Interest revenue $ 52,320
Investment revenue 9,527
Reserve revenue 2,260
64,107 Trust expenses:
Management expenses 2,029
Tax expenditure 1,128
Interest expenses 42,649
Fee and commission 6,952
Audit expenses 110
Investment loss 49
Repayment of trust principal 4,935
57,852
Net income before income tax 6,255
Income tax expense 2
Net income after income tax $ 6,253
Trust Property List March 31, 2007
Invested items Book value
Short-term investments:
Bonds $ 19,801,345
Common stock 1,205,051
Funds 29,390,417
50,396,813
Others:
Deposits 140,914
Long-term investments:
Debt investments 8,016,480
Real estate:
Land 1,854,268
$ 60,408,475
Trust Property List March 31, 2006
Invested items Book value
Short-term investments:
Bonds $ 15,070,025
Common stock 1,272,100
Funds 21,403,794
37,745,919 Others:
Deposits 131,471
Long-term investments:
Debt investments 9,286,480
Real estate:
Land 2,516,243
$ 49,680,113 As of March 31, 2007, the trust balance sheet and property list included specific-purpose foreign currency trust fund business of the OBU. As of March 31, 2006, the OBU did not have such business.
(28) Significant Subsequent Events
On December 28, 2006, the shareholders' meeting of the Company agreed that shares of Yuanta Core Pacific Securities Co., Ltd. would be exchanged for shares of the Company, and Yuanta Core Pacific Securities Co., Ltd. became a wholly owned subsidiary of the Company on April 2, 2007.
One share of Yuanta Core Pacific Securities Co., Ltd. would be exchanged for 1,615 shares of the Company. The number of exchanged shares would be 5,150,352 thousand shares with a par value of
$10 per share.
(29) Others
1) Employment, Depreciation and Amortization Expenses
A summary of employment, depreciation and amortization expenses categorized by cost of goods sold and operating expenses is as follows:
For the three-month period ended March 31, 2007
For the three-month period ended March 31, 2006
Function
Accounts Cost of
goods sold Operating
expenses Total Cost of
goods sold Operating
expenses Total
Employment expenses:
Salary - 1,012,709 1,012,709 - 864,326 864,326 Insurance - 59,529 59,529 - 59,182 59,182 Pension - 59,787 59,787 - 56,329 56,329 Others - 33,184 33,184 - 37,055 37,055 Depreciation (note 1) - 142,900 142,900 - 103,431 103,431
Depletion - - - - - -
Amortization (note 2) - 53,041 53,041 - 62,312 62,312 Note 1: For the three-month periods ended March 31, 2007 and 2006, depreciation expenses－leased assets
were $3,988 and $3,574, respectively, and depreciation expenses－unused assets were $11 and $0, respectively, both recorded as other non-interest income, net.
Note 2: For the three-month periods ended March 31, 2007 and 2006, amortization expenses－issuance costs for corporate bonds were $3,666 and $4,593, respectively, recorded as other non-interest income, net.
The amortization expenses for premiums on held-to-maturity financial assets and guarantee deposits were $9,991 and $18,635, respectively, recorded under the contra account of interest revenue.
2) Reclassification
Adequate adjustment of 2006 first quarterly report had been made to match up 2007 first quarterly report. Such adjustments will not have significant effect on the financial statements.
3) Related information on capital ratio is not required to be disclosed in quarterly reports.
4) In accordance with Article 46 of the Financial Holding Company Act, the Comapny is not required to present a table which 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 in quarterly reports.
5) Cross-marketing activities between the financial holding company and its subsidiaries, and between subsidiaries:
1. Significant business and transactions among the financial holding company and its subsidiaries whose amount exceeded NT$100 million:
All the following transactions have been eliminated in the consolidated financial statements.
(a) Agency
For the three-month periods ended March 31, 2007 and 2006, Fuhwa Securities earned commission revenue resulting from stock transactions consigned by Fuhwa Securities Finance of $117,798 and $36,665, respectively.
