. Fuhwa
          Securities had recognized the income tax expenses relating to the above increase in
          tax amounts payable.

       B. On July 25, 2007, Fuhwa Securities has sold the land and building located in Song
          Long Rd. Xin Yi District Taipei City to Buddhist Compassion Relief Tzu Chi
          Foundation Taiwan for the amount totaling to $310, 860 and the payment is made
          by five times installment. Both parties agreed that Fuhwa Securities takes on lease
          of the abovementioned land and building until April 30, 2008 and monthly rent is
          made payable of $400. Fuhwa Securities may terminate the lease contract in
          advance and pay the rest amount prior the hand over of the building. As of August
          10, 2007, both parties signed the contract, but have not transferred the ownership.

       C. Fuhwa Bank was resolved to be renamed as “Yuanta Commercial Bank Co., Ltd.”
          by the stockholders’ meeting on July 19, 2007.

       D. Fuhwa Life Insurance Agency Co., Ltd. was resolved to be renamed as “Yuanta
          International Life Insurance Agency Co., Ltd.” by the stockholders’ meeting on
          July 9, 2007.

       E. Fuhwa Securities Finance entered the contract with Yuanta Core Pacific Securities
          for acquisition of creditor's right of margin loans and short sale stock loans. Please
          refer to Note 5(2) H. (B) for details.

       F. Fuhwa Securities Finance was resolved to be renamed as “Yuanta Securities
          Finance Co., Ltd.” by the stockholders’ meeting on August 1, 2007. The relevant
          legal procedures are processing.

       G. Fuhwa Asset Management was authorized to be renamed as “Yuanta International
          Asset Management Co., Ltd.” by the Ministry of Economic Affairs, R.O.C.,
          effective on July 13, 2007.




                                             99
         H. Because of considering of the increase of interest rate, on July 9, 2007, Fuhwa
            Securities Investment Trust resolved by stockholders and upon obtains the
            approval form authorities, delegating power for general manager to disposal of
            monetary funds amounted to $45.96 billion depends on circumstances. Fuhwa
            Securities Investment Trust is responsible for the losses incurred and the losses are
            estimated to be $0.93 billion to 1.39 billion.

              In order to enhance operating capital and improve financial structure, on July 9,
              2007, Fuhwa Securities Investment Trust resolved by stockholders to absorb the
              abovementioned losses from disposal of monetary funds. Fuhwa Securities
              Investment Trust has issued new shares in the range of 4.27 billion and decrease
              capital for recovery of accumulated deficits. Fuhwa Securities Investment Trust
              resolve to issue new shares amounted to $324,460,000 and if after capital
              reduction, the capital is still less than 3 billion, Fuhwa Securities Investment Trust
              will re-reduce capital based on the difference of the amount. In addition, Fuhwa
              Financial Holding resolved to subscribe shares issued by Fuhwa Securities
              Investment Trust amounted to $3.2446 billion.

10. Others

  (1) Disclosure of financial instruments

        A. Fair value of financial instruments

                                                                     June 30, 2007
                                                                                               Amount
                                                                 Quoted market             determined by a
Non-derivative financial instruments          Book value             value               valuation technique
Assets
 Financial assets with book value         $    190,076,990   $                   -   $         190,076,990
   equaling fair value
 Financial assets at fair value through         72,126,309            71,040,541                 1,085,768
   profit or loss
 Bills discounted and loans                    227,515,376                       -             227,515,376
 Available-for-sale financial assets            23,027,806             1,068,969                21,958,837
 Held-to-maturity financial assets               9,079,034             1,047,916                 8,031,118
 Other financial assets - non active             1,402,707                       -               1,402,707
   market
Liabilities
 Financial liabilities with book value         180,259,329                       -             180,259,329
   equaling fair value
 Financial liabilities at fair value             4,470,080                       -               4,470,080
  through profit or loss
 Deposits and remittances                      275,681,287                       -             275,681,287
 Financial bonds debentures                     19,101,902                       -              19,101,902




                                                   100
                                                                        June 30, 2007

                                                                                                      Amount
                                                                                                  determined by a
Derivative financial instruments                 Book value         Quoted market value         valuation technique
Assets

Non-hedge

 FX contracts (swaps and forwards)           $         151,272      $                       -   $            151,272

 Non-delivery forwards                                        501                           -                    501

 FX options held                                       155,764                              -                155,764
 Interest rate related contracts (interest             348,129                              -                348,129
  rate swaps and asset swaps excluding
  the principal of bonds)

 Future margin deposits                                493,946                      74,018                   493,946

 Options held – futures                                  7,576                          7,576                         -

 Asset swaptions                                        25,289                              -                 25,289
 Derivative financial instruments -                    240,780                          1,270                239,510
  counter



Liabilities

Non-hedge

 FX contracts (swaps and forwards)                     282,331                              -                282,331

 Non-delivery forwards                                        496                           -                    496

 FX options issued                                     156,204                              -                156,204
 Interest rate related contracts (interest             447,703                              -                447,703
  rate swaps and asset swaps excluding
  the principal of bonds)

 Liabilities for options written - futures               1,560                          1,560                         -
 Derivative financial instruments -                    664,943                              -                664,943
  counter

 Asset swaptions                                       349,142                              -                349,142
 Liabilities for issuance of call                    1,252,733                   1,252,733                            -
  warrants

  Others                                                58,422                          1,270                 57,152




                                                         101
                                                                        June 30, 2006
 Significant financial instruments                           Book value            Fair value
  Financial assets with book value equaling fair value $      30,779,090 $          30,779,090
  Available-for-sale financial assets                           15,255,289          15,255,289
  Held-to-maturity financial assets                              6,255,880           6,255,880
  Financial assets stated at cost                                2,906,835           2,906,835
  Bonds investments with non active market                       2,856,464           2,856,464
  Other assets – miscellaneous deposits                          2,541,181           2,541,181
  Financial liabilities with book value equaling fair            3,944,899            3,944,899
   value


The fair value of financial assets and financial liabilities, except for to determine using the
quoted market price, determined by a valuation technique are as follows:

                                                                       Amount determined by a
                                                                         valuation technique
Financial assets and financial liabilities:
Financial assets at fair value through profit or loss              $                  8,766,918
Financial liabilities at fair value through profit or loss                            2,395,189




                                                102
B. The following methods and assumptions were used to estimate the fair value
   of each class of financial instruments:

   (A) The book value of the financial instruments which have a short maturity
       period will be considered as their fair value. This assumption is used in
       evaluating the following accounts: cash and cash equivalents, due from
       Central Bank and placement to other banks, bills and bonds purchased
       under resale agreements, receivables, other financial assets (not including
       financial assets stated at cost and bond investments in non-active
       markets), deposits by Central Bank and other banks, commercial paper
       payable, bills and bonds sold under repurchase agreements, payables,
       subordinate financial debentures (not including financial liabilities
       designated at fair value), long-term or short-term loans, acrrued pension
       liabilities and other financial liabilities.

   (B) Financial assets are regarded as quoted in an active market if quoted
       prices are readily and regularly available from an exchange, dealer, broker,
       industry group, pricing service or regulatory agency, and those prices
       represent actual and regularly occurring market transactions on an arm’s
       length basis. If the market for a financial instrument is not active, an
       entity establishes fair value by using a valuation technique. Valuation
       techniques include using recent arm’s length market transactions between
       knowledgeable, willing parties, if available, reference to the current fair
       value of another instrument that is substantially the same, discounted cash
       flow analysis and option pricing models.

       Among the derivative instruments, options are valuated by the
       Black-Scholes model; stock options embedded in convertible bonds and
       currency and interest rate swaps are evaluated by the quote of the
       Bloomberg system; forward contracts, currency swaps, and interest rate
       swaps are evaluated by the rates of the Bloomberg system by discounting
       future cash flows to their present values.

   (C) The interest on loans and advances to customers is based on floating rates.
       Thus, the book value is the fair value.

   (D) When there is a quoted market price available in an active market for
       available-for-sale financial assets, the fair value is determined using the
       quoted market price. If there is no quoted market price for reference, a
       valuation technique will be adopted to measure the fair value. The
       estimation and assumption of the valuation technique used by the
       Company is consistent with those used by the market participants for
       financial instrument pricing. The discount rate used is consistent with the
       expected return rate of the financial instruments that have the same
       conditions and characteristics. Such conditions and characteristics include
       the debtor’s credit rating, the remaining period of the fixed interest rate
       contracts, the remaining period for principal repayment, the payment
       currency, etc. On June 30, 2007, Yuanta Core Pacific Securities’ discount
       rate on available-for-sale financial assets is 2.37% ~2.42%.



                                    103
     (E) When there is a quoted market price available in an active market for
         held-to-maturity financial assets, the fair value is determined using the
         quoted market price. If there is no quoted market price for reference, a
         valuation technique will be adopted to measure the fair value. The
         estimation and assumption of the valuation technique used by the Bank is
         consistent with those used by the market participants for financial
         instrument pricing. The discount rate used is consistent with the expected
         return rate of the financial instruments that have the same conditions and
         characteristics. Such conditions and characteristics include the debtor’s
         credit rating, the remaining period of the fixed interest rate contracts, the
         remaining period for principal repayment, the payment currency, etc.

     (F) There is no quoted market price in an active market for the unlisted stocks
         under the financial assets carried at cost, and their variability in the range
         of reasonable fair value estimates is not insignificant and their probability
         of the various estimates within the range can not be reasonably assessed,
         so the fair value of the unlisted stocks is not reliably measurable. As a
         result, information of the book value and the fair value with respect to
         these financial assets is not disclosed.

     (G) Other financial assets: If there is an actual transaction price or a quoted
         market price for bond investments with no active market, the fair value of
         such bond investments will be determined by the latest actual transaction
         price or quoted market price. Moreover, if there is no quoted market price
         for reference, a valuation technique will be adopted to measure the fair
         value, and the valuation technique is the discounted values of expected
         future cash flows.

     (H) Most deposits and remittances are mature within one year. If the maturity
         is over one year, the value is estimated by the floating rate. Hence, the
         book value approximates the fair value.

     (I) Bonds payable: Since the coupon rates of the senior and subordinated
         corporate bonds and financial bonds issued by the Fuhwa Group
         approximate the market rates, the fair value based on the discounted value
         of expected future cash flows approximates the book value.

C.   Fuhwa Bank and its subsidiaries have recognized current net gains (losses) on
     financial assets and financial liabilities at fair value based on valuation
     techniques amounted to $598,825 and ($205,909), respectively, for the six
     months ended June 30, 2007.

D.   As of June 30, 2007, the Fuhwa Group has financial assets and financial
     liabilities with fair value risk arising from interest rate changes amounted to
     $102,469,227 and $264,418,807, respectively.

E.   As of June 30, 2007, the Fuhwa Group has financial assets and financial
     liabilities with cash flow risk arising from interest rate changes amounted to
     $323,760,944 and $172,329,117, respectively.



                                       104
F.   For the six months ended June 30, 2007, the Company has recognized interest
     income and interest expenses from the financial assets or financial liabilities
     not at fair value through profit or loss amounted to $7,635,384 and
     $3,272,622, respectively. The Company has recognized the change in fair
     value of available-for-sale financial assets and has recorded as an adjustment
     account in the stockholders’ equity amounted to $164,313 for the six months
     ended June 30, 2007.

G.   Risk management and hedging strategy

     (A) Risk management

        The structure of the Fuhwa Group risk management system includes, the
        boards of directors of the Company and all subsidiaries, high level
        management, the risk management departments and the business
        departments. The Fuhwa Group set up a risk management center to
        control risk effectively. The members of the center include the risk
        management departments of Fuhwa Financial Holding, the risk
        management departments of Fuhwa Bank, the risk management
        departments of Fuhwa Securities and the related risk management
        departments of all subsidiaries. The chief executive officer of the center is
        in charge of all activities to maximize profit for stockholders.

        The Company performs risk management mechanism based on the
        guidelines of the risk management set by the Board of Directors, that is in
        oreder to establish the fine risk management system and sound operating
        development, promote operating model which leads by appropriate risk
        management, reach operating goals and increase the value of
        stockholders.

     (B) Hedging strategy (financial hedging)

        The Fuhwa Group strategy is using derivatives to control the risk of price
        volatility within a manageable range. According to its capacity of
        tolerating risk, the Fuhwa Group sets the notional amounts, value at risk
        and related hedge strategies for each of its businesses. The Fuhwa Group
        also establishes mechanisms to monitor the changes in hedged positions
        and principles to treat its over-hedged or under-hedged positions.

        a. Equity securities

            The Fuhwa Group will bear the risk of value loss while there is an
            unfavorable change in the price of the target security. The Fuhwa
            Group uses a complete risk management system and Index futures and
            options to lower the market risk.




                                      105
        b. Fixed income securities

            The major risk associated with fixed income securities results from
            changes in interest rate. The Fuhwa Group bears market risk when the
            change in interest rates is unfavorable. The Fuhwa Group uses
            derivatives such as interest rate swaps, governmental bond futures and
            bond options to hedge the market risk.

        c. Warrants

            The major risk associated with warrants results from unfavorable
            changes in the price of the target security. To lower the risk, the
            Fuhwa Group acquires the underlying securities as basic position and
            adjusts the shares of the target securities, the number of convertible
            bonds held and warrants based on a dynamic hedging model on an
            ongoing basis.

        d. Structured notes

            Structured notes are a combination of fixed income securities and
            asset options. The market risk of structured notes includes risk
            resulting from changes in interest rates, stock prices and volatility. To
            lower the market risk resulting from engaging in the business, not
            only the interest generated from investing in fixed income securities is
            used to repay the principal due, but also the Fuhwa Group establishes
            a dynamic hedging position. Hedging positions are usually within a
            range centered on the theoretical hedge amount.

        e. Convertible bond asset swap

            The Fuhwa Group detaches options from convertible bonds and sells
            them to the market respectively. This business involves market risk
            and credit risk of the counterparty. To lower the market risk, the
            Fuhwa Group sells the fixed income security part and the option part
            to third parties while credit limit is applied to lower the credit risk
            from the counterparty.

H.   Financial risk information

     Fuhwa Bank and its subsidiaries

     To build up a good risk management system and to improve business
     development, the Bank established a risk management policy approved by the
     board of directors, which focuses on risks that can be managed to achieve
     operative goals, to implement the system effectively and to generate stable
     and high-quality earnings for stockholders.

     The Bank follows a risk management policy and strives to quantify, assess,
     and then manage risks in order to price risks and to obtain the optimal capital
     allocation.



                                       106
The risks Fuhwa Bank and its subsidiaries encountered were as follows:

(A) Market risk

    Market risk means changes such as in interest rates, exchange rates, and
    the prices of equity securities and instruments which may result in a loss
    for the Bank, either on or off the balance sheet. Fuhwa Bank and its
    subsidiaries have developed a market risk management standard. Through
    the market risk management system, the Bank is able to evaluate and
    control each part of the market risk.

    As of June 30, 2007, Fuhwa Bank and its subsidiaries possessed
    government bonds amounting to $7,657,051 (including financial assets
    held for trading of $807,855 and available-for-sale financial assets of
    $6,849,196). Among the government bonds held by the Bank, bonds with
    a fixed rate amounting to $7,557,310, and the fair value of fixed-rate
    government bond investment will be affected by a change in market rate.
    A 1% increase in market rate will decrease the fair value of fixed-rate
    government bond investment by $286,743. As of June 30, 2007, the Bank
    possessed corporate bonds amounting to $7,402,376 (including held for-
    sale financial assets). The fixed-rate corporate bonds amounted to
    $7,204,815, and the fair value of fixed-rate corporate bond investment
    will be affected by a change in market rate. A 1% increase in market rate
    will decrease the fair value of bond investment by $182,450.

    Fuhwa Bank and its subsidiaries engage in foreign currency transactions
    which give rise to foreign currency assets and liabilities. Therefore,
    changes in exchange rates will affect the fair value of the net position in
    foreign currencies. For assets denominated in USD, appreciation of the
    NTD by $0.1(in NT dollars) against the USD position of US$26,685 will
    cause a loss of $2,669.

    As of June 30, 2006, Fuhwa Bank and its subsidiaries possessed
    government bonds amounting to $6,376,700 (including financial assets
    held for trading of $530,921 and available-for-sale financial assets of
    $5,845,779). All the government bonds held by the Bank are bonds with a
    fixed rate and the fair value of fixed-rate government bond investment
    will be affected by a change in market rate. A 1% increase in market rate
    will decrease the fair value of fixed-rate government bond investment by
    $304,839.

    As of June 30, 2006, Fuhwa Bank and its subsidiaries engage in foreign
    currency transactions which give rise to foreign currency assets and
    liabilities. Therefore, changes in exchange rates will affect the fair value
    of the net position in foreign currencies. For assets denominated in USD,
    appreciation of the NTD by $0.1(in NT dollars) against the USD position
    of US$38,930 will cause a loss of $3,893.




                                 107
(B) Credit risk

    Credit risk is the risk that borrowers and counter-parties will not be able to fulfill
    contracts. Fuhwa Bank and its subsidiaries have developed a credit risk
    management standard which is able to evaluate and manage possible credit risk
    resulting from business operations by establishing and implementing a risk
    management structure.

    For all financial instruments held by Fuhwa Bank and its subsidiaries, the
    maximum credit exposures are as follows:


                                                                     June 30, 2007
                                                                                 Maximum credit
    Non-derivative financial assets                           Book value            exposure
    Financial assets with book value equaling fair        $      89,914,730 $        89,914,730
      value
    Financial assets at fair value through profit or
                                                                 11,141,893          11,141,893
      loss
    Loans – net                                                 228,154,376         228,154,376
    Available-for-sale financial assets – net                    16,442,731          16,442,731
    Held-to-maturity financial assets                             1,268,988           1,268,988
    Equity investment with non active market                      1,102,707           1,102,707
    Other financial assets                                           83,633             83,633
    Off balance sheet accounts
     Guarantees receivable                                                  -         9,772,421
     L/C receivable                                                         -         5,293,397


                                                               June 30, 2007
                                                                            Maximum credit
    Derivative financial assets      Contract amount            Book value      Exposure
     FX options held                 $     4,142,880          $     155,764 $      155,764
     Commodity option held                        48,710               1,270               1,270
     FX contracts (swaps and               12,143,847                151,272            151,272
       forwards)
     Non-delivery forwards                        64,774                   501              501
     Interest rate swap contracts           60,455,112               348,129            348,129
     Asset swap interest rate                    761,915              25,289              25,289
       swap contracts
     Futures margin deposit                           6,547           15,348              15,348




                                                108
                                                                June 30, 2006
                                                                            Maximum credit
Non-derivative financial assets                          Book value             exposure
 Financial assets with book value equaling          $       56,673,514      $    56,673,514
  fair value
 Financial assets at fair value through profit              10,652,267           10,652,267
  or loss - net
 Bills discounted and loans – net                          227,960,673          227,960,673
 Available-for-sale financial assets – net                  14,392,202           14,392,202
 Equity investment with non active market                    2,556,464            2,556,464
 Other financial assets                                        62,046                62,046
Liabilities
 Off balance sheet accounts
  Guarantees receivable                                                 -         9,454,291
  L/C receivable                                                        -         4,190,127


                                                           June 30, 2006
                                                                            Maximum credit
Derivative financial assets         Contract amount    Book value             exposure
 FX options held                    $         922,312 $    25,868           $      25,868
 FX contracts (forwards,                   16,151,620         109,369              109,369
  swaps and cross currency
  swap)
 Non-delivery forwards                        712,458           5,144                5,144
 Asset swap interest rate and                4,120,000         26,609               26,609
  general interest rate swap

Fuhwa Bank conducts a cautious credit assessment before qualifying loans and
guarantees. Loans with collateral amounted to 63.28% of the total amount of
loans. In order to obtain credit lines from Fuhwa Bank, borrowers and guarantors
are asked to provide collateral such as cash, fixed assets, liquid securities, and
other assets. Furthermore, in order to reduce credit risk, Fuhwa Bank follows
certain credit policies and negotiates credit limits with counter-parties. In
addition, Fuhwa Bank may sign net settlement agreements with the counter-party
to reduce credit risk.

Concentration of credit risk refers to the significant concentration of credit risks
from all financial instruments, whether the risks are from an individual
counter-party or group of counter-parties. Group concentration of credit risks
exists if a number of counter-parties are engaged in similar activities or activities
in the same region, or have similar economic characteristics that would cause
their ability to meet contractual obligations to be similarly affected by changes in
economic or other conditions. There is no significant concentration of credit risk
from counter-parties of Fuhwa Bank’s financial instruments. The related
information can be found as follows:

                                     109
                                            June 30, 2007         June 30, 2006
  Loans by regions
   Domestic                             $       223,364,107 $         218,969,049
   Overseas                                       8,546,370            10,826,738
                                        $       231,910,477 $         229,795,787
                                            June 30, 2007         June 30, 2006
   Loans by industries
    Manufacturing                       $        40,279,781   $        36,886,399
    Private enterprises                          21,841,949            18,748,779
    Construction                                  5,673,907             6,275,912
    Private individual                          122,072,277           134,118,346
    Others                                       42,042,563            33,766,351
                                        $       231,910,477   $       229,795,787


(C) Liquidity risk

    Liquidity risks include market and capital risks. Market risk is the risk that
    market prices will encounter obvious changes. Capital risk is the risk that a
    responsibility cannot be fulfilled because of being unable to convert assets
    into cash or acquire enough cash. The Bank’s risk management approach
    starts with managing the daily payment queue and forecasting cash flows.
    It then covers tactical liquidity risk management dealing with access to
    unsecured funding sources. The Bank’s cash flows are monitored by the
    treasury department on a daily basis and ensure the Bank’s access to
    liquidity.

    To control risk effectively, support and respect from management are
    essential in addition to the factors mentioned above. Under the full support
    of management, the risk management system of the Bank has been
    established. It has resulted in improving management efficiency, and the
    result is gradually becoming more evident.

    The Bank controls the transaction risks of the financial instruments by
    adopting the credit approval policy, position limitation, stop loss point
    setting, and a management control process. In addition, the Bank maintains
    adequate current assets, and utilizes money market and foreign exchange
    market instruments to support its future cash flow requirements.

    The liquidity reserve ratio for the Bank was 21.6% and 13.4% as of June
    30, 2007 and 2006, respectively. In addition, the Bank’s capital and
    working capital were sufficient to fulfill all obligations. Thus, there was no
    material liquidity risk that the Bank may fail to meet the obligation.
    Analysis for time to maturity of the Bank and its subsidies’ assets and
    liabilities are as follows:




                                  110
                                                                                                                                    June 30, 2007
                                                                0~30 days              31~90 days           91~180 days              181days~1 year             1~3 years            Over 3 years                  Total
                                                                Amount                   Amount                 Amount                  Amount                  Amount                  Amount                   Amount
                                                              (recoverable             (recoverable           (recoverable            (recoverable            (recoverable            (recoverable             (recoverable
                                                               amount or                amount or              amount or               amount or               amount or               amount or                amount or
Financial instruments                                      repayment amount)       repayment amount)       repayment amount)       repayment amount)       repayment amount)       repayment amount)       repayment amount)
Assets
 Non-derivative financial instruments
  Cash and cash equivalent                                 $        5,859,084 $                     -      $                - $                     - $                        - $                     - $          5,859,084
  Due from Central Bank and call Loans from banks                  23,989,011              15,744,968              11,500,000              13,055,000                          -                       -           64,288,979
  Financial assets for trading purpose
    Government bonds                                                  807,855                          -                       -                       -                       -                       -              807,855
    Stocks                                                          1,205,041                          -                       -                       -                       -                       -            1,205,041
    Beneficiary certificates                                        1,631,799                          -                       -                       -                       -                       -            1,631,799
    Beneficiary securities                                            555,959                          -                       -                       -                       -                       -              555,959
    Commercial paper                                                1,914,523                          -                       -                       -                       -                       -            1,914,523
    Negotiable certificates of deposit                                250,191                          -                       -                       -                       -                       -              250,191
  Financial assets designated for trading purpose
    Corporate bonds                                                         -                       -                 990,398                 527,760                 187,921               1,032,626               2,738,705
    Convertible corporate bonds                                             -                       -                       -                  32,500                 145,291                 774,261                 952,052
    Assets swaps - convertible corporate bonds                              -                       -                 108,763                 241,620                 735,385                       -               1,085,768
  Investment in bills and bonds under resale agreement                212,045                       -                       -                       -                       -                       -                 212,045
  Bills discounted and loans                                        9,630,117              13,925,792              16,240,266              21,112,265              34,579,840             132,666,096             228,154,376
  Available-for-sale financial assets
    Government bonds                                                           -                       -                99,740                     -                1,579,129               5,170,327               6,849,196
    Corporate bonds                                                            -                       -               200,447               945,488                1,784,668               4,635,450               7,566,053
    Financial bonds                                                            -                       -                     -                     -                  244,574                   1,982                 246,556
    Beneficiary securities                                                     -                       -                     -                     -                        -                 579,663                 579,663
    Asset backed securities                                                    -                       -                     -                     -                        -               1,201,264               1,201,264
  Held-to-maturity financial assets
    Corporate bonds                                                            -                       -                       -                       -                   -                 294,615                 294,615
    Asset backed securities                                                    -                       -                       -                       -                   -                 155,998                 155,998
    Financial bonds                                                            -                       -                       -                       -             163,675                 654,700                 818,375
 Other financial assets
   Non-active - financial bonds                                                -                       -                       -             162,610                           -             940,097                1,102,707
   Derivative financial instruments
   Financial assets at fair value through profit or loss -
     derivatives
   FX options held                                                    63,867                  93,167                         -                         -                       -                       -             157,034
   FX contracts (swaps and forwards)                                 102,529                  44,454                     4,289                         -                       -                       -             151,272
   Interest rate swap contracts (including asset swap
     interest rate swap and general interest rate swap)                     -                       -                   2,081                   1,319                 368,701                   1,317                 373,418
   FX futures margin trading                                           15,348                       -                       -                       -                       -                       -                  15,348
   Non-delivery forwards                                                    -                       -                     501                       -                       -                       -                     501
Total assets                                                       46,237,369              29,808,381              29,146,485              36,078,562              39,789,184             148,108,396             329,168,377




                                                                                                               ~111~
                                                                                                                     June 30, 2007
                                                       0~30 days              31~90 days           91~180 days            181 days ~1 year         1~3 years          Over 3 years                     Total
                                                        Amount                  Amount               Amount                   Amount                Amount                Amount                     Amount
                                                      (recoverable            (recoverable         (recoverable            (recoverable           (recoverable          (recoverable               (recoverable
                                                       amount or               amount or            amount or               amount or              amount or             amount or                  amount or
                                                  repayment amount)       repayment amount)    repayment amount)       repayment amount)      repayment amount)     repayment amount)           repayment amount)
Financial instruments
Liabilities
 Non-derivative financial instruments
   Due to Central Bank and other banks            $        3,524,452      $       1,969,993    $       4,040,585       $       11,124,858     $                -    $                   -   $          20,659,888
   Financial liabilities designated for trading
     purpose
   Subordinated financial bonds                                       -                   -                     -               2,096,023                      -                        -               2,096,023
    Bills and bonds payable under repurchase
      agreements                                          10,290,457                      -                    -                        -                     -                      -                10,290,457
   Deposits and remittances                               46,555,694             27,246,394           42,292,255               82,012,612            80,847,918                  7,300               278,962,173
   Financial bonds payable                                         -                      -                    -                2,366,000                     -              9,800,000                12,166,000
   Other financial liabilities                               145,773                      -                    -                        -                     -                589,759                   735,532
   Derivative financial instruments
   Financial liabilities designated for trading
    purpose - derivatives
   FX options written                                         64,307                 94,183               12,639                   41,028               350,050                      -                   562,207
   FX contracts (swaps, forwards)                            190,355                  1,315               86,091                        -                     -                      -                   277,761
   Non-delivery forwards                                         496                      -                    -                        -                     -                      -                       496
   Interest rate swap contracts                                    -                      -                    -                   48,590               343,961                 24,257                   416,808
   Fixed rate commercial paper                                     -                      -                    -                        -                 1,561                      -                     1,561
Total liabilities                                         60,771,534             29,311,885           46,431,570               97,689,111            81,543,490             10,421,316               326,168,906

Net liquidity gap                                 ($     14,534,165 )     $        496,496    ($      17,285,085 )    ($       61,610,549 )   ($     41,754,306 )   $      137,687,080      $           2,999,471




                                                                                                   ~112~
                                                                                                                                    June 30, 2006
                                                                 0~30 days              31~90 days              91~180 days             181 days ~1 year            1~3 years            Over 3 years                 Total
                                                                  Amount                   Amount                 Amount                    Amount                   Amount                 Amount                   Amount
                                                               (recoverable              (recoverable          (recoverable               (recoverable            (recoverable            (recoverable             (recoverable
                                                                amount or                 amount or              amount or                 amount or               amount or               amount or                amount or
Financial instruments                                       repayment amount)       repayment amount)       repayment amount)         repayment amount)        repayment amount)       repayment amount)       repayment amount)
Assets
 Non-derivative financial instruments
  Cash and cash equivalent                                  $        4,276,270 $                     -      $                - $                 110,000 $                         - $                     - $          4,386,270
  Due from Central Bank and call loans from banks                   22,209,033               4,700,000               4,500,000                 4,300,000                           -                       -           35,709,033
  Financial assets for trading purpose
    Government bonds                                                   530,921                          -                       -                          -                       -                       -              530,921
    Stocks                                                              31,581                          -                       -                          -                       -                       -               31,581
    Beneficiary certificates                                         1,070,630                          -                       -                          -                       -                       -            1,070,630
    Beneficiary securities                                             513,495                          -                       -                          -                       -                       -              513,495
    Commercial paper                                                 5,013,779                          -                       -                          -                       -                       -            5,013,779
    Negotiable certificates of deposit                                 738,747                          -                       -                          -                       -                       -              738,747
  Financial assets designated for trading purpose
    Corporate bonds                                                          -                       -                 324,735                         -                  888,215               1,299,764               2,512,714
    Convertible corporate bonds                                              -                       -                       -                         -                        -                  10,800                  10,800
    Assets swaps - convertible corporate bonds                               -                       -                       -                         -                  229,600                       -                 229,600
  Investment in bills and bonds under resale agreement               1,552,510                       -                       -                         -                        -                       -               1,552,510
  Bills discounted and loans                                        11,960,702              14,831,152              17,907,049                 7,884,466              174,520,582                 856,722             227,960,673
  Available-for-sale financial assets
    Government bonds                                                            -             538,258                  51,187                          -                  982,349               4,273,985               5,845,779
    Corporate bonds                                                             -                   -                 501,441                    981,551                1,601,098               5,293,445               8,377,535
    Financial bonds                                                             -                   -                       -                          -                        -                   2,843                   2,843
    Foreign convertible bonds – asset swaps                                     -                   -                 166,045                          -                        -                       -                 166,045
 Other financial assets
  Non-active - financial bonds                                                  -                       -                       -                          -             321,793                2,072,820               2,394,613
  Non-active - negotiable certificates of deposit                               -                       -                       -                          -                   -                  161,851                 161,851
  Derivative financial instruments
  Financial assets at fair value through profit or loss -
    derivatives
    FX options held                                                    11,407                   11,095                  3,366                          -                           -                       -              25,868
    FX contracts (forwards, swaps and cross currency)                  50,186                    4,152                 22,480                     32,551                           -                       -             109,369
    Interest rate swap contracts (including asset swap
     interest rate swaps and general interest rate swaps)              17,420                    3,283                          -                          -                5,906                          -              26,609
  Non-delivery forwards                                                 1,570                    3,574                          -                          -                    -                          -               5,144
Total assets                                                        47,978,251              20,091,514              23,476,303                13,308,568              178,549,543              13,972,230             297,376,409




                                                                                                            ~113~
                                                                                                                         June 30, 2006
                                                         0~30 days               31~90 days              91~180 days            181 days ~1 year         1~3 years        Over 3 years                 Total
                                                           Amount                   Amount                Amount                     Amount               Amount              Amount                  Amount
                                                        (recoverable              (recoverable          (recoverable               (recoverable         (recoverable        (recoverable            (recoverable
                                                          amount or                amount or             amount or                  amount or            amount or           amount or               amount or
                                                    repayment amount)        repayment amount)      repayment amount)         repayment amount)     repayment amount)   repayment amount)       repayment amount)
Financial instruments
Liabilities
 Non-derivative financial instruments
  Due to Central Bank and other banks              $        15,275,109       $       2,108,691      $       6,766,942         $       8,690,487     $        700,000    $                   -   $       33,541,229
  Financial liabilities designated at fair value
   through profit or loss
 Subordinated financial bonds                                           -                    -                       -                         -            2,057,727                       -            2,057,727
  Bills and bonds payable under repurchase
   agreements                                               16,073,057                  60,000                      -                         -                     -                    -              16,133,057
  Deposits and remittances                                  37,425,035              31,535,300             37,714,922                69,696,433            56,390,517                    -             232,762,207
  Financial bonds payable                                            -                       -                      -                         -             2,366,000            5,000,000               7,366,000
  Other financial liabilities                                        -                       -                      -                         -                     -              131,029                 131,029
  Derivative financial instruments
   Financial liabilities for trading purpose -
    derivatives
   FX options written                                           11,410                  11,095                  3,366                          -              14,623                        -              40,494
   FX contracts (forwards, swaps and cross
    currency)
                                                               100,466                   3,596                  2,612                         -                     -                    -                 106,674
   Non-delivery forwards                                             -                   1,086                      -                         -                     -                    -                   1,086
   Interest rate swap contracts                                 15,262                       -                      -                         -               110,797                    -                 126,059
Total liabilities                                           68,900,339              33,719,768             44,487,842                78,386,920            61,639,664            5,131,029             292,265,562


Net liquidity gap                                  ($      20,922,088 )     ($      13,628,254 )   ($      21,011,539 )     ($       65,078,352 )   $     116,909,879   $        8,841,201      $        5,110,847




                                                                                                        ~114~
(D) Cash flow risk and fair value risk arising from changes in interest rates

    Cash flow risk arising from changes in interest rates is future cash flows of
    floating rate assets and liabilities held by Fuhwa Bank and its subsidiaries
    may fluctuate due to changes in interest rates. Thus, the Bank evaluates
    interest rate risk and has entered into the interest rate swap contract under
    the consideration of risk level and operation needs to mitigate such risk.

   a. Expected reprising date or expected maturity date

      As of June 30, 2007, and 2006 the expected reprising date or expected
      maturity date were not affected by the contract date. The following table
      shows the interest rate risk of Fuhwa Bank, and is presented by the book
      value of financial assets and financial liabilities and is classified by the
      earlier of the expected reprising date or expected maturity date:




                                 ~115~
                                                                                                                               June 30, 2007
                                                            0~30 days              31~90 days            91~180 days            181 days ~1 year            1~3 years            Over 3 years                  Total
                                                            Amount                   Amount                 Amount                   Amount                 Amount                  Amount                   Amount
                                                          (recoverable             (recoverable           (recoverable            (recoverable            (recoverable            (recoverable             (recoverable
                                                           amount or                amount or              amount or               amount or               amount or               amount or                amount or
Financial instruments                                  repayment amount)       repayment amount)       repayment amount)       repayment amount)       repayment amount)       repayment amount)       repayment amount)
Assets
 Non-derivative financial instruments
  Due from other banks                                 $          645,682 $                     -      $                - $                     - $                        - $                     - $            645,682
  Due from Central Bank and call loans from banks              22,096,839              15,744,968              11,500,000              13,055,000                          -                       -           62,396,807
  Financial assets for trading purpose
    Government bonds                                              807,855                          -                       -                       -                       -                       -              807,855
    Commercial paper                                            1,914,523                          -                       -                       -                       -                       -            1,914,523
    Negotiable certificates of deposit                            250,191                          -                       -                       -                       -                       -              250,191
  Financial assets designated for trading purpose
    Corporate bonds                                                     -                       -                 990,398                 527,760                 187,921               1,032,626               2,738,705
    Convertible corporate bonds                                         -                       -                       -                  32,500                 145,291                 774,261                 952,052
    Assets swaps - convertible corporate bonds                          -                       -                 108,763                 241,620                 735,385                       -               1,085,768
  Investment in bills and bonds under resale agreement            212,045                       -                       -                       -                       -                       -                 212,045
  Bills discounted and loans                                    9,630,117              13,925,792              16,240,266              21,112,265              34,579,840             132,666,096             228,154,376
  Available-for-sale financial assets
    Government bonds                                                       -                       -                99,740                     -                1,579,129               5,170,327               6,849,196
    Corporate bonds                                                        -                       -               200,445               945,488                1,784,668               4,635,451               7,566,052
    Financial bonds                                                        -                       -                     -                     -                  244,574                   1,982                 246,556
    Beneficiary securities                                                 -                       -                     -                     -                        -                 579,663                 579,663
    Asset backed securities                                                -                       -                     -                     -                        -               1,201,264               1,201,264
  Held-to-maturity financial assets
    Corporate bonds                                                        -                       -                       -                       -                   -                 294,615                 294,615
    Financial bonds                                                        -                       -                       -                       -             163,675                 654,700                 818,375
 Other financial assets
  Non-active - financial bonds                                             -                       -                       -             162,610                           -             940,097                1,102,707
 Derivative financial instruments
  Financial assets for trading purpose -derivatives
    FX contracts (forwards, swaps and cross currency)            102,529                  44,454                     4,289                         -                       -                       -             151,272
    Interest rate futures                                         15,348                       -                                                   -                       -                       -              15,348
    Interest rate swaps (including asset swap interest
       rate swaps and general interest rate swaps)                      -                       -                   2,081                   1,319                 368,701                   1,317                 373,418
Total assets                                                   35,675,129              29,715,214              29,145,982              36,078,562              39,789,184             147,952,399             318,356,470




                                                                                                           ~116~
                                                                                                                         June 30, 2007
                                                       0~30 days              31~90 days            91~180 days         181 days ~1 year         1~3 years        Over 3 years                  Total
                                                        Amount                  Amount               Amount                 Amount                Amount              Amount                   Amount
                                                      (recoverable            (recoverable         (recoverable           (recoverable          (recoverable        (recoverable             (recoverable
                                                       amount or               amount or            amount or              amount or             amount or           amount or                amount or
                                                  repayment amount)       repayment amount)    repayment amount)      repayment amount)     repayment amount)   repayment amount)        repayment amount)
Financial instruments
Liabilities
 Non-derivative financial instruments
  Due to Central Bank and other banks            $         3,524,451      $       1,969,993    $       4,040,585      $      11,124,859     $               -   $                   -    $       20,659,888
  Financial liabilities designated for trading
    purpose
  Subordinated financial bonds                                        -                   -                     -             2,096,023                     -                       -             2,096,023
  Bills and bonds payable under repurchase
   agreements                                             10,290,457                      -                    -                      -                     -                    -               10,290,457
  Deposits                                                92,978,833             21,879,230          120,690,546             38,272,550             2,978,425                8,370              276,807,954
  Financial bonds payable                                          -                      -                    -              2,366,000                     -            9,800,000               12,166,000
  Other financial liabilities                                145,773                      -                    -                      -                     -              589,759                  735,532
  Financial liabilities for trading purpose
   derivatives
  FX contracts (swaps, forwards and cross
    currency)                                                190,355                 1,315                86,091                      -                     -                    -                  277,761
  Non-delivery forwards                                          496                      -                    -                      -                     -                    -                      496
  Interest rate swaps                                              -                      -                    -                 48,590               343,961               24,257                  416,808
  Fixed rate commercial paper contracts                            -                      -                    -                      -                 1,561                    -                    1,561
Total liabilities                                        107,130,365            23,850,538           124,817,222             53,908,022             3,323,947           10,422,386              323,452,480

Interest-rate-sensitivity gap                    ($       71,455,236 )    $       5,864,676   ($      95,671,240 )   ($      17,829,460 )   $      36,465,237   $      137,530,013      ($        5,096,010 )




                                                                                                    ~117~
                                                                                                                                    June 30, 2006
                                                                 0~30 days              31~90 days              91~180 days          181 days ~1 year            1~3 years            Over 3 years                  Total
                                                                 Amount                    Amount                 Amount                  Amount                 Amount                  Amount                   Amount
                                                               (recoverable              (recoverable          (recoverable            (recoverable            (recoverable            (recoverable             (recoverable
                                                                amount or                 amount or              amount or               amount or              amount or               amount or                amount or
Financial instruments                                       repayment amount)       repayment amount)       repayment amount)       repayment amount)       repayment amount)       repayment amount)       repayment amount)
Assets
 Non-derivative financial instruments
  Due from Central Bank and call loans from banks           $       21,286,047 $             4,700,000      $        4,500,000 $             4,410,000 $                        - $                     -           34,896,047
  Financial assets for trading purpose
    Government bonds                                                   530,921                          -                       -                       -                       -                       -              530,921
    Commercial paper                                                 5,013,779                          -                       -                       -                       -                       -            5,013,779
    Negotiable certificates of deposit                                 738,747                          -                       -                       -                       -                       -              738,747
  Financial assets designated at fair value through profit
   or loss
    Corporate bonds                                                          -                       -                 324,735                       -                 888,215               1,299,764               2,512,714
    Convertible corporate bonds                                              -                       -                       -                       -                       -                  10,800                  10,800
    Assets swaps - convertible corporate bonds                               -                       -                       -                       -                 229,600                       -                 229,600
  Investment in bills and bonds under resale agreement               1,552,510                       -                       -                       -                       -                       -               1,552,510
  Bills discounted and loans                                        11,960,702              14,831,152              17,907,049               7,884,466             174,520,582                 856,722             227,960,673
  Available-for-sale financial assets
    Government bonds                                                            -             538,258                  51,187                       -                  982,349               4,273,985               5,845,779
    Corporate bonds                                                             -                   -                 501,441                 981,551                1,601,098               5,293,445               8,377,535
    Financial bonds                                                             -                   -                       -                       -                        -                   2,843                   2,843
    Asset swaps – convertible corporate bonds                                   -                   -                 166,045                       -                        -                       -                 166,045
 Other financial assets
  Non-active - financial bonds                                                  -                       -                       -                       -             321,793                2,072,820               2,394,613
  Non-active – negotiable certificates of deposit                               -                       -                       -                       -                   -                  161,851                 161,851
  Derivative financial instruments
  Financial assets for trading purpose - derivatives
    FX contracts (forwards, swaps and cross currency)                  50,186                    4,152                 22,480                   32,551                          -                       -             109,369
    Interest rate swaps (including asset swap interest rate
     swaps and general interest rate swaps)                            17,420                    3,283                          -                       -                5,906                          -              26,609
Total assets                                                        41,150,312              20,076,845              23,472,937              13,308,568             178,549,543              13,972,230             290,530,435




                                                                                                            ~118~
                                                                                                                     June 30, 2006
                                                       0~30 days              31~90 days          91~180 days       181 days ~1 year          1~3 years        Over 3 years                  Total
                                                        Amount                  Amount              Amount               Amount                Amount             Amount                   Amount
                                                      (recoverable           (recoverable        (recoverable          (recoverable         (recoverable        (recoverable             (recoverable
                                                       amount or               amount or           amount or            amount or            amount or           amount or                amount or
Financial instruments                             repayment amount)       repayment amount)   repayment amount)    repayment amount)     repayment amount)   repayment amount)       repayment amount)
Liabilities
 Non-derivative financial instruments
  Due to Central Bank and other banks            $        15,275,109      $       2,108,691   $       6,766,942   $        8,690,487     $        700,000    $                   -   $       33,541,229
  Financial liabilities designated at fair
    value through profit or loss
 Subordinated financial bonds                                         -                   -                   -                     -            2,057,727                       -            2,057,727
  Bills and bonds payable under repurchase
   agreements                                             16,133,057                      -                   -                    -                     -                    -              16,133,057
  Deposits                                                87,859,449             18,820,100          93,264,922           28,948,432             1,780,493               18,400             230,691,796
  Financial bonds payable                                          -                      -                   -                    -             2,366,000            5,000,000               7,366,000
  Other financial liabilities                                      -                      -                   -                    -                     -              131,029                 131,029
  Derivative financial instruments
   Financial liabilities for trading purpose -
     derivatives
   Interest rate swaps                                       15,261                       -                   -                     -             110,798                        -             126,059
  FX contracts (swaps, forwards and cross
    currency)                                                100,466                  3,596               2,612                    -                     -                    -                 106,674
Total liabilities                                        119,383,342             20,932,387         100,034,476           37,638,919             7,015,018            5,149,429             290,153,571

Interest-rate-sensitivity gap                    ($       78,233,030) ($           855,542 ) ($      76,561,539 ) ($      24,330,351 )   $     171,534,525   $        8,822,801      $         376,864




                                                                                                        ~119~
b. Effective interest rates

  As of June 30, 2007, and 2006 the effective interest rates for financial instruments
  (except for financial instruments at fair value through profit or loss) held or issued by
  the Bank are as follows:

                                                June 30, 2007
                        Items                                   NTD            USD
    Available-for-sale financial assets
     Government bonds                                           1.76%~2.48%              -
     Corporate bonds                                            1.62%~2.60%              -
     Beneficiary certificates                              2.175%~2.3130%                -
     Financial bonds                                                      -    2.9%~3.5%
     Asset backed securities                                              -   5.32%~6.00%
    Held-to-maturity financial assets
     Financial bonds                                                      -   7.26%~8.00%
    Equity investments with non active market
     Financial bonds                                                      -   0.40%~6.90%
    Loans and advances
     Short-term loans                                                 3.43%          5.45%
     Short-term secured loans                                         3.69%          5.24%
     Mid-term loans                                                   4.19%          6.53%
     Mid-term secured loans                                           4.24%          6.17%
     Long-term loans                                                  3.58%          6.15%
     Long-term secured loans                                          3.14%          6.19%
    Financial bonds                                              2.5%~3.5%               -
    Deposits
     Demand deposits                                                  0.13%          2.05%
     Time deposits                                              1.75%~1.88%          4.80%
     Transfer deposits Chunghwa Post Co.                              2.17%              -
     Demand saving deposits                                     0.37%~9.54%              -
     Time saving deposits                                       1.88%~2.13%              -




                                           ~120~
                                           June 30, 2006
                    Items                                  NTD            USD
Available-for-sale financial assets
 Government bonds                                          0.05%~3.75%              -
 Beneficiary certificates                                            -   0.00%~3.12%
Equity investments with no active market
 Financial bonds                                                     -   0.50%~8.20%
 Redeemable certificates of deposit                                  -          5.00%
Loans and advances
 Short-term loans                                                3.27%          5.33%
 Short-term secured loans                                        3.32%          3.64%
 Mid-term loans                                                  4.72%          5.92%
 Mid-term secured loans                                          4.67%          5.46%
 Long-term loans                                                 2.20%          2.50%
 Long-term secured loans                                         3.05%          5.42%
Financial bonds                                            0.90%~3.50%              -
Deposits
 Demand deposits                                                 0.15%          1.62%
 Time deposits                                             1.59%~1.66%          4.25%
 Transfer deposits Chunghwa Post Co.                             2.09%              -
 Demand saving deposits                                    0.42%~9.37%              -
 Time saving deposits                                      1.74%~1.89%              -




                                      ~121~
Securities subsidiaries:

(A) Derivative financial statements

    a. Derivative financial instruments as of June 30, 2007 and 2006 were as
       follows:

                                                          June 30, 2007
                                                Derivative            Derivative
                                             financial assets    financial liabilities
       Interest rate swap contracts        $                  - $              20,882
       Asset swap IRS contracts                               -                46,563
       Asset swap options                              238,027                176,125
       ELN – options                                     1,113                         -
       PGN – fixed income                                     -                  3,270
       PGN                                                    -                      15
       Cross currency swap contracts                          -                    561
       Equity swaps                                        370                404,792
       ELN - premium                                          -                12,735
       ELN- fixed income (Note)                               -                30,064
       PGN - fixed income (Note)                              -               198,673
       Futures guarantee deposits                      404,570                         -
       receivable
       Options held - futures                             7,297                      -
       Options written - futures                              -                  1,560
       Premium of structured                                  -                 56,879
       instruments
                                           $           651,377 $               952,119

       Note: Recorded under “other financial liabilities – current”.