(b) Brokerage commission revenue for futures
For the three-month periods ended March 31, 2007 and 2006, Fuhwa Securities conducted futures trading support on behalf of Fuhwa Futures and earned brokerage commission revenue of $11,805 and $21,275, respectively.
(c) Banking a) Deposits
As of March 31, 2007 and 2006, deposits in Fuhwa Bank from subsidiaries were as follows:
March 31, 2007 March 31, 2006
Fuhwa Financial Holding $ 6,155 5,547
Fuhwa Securities Finance 38,080 30,126
Fuhwa Securities 218,071 1,669,094
Fuhwa Futures 126,505 63,758
Fuhwa Capital Management 41,354 4,198
Fuhwa Securities Investment Trust 69,334 67,910
Fuhwa Asset Management 5,895 7,454
Fuhwa Venture Capital 2,844 5,040
Fuhwa I Venture Capital 4,390 8,751
Fuhwa Finance Consulting 16,559 15,816
Fuhwa Life Insurance Agency 50,136 81,578
Fuhwa Property Insurance Agency 7,082 4,355
Fuhwa Lease 5,224 7,640
Fuhwa Futures Management 100,578 54,178
$ 692,207 2,025,445
Interest revenue was as follows:
2007 2006
Fuhwa Financial Holding $ 39 31
Fuhwa Securities Finance 232 431
Fuhwa Securities 1,720 962
Fuhwa Futures 2,661 2,074
Fuhwa Capital Management 161
-Fuhwa Securities Investment Trust 336 257
Fuhwa Finance Consulting 198
-Fuhwa Life Insurance Agency 27 176
Fuhwa Property Insurance Agency 16
-Fuhwa Futures Management 440 250
$ 5,830 4,181 b) As of March 31, 2007 and 2006, Fuhwa Securities had deposited negotiable
certificates of deposit and certificates of deposit with Fuhwa Bank as contractual guarantee deposits for issuing stock warrants.
March 31, 2007 March 31, 2006
Fuhwa Bank $ 110,000 200,000
c) As of March 31, 2007 and 2006, Fuhwa Securities Finance had purchased negotiable certificates of deposit from Fuhwa Bank of $0 and $100,000, respectively.
d) As of March 31, 2007 and 2006, the amounts deposited in Fuhwa Bank by Fuhwa Futures for customers' deposits from futures trading accounts were as follows:
March 31, 2007 March 31, 2006
Customers' deposits－futures trading accounts
$ 429,878 409,669
e) As of March 31, 2007 and 2006, the balance of subordinate financial debentures purchased from Fuhwa Bank by Fuhwa Securities Finance and the related interest revenue were as follows:
2007
Ending balance
Current interest revenue Subordinate financial debentures $ 966,000 1,896
2006
Ending balance
Current interest revenue
Subordinate financial debentures $ 966,000 3,954 f) Credit lines
As of March 31, 2007, in order to obtain short-term borrowing credit lines of
$650,000 from Fuhwa Bank, Fuhwa Securities Finance had pledged several pieces of land and buildings as collateral. The book value of the abovementioned collateral amounted to $1,442,495 and $1,458,230, respectively. The borrowing amounts were
$0 and $0, respectively.
As of March 31, 2007 and 2006, in order to obtain credit lines of $1,870,000 and
$1,570,000, respectively, from Fuhwa Bank, Fuhwa Securities had pledged beneficiary certificates with book value of $1,310,848 and $1,041,324, respectively, and land and buildings with book value of $1,427,950 and $1,444,391, respectively, as collateral.
g) Expenses from sale of funds
Fuhwa Securities Investment Trust appointed related parties to sell its securities investment trust fund. Details of expenses resulting from the abovementioned transaction were as follows:
2007 2006
Fuhwa Bank $ 915 1,225
Fuhwa Securities 683 636
$ 1,598 1,861 h) Outright purchases and sales
Fuhwa Securities engaged in outright purchases and sales with subsidiaries as follows:
2007
Name Type
Outright purchase amount
Outright sale amount
Fuhwa Bank Bonds $ 348,774 348,980
2006