                                   ~122~
     b. Gain (loss) on derivative financial instruments for the six months ended
        June 30, 2007 and 2006 were as follows:

                                                        June 30, 2007
                                            Gain (loss) on            Unrealized
                                          derivative financial        gain (loss)
                                                assets                included
         Futures contract loss          $              77,749 ($                 2,115)
         Interest rate swap contracts                  17,006                  32,085
         Interest rate options                               6                       6
         Asset Swap IRS contracts       (               8,438)                 14,555
         Asset swap options                            21,349                  52,255
         ELN                            (               8,762) (                   402)
         PGN                            (               5,357) (                 4,607)
         Bond options – non hedge                       4,483                      275
         Equity swaps                   (              69,014) (               69,201)
         Cross currency swap            (               5,499)                   2,215
         contracts
         Options held - futures                        9,206 (                    816)
                                        $             32,729 $                 24,250

(B) Yuanta Core Pacific Securities and its subsidiaries engage in futures trading,
    the presentation on the financial statements are as follows:

    a. The balance of futures guarantee deposits in futures account are as follows:

                                                                  June 30, 2007
        Futures guarantee deposits - self-owned capital     $               370,582
        The balance of excess futures guarantee             $                52,496
        deposits

    b. Gain or loss from futures contract are as follows:

                                                            For the six months ended
                                                                  June 30, 2007
       Gains from futures contract                          $                37,581

    c. Gain or loss from futures options:

                                                            For the six months ended
                                                                  June 30, 2007
       Gains form futures options                           $                   626

                                     ~123~
(C) Yuanta Core Pacific Securities and its subsidiaries engage in warrants, the
    profit or lossfor the six months ended June 30, 207 are as follows:

                                    For the six months
                                   ended June 30, 2007             Account
    A. Gain (loss) on valuation
    Liabilities for issuance of  $              985,916 Gain on issuance of call
     call (put) warrants                                  (put)    warrants
    Repurchase of issued call                   443,032 Gains on issuance of call
     (put) warrants                                       (put)    warrants
    Performance prior maturity (                 16,994) Gain on issuance of call
     of issuance of call (put)                            (put)    warrants
     warrants
    Trading securities - hedging                154,132 Gain (loss) on decline
                                                         market price of trading
                                                         securities
    B. Gain (loss) on sale
    Repurchase of issued call    (            1,018,407) Gain on issuance of call
     (put) warrants                                       (put)    warrants
    Trading securities - hedging                236,417 Gain (loss) on sale of
                                                          securities – hedging


(D) Information of financial instruments:

    a. Futures

       The Securities Subgroup engages in the business of futures dealers so
       futures and futures options are traded for the purpose of efficient
       employment of capital. As of June 30, 2007, TX futures guarantee
       deposits receivable includes the balance of excess futures guarantee
       deposits of $66,984.

    b. Warrants

       For information regarding the issuance of warrants, please refer to Note
       4(3).




                                   ~124~
    c. Convertible bond asset swaps and options

       The Securities Subgroup engages in the business of asset swaps and
       options. Under an asset swap, the Securities Subgroup sells convertible
       bonds to the counterparty and receives proceeds. Over the contract period,
       the Securities Subgroup exchanges its cash flows with the counterparty
       and retain the right to buyback the convertible bonds. Under an option
       transaction, the Securities Subgroup keeps the right to buyback the
       convertible bonds or the counterparty has the right to buy the convertible
       bonds. The Securities Subgroup can clear the position by rendering its
       currently owned bonds. As of June 30, 2007, notional amounts of
       convertible bond options purchased were $994,126 notional principal of
       convertible bond options sold were $766,800.

    d. Interest rate swaps

       The purpose of the Securities Subgroup to enter into an interest rate swap
       contract is to earn the interest gap based on the Securities Subgroup
       estimation toward the interest rate trend. The contracts entered with
       financial institutions are valid for 1~5 years. On settlement date, interest
       is received and paid according to the production of nominal principal and
       difference in interest rates. Most of the counterparties are financial
       institutions. As of June 30, 2007, the nominal principal was $122,354,555.

    e. Structured notes

       The Securities Subgroup combines fixed income instruments with call or
       put options into structured notes, which are further categorized into ELN
       and PGN. On trade date, the contracted amounts were collected in full
       from the counterparties. The payout amount on maturity will depend on
       the price fluctuation of the instruments linked to these contracts. All the
       linked products are financial instruments under the supervision of the SFB.
       As of June 30, 2007, the nominal principal of ELN was $100,000, and the
       nominal principal of PGN was $82,817.

    f. Bond options

       The Securities Subgroup enters into bond options for trading purposes.
       Option premiums are paid to or received from counterparties on contract
       date. On settlement date, interests are received from or paid to
       counterparties or physical instruments delivered. The Company will take
       advantage of price arbitrage arising from interest rate fluctuations. As of
       June 30, 2007, the nominal principal of bond options purchased was
       $100,000, and the nominal principal of bond options sold was $0.

(E) Securities subgroup engages in financial instruments (derivative and
    non-derivative financial instruments). The related financial risk are as
    follows:




                                   ~125~
a. Market risk

 The Securities Subgroup sets operational limit and VaR (value at risk) limit for
 each business department as the standard of executing risk management.

 The Company measures market risk of each position using the variance –
 covariance method, which contains after-back testing one-day VaRs and a
 confident interval of 99%. The following table shows the VaR data of all
 positions for period ended June 30, 2007. In the table, VaRs are classified to
 equity securities, fixed income securities, derivatives and total amount. Because
 of the elimination effect resulting from the different classification, the total VaR
 is less than the sum of all classification. The difference between the total and the
 sum of individual VaR may be regarded as the achievement resulting from
 diversification.

  Yuanta Core Pacific Securities
                                                         VaR            VaR
        Item          June 30, 2007 VaR Mean            Minimum        Minimum
  Equity securities        260,874     339,714             242,538         524,072
  Fixed income              75,746      71,978              36,656         140,490
    securities
  Derivatives               13,693      23,891                2,407         66,527
  Subtotal                 350,313     435,583                    -              -
  Less: Benefits    (       83,451) (   85,574)                   -              -
    resulting from
    diversification
  Total VaR                266,862     350,009             236,968         515,948

 Fuhwa Securities
                                                         VaR            VaR
         Item         June 30, 2007 VaR Mean            Minimum        Minimum
  Equity securities         25,560      28,533             21,796         39,871
  Fixed income              18,739       1,169              4,869         24,178
  securities
  Derivatives               17,397       7,283                1,202         23,714
  Subtotal                  61,696      46,985                    -              -
  Less: Benefits    (       25,795) (   36,867)                   -              -
  resulting from
  diversification
  Total VaR                 35,901      10,118 (            11,484)         44,978




                                    ~126~
b. Credit risk

  Credit risk occurs when the counterparty defaults. Due to the lack of a
  generally accepted credit rating system, the Securities Subgroup suffers
  some difficulties in managing credit risk. To manage credit risk, the
  Securities Subgroup sets credit limit for each issuer and counterparty based
  on an internal established credit rating system. Moreover, the Securities
  Subgroup risk control office continuously improves its credit risk
  management model, which monitors the changes in the credit situation of
  security issuers. Therefore, the credit risk of the bonds held is dynamically
  traced and evaluated.

  An efficient credit risk management system must rely on a credit rating
  system, which is maintained by the Securities Subgroup and used to rate
  the Securities Subgroup’s counterparties or security issuers. Each
  counterparty or issuer will receive one of the eight classes including A, B,
  C, D, E, F, G and Z. The Securities Subgroup also calculates the default
  rates for each class based on financial statements and market information.
  The monitoring, evaluation, and control of credit risk is conducted in a
  dynamic and continuous way to ensure that the Securities Subgroup
  manages the credit risk efficiently and actively. The maximum credit
  exposure is equal to the book value of the Securities Subgroup’s financial
  assets minus allowance. Since the Securities Subgroup does not have
  significant commitment or guaranty items, no extra credit risk is expected
  to occur.

c. Liquidity risk

  Liquidity risk includes market liquidity risk and cash liquidity risk.
  Liquidity risk occurs when the volume of transactions is insufficient in the
  market so that the Securities Subgroup will suffer difficulty when
  disposing its position within a reasonable time. To lower liquidity risk, the
  Securities Subgroup sets rules for different businesses and securities and
  adopts dynamic monitoring to manage the market liquidity risk of its entire
  positions. The Securities Subgroup also analyzes the characteristics of
  those financial instruments without sufficient liquidity and sets limit for
  each item.

  Cash liquidity risk refers to the Securities Subgroup’s incapacity of raising
  enough funds at reasonable costs to fulfill its payment obligation at
  maturity. The Securities Subgroup ensures the safety of its cash flows via
  cash flow management and control over the credit line. To ensure the
  diversification and stability of fund sources, the Securities Subgroup uses
  common stock, retained earnings, and gains on short-term investment as its
  fund sources. The Securities Subgroup also applies for bank lines in
  advance for similar purposes.




                               ~127~
    d. Fair value risk resulting from changes in interest rate

       Fair value risk from changes in interest rates refers to the uncertainty of
       future cash flows resulting from changes in index interest rates. If the
       possible risk from interest rate change exceeds the manageable range, the
       Securities Subgroup uses interest swaps to hedge the risk.

(F) As Yuanta Futures engaging in futures derivative financial instruments
    designated for trading purpose and the transaction amounts are insignificant,
    the disclosure is simplifies as follows:

                                        June 30, 2007
                                                   Uncovered        Contract
                                                      position     amount or
                                                           Number     paid
                                                Buyer/        of   (collected)
          Item           Type of transaction      seller contracts premium           Fair value
    Futures contract   Taiwan Micro Index     Buyer        4        ($    1,766) ($      1,762)
                       Futures
    Futures contract   Taiwan Electron Index Buyer        10             15,141          15,182
                       Futures
    Futures contract   Financial Futures      Buyer        8             8,312     87,280
    Futures contract   Taiwan Index Futures   Buyer       99        ( 174,563) ( 174,448)
    Option contract    Taiwan Index Futures Put option 1,009        (   1,564) (   1,287)
                       Options
    Option contract    Taiwan Index Futures Call option  658        (     2,635)          2,117
                       Options
    Option contract    Taiwan Index Futures Call option   60                203             194
                       Options
    Option contract    Taiwan Index Futures Put option   336        (      298) (          273)
                       Options




                                    ~128~
a. Credit risk

   Yuanta Futures conducts futures contracts and options via Taiwan Futures
   Exchange; hence, no significant credit risk is expected to occur.

b. Market price risk

   As of June 30, 2007, Yuanta Futures is exposed to price risk because of
   index options and stock price index futures transactions, which have the
   fair value in the active market. Yuanta Futures set limits to control the
   transaction volume and stop-loss amount of derivatives to reduce its
   market price risk.

c. Liquidity risk, cash flow risk and amount/ period/ uncertainty of future
   cash needs

   As of June 30, 2007, options and futures held by Yuanta Futures have
   ability to close out market positions. Hence the cash flow risk is
   insignificant.

   Yuanta Futures has prudent liquidity risk management which includes
   maintaining sufficient cash and marketable securities, the availability of
   funding through an adequate amount of committed credit facilities and the
   ability to close out market positions. Due to the dynamic nature of the
   underlying businesses, Yuanta Futures aims to maintain flexibility in
   funding by keeping committed credit lines available. Yuanta Futures
   engages in options trading, pays (collects) premium prior transactions, if
   counterparty request to perform the contract, Yuanta Futures has sufficient
   capital to meet the contract obligation, hence the cash flow risk is
   insignificant.

d. Type, purpose, and strategy to accomplish the purpose

   Yuanta Futures currently engaging in futures and options designed for
   trading purposes is to expand investment channel and make effective use
   of the capital.




                               ~129~
   (G) Yuanta Core Pacific Securities engaged in futures business and shall meet the requirements of relevant futures transactions regulations.
       Financial ratio and enforcement of Yuanta Core Pacific Securities are as follows:

          The table below is prepared according to: “Regulations Governing Futures Commission Merchants”

                                                               Current period                    Prior period
Article               Calculation formula                                                                                Standard Enforcement
                                                          Calculation           Ratio      Calculation          Ratio
  17                Stockholders’ equity                          328,087       752%               337,689      96.26%     ≧1        Meet the
          (Total liability futures trader’s equity                      437                           3,508                        requirements
                           reserve for breach of
                           contract losses
                           reserve for trading losses)
  17                     Current assets                           318,524       730%               335,666      95.71%     ≧1        Meet the
                       Current liabilities                              437                           3,508                        requirements
  22                  Stockholders’ equity                        328,087     82.00%               337,689        84%    ≧60%        Meet the
                   Minimum paid-in capital                        400,000                          400,000               ≧40%      requirements
  22                  Adjusted net capital                        319,262     9,946%               317,226      1,511%   ≧20%        Meet the
         Total amount of customer margins required                   3,210                            21,000             ≧15%      requirements
          for the open positions of futures traders
Note 1: “Minimum paid-in capital” is capital or appropriate operating capital stipulated in “Regulations Governing Futures Commission
         Merchants”

Note 2: For foreign futures merchants engaging in foreign futures sub-contract business, the ratio for stockholders’ equity/ minimum paid-in
         capital adjusts to 50% and 30%.


                                                                    ~130~
Note 3: “Enforcement” shall fill in whether it meets the requirement of financial ratio, if it does not meet the requirement, shall disclose the
         improvement plans to us or designated organizations.

   (H) Yuanta Core Pacific Securities’ subsidiaries engaged in futures business and shall meet the requirements of relavent futures transactions
       regulations. Financial ratio and enforcement of Yuanta Core Pacific Securities are as follows:

The table below is prepared according to: “Regulations Governing Futures Commission Merchants”
                                                                   Current period                   Prior period
 Article              Calculation formula                                                                                     Standard   Enforcement
                                                             Calculation       Ratio           Calculation          Ratio
   17                Stockholders’ equity                       1,262,773           831%             1,204,416       384%       ≧1         Meet the
           (Total liability futures trader’s equity               152,003                             313,293                            requirements
                            reserve for breach of
                            contract losses
                            reserve for trading losses)
   17                     Current assets                        5,366,165           123%             5,668,358       118%       ≧1         Meet the
                        Current liabilities                     4,378,135                            4,792,818                           requirements
   22                  Stockholders’ equity                     1,262,773      205.33%               1,204,416     195.84%     ≧60%        Meet the
                    Minimum paid-in capital                       615,000                             615,000                  ≧40%      requirements
   22                  Adjusted net capital                     1,147,108     150.065%               1,060,822     156.00%     ≧20%        Meet the
              Total amount of customer margins                    764,405                              680,027                 ≧15%      requirements
           required for the open positions of futures
                             traders




                                                                       ~131~
Note 1: “Minimum paid-in capital” is capital or appropriate operating capital stipulated in “Regulations Governing Futures Commission
         Merchants”

Note 2: For foreign futures merchants engaging in foreign futures sub-contract business, the ratio for stockholders’ equity/ minimum paid-in
         capital adjusts to 50% and 30%.

Note 3: “Enforcement” shall fill in whether it meets the requirement of financial ratio, if it does not meet the requirement, shall disclose the
         improvement plans to us or designated organizations.




                                                                       ~132~
   (I) Specific risk exposed for futures business

       Main risk for futures merchants conducting futures business is credit risk.
       Credit risk occurs when clients do not deposit margin call on time. Yuanta
       Futures keeps an eye on margin limits on each individual clients and requests
       client to deposit additional margins or decrease the transaction amounts to
       control this credit risk. In addition, the main risk exposed for Yuanta Core
       Pacific Securities and Yuanta Futures is market price risk. The market contract
       price of futures or options held vary depends on the fluctuation on index of
       underlying investments. If market index price converses to underlying
       investments, losses occur. The Yuanta Core Pacific Securities and Yuanta
       Futures sets up stop-loss in order to control this risk.

Other subsidiaries

(A) Market risk

    Subsidiaries engage in trading purposes, held-to-sale or derivative financial
    instruments transactions, whose primary market risk comes from price changes in
    those instruments. Subsidiaries have no significant market risk, as each
    instrument has been set up a stop-loss point and its changes in the fair value are
    controlled under the predetermined limit. Corporate bonds, financial bonds and
    premium divided bonds engaged by Fuhwa Securities Investment totaling to
    $3,696,474, and all of these have been sold on July 2007, possible losses have
    been recorded, hence, there is no significant market risk.

    Financial assets of Fuhwa Securities Finance are listed stocks, unlisted stocks,
    open-end funds, convertible corporate bonds, government bonds and financial
    bonds. Except for unlisted stocks and bond investments with non-active market,
    changes on market interest rate and stock price fluctuate the value of financial
    assets. In order to manage market risk, Fuhwa Securities Finance conducts
    transactions with high-credit-quality securities investment firms to manage and
    reduce market risk.

(B) Credit risk

    As stock index futures contracts and options trading are via Taiwan Futures
    Exchange, hence, credit risk is insignificant. Setting up transaction limits for
    non-derivative investments on open-end stock funds and bonds to avoid
    concentration of risk and decrease settlement risk by using the third party.

    Fuhwa Securities Finance’s main business is margin trading, the main risk is
    credit risk. To control customers’ risk, Fuhwa Securities Finance not only
    follows the lower percentage or distributable amounts for abnormal stocks
    regulated by Taiwan Stock Exchange Corporation and Gre Tai Market but also
    stipulated distributable method for margin loan limits, warning and treatment,
    and spread of trust and etc., to reduce the occurrence of credit risk.

    Potential credit risk of financial instruments held by Fuhwa Securities Finance
    derives from possibility of default of counterparty. Derivative counterparties and
    cash transactions are limited to high-credit-quality financial institutions;

                                       ~133~
    therefore, the possibility of default is insignificant. Fuhwa Securities Finance
    always pre-evaluates the counterparty’s credit and updates periodically. It
    predetermines the credit limit of each counterparty to control credit limit. Thus,
    no significant credit risk is expected. The maximum exposure risk of the
    financial assets is for those with the positive fair value at the balance sheet date.

(C) Liquidity risk

    Transitions traded by the Consolidated Company all have high liquidity; hence,
    the Consolidated Company does not have the significant liquidity risk. While
    Fuhwa Futures conducting transactions, due to the fluctuation of market price,
    Fuhwa Futures may request to deposit the margin call. As a result, amount and
    time of future cash flow is uncertain. Fuhwa Securities Investment Trust resolved
    to increase capital on second quarter of 2007 to enhance operating capital and
    improve financial structure. It is expected no significant cash flow risk. Please
    refer to Note 9 significant subsequent events for details.

    Fuhwa Securities Finance’s capital and working capital were sufficient to fulfill
    all obligations. Thus, there was no material liquidity risk that Fuhwa Securities
    Finance may fail to meet the obligation.

    Financial assets invested by Fuhwa Securities Finance, except for unlisted stocks,
    bonds investments and held-to-maturity bonds with non-active market, others are
    all with active market. Thus, these financial assets have high liquidity and are
    expected to be sold at fair value promptly when needed. As a result, Fuhwa
    Securities Finance does not have the significant liquidity risk.

    The match up of the maturity date and interest rate for assets and liabilities and
    control unmatched gap are Fuhwa Securities Finance‘s basic management policy.
    As trading conditions are uncertain and trading types are different, the maturity
    date and interest rate for assets and liabilities are usually unmatched; these gaps
    may generate either potentially gains or potential losses.

(D) Risk form changes in interest rates

    The company engages in long-term or short-term fixed-income marketable
    securities, for those with fixed interest rates, profits are mainly capital gain and
    supplemented by interest difference, hence, there is no cash flow risk, but there is
    fair value risk. For those with floating rates, profits are mainly fixed-income
    and supplemented by capital gain, hence, there is cash flow risk arising from
    changes in interest revenue, but in normal situation, lower than fair value risk.

    Short-term borrowings held by Fuhwa Securities Finance are negotiated prices
    based on interest rate in monetary market. Thus, the changes on market interest
    rate differ negotiated interest rate of short-term borrowings and fluctuate future
    cash flows. If market interest rate increase by 1%, Fuhwa Securities Finance is
    expected to increase whole year cash outflow amounted to $305,344.




                                          ~134~
(2) Capital adequacy ratio

                                                       June 30, 2007
                                          Eligible capital           Minimum capital
     Financial holding company        $        106,049,150 $               111,994,606
     Bank subsidiaries                          20,889,800                  19,215,609
     Securities subsidiaries                    48,248,080                  18,705,176
     Futures subsidiaies                           910,432                   1,222,959
     Venture capital subsidiaries                1,025,712                     510,998
     Other subsidiaries                          7,819,824                   5,580,962
     Deduction item                   (        107,590,905) (              110,849,733)
     Subtotal                         $          77,352,093 $               46,380,577
     Capital adequacy ratio of the                       166.78%
       Consolidated Company


                                                       June 30, 2006
                                          Eligible capital           Minimum capital
     Financial holding company        $          39,530,235 $               48,636,903
     Bank subsidiaries                           21,974,836                 18,598,167
     Securities subsidiaries                      6,708,651                  3,192,920
     Futures subsidiaries                           889,301                  1,236,207
     Venture capital subsidiaries                   998,707                    498,701
     Other subsidiaries                           9,600,405                  3,541,069
     Deduction item                   (          48,372,982) (              47,837,335)
     Subtotal                         $          31,329,153      $          27,866,632
     Capital adequacy ratio of the                           112.43%
       Consolidated Company




                                     ~135~
As of June 30, 2007, the financial holding's net eligible capital
                               Item                                            Amount
Common stocks                                                              $     83,121,145
Unaccumulated preferred stocks which meet 1 tier capital requirement                      -
  and unaccumulated subordinated debts with no maturity date
Other preferred stocks and subordinated debts                                             -
Capital collected in advance                                                              -
Additional paid-in capital                                                       23,832,730
Legal reserve                                                                             -
Special reserve                                                                           -
Accumulated earnings (losses)                                                     4,327,013
Equity adjustment number                                               (            253,546)
Less: goodwill                                                                            -
      deferred assets                                                  (            249,748)
      treasury stocks                                                  (          4,728,444)
Total net eligible capital                                                 $    106,049,150




                                         ~136~
(3) In accordance with Article 46 of the Financial Holding Company Act, the following
    table represents the Company's subsidiaries' provision of business credit or
    endorsements to, or other transactions with, the same individual, the same related party,
    or the same affiliated company (expressed in millions of New Taiwan dollars; %)



                                        June 30, 2007
                                                 Total of business
                                                       credit,           Percentage of net
                                                 endorsements, or          value of the
                    Name                         other transactions        Company (%)
   Same person:
     Construction and Planning Agent            $              5,000                    4.69
     Taiwan Power Company                                      3,179                    2.98
     Trust property account entrusted to                       8,594                    8.07
       Land Bank of Taiwan
     Taiwan High Speed Rail Co., Ltd                           9,282                    8.71
     The Engineering Department of High                        3,000                    2.82
       Speed Rail System of Ministry of
       Transportation and Communications
     RESA Engineering Corporation                              3,209                    3.01
        Total                                                 32,264                  30.28
   Same unit:
     Nan Shan Life Insurance Co., Ltd. and                     3,028                    2.84
       its related unit
   Same related company:
     Hon Hai Precision Industry Company                        5,857                    5.50
       Ltd and its related parties
            Total                               $             41,149                  38.62




                                      ~137~
                                        June 30, 2006
                                                 Total of business
                                                       credit,              Percentage of net
                                                 endorsements, or             value of the
                   Name                          other transactions           Company (%)
Same person:
  Taiwan Power Company                          $                3,329                      8.35
  RESA Engineering Corporation                                   2,817                      7.07
  Construction and Planning Agency                               5,000                     12.55
  The Engineering Department of High                             3,000                      7.53
    Speed Rail System of Ministry of
    Transportation and Communications
  Taiwan Tobacco and Liquor                                      2,320                      5.82
    Corporation
  Trust property account entrusted to                            9,567                     24.01
    Land Bank of Taiwan
  Trust property account entrusted to                            3,582                      8.99
    Fuhwa Commercial Bank
  Nan Shan Life Insurance Co., Ltd.                              7,112                     17.85
  Total                                                         36,727                     92.17
Same unit:
  Taipei Fubon Bank                                              2,557                      6.42
  Cathay Life Insurance Co., Ltd.                                3,355                      8.42
  Yulon Motors Co., Ltd.                                         3,019                      7.58
  Quanta Display Inc.                                            5,835                     14.64
  Hann Star Display Co., Ltd.                                    2,392                      6.00
  Total                                                         17,158                     43.06
                                                $               53,885                   135.23
Note 1: The above table represents the financial holding company's subsidiaries' provision of
        business credit or endorsements to, or other transactions with, the same individual, the
        same related party, or the same affiliated company. It discloses transactions that
        reached the lower of 5% of the net value of the financial holding company or three
        billion New Taiwan dollars.

     2: Business credit refers to loans, discounts, overdrafts, acceptances, guarantees and other
        business activities certified by the government authorities.

     3: Endorsement refers to a bills company's endorsement or guarantee.

     4: Other transactions mean the following transactions with the same individual, the same
        related party, or the same affiliated company:

                                           ~138~
     (a) Investing in marketable security issued by related parties.

     (b) Purchasing real estate or other assets from related parties.

     (c) Selling marketable securities, real estate or other assets to related parties.

     (d) Entering into contracts to pay money or provide services.

     (e) Being agents, brokers or other that would receive commissions or service
         charges from the financial holding company or its subsidiaries.

     (f) Doing the aforementioned transactions with a third party which has a conflict
         of interest with related parties, or transactions with a third party involving
         related parties.

     (g) The scope of calculation of the transaction amount does not include
         transferable time deposits issued by subsidiaries.

(4) Significant impact arising from changes in government laws and
    regulations:

     None

(5) Information for discontinued operations:

     None

(6) Major operating assets or liabilities transferred from (or to) other financial
    institutions:

     Please refer to Note 5 (2) H for details.

(7) Allocation of expenses between the Company and its subsidiaries and
    among subsidiaries

     According to Article 25 of Fuhwa Financial Holding Group's
     Cross-Marketing Management System, contracts regarding legal
     responsibility and the allocation method for expenses arising from the
     mutual use of business facilities and cross-sales between the Company's
     subsidiaries should be formulated and signed.

(8) Information for private placement securities:

     None




                                      ~139~
       (9) Financial information by business segments

            Information by business segments for the six months ended June 30, 2007 is as follow:

                                                                                                        (In Thousands of New Taiwan Dollars)
                                                      Yuanta Core                        Fuhwa Securities
            Items                Fuhwa Bank        Pacific Securities   Fuhwa Securities    Finance          Other business   Consolidated
Net interest income            $     2,787,119     $         747,077 ($         27,914) $        935,702 $          128,746 $     4,570,730
Net non-interest income               1,475,152           4,812,193            2,373,780 (          242,482) (     1,553,315)      6,865,328
Net revenues                          4,262,271           5,559,270            2,345,866            693,220   (    1,424,569)     11,436,058
Credit losses                  (      1,374,554)                   -                    -                 -         353,884 (     1,020,670)
Operating expenses             (      2,288,342) (        2,003,333) (         1,419,076) (         191,952) (      292,425) (    6,195,128)
Net income (loss) from                  599,375           3,555,937             926,790             501,268   (    1,363,110)      4,220,260
 continuing operations
 before income tax
Income tax (expense) benefit            144,670             516,882 (             78,246) (          77,266) (      405,176)        100,864
Net income (loss) from
 continuing operations
 before income tax             $        744,045    $      4,072,819    $        848,544     $       424,002   ($   1,768,286) $    4,321,124




                                                                       ~140~
  Information by business segments for the six months ended June 30, 2006 is as follow:

                                                                                                              (In Thousands of New Taiwan Dollars)
                                                                                 Fuhwa Securities
            Items                   Fuhwa Bank             Fuhwa Securities         Finance                Other business          Consolidated
Net interest income            $         3,005,957     $              18,771   $          822,605    ($               31,730) $          3,815,603
Net non-interest income                    597,468                 1,433,995 (             31,382)                  509,856              2,509,937
Net revenues                              3,603,425                1,452,766              791,223                   478,126              6,325,540
Credit losses                  (          2,276,638)                       -                    -                         -   (          2,276,638)
Operating expenses             (          1,993,786) (             1,321,177) (           130,249) (                321,074) (           3,766,286)
Net income (loss) from         (           666,999)                 131,589               660,974                   157,052               282,616
 continuing operations
 before income tax
Income tax (expense) benefit   (             63,901) (              136,071) (            158,073)                    2,976   (           355,069)
Net income (loss) from
 continuing operations
 before income tax             ($          730,900) ($                 4,482) $           502,901      $            160,028   ($           72,453)




                                                                      ~141~
 (10) Financial statements of the Company and condensed financial statements of its subsidiaries:

        A. Fuhwa Financial Holding Co., Ltd.

                                                               Fuhwa Financial Holding Co., Ltd.
                                                                        Balance Sheets
                                                                   June 30, 2007 And 2006
                                                              (Expressed In Thousands of Dollars)
           ASSETS                  June 30, 2007     June 30, 2006      LIABILITIES AND STOCKHOLDERS’ EQUITY June 30, 2007                             June 30, 2006
Cash and cash equivalents        $           8,038 $           4,712 Commercial paper payable - net                               $     2,895,762    $      2,123,212
Investments in bills and bonds                                         Financial liabilities at fair value through profit or loss       1,442,314           1,468,437
 under resale agreements                1,290,604             80,000 Payables                                                           1,751,342           1,147,804
Receivables – net                       1,445,245          1,056,866 Corporate bonds payable                                            1,401,902           2,113,484
Equity investments under the                                           Other borrowings                                                   300,000           2,850,000
 equity method - net                 110,845,094          47,832,697 Accrued pension liabilities                                            8,278                8,998
Other financial assets – net                 4,639             4,639 Total liabilities                                                  7,799,598           9,711,935
Property and equipments - net             237,325            258,676
Intangible assets – net                    15,635                   - Stockholders’ equity
Other assets                              251,916            324,341 Common stocks                                                     83,121,145            31,617,616
                                                                       Additional paid-in capital                                      23,832,730             8,300,878
                                                                       Retained earnings
                                                                            Unappropriated earnings                                     4,327,013               92,929
                                                                       Other stockholders’ equity
                                                                            Cumulative translation adjustments                    (        49,573)   (          61,631)
                                                                            Unrealized gain pr loss on available-for-sale
                                                                             financial assets                                     (       164,313)   (           40,504)
                                                                            Treasury stocks                                       (     4,728,444)                    -
                                                                            Net loss on unrecognized pension costs                (        39,660)   (           59,292)
                                                                       Total stockholders’ equity                                     106,298,898            39,849,996
Total assets                     $   114,098,496 $        49,561,931 Total liabilities and stockholders’ equity                     $ 114,098,496        $   49,561,931


                                                                           ~142~
                                     Fuhwa Financial Holding Co., Ltd.
                                          Statements Of Income
                                    For The Six Months Ended June 30,
                                    (Expressed In Thousands of Dollars)
                   Accounts                                     2007                          2006
Revenues
 Investment income accounted for under the equity
  method                                               $              4,660,740         $             963,400
 Other revenues                                                          39,849                        28,898
                                                                      4,700,589                       992,298
Expenses and losses
Investment loss accounted for under the equity
  method                                               (               219,628)     (                781,700)
 Operating expenses                                    (               133,842)      (                55,962)
 Other expenses and losses                             (                 75,012)     (                72,807)
                                                       (               428,482)      (               910,469)
Income from continued operations before income                        4,272,107                        81,829
  Taxes
Income tax benefits                                                       40,233                         36,303
Net income before cumulative effect of changes in
 accounting principle                                                 4,312,340                       118,132
Cumulative effect of changes in accounting
  principle (net of income taxes of $8,401)                                   -     (                    25,203)
Net income                                             $              4,312,340         $                92,929


Earnings per common share                              Before taxes   After taxes   Before taxes     After taxes
 Net income before cumulative effect of changes in
  accounting principle                                 $     0.77     $      0.77   $       0.03    $       0.04
  Cumulative effect of changes in accounting                                    -                  (        0.01)
   principle
Net income                                                            $      0.77                    $      0.03
Diluted earnings per common share
 Net income before cumulative effect of changes in
  accounting principle                                 $     0.76     $      0.77   $       0.03     $      0.04
 Cumulative effect of changes in accounting
   principle                                                                    -                  (        0.01)
Net income                                                            $      0.77                   $       0.03

Presume that the Company’s stocks held by the investees are regarded as investments rather than treasury
 stocks. The pro-forma information is as follows:
Basic earnings per share                              Before taxes    After taxes
Net income                                            $       0.88 $          0.89
Diluted earnings per share
Net income                                             $       0.88   $      0.88




                                                    ~143~
                                                                                             Fuhwa Financial Holding Co., Ltd.
                                                                                       Statements of Changes in Stockholders’ Equity
                                                                                     For The Six Months Ended June 30, 2007 And 2006
                                                                                            (Expressed In Thousands of Dollars)
                                                                                                         Retained earnings                        Cumulative
                                                                                                                                                foreign currency    Unrealized gain                                Net loss
                                                                                                                                                   Translation             on                                        from
                                                                                                            Special        Unappropriated         adjustments      available-for-sale                            unrecognized
 For the six months ended June 30, 2007       Common stock         Capital surplus       Legal reserve      reserve        retained earnings       translation       financial assets       Treasury stock       pension cost       Total
Balance, January 1, 2006                      $   31,617,616   $        8,553,292    $       591,428      $ 95,561        ($       931,934)    ($        50,484)   $               -    ($          73,779)      ($   59,292)   $    39,742,408



Recovery of accumulative deficits                          -   (          244,945)   (       591,428)     ( 95,561)                931,934                     -                   -                         -             -                    -
Treasury stock transferred to employees
                                                           -   (            7,469)                  -                 -                   -                    -                   -                73,779                 -            66,310
Recognition of unrealized loss on financial
                                                           -                     -                  -                 -                   -                    -   (         40,504)                         -             -    (       40,504)
  assets
Recognition of foreign currency translation
                                                           -                     -                  -                 -                   -    (         11,147)                   -                         -             -    (       11,147)
  adjustments
Net profits for the six months ended June
                                                           -                     -                  -                 -             92,929                     -                   -                         -             -            92,929
  30, 2006
Balance, June 30, 2006                        $   31,617,616   $        8,300,878    $              -     $           -   $         92,929     ($        61,631)   ($        40,504)    $                    -   ($   59,292)   $    39,849,996

 For the six months ended June 30, 2007

Balance, January 1, 2007                      $   31,617,616   $        8,300,878    $              -                 -   ($     3,311,655)    ($        59,232)       $     15,551     $                    -   ($   39,660)   $    36,523,498
Acquire subsidiaries’ equity by issuing
                                                  51,503,529          18,850,292                    -                 -                   -                    -                   -                         -             -         70,353,821
  new stocks
Recovery of accumulative deficits
                                                           -   (        3,326,328)                  -                 -          3,326,328                     -                   -                         -             -                    -
Parent company’s stocks held by
                                                           -                     -                  -                 -                   -                    -                   -    (         4,979,708)               -    (     4,979,708)
  subsidiaries
Subsidiaries sold the parent company’s
                                                           -                5,392                   -                 -                   -                    -                   -               251,264                 -           256,656
  stocks held
Recognition of capital surplus
                                                           -                2,496                   -                 -                   -                    -                   -                         -             -                2,496
Recognition of unrealized loss on financial
                                                           -                     -                  -                 -                   -                    -   (        179,864)                         -             -    (      179,864)
  assets
Recognition of foreign currency translation
                                                           -                     -                  -                 -                   -               9,659                    -                         -             -                9,659
  adjustments
Net profits for the six months ended June
                                                           -                     -                  -                 -          4,312,340                     -                   -                         -             -          4,312,340
  30, 2007

Balance, June 30, 2007                        $   83,121,145   $      23,832,730     $              -     $           -   $      4,327,013     ($        49,573)   ($164,313       )    ($        4,728,444)     ($   39,660)   $   106,298,898


                                                                                                                ~144~
                                                 Fuhwa Financial Holding Co., Ltd.
                                                     Statements of Cash Flows
                                         For The Six Months Ended June 30, 2007 And 2006
                                                (Expressed In Thousands of Dollars)
                                Item                                             For the six months ended June 30
                                                                               2007                                 2006
Cash flows from operating activities:
  Net profits
                                                                           $          4,312,340     $                         92,929
  Adjustments to reconcile net profit/loss to net cash provided by
   operating activities:
   Depreciation
                                                                                        11,001                                 9,989
   Amortization
                                                                                          4,515                                3,954
   Net gains investments under equity method
                                                                           (          4,441,112)   (                         181,700)
   Cash dividends from long-term investments under equity method
                                                                                      4,389,137                              370,663

   Revenue on redeeming bonds payable
                                                                                          4,131                                3,869
   Effect of exchange rate on redeeming bonds payable
                                                                                          2,780    (                           9,020)
   Amortization of premiums on redeeming bonds payable
                                                                           (               789)    (                             788)
   Changes on assets and liabilities
   (Increase) decrease in operating assets
    Increase in receivables
                                                                           (           143,668)    (                          76,954)
    Decrease in other assets
                                                                                        11,268                                   501
    Decrease in deferred income tax assets
                                                                                       128,234                                 2,568
    Increase in intangible assets
                                                                           (            15,635)                                     -
   Increase (decrease) in operating liabilities
      (Decrease) increase in financial liabilities at fair value through
                                                                           (            15,039)                               18,437
        profit or loss
       Increase in payables
                                                                                        48,986                                94,492
       Decrease in accrual pension liabilities
                                                                           (               448)     (                            227)
           Net cash provided by operating activities
                                                                                      4,295,701                              328,713
Cash flows from investing activities
  Decrease (increase) in bills and bonds investments under resale
                                                                           (          1,216,715)                             263,483
   agreement
  Acquisition of property and equipment
                                                                           (               695)    (                           3,508)
  Increase in long-term investments under equity method
                                                                                              -    (                       1,500,000)
  Capital refund from financial assets carried at cost
                                                                                              -                               15,361
           Net cash provided by (used in) investing activities
                                                                           (          1,217,410)   (                       1,224,664)
Cash flows from financing activities
  Increase (decrease) in commercial paper payable – net
                                                                                       598,198     (                        325,481)
  (Decrease) increase in other borrowings
                                                                           (          3,675,000)                           1,150,000
  Treasury stock transactions
                                                                                              -                               66,310
            Net cash provided by (used in) financing activities
                                                                           (          3,076,802)                             890,829
Net increase in cash and cash equivalents
                                                                                          1,489    (                           5,122)
Cash and cash equivalents at beginning of period
                                                                                          6,549                                9,834
Cash and cash equivalents at end of period
                                                                           $              8,038     $                          4,712
Supplementary disclosure of cash flow information
  Payments of interest
                                                                           $            57,039      $                         44,959
  Payments of income tax
                                                                           $               858      $                            135




                                                              ~145~
         B. Fuhwa Bank and its subsidiaries

                                                               Fuhwa Commercial Bank and Its Subsidiaries
                                                                        Condensed Balance Sheets
                                                            For The Six Months Ended June 30, 2007 And 2006
                                                                   (Expressed In Thousands of Dollars)
                                                                                                LIABILITIES AND
                 ASSETS                                June 30, 2007       June 30, 2006        STOCKHOLDERS’EQUITY                  June 30, 2007       June 30, 2006
Cash and cash equivalents                          $       5,859,084   $       4,386,270   Due to Central Bank and other banks   $     20,659,888    $      33,541,229
Due from Central Bank and call loans to other             64,288,979          35,709,033   Financial liabilities at fair value          3,354,856            2,332,040
 banks                                                                                      through profit or loss
Financial assets at fair value through profit or          11,839,466          10,819,257   Bills and bonds investments under           10,290,457           16,133,057
 loss                                                                                       repurchase agreements
Bills and bonds investments under resale                     212,045           1,552,510   Payables                                    15,048,351            9,115,388
 agreements – net
Receivables – net                                         18,693,354          15,025,701   Deposits and remittances                   278,962,173          232,762,207
Bills discounted and loans – net                         228,154,376         227,960,673   Financial bonds payable                     12,166,000            7,366,000
Available-for-sale financial assets –net                  16,442,731          14,392,202   Other financial liabilities                     17,991               51,831
Held-to-maturity financial assets – net                    1,268,988                   -   Other liabilities                              735,532              131,102
Other financial assets- net                                1,473,675           2,925,845   Total liabilities                              290,508              348,401
Property and equipment                                     3,106,504           3,149,123                                              341,525,756          301,781,255
Intangible assets – software                               1,435,470           1,449,605   Common stocks                               18,000,000           18,000,000
Other assets                                               3,189,536           2,308,330   Additional paid-in capital                           -               14,673
                                                                                           Accumulated deficits                  (      3,357,570) (            41,803)
                                                                                           Other stockholders’ equity            (        206,779) (            78,412)
                                                                                           Minority interest                                2,801                2,836
                                                                                                Total stockholders’ equity             14,438,452           17,897,294
Total assets                                       $ 355,964,208       $     319,678,549   Total liabilities and stockholders’   $    355,964,208 $        319,678,549
                                                                                            equity




                                                                                   ~146~
                              Fuhwa Commercial Bank and Its Subsidiaries
                                   Condensed Statements Of Income
                          For The Six Months Ended June 30, 2007 And 2006
                                (Expressed In Thousands of Dollars)
                                                            For the six months ended June 30
                     Accounts                                  2007                    2006
Net interest income                                  $            2,877,776    $         2,997,589
Other non-interest income                                         1,082,447                661,737
Net revenue                                                       3,960,223              3,659,326
Bad debts expenses                                  (             1,018,651) (           2,276,638)
Operating expenses                                  (             2,426,730) (           2,106,592)
Net income (loss) before income tax expense                         514,842 (              723,904)
Income tax benefit (expense)                                        141,209 (                  66,406)
Net income (loss) after income tax expense                          656,051 (              790,310)
Cumulative effect of changes in accounting                                 -                   11,158
principle
Net income (loss)                                    $              656,051 ($             779,152)



Earnings per share
   Continued operating income (loss) before tax      $                  0.29 ($                  0.40)

   Continued operating income (loss) after tax       $                  0.36 ($                  0.44)

   Cumulative effect of changes in accounting        $                     -   $                 0.01
     principles (after tax)
   Net income (loss) (after tax)                     $                  0.36 ($                  0.43)




                                                 ~147~
               C. Yuanta Core Pacific Securities and Its Subsidiaries

                                                             Yuanta Core Pacific Securities and Its Subsidiaries
                                                                       Condensed Balance Sheets
                                                                         June 30, 2007 And 2006
                                                                   (Expressed In Thousands of Dollars)
                                                                                                   LIABILITIES AND
                    ASSETS                   June 30, 2007          June 30, 2006           STOCKHOLDERS’EQUITY                  June 30, 2007         June 30, 2006
Current assets                           $        110,381,808   $        115,941,135   Current liabilities                   $        68,091,381   $        77,230,374
Funds and investments                              11,836,770              9,940,802   Other liabilities                               1,040,065               935,584
Property and equipment                              7,144,720              6,920,462     Total liabilities                            69,131,446            78,165,958
Intangible assets                                       7,828                  8,205   Common stocks                                  31,890,730            31,898,730
Other assets                                        5,088,703              5,291,728   Additional paid-in capital                     16,841,846            16,841,988
Credit items for securities - net                     190,060                451,042   Retained earnings                              15,871,291            11,619,246
                                                                                       Other stockholders’ equity                        914,576                27,452
                                                                                       Total stockholders’ equity                     65,518,443            60,387,416
Total assets                             $        134,649,889   $        138,553,374   Total liabilities and stockholders’   $       134,649,889   $       138,553,374
                                                                                        equity




                                                                             ~148~
                     Yuanta Core Pacific Securities and Its Subsidiaries
                             Condensed Statements of Income
                    For The Six Months Ended June 30, 2007 And 2006
                           (Expressed In Thousands of Dollars)
                                                     For the six months ended June 30,
                                                          2007                  2006

Revenues                                           $     10,399,238     $        7,430,686
Expenses                                       (          5,286,648)   (         4,486,963)
Net income before income tax expense                      5,112,590              2,943,723
Income tax expenses                            (            190,705)   (         1,035,254)
Net income after income tax expense                       4,921,885              1,908,469
Cumulative effect of changes in accounting                        -                 88,635
Net income                                         $      4,921,885    $         1,997,104


Earnings per share
   Continued operating income before tax           $            1.57   $                 0.89
   Continued operating after tax                   $            1.55   $                 0.60
  Cumulative effect of changes in                  $               -   $                 0.03
     accounting principles
Net income (after tax)                             $            1.55   $                 0.63




                                             ~149~
               D. Fuhwa Securities and its subsidiaries

                                                              Fuhwa Securities And Its Subsidiaries
                                                                   Condensed Balance sheets
                                                                     June 30, 2007 and 2006
                                                              (Expressed In Thousands of Dollars)
                                                                                     LIABILITIES AND
           ASSETS                June 30, 2007                 June 30, 2006    STOCKHOLDERS’EQUITY             June 30, 2007         June 30, 2006
Current assets                 $      22,712,627          $        29,772,849 Current liabilities        $          15,038,585    $       22,795,315
Funds and investments                  1,236,019                    1,245,229 Other liabilities                        615,507               566,169
Property and equipment                 1,037,068                    1,053,713    Total liabilities                  15,654,092            23,361,484
Intangible assets                        403,781                      471,154 Common stocks                         10,402,938            10,402,938
Other assets                           1,452,384                    1,688,059 Additional paid-in capital                 83,786                83,786
Credit items for                          45,855                        21,543 Retained earnings                       799,481               379,279
securities – net
consignment trading - net
                                                                               Other stockholders’ equity   (           52,563)               25,060
                                                                             Total stockholders’ equity             11,233,642            10,891,063
Total assets                   $       26,887,734         $       34,252,547 Total liabilities and          $       26,887,734    $       34,252,547
                                                                              stockholders’ equity




                                                                       ~150~
                        Fuhwa Securities And Its Subsidiaries
                           Condensed Statements of Income
                  For The Six Months Ended June 30, 2007 And 2006
                         (Expressed In Thousands of Dollars)
                                             For the six months ended June 30,
                                                   2007                 2006

Revenues                                $           2,559,959    $       2,421,175

Expenses                                (           1,887,547) (         2,020,074)

Net income before income tax                          672,412              401,101
expense
Income tax expenses                     (              78,242) (           136,071)

Net income after income tax expense                   594,170              265,030

Cumulative effect of changes in                              -             113,682
 accounting
Net income                              $             594,170    $         378,712



Earnings per share

 Continued operating income before      $                0.65    $               0.42
  tax
 Continued operating income after       $                0.57    $               0.27
  tax
 Cumulative effect of changes in        $                    -   $               0.12
  accounting principles
Net income (after tax)                  $                0.57    $               0.39




                                      ~151~
          E. Other subsidiaries

                                                          Condensed Balance Sheets
                                                            June 30, 2007 and 2006
                                                      (Expressed In Thousands of Dollars)

                                                                            LIABILITIES AND
          ASSETS                  June 30, 2007       June 30, 2006      STOCKHOLDERS’EQUITY           June 30, 2007        June 30, 2006
Current assets                $        48,907,022 $       40,260,867 Current liabilities           $        42,373,145 $          33,645,729
Funds and investments                  17,386,217          9,586,153 Long-term liabilities                   7,516,821                 3,305
Property and equipment                  1,545,336          1,059,064 Other liabilities                         168,735               153,580
Intangible assets                          16,931              1,770   Total liabilities                    50,058,701            33,802,614
Other assets                             1,296,573         2,802,468 Common stocks                          11,221,080            12,200,000
Credit items for securities                                          Additional paid-in capital                 36,462                25,693
 - net
                                                                      Retained earnings                       7,788,303             7,718,237
                                                                      Other stockholders’ equity                 47,533 (              36,222)
                                                                      Total stockholders’ equity            19,093,378            19,907,708
Total assets                  $        69,152,079 $       53,710,322 Total liabilities and         $        69,152,079 $          53,710,322
                                                                      stockholders’ equity




                                                                 ~152~
                                       Condensed Statements of Income
                                For the six months ended June 30, 2007 and 2006
                                      (Expressed In Thousands of Dollars)
                                                                  For the six months ended June 30,
                                                                  2007                       2006
Operating revenues                                    $                   328,638      $              1,422,942
Operating costs                                      (                    101,029) (                   471,881)
Net operating revenues                                                    227,609                      951,061
Operating expenses                                   (                    192,846) (                   281,472)
Non-operating revenues and gains                                         1,722,931                     246,632
Non-operating expenses and losses                    (                    469,510) (                   198,250)
Net income before income tax                          $                  1,288,184     $               717,971
Net income after income tax                           $                  1,013,722     $               595,027


Continued operating income before tax                 $                       1.15     $                   0.59
Continued operating after tax                         $                       0.90     $                   0.49
Cumulative effect of changes in accounting            $                          -     $                      -
  principles
Net income (after tax)                                $                       0.90     $                   0.49




                                                          ~153~
(11) Profitability, asset quality, management information, and liquidity and market
     risk sensitivity of subsidiaries:

    Fuhwa Bank

    A. Profitability

                                                                For the six
                                                           months ended June 30,
                                                             2007          2006
    Return on total assets (%)         Before tax              0.15    (     0.23)
                                       After tax               0.19    (     0.25)
    Return on stockholders’ equity (%) Before tax              3.63    (     3.95)
                                       After tax               4.62    (     4.26)
    Net profit margin ratio (%)                               16.57    (    21.29)

    Note 1: Return on total assets = Income before (after) income tax/average total
            assets.

    Note 2: Return on stockholders’ equity = Income before (after) income tax /
            average stockholders’ equity.

    Note 3: Net profit margin ratio = Income after income tax / total operating
            revenues.

    Note 4: The term “Income before (after) income tax” represents net income
           from January 1 to the balance sheet date of the reporting period.




                                   ~154~
               B.         Non-performing loans and non-performing loan asset quality

                                                                                                                                              Unit: thousands of New Taiwan dollars, %
Month / Year                                                              June 30, 2007                                                                   June 20, 2006
                                           Amount of        Gross loans    Non-performing   Allowance       Coverage       Amount of        Gross loans    Non-performing   Allowance       Coverage
                                                                           loan ratio (%)                                                                  loan ratio (%)
Business / Items                           non-performing                                   for doubtful    ratio    (%)   non-performing                                   for doubtful    ratio (%)
                                                                           (Note2)
                                           loans (Note1)                                    accounts        (Note 3)       loans                                            accounts
Corporate      Secured loans                   900,456       55,917,979         1.61%           656,575        72.92%          982,760       40,508,551         2.43%          244,720          24.90%
Banking        Unsecured loans                 415,040       66,332,281         0.63%         1,075,990       259.25%          508,168       64,205,450         0.79%          356,899          70.23%
Consumer       Residential mortgage          1,016,727       73,315,131         1.39%           370,200        36.41%        1,447,442       87,360,858         1.66%          358,860          24.79%
banking         loans (Note 4)
               Cash card services                      -            136         0.00%                  65       0.00%                 432       19,206          2.25%               190         43.98%
               Small      amount      of     1,381,232       18,560,979         7.44%         1,628,892       117.93%        2,124,622       26,892,140         7.90%          864,152          40.67%
               credit loans (Note 5)
               Others       Secured            462,811       17,728,827         2.61%            22,466         4.85%          171,201       10,594,780         1.62%             7,078          4.13%
               (Note 6)     loans
                            Unsecured            1,913           55,144         3.47%              1,913      100.00%                 741      214,802          0.34%             3,215       433.87%
                            loans
Gross loan business                          4,178,179      231,910,477         1.80%         3,756,101        89.90%        5,235,366      229,795,787         2.28%        1,835,114          35.05%
                                           Amount of        Balance of    Overdue           Allowance       Coverage       Amount of        Balance of    Overdue           Allowance       Coverage
                                           overdue          accounts      account ratio     for doubtful    ratio          overdue          accounts      account ratio     for doubtful    ratio
                                           accounts         receivable    (%)               accounts                       accounts         receivable    (%)               accounts
Credit card services                            63,450        3,031,090         2.09%           190,281       299.89%          197,436        4,239,150         4.66%          381,388        193.17%
Without recourse factoring (Note 7)                    -      4,369,393             -                  -            -                   -     3,478,278                                 -               -
Note 1:The amount recognized as non-performing loans is in compliance with the “Regulation Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with
       Non-performing/Non-accrual Loans”. The amount included in overdue accounts for credit cards is in compliance with the Banking Bureau (4) Letter No.0944000378 dated
       July 6, 2005.

Note 2:Non-performing loan ratio=non-performing loans/gross loans. Overdue account ratio for credit cards=overdue accounts/balance of accounts receivable.

Note 3:Coverage ratio for loans=allowance for doubtful accounts of loans/non-performing loans. Coverage ratio for accounts receivable of credit cards=allowance for doubtful
       accounts for accounts receivable of credit cards/overdue accounts.




                                                                                            ~155~
Note 4: For residential mortgage loans for the six months ended June 30, 2007. The borrower provides his/her (or spouses) house as collateral in full and mortgages it to the
         financial institution for the purpose of obtaining funds to purchase or add improvements to a house. Besides, due to limited to summarized the information, the amount
         includes all residential mortgage loans for the six months ended June 30, 2006.

Note 5: Small amount of credit loans apply to the norms of the Banking Bureau (4) Letter No. 09440010950 dated December 19, 2005, excluding credit card and cash card
         services.

Note 6: Other consumer banking is specified as secured or unsecured consumer loans other than residential mortgage loan, cash card services and small amount of credit loans, and
        excluding credit card services.

Note 7: Pursuant to the Banking Bureau (5) Letter No. 094000494 dated July 19, 2005, the amount of without recourse factoring will be recognized as overdue accounts within
        three months after the factor or insurance company resolves not to compensate the loss.




                                                                                   ~156~
C. Loan assets quality

                                  Expressed In Thousands of New Taiwan Dollars (%)
                                  June 30, 2007
 Items                          Amount        Non-performing loans/gross loans (%)
 Non-performing loans A       $ 3,100,256                   1.34%
 Non-performing loans B         1,077,923                   0.46%
 Gross non-performing loans     4,178,179                   1.80%
                                  June 30, 2006
 Non-performing loans A       $ 4,435,936                   1.93%
 Non-performing loans B           799,430                   0.35%
 Gross non-performing loans     5,235,366                   2.28%

Note 1: The amount recognized as non-performing loans (NPLs) is in
        compliance with the“Regulations Governing the Procedures for
        Banking Institutions to     Evaluate Assets and Deal with
        Non-performing / Non-accrual Loans”.

Note 2: Definitions of non-performing loans A and non-performing loans
        B are according to the Banking Bureau (1) Letter No.0941000251
        dated April 19, 2005.

Note 3: Non-performing loan ratio = non-performing loans / gross loans




                              ~157~
D. Contract amounts of significant credit risk concentration are as follows:

                                  June 30, 2007
                                                               Total outstanding
 Ranking    Name of Enterprise Group Total outstanding         loan amount / net
 (Note 1)   (Note 2)                 loan amount               worth of the
                                     (Note 3)                  Current Year (%)
    1       HALSHI LIHWA Co., Ltd.        $       2,390,254         16.42%
    2       Formosa Plastic Group                 1,709,367         11.74%
    3       CHIMEI Group                          1,705,030         11.71%
    4       Uni-President Group                   1,588,937         10.91%
    5       Ben Q                                 1,459,954         10.03%
    6       E-United Group                        1,294,547          8.89%
    7       Auto 21                               1,022,845          7.03%
    8       Tainan Spinning Co., Ltd              1,017,376          6.99%
    9       Evergreen Group                         858,962          5.90%
    10      Tatung Co., Ltd                         839,037          5.76%

Note1: Ranking the top ten enterprise groups other than government and
       government enterprise according to their total outstanding loan amount.
       While, if the total loan amount for the top ten enterprise groups does not
       reach 5% of the bank’s net worth, this table is exempt.

Note 2: Definition of enterprise group is based on the Article 6 of Supplementary
        Provisions to the Taiwan Stock Exchange Corporation Rules for Review of
        Securities Listings.

Note 3: Total outstanding loan amount is the sum of balances of all types of loans
        (including import negotiation, export negotiation, forfeiting, overdraft,
        short-term unsecured loan, short-term secured loan, margin loans receivable,
        medium-term unsecured loan, medium-term secured loan, long-term
        unsecured loan, long-term secured loan and overdue loan), purchases in
        remittances, without recourse factoring, acceptance receivable and
        guarantees.




                                    ~158~
E. Structure analysis of time to maturity

                                                                June 30, 2007

                                                                                           (Expressed in Thousands of New Taiwan Dollars)

                                              0~30 days         31~90 days      91~180 days       181 days ~ 1 year   Over 1 year         Total
    Primary funds inflow upon maturity        44,945,719         23,320,223       24,415,635           33,359,974      209,388,245       335,429,796
    Primary funds outflow upon maturity       41,560,056         23,301,033       45,325,695           96,333,195      133,753,599       340,273,578
    Gap                                        3,385,663             19,190   (   20,910,060)   (      62,973,221)      75,634,646   (     4,843,782)



                                                                June 30, 2007

                                                                                                        (Expressed in Thousands of US Dollars)

                                              0~30 days         31~90 days      91~180 days      181 days ~ 1 year    Over 1 year        Total
    Primary funds inflow upon maturity           582,246           202,173          102,185               72,184           197,035        1,155,823
    Primary funds outflow upon maturity          732,645           289,105           38,398               58,696             3,797        1,122,641
    Gap                                   (      150,399)   (       86,932)          63,787               13,488           193,238            33,182

    Note: The amounts listed above represent the funds denominated in NT dollars only (i.e., excluding foreign currency) for
          both Head Office and domestic branches.




                                                                   ~159~
                                                                 June 30, 2006

                                                                                       (Expressed in Thousands of New Taiwan Dollars)

                                         0~30 days          31~90 days         91~180 days      181 days ~ 1 year   Over 1 year          Total
Primary fund inflow upon maturity         45,071,000         16,656,000           18,307,000          11,567,000     204,224,000       295,825,000
Primary fund outflow upon maturity        54,295,000         46,014,000           56,294,000         118,846,000     114,346,000       389,795,000
Gap                                  (     9,224,000)   (    29,358,000)   (      37,987,000) (      107,279,000)     89,878,000   (    93,970,000)



                                                                 June 30, 2006

                                                                                                   (Expressed in Thousands of US Dollars)

                                         0~30 days          31~90 days         91~180 days      181 days ~ 1 year   Over 1 year          Total
Primary fund inflow upon maturity           289,137            202,748            186,178                54,756          246,091           978,910
Primary fund outflow upon maturity          721,940            143,436             34,773                35,804            4,027           939,980
Gap                                  (      432,803)            59,312            151,405                18,952          242,064            38,930

Note: The amounts listed above represent the funds denominated in NT dollars only (i.e., excluding foreign currency) for both
      head office and domestic branches.




                                                               ~160~
  F. Sensitivity analysis of interest rate for assets and liabilities

                                             Sensitivity analysis of interest rate for assets and liabilities (NTD)

                                                                              June 30, 2007
                                                                                                       (Expressed in Thousands of New Taiwan Dollars, %)


                Items                           1~90 days                    91~180 days           181 days ~1 year      Over 1 year           Total
Interest-rate-sensitive assets                      153,137,485                     22,209,112            21,135,200          95,558,641       292,040,438
Interest-rate-sensitive liabilities                 122,465,487                    119,298,115            38,414,108          13,376,554       293,554,264
Interest-rate-sensitive gap                          30,671,998 (                   97,089,003 ) (        17,278,908 )        82,182,087   (      1,513,826)
Total stockholders’ equity                                                                                                                      14,438,452
Ratio of interest-rate-sensitive assets to interest-rate-sensitive liabilities (%)                                                                   99.48%
Ratio of interest-rate-sensitive gap to stockholders’ equity (%)                                                                                   -10.48%

Note: The amounts listed above represent the items denominated in NT dollars (i.e., excluding foreign currency) for both Head
      Office and domestic branches and overseas branches.




                                                                           ~161~
                                              Sensitivity analysis of interest rate for assets and liabilities (USD)

                                                                               June 30, 2007

                                                                                                                (Expressed in thousands of US dollars, %)


                 Items                           1~90 days                   91~180 days       181 days ~1 year      Over 1 year            Total
Interest-rate-sensitive assets                           255,047                      94,591               90,256           259,290                 699,184
Interest-rate-sensitive liabilities                      635,250                      36,446               56,985                 -                 728,681
Interest-rate-sensitive gap                 (            380,203)                     58,145               33,271           259,290   (              29,497)
Total stockholders’ equity                                                                                                                             9,911
Ratio of interest-rate-sensitive assets to interest-rate-sensitive liabilities (%)                                                                  95.95%
Ratio of interest-rate-sensitive gap to stockholders’ equity (%)                                                                                     -2.98%

Note: The amounts listed above represent the items denominated in US dollars for head office, domestic branches, OBU, and
      overseas branches, excluding contingent assets and contingent liabilities.




                                                                             ~162~
                                              Sensitivity analysis of interest rate for assets and liabilities (NTD)

                                                                                June 30, 2006

                                                                                                            (Expressed in Thousands of New Taiwan Dollars, %)


                  Items                            1~90 days                    91~180 days          181 days ~1 year       Over 1 year           Total
Interest-rate-sensitive assets                         151,820,000                   14,648,000               9,406,000          87,496,000       263,370,000
Interest-rate-sensitive liabilities                    130,876,000                   95,534,000             28,652,000           11,430,000       266,492,000
Interest-rate-sensitive gap                             20,944,000 (                 80,886,000)   (        19,246,000 )         76,066,000   (      3,122,000)
Total stockholders’ equity                                                                                                                         17,747,000
Ratio of interest-rate-sensitive assets to interest-rate-sensitive liabilities (%)                                                                      98.83%
Ratio of interest-rate-sensitive gap to stockholders’ equity (%)                                                                                      -17.59%

Note: The amounts listed above represent the items denominated in NT dollars (i.e., excluding foreign currency) for both head Office
      and domestic branches and overseas branches.

                                              Sensitivity analysis of interest rate for assets and liabilities (USD)

                                                                                June 30, 2006

                                                                                                            (Expressed in Thousands of New Taiwan Dollars, %)


                  Items                            1~90 days                    91~180 days          181 days ~1 year       Over 1 year           Total
Interest-rate-sensitive assets                             206,170                      142,937                  54,392             243,444            646,943
Interest-rate-sensitive liabilities                        547,519                       15,906                   4,978                   -            568,403
Interest-rate-sensitive gap                  (             341,349)                     127,031                  49,414             243,344             78,540
Total stockholders’ equity                                                                                                                               4,000
Ratio of interest-rate-sensitive assets to interest-rate-sensitive liabilities (%)                                                                    113.82%
Ratio of interest-rate-sensitive gap to stockholders’ equity (%)                                                                                     1,963.5%

Note: The amounts listed above represent the items denominated in US dollars for head office, domestic branches, OBU, and
      overseas branches, excluding contingent assets and contingent liabilities.

                                                                              ~163~
  (12) Information with respect to the subsidiary holding the capital stock of parent company:

         Please refer to Note 1(10) for details.

  (13) Presentation of financial statements

        Certain accounts of the consolidated financial statements for the six months ended June 30, 2006 have been reclassified to
        conform to the presentation of the consolidated financial statements for the six months ended June 30, 2007.



11. Other Disclosure Items

  (1) Related information on material transaction items:

       A. Information regarding stock of long-term equity investment for which the purchase or sale amount for the period
          exceeded NT$300 million or 10% of the Bank's paid-in capital:

     Name of      Category and    Account      Name       Relation    Beginning balance               Addition                          Deduction                      Ending balance
     company        name of        name         of         -ship
      which         securities                 counter               Number      Amount        Number        Amount     Number      Proceeds    Cost    Gains/     Number       Amount
    purchases /                                 -party               of shares                of shares                 of shares                per    loss on    of shares
    disposes of                                                                                                                                 book    disposal
     securities
    Fuhwa         Stocks          Long-term           -          -          -    $        -   3,189,073   $70,353,820   -           $     -    $    -   $     -    3,189,073   $65,898,270
     Financial                   investments
     Holding      Yuanta Core      under
                   Pacific         equity
                   Securities      method




                                                                                 ~164~
B. Information on the acquisition and disposal of real estate for which the purchase amount exceeded NT$300 million or 10% of the
   Bank's paid-in capital: none.

C. Information regarding discounted processing fees on transactions with related parties for which the amount exceeded NT$5 million:
   none.

D. Information regarding discounted processing fees on transactions with related parties for which the amount exceeded NT$5
   million:

                                                          Accounts
       The company                                                                           Amount overdue           Accounts
                                                       receivable from                                                                  Amount of
      listed accounts   Counterparty   Relationship                         Turnover rate                         receivable from
                                                       related party at                                                                 allowance
         receivable                                                                         Amount   Disposure      related party
                                                        Mar. 31, 2007
    Fuhwa Financial     Fuhwa          Subsidiary of
    Holding             Securities     the Fuhwa         $ 744,432                      -        -            -                     -               -
                        Co., Ltd.      Group               (Note)

    Note: Income tax receivable was calculated under combined corporate income tax return filing with related parties.

E. Information regarding selling non-performing loans: None.

F. Information on and categories of securitized assets which are approved by the authority pursuant to Financial Asset Securitization
   Act or the Real Estate Securitization Act: none.

G. Other material transaction items which were significant to the users of the financial statement: non




                                                                          ~165~
(2) Supplementary disclosure regarding investee companies:

    Supplementary disclosure regarding investee companies

                                                                                                                      In thousand NT dollars / US dollar
                                                                                                              Share ownerships of the Company and related parties (Note1)
                                                              Percentage
                                                                                                                                                         Total
                                                              of
                                                              ownership                                                       Pro-forma                       Percentage
                                                              at the                                                          share of                        of
                                                  Main        period end                      Investment      Shares (In      ownership        Shares (In     ownership
        Investee              Address           service       (%)           Book value        income / loss   thousands)      (Note 2)         thousands)     (%)
   Yuanta Core Pacific 14F, No.225, Sec.     Securities           100         65,898,270          2,900,817       3,189,073                -     3,189,073       100
   Securities Co., Ltd. 3, Nanjin E. Rd.     brokerage,
                        Taipei City,         dealing and
                        Taiwan (R.O.C)       underwriting
   Fuhwa                1,2,3,7F.,No.4,      Banking            100              14,435,650        655,916        1,800,000                -     1,800,000       100
   Commercial Bank      Sec.1, Jhongsiao
   Co., Ltd.            W.Rd., Jhongjheng
                        District, Taipei
                        City, Taiwan
                        (R.O.C)
   Fuhwa Securities     4-1, 4F., No.1,      Stock              100              11,226,366        589,177        1,040,294                -    1,040,294        100
   Co., Ltd. (Note 2)   Nanhai Rd.,          brokerage
                        Jhongjheng
                        District, Taipei
                        City, Taiwan
                        (R.O.C)
   Fuhwa Securities     5F., No.4, Sec, 1,   Securities         100              15,769,182        434,184          800,000                -      800,000        100
    Finance Co., Ltd. Jhongjheng W.Rd.,      financing,
    (Note 2)            Taipei City,         refinancing to
                        Taiwan (R.O.C)       securities
                                             firms
   Fuhwa Asset         8F., No.4, Sec. 1,    Management         100               1,063,728         45,261          100,000                -      100,000        100
   Management Co.,     Jhongsiao W. Rd.,     of monetary
   Ltd.                Jhongjheng            debts of
                       District, Taipei      financial
                       City,                 institutions




                                                                           166
                    Taiwan(R.O.C)
Fuhwa Venture       8F., No.4, Sec. 1,    Venture capital    100          1,025,712         3,751    100,000   -   100,000        100
Capital Co., Ltd.   Jhongsiao W. Rd.,     business
                    Jhongjheng
                    District, Taipei
                    City,
                    Taiwan(R.O.C)
Fuhwa Futures       4F, No.4, Sec. 1,     Futures            100           949,900         29,865     80,000   -    80,000        100
Co., Ltd.           Jhongsiao W. Rd.,     brokerage,
                    Jhongjheng            futures
                    District, Taipei,     trading and
                    City,                 clearing
                    Taiwan(R.O.C)
Fuhwa Securities    8F., No.4, Sec. 1,    Securities         100           358,965    (   219,628)    32,108   -    32,108        100
Investment Trust    Jhongsiao W. Rd.,     investment
Co., Ltd.           Jhongjheng            trust
                    District, Taipei,     fund-related
                    Taiwan(R.O.C)         business
Fuhwa Capital       10F., No.4, Sec. 1,   Issuing           99.99           64,986          1,152      4,999   -     4,999       99.99
Management Co.,     Jhongsiao W. RD.,     publications
Ltd.                Jhongjheng            related to
                    District, Taipei,     securities
                    Taiwan(R.O.C)         investment
                                          and providing
                                          consultations.
Fuhwa Finance       8F., No.4, Sec. 1,    Investment         100            52,335           617       5,000   -     5,000        100
Consulting Co.,     Jhongsiao W. RD.,     consulting,
Ltd.                Jhongjheng            corporation
                    District, Taipei,     operation and
                    Taiwan(R.O.C)         management
                                          consulting
Fuhwa Leasing       5F, No. 4, Sec. 1,    Purchase,         98.56          115,426          1,911     19,700   -    19,700       98.56
Co., Ltd.           Jhongsiao W. Rd.,     sale, and lease
                    Jhongjheng            of various real
                    District, Taipei,     estate and
                    Taiwan(R.O.C)         movable
                                          properties
Fuhwa Property      3F-1, No. 40, Sec.    Property            80             4,450           534           -   -             -    100
Insurance Agency    2, Dunhua S. Rd.,     insurance
Co., Ltd.           Taipei City,          agent
                    Taiwan(R.O.C)




                                                                    167
Fuhwa Life                            Life insurance   99.99           27,355         16,758              -             100
Insurance Agency             〃        agent                                                        300           300
Co., Ltd.
Yuanta Futures       R.O.C            Futures           100          1,259,373       108,307              -             100
                                                                                                 80,000        80,000
Co., Ltd.                             business
Yuanta Core          R.O.C            Securities        100           326,739          4,785              -             100
Pacific Securities                    investment
Capital                               consultations                                              30,000        30,000
Management Co.,
Ltd.
Yuanta Core          Bermuda          Investment        100          9,947,510       565,190              -             100
Pacific Securities                    holding
                                                                                                164,670       164,670
Asia Finance Co.,
Ltd.
Yuanta Core          R.O.C            Insurance         100             7,340          1,172              -             100
Pacific Insurance                     agent                                                        500           500
Agency Co., Ltd.
Yuanta Core          R.O.C            Investment       83.19                                              -              83
Pacific Securities                    trust
                                                                     2,714,626       139,344     51,523        51,523
Investment Trust
Co., Ltd.
Yuanta Futures       R.O.C            Futures           100                                               -             100
Management Co.,                       management                      171,653    (     2,323)    20,000        20,000
Ltd.                                  business
Din Hwa              British Virgin   Investments        50                                               -              50
Securities           Islands          business
Investment                                                             27,625          4,114       500           500
Management Co.,
Ltd.
Yuanta Core          Hong Kong        Securities        100                                               -             100
Pacific Securities                    brokerage,
                                                                     1,357,047   (    31,182)   318,133       318,133
(H.K) Co., Ltd.                       dealing and
(Note 3)                              underwriting
Kim Eng Finance      Singapore        Securities       28.63                                              -              29
Pte. Ltd.                             brokerage,
                                                                     5,647,217       586,937    168,477       168,477
                                      dealing and
                                      underwriting
Grand Asia Capital   Singapore        Property          100                                               -             100
Services Pte. Ltd.                    management                        3,482           154        100           100
                                      consultations
Fuhwa                Tropic Isle      Investment        100           593,805         16,488     18,700   -    18,700   100




                                                               168
Holding(BVI) Co.,   Building,             holding
Ltd.                P.O.BOX,438,
                    Road Town,
                    Tortola British
                    Virgin Islands
Fuhwa Futures       10F., No.4, Sec. 1,   Futures            -               -     347            -           -           -         -
Management Co.,     Jhongsiao W. Rd.,     management
Ltd.                Jhongjheng
                    District, Taipei
                    City,
                    Taiwan(R.O.C)
Fuhwa               Room 1505,            Securities       100         603,877   15,555      18,500           -      18,500    100
Securities(H.K.)    Tongning Building,    brokerage,
Co., Ltd.           No.2 Xili St.         dealing,
                    Zhonghuan Hong        underwriting
                    Kong                  and investment
                                          consultation
Fuhwa 1 Venture     12F., No.333, Sec.    Venture           97         996,681    4,373      97,000           -      97,000    97
Capital Co., Ltd.   1, Gilong Rd.,        capital
                    Taipei City,          business
                    Taiwan(R.O.C)


   Note 1: Common stocks or pro-forma of the Company, directors, supervisors, general managers, vice general manager and
          investee companies conforming with Company Law shall be included.

   Note 2: (a) Pro-forma share of ownership refers to equity marketable securities or derivative instrument contracts (not yet
               transferred to ownership of shares).

              (b)”Equity marketable securities” are marketable securities stipulated in Paragraph 1, Article 11 of Securities and
                 Exchange Law Enforcement Rules, eg: convertible corporation bonds or warrants.

              (c) “Derivative instrument contracts” are derivative instruments met the definition stipulated in SFAS. No.34, eg:
                 stock options.

   Note 3: Original name was Core Pacific International Co., Ltd.




                                                                 169
             (3) Significant transactions regarding investee companies

                    A. Information regarding stock of long-term equity investment for which the purchase or sale amount for the period
                       exceeded NT$300 million or 10% of the Bank's paid-in capital:

                                                                       Beginning balance              Acquisition                                    Sell                               Ending balance

             Category and                Transaction                                                                                                                       Gain /
               name of       Account      counter-                    Number                   Number                          Number                       Book          loss on    Number
 Acquirer      securities      name         party      Relationship   of shares    Amount     of shares           Amount       of shares    Amount          value     disposure      of shares   Amount
Fuhwa        Beneficiaries
Securities   certificates
Investment
Trust Co.,
Ltd
             Fuhwa Bond      Financial        -        The              15,642    $ 200,000         31,239    $      400,000     46,881    $ 601,402    $ 600,000     $      1,402          -    $        -
                             assets at                 management
             Fund            fair                      company
                             value                     was an
                             through                   affiliated
                             profit or                 company
                             loss-                     controlled
                             current                   by
                                                       the same
                                                       company as
                                                       the
                                                       Company
             The First                        -                         34,248      500,000               -                -     34,248      500,175        500,000            175          -             -
             Global
             Investment
             Trust Duo
             Li-2 Bond
             Fund
             The First                        -                         28,745      400,000         35,821           500,175     64,566      902,436        900,175          2,261          -             -
             Global
             Investment
             Trust Wan
             Tai Bond
             Fund




                                                                                              170
                                                                  Beginning balance                 Acquisition                                  Sell                                 Ending balance

           Category and             Transaction                                                                                                                          Gain /
             name of      Account    counter-                    Number                     Number                          Number                       Book           loss on    Number
Acquirer     securities    name        party      Relationship   of shares    Amount       of shares        Amount          of shares   Amount           value      disposure      of shares   Amount
           Listed stock
           Capital                       -                                -            -          30,788          474,632        300       4,945           4,567             378   30,488        470,065
           Securities
           Dealing
           bonds:
           A95106                        -                        100,000      99,024            300,000          296,968    400,000     396,466         395,992             474          -             -
           A94103                        -                                -            -     1,200,000        1,191,772     1,200,000   1,173,403       1,191,772   (    18,369)          -             -




                                                                                           171
B. Information on the acquisition or disposure of real estate for which the purchase amount exceeded NT$300 million or
   10% of the Bank's paid-in capital: none.

C. Information regarding discounted processing fees on transactions with related parties for which the amount exceeded
   NT$5 million: none.

D. Information regarding discounted processing fees on transactions with related parties for which the amount exceeded
   NT$5 million:

       The company          Counterparty    Relationship        Accounts         Turnover rate     Amount overdue                Accounts         Amount of
      listed accounts                                        receivable from                                                 receivable form      allowance
         receivable                                          related party at                    Amount        Disposure       related party
                                                              Mar. 31, 2007
    Fuhwa                   Fuhwa              Parent
    Commercial Bank         Financial         Company          $ 556,994                     -             -           -                   -                    -
                            Holding                              (Note)
   Note: Income tax refundable arising from filing consolidated income tax returns has been write-offs.

E. Information regarding selling non-performing loans: None.

    Transaction         Counterparty    Contents of right   Carry value     Sales price      Gain (Loss)         Attached               Relationship with the
      date                               of claim (Note                                       from Disposal       conditions (Note       Company (Note 4)
                                         1)                 (Note 2)                                              3)

    June 11, 2007       China Mental    Enterprise -
                         Products        Agreement and
                                         doubtful debt        325,393           516,800          184,767                   None                  None



     Note 1: For contents of right of claim, please describe the types of claim, for example, claims to credit cards, cash cards,
             residential mortgage loans and accounts receivable, etc.




                                                                          172
     Note 2: Carrying value is the difference of initial claim amount $332,033 minus allowance for doubtful accounts
            $6,640. Gain (loss) from disposal is the difference of sales price $516,800 minus initial claim amount
            $332,033.

     Note 3: In case of attached conditions, please disclose the contents of attached conditions, for example, profit-sharing
             term, repurchase or resale agreement.

     Note 4: Please record the types of related parties in accordance with the R.O.C. SFAS No. 6 and describe the facts of
             relationship judgment for substantial related parties.

    Note 5: Please make note on the table in relation to the detailed transaction information on selling non-performing
            loans for related parties. Please refer to table I for related party transaction (4).

F. Information on and categories of securitized assets which are approved by the authority pursuant to Financial Asset
   Securitization Act or the Real Estate Securitization Act: please refer to Note 4 (32) for details.

G. Other material transaction items which were significant to the users of the financial statement: none.




                                                        173
H. Funds lent to others:

   Fuhwa Bank engages in the loan and credit business regulated by the Banking Law and is classified as a financial service industry.
   Thus, the disclosure requirement is not applicable. Yuanta Core Pacific Securities, Fuhwa Securities and Fuhwa Investment Trust
   Securities classified as a securities firms, does not lend funds to others except that engages in the margin loan and stock loan
   business.

   Fuhwa Futures, Fuhwa Securities Investment Trust, Fuhwa Capital Management, Fuhwa Venture Capital, Fuhwa Asset
   Management and Fuhwa Finance Capital : none.

   Lending company     Borrower      Account    Maximum      Ending     Interest rate     Characteristi    Amount    Reason for   Provisi    Collateral   Fund lent    Total limit of
                                                balance at   balance                      c of fund lent             short-term   on for                   to others   funds lent to
                                                 current                                  to others                    loans      credit                                  others
                                                 period                                                                           loss
                      Yuanta
                      Core         Receivable
  Yuanta Securities                                                                       Short-term                Operation
                      Pacific      – related    $798,720     $788,690   Not accrued.                            -                        -          -     $9,947,510   $13,061,676
  Asia Finance                                                                            loans                     financing
                      Securities   party
                      (H.K)

   Note: Funds lent to others are not more than borrowers’ net value, total lending amounts are more than 20% of parent company’s net value.

I. Endorsements and guarantees provided for others:

   Fuhwa Bank engages in guarantee business regulated by the Banking Law and is classified as a financial service industry, so the
   disclosure requirement is not applicable.

   Fuhwa Securities Finance, Fuhwa Securities, Yuanta Core Pacific Securities, Fuhwa Futures, Fuhwa Securities Investment Trust,
   Fuhwa Capital Management, Fuhwa Venture Capital, Fuhwa Asset Management and Fuhwa Finance Capital : none.

   Indirect investee: None.




                                                                                        174
             J. Securities held at the end of period:
 Name of company                                                     Relationship between issuer                                                                    Percentage
   which holds                Category and name of securities           of securities and the                                Number of shares                      of ownership                        Note
    securities                (or name of issuer of securities)              company                     Account              (In thousands)        Book value          (%)           Market value   (Note2)
  Fuhwa Futures
                   Stocks
                   Wistron                                                        -                Financial assets at                   180 $           11,052              -    $        11,052
                                                                                                   fair value through
                                                                                                   profit or loss -current
                   Taiflex                                                        -                            ″                          30              1,821              -              1,821
                   subtotal                                                                                                                     $        12,873                   $        12,873


                   Beneficiary certificates
                   Fuhwa Diamond Fund                               The management company         Financial assets at                 2,148 $           22,729        N/A        $        22,729
                                                                    was an affiliated company      fair value through
                                                                    control by the same            profit or loss -current
                                                                    company as the company
                   The First Global Investment Trust Global Asset                  ″                          ″                          200               1,944        ″                   1,944
                     Securitization Balanced Income Fund
                   Subtotal                                                                                                                     $        24,673                   $        24,673


                   Stocks
                   Taiwan Futures Exchange Corporation                           -                 Available-for sale                  1,271 $           13,866              -    $        13,866
                                                                                                   financial assets


Fuhwa I Venture    Stocks
 Capital
                   sigmatel                                                      -                 Available-for sale                     41 $           18,828              -    $         3,881
                                                                                                   financial assets
                   Yageo                                                         -                            "                          198              2,235              -              3,115
                   Nano-op                                                       -                            "                          811             13,291              -             40,630
                                                                                                                                                $        34,353                   $        47,626
                   Beneficiary certificates
                   Fuhwa Bond Fund                                               -                 Available-for sale                  2,800 $           35,804        N/A        $        36,064
                                                                                                   financial assets

                   Stocks




                                                                                            175
 Name of company                                                  Relationship between issuer                                                       Percentage
    which holds            Category and name of securities           of securities and the                          Number of shares               of ownership                   Note
      securities           (or name of issuer of securities)              company                    Account         (In thousands)   Book value        (%)      Market value   (Note2)
Fuhwa I Venture    Taiwan Nano Electro-Optical Technology Co.,                 -              Financial assets                  151 $        2,481           - $            -
Capital                Ltd                                                                    stated at cost
                     G-TECH Optoelectronics Corporation                        -                         ″                   2,780         27,800        4.98               -
                     Eon Silicon Solution Inc.                                 -                         ″                     130          1,500        0.19               -
                     Luminous Town Electronic Co., Ltd.                        -                         ″                   1,773         12,864        2.29               -
                     Key Technology Corporation                                -                         ″                   1,271          2,390        7.79               -
                     EoNex Technologies, Inc                                   -                         ″                      15         34,653        1.32               -
                     Glory Innovations Inc.                                    -                 Financial assets                                                           -
                                                                                                                             1,057         25,008        3.52
                                                                                                   stated at cost
                     NUMA Technology Inc.                                      -                         ″                   1,929            526       19.89               -
                     Green Rich Technology Co., Ltd.                           -                         ″                   4,265         42,649       12.22               -
                     Elcos Microdisplay Technology. Ltd                       -                         ″                    2,776         75,958        6.73               -
                     Ralink Technology Corp.                                  -                         ″                      424          5,126        0.51               -
                     Capella Microsystems(Taiwan)Inc.                         -                         ″                    3,795         45,746       15.57               -
                     Ultra-Pak Industries Co., Ltd.                           -                         ″                    1,860         42,286        5.32               -
                     Glory Praise Photronics Corporation                      -                         ″                    1,145         12,447        4.06               -
                     Great Team Backend Foundry, Inc                          -                         ″                    1,800         66,764        5.21               -
                     OEpic Semiconductors Inc.                                -                         ″                    4,747         60,110       17.58               -
                     Infomedia Inc.                                           -                         ″                    1,608         25,728        0.87               -
                     E-RAY Optoelectronics Technology Co., Ltd.               -                         ″                    2,726         45,990       18.98               -
                     Microtech International Inc.                             -                         ″                    7,800         22,620           7               -
                      1L,Inc.                                                 -                         ″                      373          2,122           2               -
                     WANXIN Mage Inc.                                         -                         ″                    1,878         31,560           5               -
                     Ether precision, Inc.                                    -                         ″                    2,500         32,220           3               -
                     Dragon Technology Inc.                                   -                         ″                    3,790         27,478          20               -
                     Jing Yang Media Co., Ltd                                 -                         ″                        -              -          15               -
                     ANDA Networks, Inc.                                      -                         ″                      977         12,128           4               -
                     Yi Ze Technology Co., Ltd.                               -                         ″                    2,727         29,997          11               -
                     Micro Base Technology Corp.                              -                         ″                    1,560         26,520           5               -
                     BluePacket Communications, Co., Ltd                      -                         ″                      414         12,006           5               -
                     Integrated System Solution Corp.                         -                         ″                    1,255         32,915           2               -
                     KISmart Corporation                                      -                         ″                    1,250         15,000           4               -
                     Sync Power Corp.                                         -                         ″                    1,250         15,000          11               -
                     Lionic Corporation                                       -                         ″                      650         25,000           5               -
                     Arrow Span Inc.                                          -                         ″                      248         11,331          10               -




                                                                                         176
 Name of company                                                  Relationship between issuer                                                                  Percentage
    which holds            Category and name of securities           of securities and the                            Number of shares                        of ownership                        Note
      securities           (or name of issuer of securities)              company                    Account           (In thousands)        Book value            (%)           Market value   (Note2)
Fuhwa I Venture      Evest Corporation                                         -                        ″
                                                                                                                                  606 $             6,064               3    $              -
Capital
                     Achievo Corporation                                      -                          ″                         91             16,450                1                   -
                     Bridgewell Inc.                                          -                          ″                        900             22,500                5                   -
                     Yi Ke Internation Co., Ltd.                              -                          ″                       1,201               996                7                   -
                     8 La Music Community,Inc.                                -                          ″                           -             4,121                -                   -
                   Financial assets sated at costs                                                                                       $       876,054                     $              -
Fuhwa Venture       Stocks
 Capital
                     Da Hwa Venture Investment Co., Ltd.                      -                   Financial assets                800 $             8,000        0.50        $         8,000
                                                                                                    stated at cost
                     Fuhwa I Venture Capital Co., Ltd.           Investee companies                  Long-term                970,000 $          996,681          97         $       996,681
                                                                 accounted for by equity         investments under
                                                                 method                            equity method
                    Beneficiary certificates
                     Fuhwa Bond Fund                             The management company          Available-for-sale               914 $           11,227         N/A         $        11,776
                                                                 was an affiliated company        financial assets
                                                                 control by the same
                                                                   company as the company
   Fuhwa Asset      Stocks
   Management
                     Fuhwa Property Insurance Agency Co., Ltd.   The affiliated company was          Long-term        Incorporated by $             1,200         20         $         1,200
                                                                 control by the same             investments under    limited company
                                                                   company as the company          equity method
                     Fuhwa Life Insurance Agency Co., Ltd.       The affiliated company was       Financial assets    9 SHARES                            1        -                       1
                                                                 control by the same                stated at cost
                                                                   company as the company
                     AccuSpeech. Inc                                          None                Financial assets               3000                     -       15                        -
                                                                                                   stated at cost
                     DigiMedia Technologies Co., Ltd.-Cayman                 None                 Financial assets               7000            105,000         5.74                105,000
                     Inc.                                                                          stated at cost
  Fuhwa Finance     Beneficiary certificates                                                                                             $       105,001                     $       105,001
     Capital
                     Fuhwa Bond Fund                             The management company          Available-for-sale              2,344 $          29,578         N/A         $        30,182
                                                                 was an affiliated company        financial assets
                                                                 control by the same
                                                                   company as the company
                     Fuhwa Fund                                                 ″                        ″                        412               5,003          ″                   5,892
                                                                                                                                         $        34,581                     $        36,074




                                                                                           177
Name of company                                                   Relationship between issuer                                                              Percentage
  which holds              Category and name of securities           of securities and the                             Number of shares                   of ownership                        Note
   securities              (or name of issuer of securities)              company                    Account            (In thousands)     Book value          (%)           Market value   (Note2)
Fuhwa Securities    Beneficiary certificates
    Finance
                                                                 The management company         Financial assets for
                   Fuhwa II Fund                                 was an affiliated company        trading purpose
                                                                                                                                 1,039 $        13,351       N/A         $        13,351
                                                                 control by the same
                                                                   company as the company
                      Fuhwa Fund                                                ″                        ″                         720          10,297         ″                  10,297
                      Fuhwa Diamond Fund                                        ″                        ″                       1,503          15,900         ″                  15,900
                      Fuhwa System Fund of Funds                              ″                          ″                       1,424          19,095         ″                  19,095
                      Fuhwa Advantage Bond Fund                               ″                          ″                      28,938         303,696         ″                 303,696
                      Fuhwa Apex Bond Fund                                    ″                          ″                      24,427         290,251         ″                 290,251
                      KGI Blue Ocean Strategy Fund                            -                          ″                       2,147          20,714         ″                  20,714
                      Polaris Silicon Valley Fund                             -                          ″                         771          11,629         ″                  11,629
                      Dah Fa Fund                                             -                          ″                       1,103          22,239         ″                  22,239
                      Truswell Eastern Key Fund                               -                          ″                       1,000          11,120         ″                  11,120
                      Polaris Global Win-Win New Balance Fund                 -                          ″                         920          10,521         ″                  10,521
                     Truswell Global Fixed Income Fund of Fund                -                          ″                       6,000          61,491         ″                  61,491
                     Upame Global Select Fund of Funds                        -                          ″                       5,000          50,366         ″                  50,366
                      Subtotal                                                                                                                 840,670                           840,670
                    Listed stocks
                      Wei Chuan                                               -                          ″                         100            2,765        ″                   2,765
                      Uni-President                                           -                          ″                         250            8,225        ″                   8,225
                      FCFC                                                    -                          ″                         122            9,248        ″                   9,248
                      SKEC                                                    -                          ″                         809            9,870        ″                   9,870
                      CSRC.                                                   -                          ″                          70            2,583        ″                   2,583
                      Mitac                                                   -                          ″                         250          10,425         ″                  10,425
                      TSMC                                                    -                          ″                         151          10,741         ″                  10,741
                      Opto                                                    -                          ″                         343           9,570         ″                   9,570
                      USI                                                     -                          ″                         600          16,770         ″                  16,770
                      Kim Xiang Electronic                                    -                          ″                         450          11,475         ″                  11,475
                      Ta Tung                                                 -                          ″                         400           5,880         ″                   5,880
                      Realtek                                                 -                          ″                          60           9,780         ″                   9,780
                      ZyXEL                                                   -                          ″                         370          22,422         ″                  22,422
                      AUO                                                     -                          ″                         150            8,400        ″                   8,400




                                                                                         178
  Name of company                                             Relationship between issuer                                                             Percentage
    which holds           Category and name of securities        of securities and the                            Number of shares                   of ownership                        Note
     securities           (or name of issuer of securities)           company                  Account             (In thousands)     Book value          (%)           Market value   (Note2)
Fuhwa Securities      Merry                                                -              Financial assets for                                             ″
                                                                                                                              218 $        26,160                   $        26,160
Finance                                                                                     trading purpose
                      Epi-Star                                             -                       ″                           75          10,088         ″                  10,088
                      Media Tek                                           -                         ″                          45          23,040         ″                  23,040
                      Catcher                                             -                         ″                          30            9,225        ″                   9,225
                      Chunghwa Picture Tubes                              -                         ″                         900            7,965        ″                   7,965
                      Evaair                                              -                         ″                       1,000          13,250       N/A                  13,250
                      China Trust Group                                   -                         ″                         300           7,680         ″                   7,680
                      Far Eastern Department Stores                       -                         ″                          70            1,774        ″                   1,774
                      CHIMEI                                              -                         ″                         200            7,800        ″                   7,800
                      APAC Opto                                           -                         ″                          23           2,553         ″                   2,553
                      PSC                                                 -                         ″                         807          16,140         ″                  16,140
                      Won Ten                                             -                         ″                         120           6,804         ″                   6,804
                      ProMos                                              -                         ″                         800          11,040         ″                  11,040
                      TCB                                                 -                         ″                       1,210          28,858         ″                  28,858
                      Capital Securities                                  -                         ″                      30,488         515,247         ″                 515,247
                      FPCC                                                -                         ″                          60           4,920         ″                   4,920
                      Subtotal                                            -                                                               830,698                           830,698
                    Convertible corporate bonds
                      SKEC 3                                              -                Financial assets at
                                                                                           fair value through                 250          27,875         ″                  27,875
                                                                                              profit or loss
                      Yulon 2                                             -                          ″                        400          45,980         ″                  45,980
                      Hon-Hai 1                                           -                         ″                         600          64,200         ″                  64,200
                      NTC 1                                               -                         ″                          75           7,845         ″                   7,845
                      China-Airlines 3                                    -                         ″                         200          21,000         ″                  21,000
                      Union 1                                             -                         ″                          77           7,885         ″                   7,885
                      Minaik 1                                            -                         ″                         125          16,250         ″                  16,250
                      GMTC 2                                              -                         ″                          50           6,055         ″                   6,055
                      PSC 1                                               -                         ″                         154          16,154         ″                  16,154
                      Subtotal                                                                                                            213,244                           213,244
                    Government bonds
                      A92102                                              -                Financial assets for                                           ″
                                                                                                                                -         211,747                           211,747
                                                                                            trading purpose
                      A92106                                              -                        ″                            -         546,965         ″                 546,965




                                                                                     179
  Name of company                                                      Relationship between issuer                                                               Percentage
    which holds           Category and name of securities                 of securities and the                           Number of shares                      of ownership                        Note
     securities           (or name of issuer of securities)                    company                   Account           (In thousands)        Book value          (%)           Market value   (Note2)
Fuhwa Securities      A94107                                                        -                       ″                                                         ″
                                                                                                                                        - $          188,587                   $       188,587
Finance
                      A95101                                                       -                         ″                          -            244,746         ″                 244,746
                      A95105                                                       -                         ″                          -             46,379         ″                  46,379
                      A96101                                                       -                         ″                          -              97,843        ″                  97,843
                      Subtotal                                                                                                                      1,336,267                        1,336,267
                      Total financial assets designated for trading
                                                                                                                                             $      3,220,879                  $     3,220,879
                        purpose
                    Beneficiary certificates
                      952 Polaris C                                                -                 Available-for-sale                                              ″
                                                                                                                                        - $          567,700                   $       567,700
                                                                                                      financial assets
                    Financial bonds - current
                    The Export-Import Bank of R.O.C10-10                           -                 Held-to-maturity
                                                                                                                                        - $          300,000       N/A         $       295,571
                                                                                                     financial assets
                    91 Jih Sun Bank 1                                              -                        ″                           -            699,951         ″                 703,212
                    91 Cathay Bank 2G                                              -                         ″                          -            501,787         ″                 600,320
                    92 North Europe Bond 1D                                        -                         ″                          -             30,313         ″                  31,237
                    92 North Europe Bond 1H                                        -                         ″                          -            201,911         ″                 208,483
                    92 Europe Trust Bond 1C                                        -                         ″                          -            655,356         ″                 637,561
                    91 Fuhwa Bank 1E                                  The management company                 ″
                                                                      was an affiliated company
                                                                                                                                        -            966,000         ″               1,000,574
                                                                      control by the same
                                                                        company as the company
                    Held-to-maturity financial assets - current                                                                              $      3,355,318                  $     3,476,958
                    Government bonds
                    92 Central Bond A2                                             -                 Held-to-maturity
                                                                                                                                        - $          337,905       N/A         $       337,079
                                                                                                     financial assets
                    95 Central Bond A5                                             -                        ″                           -              3,013         ″                   2,960
                    85 Jiao Jian A5                                                -                         ″                          -             16,654         ″                  18,496
                    85 Jiao Jian A6                                                -                         ″                          -             10,248         ″                  11,508
                    Subtotal                                                                                                                         367,820                           370,043
                    Financial bonds – non-current:
                    Panhsin subordinate bond 1                                     -                         ″                          -            100,000       N/A                 101,232
                    Panhsin subordinate bond 2                                     -                         ″                          -            100,000         ″                 101,976
                    93 E Sun Bank 1G                                               -                         ″                          -            117,301         ″                 103,906
                    92 Fubon Bank 1A13                                             -                         ″                          -            200,000         ″                 187,043




                                                                                              180
Name of company                                                 Relationship between issuer                                                                Percentage
  which holds             Category and name of securities          of securities and the                            Number of shares                      of ownership                         Note
   securities             (or name of issuer of securities)             company                    Account           (In thousands)        Book value          (%)            Market value   (Note2)
Fuhwa Securities   92 Taipei Fubon Bank 2B04                                 -                        ″                                                         ″
                                                                                                                                  - $           30,731                    $        28,734
    Finance
                   92 Taipei Fubon 2C04                                     -                          ″                          -            300,000         ″                  278,520
                   93 Hwa Nan Bank 3A                                       -                          ″                          -            200,000         ″                  191,127
                   93 Europe Fu bond 2A                                     -                          ″                          -           1,010,969        ″                1,022,655
                   92 First Bank 4A                                         -                          ″                          -             302,480        ″                  262,305
                   92 Nordic Investment Bank 3E                             -                          ″                          -            103,312         ″                  107,546
                   92 Nordic Investment Bank 3F                             -                          ″                          -            300,000         ″                  277,963
                   92 Nordic Investment Bank 3H                             -                          ″                          -            120,000         ″                  117,841
                   92 European Investment Bank 2A09                         -                          ″                          -            109,474         ″                   95,592
                   92 European Investment Bank 2A11                         -                          ″                          -            210,725         ″                  216,213
                   92 European Investment Bank 2A14                         -                          ″                          -            200,000         ″                  185,657
                   92 European Investment Bank 2A15                         -                          ″                          -            200,000         ″                  185,657
                   92 European Investment Bank 2A18                         -                          ″                          -            200,000         ″                  185,657
                   92 European Investment Bank 2A10                         -                          ″                          -            200,000         ″                  185,657
                   Subtotal                                                                                                                   4,004,992                         3,835,281
                   Total held-to-maturity financial asset                                                                              $      4,372,812                   $     4,205,324
                   Stocks
                   Taiwan Depository $ Clearing Corporation                 -                   Financial assets
                                                                                                                             39,630 $          169,514         13.96      $              -
                                                                                                 stated at cost
                   Taiwan Futures Exchange Corporation                      -                          ″                     10,000            100,000             5.00                  -
                   He Din Venture Investment Co., Ltd.                      -                          ″                     10,000            100,000         10.00                     -
                   Hwa Chen Venture Investment Co.                          -                          ″                      6,000             45,180          6.00                     -
                   Lian Din Venture Investment Co.                          -                          ″                     10,000            100,000         10.00                     -
                   Shin Cheng Venture Investment Co.                        -                          ″                     10,000            100,000          9.43                     -
                   Kui Ji Er Venture Investment Co.                         -                          ″                      7,000             70,000         10.00                     -
                   Global strategy Din Venture Investment Co.               -                          ″                      3,000             30,000          1.94                     -
                   Sheng Yuan Venture Investment Co.                        -                          ″                      4,000             40,000             9.88                  -
                   Guan Yuan Venture Investment Co.                         -                          ″                      4,000             40,000             6.67                  -
                   Hwa Sheng Venture Investment Co.                         -                          ″                      4,000             31,960             3.33                  -
                                                                                                                                       $       826,654                    $              -
                   Financial assets stated at cost
                   2004 Taiwan Industrial Bank 1                            -                 Bond investments in
                                                                                                                                  - $          300,000                    $       299,996
                                                                                               non-active market




                                                                                       181
Name of company                                                       Relationship between issuer                                                                  Percentage
  which holds              Category and name of securities               of securities and the                            Number of shares                        of ownership                        Note
   securities              (or name of issuer of securities)                  company                   Account            (In thousands)        Book value            (%)           Market value   (Note2)
Fuhwa Securities
Investment Trust
                   JPM(Taiwan) Greater Europe Fund                                -                 Financial assets at
                                                                                                    fair value through            181,622 $             3,360        N/A         $         3,302
                                                                                                       profit or loss
                   JPM (Taiwan) Global Dynamic Fund                                 -                         ″                   190,542               2,740          ″                   2,887
                   The First Global Investment Trust Global          The affiliated company was               ″                                                        ″
                   Growth Equity Fund                                control by the same                                          424,128               9,000                              8,745
                                                                       company as the company
                   The First Global Investment Trust Hi-Tech                        ″                       ″                                                          ″
                                                                                                                                  125,086               2,250                              2,468
                   Equity Fund
                   The First Global Investment Trust International                ″                         ″                                                          ″
                                                                                                                                  236,167               6,500                              6,759
                   Trade Equity Fund
                   The First Global Investment Trust Duo Fu Equity                ″                         ″                                                          ″
                                                                                                                                  100,964               4,500                              4,746
                   Fund
                   The First Global Investment Trust Duo Yuan                     ″                         ″                                                          ″
                                                                                                                                  211,511               2,500                              2,699
                   Equity Fund
                   The First Global Investment Trust Duo Duo                      ″                         ″                                                          ″
                                                                                                                                  160,061               3,750                              3,795
                   Equity Fund
                   Subtotal                                                                                                                  $        34,600                     $        35,401
                   Principal only bonds
Fuhwa Securities   BA288H                                                         -                 Available-for-sale                       $                0      N/A         $              -
                                                                                                                                1,945,000
Investment Trust                                                                                     financial assets
                   BA4DGH                                                         -                         ″                   2,917,500                     -        ″                        -
                   BA4DKH                                                         -                         ″                   1,945,000                     -        ″                        -
                   BA812                                                          -                         ″                   4,862,500                     -        ″                        -
                   BA3BVG                                                         -                         ″                   2,917,500                     -        ″                        -
                   BA3BWG                                                         -                         ″                   1,945,000                     -        ″                        -
                   BAD03G                                                         -                         ″                   5,050,000                     -        ″                        -
                   BAD11G                                                         -                         ″                   5,050,000                     -        ″                        -
                   BA288J                                                         -                         ″                   1,945,000                     -        ″                        -
                   BA4DGJ                                                         -                         ″                   2,917,500                     -        ″                        -
                   BA4DKJ                                                         -                         ″                   1,945,000                     -        ″                        -
                   BA812K                                                         -                         ″                   4,862,500                     -        ″                        -
                   BA3BVH                                                         -                         ″                   2,917,500                     -        ″                        -
                   BA3BWH                                                         -                         ″                   1,945,000                     -        ″                        -
                   BAD03H                                                         -                         ″                   5,050,000                     1        ″                       1
                   BAD11H                                                         -                         ″                   5,050,000                     3        ″                       3




                                                                                             182
Name of company                                              Relationship between issuer                                                              Percentage
  which holds            Category and name of securities        of securities and the                           Number of shares                     of ownership                        Note
   securities            (or name of issuer of securities)           company                   Account           (In thousands)     Book value            (%)           Market value   (Note2)
Fuhwa Securities   BA288K                                                 -                Available-for-sale                                              ″
                                                                                                                      1,945,000 $                -                  $              -
Investment Trust                                                                            financial assets
                   BA4DGK                                                -                         ″                  2,917,500                  1        ″                       1
                   BA4DKK                                                -                         ″                  1,945,000                  -        ″                       -
                   BA812L                                                -                         ″                  4,862,500               2           ″                       2
                   BA3BVJ                                                -                         ″                  2,917,500             134           ″                     134
                   BA3BWJ                                                -                         ″                  1,945,000              90           ″                      90
                   BAD03J                                                -                         ″                  5,050,000             247           ″                     247
                   BAD11J                                                -                         ″                  5,050,000             362           ″                     362
                   BA288L                                                -                         ″                  1,945,000               7           ″                       7
                   BA4DGL                                                -                         ″                  2,917,500              19           ″                      19
                   BA4DKL                                                -                         ″                  1,945,000              13           ″                      13
                   BA812M                                                -                         ″                  4,862,500              25           ″                      25
                   BA3BVK                                                -                         ″                  2,917,500             261           ″                     261
                   BA3BWK                                                -                         ″                  1,945,000             174           ″                     174
                   BAD03K                                                -                         ″                  5,050,000             451           ″                     451
                   BAD11K                                                -                         ″                  5,050,000             620           ″                     620
                   BA4DGM                                                -                         ″                  2,917,500              44           ″                      44
                   BA4DKM                                                -                         ″                  1,945,000              29           ″                      29
                   BA812N                                                -                         ″                  4,862,500              52           ″                      52
                   BAD11L                                                -                         ″                  5,050,000            1,926          ″                   1,926
                   BA4DGN                                                -                         ″                  2,917,500               60          ″                      60
                   BA4DKN                                                -                         ″                  1,945,000              40           ″                      40
                   BA812P                                                -                         ″                  4,862,500              76           ″                      76
                   BAD11M                                                -                         ″                  5,050,000            2,085          ″                   2,085

                   BA4DGP                                                -                         ″                  2,917,500              82           ″                      82
                   BA4DKP                                                -                         ″                  1,945,000              54           ″                      54
                   B903K6                                                -                         ″                150,000,000         145,479           ″                 145,479
                   B903K6                                                -                         ″                150,000,000         145,479           ″                 145,479
                   B94851                                                -                         ″                200,000,000         197,890           ″                 197,890
                   G17998                                                -                         ″                500,000,000         499,703           ″                 499,703
                   B903MQ                                                -                         ″                150,000,000         148,566           ″                 148,566
                   B903MQ                                                -                         ″                150,000,000         148,642           ″                 148,642




                                                                                    183
Name of company                                              Relationship between issuer                                                    Percentage
  which holds            Category and name of securities        of securities and the                Number of shares                      of ownership                        Note
   securities            (or name of issuer of securities)           company               Account    (In thousands)        Book value          (%)           Market value   (Note2)
Fuhwa Securities   B903LH                                                 -                   ″                                                  ″
                                                                                                         150,000,000 $          149,881                   $       149,881
Investment Trust
                   B903LH                                                -                    ″          150,000,000            149,989         ″                 149,989
                   B97822                                                -                    ″          500,000,000            491,496         ″                 491,496
                   B903NG                                                -                    ″          250,000,000            244,495         ″                 244,495
                   B903NG                                                -                    ″          250,000,000            244,487         ″                 244,487
                   BA2881                                                -                    ″          200,000,000            192,013         ″                 192,013
                   BA3BV1                                                -                    ″          300,000,000            284,770         ″                 284,770
                   BA4DG1                                                -                    ″          300,000,000            275,911         ″                 275,911
                   BA4DK1                                                -                    ″          200,000,000            183,847         ″                 183,847
                   GA3451                                                -                    ″          200,000,000             193,826        ″                 193,826
                   Subtotal                                                                                             $      3,703,332                  $     3,703,332




                                                                                    184
K. According to the Explanatory Letter Tai-Tsai-Jen Ruling (2) No.0920004507 of Securities and Futures Bureau, Financial
   Supervisory Commission, Executive Yuan, the following information is provided:

        (A) Yuanta Securities Asia Finance Co., Ltd.

            a. Securities held at the end of period:
                                                                                                                                                  Expressed in US dollar
                                                                                  Book value                    Market price at period end
                           Item                         Number                                                                                             Note
                                                                     Unit price            amount            Unit price            Amount
Long-term equity investments accounted for under
  equity method
  Din Hwa Securities Investment Management Co., Ltd.      500,000          1.68                  840,755              1.68             840,755
  Yuanta Core Pacific Securities (H.K) Co., LTD.       318,132,525         0.13                41,297,724             0.13          41,297,724
  KIM ENG HOLDINGS LIMITED                             168,476,566         1.02            171,856,929                1.02         225,451,485
  Held-to-maturity financial assets – non-current
  The First Securities Joint Stock Company (Vietnam)     2,810,400         1.03                 2,892,148             1.00           2,892,148
  GLOBAL STRATEGIC INVESTMENT FUND                       1,500,000         1.00                 1,500,000             1.00           1,500,000
  Equity Collateral Bond SAPPHIRE CDO LIMITED                    -            -                 5,000,000                 -          4,955,000   Par value $5,000,000
                                                                                                                                                 Issuance price100%
  Equity Collateral Bond      SAPPHIRE CDO II)                   -            -                 9,000,000                 -          8,935,200   Par value $9,000,000
                                                                                                                                                 Issuance price100%
  Far East CDO Bond                                              -            -                 5,000,000                 -          4,912,500
  LLOYDS TSB Bond                                                -            -                 1,003,489                 -          1,007,500
  KOREA DEV Bond                                                 -            -                  971,116                  -            973,330
  WOORI BANK Bond                                                -            -                  974,452                  -            978,840
  EXP-IMP BK Bond                                                -            -                  982,040                  -            986,500
  PIANO Protected Investment Alpha Notes                         -            -                 1,000,000                 -          1,003,500
  ASIA TECH TAIWAN            VENTURE FUND                500,000             -                 5,000,000                 -          5,000,000
  Taiwan Balance Technology Fund                         2,616,534            -                 2,616,534                 -          2,616,534
  ASIA PACIFIC VENTURE INVESTMENT                         200,000        10.00                  2,000,000            10.00           2,000,000
  CHINA COALAND COKE INVESTMENT FUND                             -            -                 9,000,000                 -          9,000,000
  Gain or loss on valuation                                                          (            178,727)                -                  -
Held-to-maturity financial assets – non-current
  LIBOR RANGE ACCRUAL REVENUE                                    -            -                 3,000,000                 -          3,000,000   Par value $3,000,000
                                                                                                                                                 Issuance price 100%
total                                                                                      263,756,460                             317,351,016




                                                                       185
           b. Condition of conducting derivative instruments and source of capital: None.

           c. Service revenues, service contents and litigations from consulting service: None.

           d. Balance sheet
                                                          Yuanta Securities Asia Finance Co., Ltd.
                                                                      Balance Sheets
                                                                      June 30, 2007
                                                                                                                                         Expressed in US dollars


Assets                                      Amount                    %       Liabilities and stockholders’ equity             Amount                    %
Current assets                                                                Current liabilities
  Cash and bank deposits                $             15,072,366         5      Other payables                             $               345,000             -
  Other receivables – related parties                 24,000,000         8      Total liabilities                                          345,000             -
  Other receivables                                      240,148        -     Stockholders’ equity
    Total current assets                              39,312,514       13       Common stocks                                           164,670,352          54
Funds and investments                                                           Additional paid-in capital                                9,035,067            3
  Long-term equity investments                       213,995,408       71       Cumulative translation adjustment                        21,355,925            7
   accounted for under equity method
  Available-for-sale financial assets                 46,761,052       15       Unrealized gain/loss on financial                         5,348,066            2
                                                                                  assets
  Held-to-maturity financial assets                    3,000,000        1       Retained earnings                                       102,314,564           34
    Total funds and investments                      263,756,460       87         Total stockholders’ equity                            302,723,974          100
Total assets                            $            303,068,974     100      Total liabilities and stockholders’ equity   $            303,068,974          100




                                                                   186
(B) Din Hwa Securities Investment Management Co., Ltd.

    a. Securities held at the end of period:

                                                                                                 Expressed in US dollars
                                                                                            Market price at period
                                                                    Book value
                       Item                        Number                                             end          Note
                                                             Unit price        Amount      Unit price     Amount
  Financial assets stated at costs – non-current
    Grand Asia Gemini Investment Ltd.               70,000          0.21 $       15,029         0.21 $ 15,029
    Top Fortune Direct Investment Ltd.              15,000          2.75         41,290         2.75    41,290
    Digital Ct Investment Ltd.                      10,000          4.98         49,780         4.98    49,780
    Grand Asia Special Innovation Direct            35,000         10.00        350,000        10.00   350,000
  Investment Ltd.                                                                                      350,000
    Ocon Inc.                                       30,000          0.49          14,833        0.49    14,833
  Long-term equity investments accounted for
    under equity method
    Grand Asia Capital Services Pte. Ltd.          100,000          1.06        102,064         1.06     102,064
                                                                                                         102,064
  Total                                                                    $     572,996               $ 572,996


    b. Condition of conducting derivative instruments and source of capital: None.

    c. Service revenues, service contents and litigations from consulting service: None.




                                                    187
 d. Balance sheet:

                              Ding Hwa Securities Investment Management Co., Ltd
                                                 Balance Sheet
                                                 June 30, 2007
                                                                                             Expressed in US dollars

                                                                LIABILITIES AND
        ASSETS                    Amount               %     STOCKHOLDERS’EQUITY               Amount          %
Current assets                                               Current liabilities
  Cash and bank deposits      $        127,322          32    Accrued expenses           $         142,980         6
  Receivables                          867,000          33    Other payables                         5,736
  Other receivables                         24           -    Payments collected in                 10,925         -
                                                                advance
  Temporary payment                         62          -    Total current liabilities             159,641         6
  Other financial assets                     -          9    Other liabilities                      11,133         -
    current
    Total current assets               994,408         74    Total liabilities                     170,774         6
Funds and investments                                        Stockholders’ equity
 Long term equity                      102,064          4      Common stocks                     1,000,000       42
   investment accounted
   for under equity
   method
 Financial assets stated at            470,932         20      Retained earnings                   844,021       52
   cost – non-current
 Total funds and                       572,996         24    Total stockholders’                 1,844,021       94
   investments                                                equity
Other assets                           447,391           2
TOTAL ASSETS                  $      2,014,795         100   Total liabilities and       $       2,014,795      100
                                                               stockholders’ equity




                                                 188
  e. Statement of income:

                Yuanta Securities Asia Finance Co., Ltd
                         Statement Of Income
           For The Six Months Ended June 30, 2007 And 2006
                                                 Expressed in US dollars

           Item                     Amount                   %
 Revenues
   Non-operating income      $          19,504,649                 100
      and gains
   Total                                19,504,649                 100
 Expenses
   Operating expenses        (             643,225)   (              3)
   Non-operating expenses    (           1,744,824)   (              9)
   Total                     (           2,388,049)   (             12)
 Net income                   $         17,116,600     $            88


  f. Statement of income:

                Yuanta Securities Asia Finance Co., Ltd
                         Statement Of Income
           For The Six Months Ended June 30, 2007 And 2006
                                                 Expressed in US dollars

          Item                    Amount                    %
 Revenues
   Non-operating income      $             582,090                 100
and gains
   Total                                    23,480                  27
 Expenses                                  605,570                 127
   Operating expenses
   Non-operating expenses    (              67,724) (               16)
   Total                     (              67,724) (               16)
 Net income                   $            537,846                 111




                            189
                       (C) Condition of conducting derivative instruments and source of capital: None.

                       (D) Service revenues, service contents and litigations from consulting service: None.

       (4) Investments in People’s Republic of China

              A. Information of investment in Mainland China:

                   For the six months ended June 30, 2007, the investments made by Fuhwa Venture Capital's subsidiary, Fuhwa I Venture
                   Capital, in entities incorporated in Mainland China were as follows (expressed in thousands of dollars):
Name of investee in         Main           Issued    Method of     Beginning balance of         Investment       Ending        Percentage of        Gain (loss)   Book value as   Accumulated
 Mainland China           operational      capital   investment   foreign investment from     movement within    balance of   direct or indirect    recognized     of June 30,    gain returned
                            items                     (Note 1)             Taiwan               this period      foreign         investment         during the        2007        to Taiwan at
                                                                                            Invested Retuned     investment        holding         period (Note                   end of period
                                                                                             amount     amount   from                                   2)
                                                                                                                 Taiwan
Jie Qun Electronic       Transistors      USD         (Note 1)    USD     1,980                -         -       USD               5.21%                -         NTD                   -
Technology (Dong                          36,868                                                                 1,980                                            66,764
Guan) Ltd.
Ether Precision Inc.     Manufacturing    USD         (Note 2)    USD     1,000                -         -       USD               3.16%                -         NTD                   -
(Su Zhou)                and selling of   17,594                                                                 1,000                                            32,220
                         a variety of
                         discs
Note 1: Great Team Backend Foundry, Ltd. (BVI), a 5.21%-owned subsidiary of Fuhwa I Venture Capital, resides in a third country.
        Jie Qun Electronic Technology (Dong Guan) Ltd. is a wholly owned subsidiary of Great Team Backend Foundry Ltd. (BVI).

Note 2: Ether Precision Inc. (Cayman Islands), a 3.16%-owned subsidiary of Fuhwa I Venture Capital, resides in a third country. Ether
        Precision Inc. (Su Zhou) is a wholly owned subsidiary of Ether Precision Inc. (Cayman Islands).

Note 3: Gain or loss on investments was not recognized for the reason that the investees are accounted for as financial assets carried at
       cost.




                                                                                              190
    B. Limitation on investment in Mainland China (expressed in thousands of dollars)

            Aggregate investment           Investment amount approved by    Limitation on investments in Mainland China
            amount remitted from         Investment Commission of Ministry   by Investment Commission of Ministry of
         Taiwan to Mainland China                of Economic Affairs                     Economic Affairs
        USD                      2,980 USD                           2,980 NTD                                  411,002
       Note: The abovementioned limitations on investments in Mainland China were based on 40% of Fuhwa I Venture
             Capital's net worth of $1,027,506.

(5) Significant commitments or contingency of subsidiaries

    Please refer to Note 7.

(6) Significant loss from disasters of subsidiaries

    Please refer to Note 8.

(7) Significant subsequent events of subsidiaries

    Please refer to Note 9.

(8) Related party transactions of subsidiaries amounting to at least NT $100 million dollars

    Please refer to Note 5.




                                                             191
   (9) Significant transactions between parent company and subsidiaries

       Information for the six months ended June 30, 2007:
                                                                               (Expressed In Thousands of New Taiwan Dollars)
  No.       Company     Counterparty Relationship                                Details of transactions
(Note 1)                              (Note 2)                  Account            Amount        Conditions   Percentage (%) of
                                                                                                              accounting for the
                                                                                                              total consolidated
                                                                                                               net revenues or
                                                                                                                assets (Note 3)
   0       Fuhwa        Yuanta Core          1        Service fees                   15,000 No significant                   0.00
           Financial    Pacific                                                                   difference
           Holding      Securities                                                              from general
                                                                                                  customers
   0       Fuhwa        Fuhwa                1        Consolidated income tax       111,402           〃                      0.02
           Financial    Securities                    return system receivable
           Holding      Finance
   0       Fuhwa        Fuhwa                1        Consolidated income tax        17,695        〃                        0.00
           Financial    Securities                    return system payable
           Holding      Finance
   0       Fuhwa        Fuhwa                1        Consolidated income tax       744,399        〃                        0.13
           Financial    Securities                    return system receivable
           Holding
   0       Fuhwa        Fuhwa                1        Consolidated income tax        53,410        〃                        0.01
           Financial    Securities                    return system payable
           Holding
   0       Fuhwa        Fuhwa Bank           1        Consolidated income tax       556,994        〃                        0.10
           Financial                                  return system payable
           Holding
   0       Fuhwa        Fuhwa Bank           1        Time deposits                   5,970        〃                        0.00




                                                             192
  No.       Company     Counterparty Relationship                              Details of transactions
(Note 1)                              (Note 2)              Account              Amount        Conditions   Percentage (%) of
                                                                                                            accounting for the
                                                                                                            total consolidated
                                                                                                             net revenues or
                                                                                                              assets (Note 3)
           Financial
           Holding
   0       Fuhwa        Fuhwa             1         Consolidated income tax        15,638         〃                       0.00
           Financial    Securities                  return system receivable
           Holding      Investment
                        Trust
   0       Fuhwa        Fuhwa             1         Consolidated income tax         2,112         〃                       0.00
           Financial    Securities                  return system payable
           Holding      Investment
                        Trust
   0       Fuhwa        Fuhwa             1         Consolidated income tax         3,788         〃                       0.00
           Financial    Venture                     return system payable
           Holding      Capital
   0       Fuhwa        Fuhwa Asset       1         Consolidated income tax        15,319         〃                       0.00
           Financial    management                  return system receivable
           Holding
   1       Fuhwa        Fuhwa             2         Consolidated income tax       111,402         〃                       0.02
           Securities   Financial                   return system payable
           Finance      Holding
   1       Fuhwa        Fuhwa             2         Consolidated income tax        17,695         〃                       0.00
           Securities   Financial                   return system receivable
           Finance      Holding
   1       Fuhwa        Fuhwa             3         Bonds investments under     1,344,272         〃                       0.23
           Securities   Securities                  repurchase agreement




                                                           193
  No.       Company     Counterparty Relationship                                Details of transactions
(Note 1)                              (Note 2)               Account               Amount        Conditions   Percentage (%) of
                                                                                                              accounting for the
                                                                                                              total consolidated
                                                                                                               net revenues or
                                                                                                                assets (Note 3)
           Finance
   1       Fuhwa        Fuhwa             3         Corporate bonds payable       1,000,000         〃                       0.17
           Securities   Securities
           Finance
   1       Fuhwa        Fuhwa             3         Accrued transaction fees        241,946         〃                       0.02
           Securities   Securities
           Finance
   1       Fuhwa        Fuhwa             3         Accounts payable                 42,903         〃                       0.01
           Securities   Securities
           Finance
   1       Fuhwa        Fuhwa             3         Interest expenses                10,657         〃                       0.00
           Securities   Securities
           Finance
   1       Fuhwa        Fuhwa             3         Rental income                     6,865         〃                       0.00
           Securities   Securities
           Finance
   1       Fuhwa        Fuhwa             3         Accrued interest                  1,862         〃                       0.00
           Securities   Securities
           Finance
   1       Fuhwa        Fuhwa Bank        3         Held-to-maturity financial      966,000         〃                       0.17
           Securities                               assets
           Finance
   1       Fuhwa        Fuhwa Bank        3         Short-term borrowing            639,000         〃                       0.11
           Securities




                                                           194
  No.       Company     Counterparty Relationship                             Details of transactions
(Note 1)                              (Note 2)               Account            Amount        Conditions   Percentage (%) of
                                                                                                           accounting for the
                                                                                                           total consolidated
                                                                                                            net revenues or
                                                                                                             assets (Note 3)
           Finance
   1       Fuhwa        Fuhwa Bank        3         Bank deposits              1,469,510         〃                       0.25
           Securities
           Finance
   1       Fuhwa        Fuhwa Bank        3         Rental income                  5,555         〃                       0.00
           Securities
           Finance
   1       Fuhwa        Fuhwa Bank        3         Interest income                3,804         〃                       0.00
           Securities
           Finance
   1       Fuhwa        Fuhwa Bank        3         Interests receivable           1,213         〃                       0.00
           Securities
           Finance
   1       Fuhwa        Fuhwa Bank        3         Accrued interests              1,189         〃                       0.00
           Securities
           Finance
   1       Fuhwa        Fuhwa             3         Rental income                  3,462         〃                       0.00
           Securities   Futures
           Finance
   2       Fuhwa        Yuanta Core       3         Bonds investments under       50,000         〃                       0.01
           Securities   Pacific                     repurchase agreement
                        Securities
   2       Fuhwa        Fuhwa             2         Consolidated income tax      744,399         〃                       0.13
           Securities   Financial                   return system payable




                                                            195
  No.       Company     Counterparty Relationship                              Details of transactions
(Note 1)                              (Note 2)               Account             Amount        Conditions   Percentage (%) of
                                                                                                            accounting for the
                                                                                                            total consolidated
                                                                                                             net revenues or
                                                                                                              assets (Note 3)
                        Holding
   2       Fuhwa        Fuhwa             2         Consolidated income tax        53,410         〃                       0.01
           Securities   Financial                   return system receivable
                        Holding
   2       Fuhwa        Fuhwa             3         Bonds investments under     1,344,272         〃                       0.23
           Securities   Securities                  resale agreement
                        Finance
   2       Fuhwa        Fuhwa             3         Operating                   1,000,000         〃                       0.17
           Securities   Securities                  securities-dealing-OTC
                        Finance                     -bond
   2       Fuhwa        Fuhwa             3         Interest income                10,657         〃                       0.00
           Securities   Securities
                        Finance
   2       Fuhwa        Fuhwa             3         Accrued rents                   6,865         〃                       0.00
           Securities   Securities
                        Finance
   2       Fuhwa        Fuhwa             3         Interest income                 1,862         〃                       0.00
           Securities   Securities
                        Finance
   2       Fuhwa        Fuhwa Bank        3         Bonds investments under     1,000,239         〃                       0.17
           Securities                               resale agreement
   2       Fuhwa        Fuhwa             3         Other operating income –      241,946         〃                       0.02
           Securities   Securities                  brokerage commissions
                        Finance




                                                           196
  No.       Company     Counterparty Relationship                             Details of transactions
(Note 1)                              (Note 2)               Account            Amount        Conditions   Percentage (%) of
                                                                                                           accounting for the
                                                                                                           total consolidated
                                                                                                            net revenues or
                                                                                                             assets (Note 3)
   2       Fuhwa        Fuhwa Bank        3         Non-operating income          98,670         〃                        0.01
           Securities
   2       Fuhwa        Fuhwa             3         Accounts receivable           42,903         〃                       0.01
           Securities   Securities
                        Finance
   2       Fuhwa        Fuhwa Bank        3         Rental income                 10,025         〃                       0.00
           Securities
   2       Fuhwa        Fuhwa Bank        3         Bank deposits                152,710         〃                       0.03
           Securities
   2       Fuhwa        Fuhwa Bank        3         Interest income                2,798         〃                       0.00
           Securities
   2       Fuhwa        Fuhwa Bank        3         Interest income                2,540         〃                       0.00
           Securities
   2       Fuhwa        Fuhwa             3         Futures commission            25,058         〃                       0.00
           Securities   Futures                     income
   2       Fuhwa        Fuhwa             3         Accounts receivable            4,791         〃                       0.00
           Securities   Futures
   2       Fuhwa        Fuhwa             3         Bonds investments under    1,800,000         〃                       0.31
           Securities   Securities                  resale agreement
                        Investment
                        Trust
   2       Fuhwa        Fuhwa             3         Interest income               11,719         〃                       0.00
           Securities   Securities
                        Investment




                                                           197
  No.       Company     Counterparty Relationship                              Details of transactions
(Note 1)                              (Note 2)                 Account           Amount        Conditions   Percentage (%) of
                                                                                                            accounting for the
                                                                                                            total consolidated
                                                                                                             net revenues or
                                                                                                              assets (Note 3)
                        Trust
   3       Fuhwa Bank   Yuanta Core       3         Bonds investments under     1,731,175         〃                       0.30
                        Pacific                     repurchase agreement
                        Securities
   3       Fuhwa Bank   Yuanta Core       3         Time deposits –               387,609         〃                       0.07
                        Pacific                     certificates of deposits
                        Securities                  TWD
   3       Fuhwa Bank   Yuanta Core       3         Rental income                  29,362         〃                       0.00
                        Pacific
                        Securities
   3       Fuhwa Bank   Yuanta Core       3         Bank deposits                  50,609         〃                       0.01
                        Pacific
                        Securities
   3       Fuhwa Bank   Yuanta Core       3         Accrued expenses                7,204         〃                       0.00
                        Pacific
                        Securities
   3       Fuhwa Bank   Fuhwa             2         Consolidated income tax       556,994         〃                       0.10
                        Financial                   return system receivable
                        Holding
   3       Fuhwa Bank   Fuhwa             2         Deposits                        5,970         〃                       0.00
                        Financial
                        Holding
   3       Fuhwa Bank   Fuhwa             3         Financial bonds               966,000         〃                       0.17
                        Securities




                                                            198
  No.       Company     Counterparty Relationship                             Details of transactions
(Note 1)                              (Note 2)                 Account          Amount        Conditions   Percentage (%) of
                                                                                                           accounting for the
                                                                                                           total consolidated
                                                                                                            net revenues or
                                                                                                             assets (Note 3)
                        Finance
   3       Fuhwa Bank   Fuhwa             3         Deposits                   1,469,510         〃                       0.25
                        Securities
                        Finance
   3       Fuhwa Bank   Fuhwa             3         Short-term borrowings        639,000         〃                       0.11
                        Securities
                        Finance
   3       Fuhwa Bank   Fuhwa             3         Rental income                  5,555         〃                       0.00
                        Securities
                        Finance
   3       Fuhwa Bank   Fuhwa             3         Interest expenses              3,804         〃                       0.00
                        Securities
                        Finance
   3       Fuhwa Bank   Fuhwa             3         Interests receivable           1,213         〃                       0.00
                        Securities
                        Finance
   3       Fuhwa Bank   Fuhwa             3         Interest income                1,189         〃                       0.00
                        Securities
                        Finance
   3       Fuhwa Bank   Fuhwa             3         Bonds investments under    1,000,239         〃                       0.17
                        Securities                  repurchase agreement
   3       Fuhwa Bank   Fuhwa             3         Deposits                     152,710         〃                       0.03
                        Securities
   3       Fuhwa Bank   Fuhwa             3         Rental income                108,695         〃                       0.01




                                                            199
  No.       Company     Counterparty Relationship                             Details of transactions
(Note 1)                              (Note 2)                 Account          Amount        Conditions   Percentage (%) of
                                                                                                           accounting for the
                                                                                                           total consolidated
                                                                                                            net revenues or
                                                                                                             assets (Note 3)
                        Securities
   3       Fuhwa Bank   Fuhwa             3         Interest expenses              2,798         〃                       0.00
                        Securities
   3       Fuhwa Bank   Fuhwa             3         Interest expenses              2,540         〃                       0.00
                        Securities
   3       Fuhwa Bank   Fuhwa             3         Interest expenses              5,962         〃                       0.00
                        Futures
   3       Fuhwa Bank   Fuhwa             3         Deposits                     268,904         〃                       0.05
                        Futures
   3       Fuhwa Bank   Fuhwa             3         Deposits                      39,600         〃                       0.01
                        Capital M
   3       Fuhwa Bank   Fuhwa             3         Deposits                      14,440         〃                       0.00
                        Securities
                        Investment
                        Trust
   3       Fuhwa Bank   Fuhwa             3         Transaction fees income        1,469         〃                       0.00
                        Securities
                        Investment
                        Trust
   3       Fuhwa Bank   Fuhwa Asset       3         Rental income                  6,304         〃                       0.00
                        management
   4       Fuhwa        Fuhwa             3         Rental income                  3,462         〃                       0.00
           Futures      Securities
                        Finance




                                                           200
  No.       Company     Counterparty Relationship                              Details of transactions
(Note 1)                              (Note 2)              Account              Amount        Conditions   Percentage (%) of
                                                                                                            accounting for the
                                                                                                            total consolidated
                                                                                                             net revenues or
                                                                                                              assets (Note 3)
   4       Fuhwa        Fuhwa             3         Futures commission             25,058         〃                        0.00
           Futures      Securities                  expenses – futures
                                                    brokerage service- Fuhwa
                                                    Securities
   4       Fuhwa        Fuhwa             3         Accounts payable                4,791         〃                       0.00
           Futures      Securities
   4       Fuhwa        Fuhwa Bank        3         Bank deposits                 268,904         〃                       0.05
           Futures
   4       Fuhwa        Fuhwa Bank        3         Financial management            5,962         〃                       0.00
           Futures                                  income
   5       Fuhwa        Fuhwa Bank        3         Bank deposits                  39,600         〃                       0.01
           Capital
           Management
   6       Fuhwa        Fuhwa             2         Consolidated income tax        15,638         〃                       0.00
           Securities   Financial                   return system payable
           Investment   Holding
           Trust
   6       Fuhwa        Fuhwa             2         Consolidated income tax         2,112         〃                       0.00
           Securities   Financial                   return system receivable
           Investment   Holding
           Trust
   6       Fuhwa        Fuhwa             3         Bonds investments under     1,800,000         〃                       0.31
           Securities   Securities                  repurchase agreement
           Investment




                                                           201
  No.       Company      Counterparty Relationship                              Details of transactions
(Note 1)                               (Note 2)               Account             Amount        Conditions   Percentage (%) of
                                                                                                             accounting for the
                                                                                                             total consolidated
                                                                                                              net revenues or
                                                                                                               assets (Note 3)
           Trust
   6       Fuhwa         Fuhwa             3         Interest expenses              11,719         〃                       0.00
           Securities    Securities
           Investment
           Trust
   6       Fuhwa         Fuhwa Bank        3         Bank deposits                  14,440         〃                       0.00
           Securities
           Investment
           Trust
   6       Fuhwa         Fuhwa Bank        3         Sales expenses                  1,469         〃                       0.00
           Securities
           Investment
           Trust
   6       Fuhwa         Fuhwa Asset       3         Rental expenses                 3,537         〃                       0.00
           Securities    management
           Investment
           Trust
   7       Fuhwa       Fuhwa               2         Consolidated income tax         3,788         〃                       0.00
           Venture     Financial                     return system receivable
           Capital     Holding
   8       Fuhwa Asset Fuhwa               2         Consolidated income tax        15,319         〃                       0.00
           management  Financial                     return system payable
                       Holding
   8       Fuhwa Asset Fuhwa Bank          3         Rental income                   6,304         〃                       0.00




                                                            202
  No.       Company    Counterparty Relationship                             Details of transactions
(Note 1)                             (Note 2)              Account             Amount        Conditions   Percentage (%) of
                                                                                                          accounting for the
                                                                                                          total consolidated
                                                                                                           net revenues or
                                                                                                            assets (Note 3)
           management
   8       Fuhwa Asset Fuhwa             3         Rental income                  3,537         〃                       0.00
           management Securities
                       Investment
                       Trust
   9       Yuanta Core Fuhwa             2         Income from providing         15,000         〃                       0.00
           Pacific     Securities                  financial consultation
           Securities  Finance
   9       Yuanta Core Fuhwa Bank        3         Bank deposits                387,609         〃                       0.07
           Pacific
           Securities
   9       Yuanta Core Fuhwa Bank        3         Bonds investments under    1,731,175         〃                       0.30
           Pacific                                 resale agreement
           Securities
   9       Yuanta Core Fuhwa Bank        3         Accounts receivable            7,204         〃                       0.00
           Pacific
           Securities
   9       Yuanta Core Fuhwa Bank        3         Rental income                 29,362         〃                       0.00
           Pacific
           Securities
   9       Yuanta Core Fuhwa             3         Bonds investments under       50,000         〃                       0.00
           Pacific     Securities                  resale agreement
           Securities  Finance




                                                          203
   Note 1: The numbers in the No. column represent as follows:

           1. 0 for the parent company

           2. According to the sequential order, subsidiaries are numbered from 1.

   Note 2: There are three types of relationships with the counterparties and they are labeled as follows:

           1. Parent company to subsidiary.

           2. Subsidiary to parent company.

           3. Subsidiary to subsidiary.



12. Segment Information: not applicable




                                                                204

				
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