KGI Life Insurance Co., Ltd.

Financial Statements for the

Three Months Ended March 31, 2024 and 2023 and Independent Auditors' Review Report

INDEPENDENT AUDITORS' REVIEW REPORT

The Board of Directors

KGI Life Insurance Co., Ltd.

Introduction

We have reviewed the accompanying balance sheets of KGI Life Insurance Co., Ltd. (the "Company") as of March 31, 2024 and 2023, and the related statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 2024 and 2023, and notes to the financial statements, including the summary of significant accounting policies (together "the financial statements"). Management is responsible for the preparation and fair presentation of these financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Insurance Enterprises and International Accounting Standard 34, "Interim Financial Reporting" as endorsed and become effective by Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on these financial statements based on our reviews.

Scope of Review

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

Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying financial statements do not present fairly, in all material respects, the financial position of the Company as at March 31, 2024 and 2023, and their financial performance and cash flows for the three months ended March 31, 2024 and 2023, in accordance with the Regulations Governing the Preparation of Financial Reports by Insurance Enterprises and International Accounting Standard 34, "Interim Financial Reporting" as endorsed and became effective by Financial Supervisory Commission of the Republic of China.

- 1 -

The engagement partners on the reviews resulting in this independent auditors' review report are Wang-Seng Lin and Yi-Chun Wu.

Deloitte & Touche

Taipei, Taiwan

Republic of China

May 9, 2024

Notice to Readers

The accompanying financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to review such financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors' review report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors' review report and financial statements shall prevail.

- 2 -

KGI LIFE INSURANCE CO., LTD.

BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

March 31, 2024

December 31, 2023

March 31, 2023

ASSETS

Amount

%

Amount

%

Amount

%

CASH AND CASH EQUIVALENTS (Notes 6 and 42)

$

35,434,908

1

$

49,203,474

2

$

60,961,525

3

RECEIVABLES (Notes 7 and 42)

21,436,173

1

22,786,016

1

23,894,849

1

CURRENT TAX ASSETS (Note 42)

3,291,946

-

2,690,111

-

2,102,475

-

INVESTMENT

Financial assets at fair value through profit or loss (Notes 8 and 42)

418,576,854

17

403,552,413

17

385,475,438

16

Financial assets at fair value through other comprehensive income (Notes 9 and 42)

69,558,232

3

71,658,283

3

51,874,924

2

Financial assets at amortized cost (Note 10)

1,636,604,280

67

1,594,184,323

66

1,583,128,273

67

Investments accounted for using equity method (Notes 12 and 42)

2,323,168

-

2,118,503

-

2,210,048

-

Investment property (Note 13)

69,560,801

3

69,752,774

3

67,736,263

3

Loans (Note 11)

34,025,798

1

33,964,918

1

32,861,007

2

Total investment

2,230,649,133

91

2,175,231,214

90

2,123,285,953

90

REINSURANCE ASSETS (Note 14)

1,093,395

-

1,011,096

-

915,587

-

PROPERTY AND EQUIPMENT (Notes 15 and 42)

10,523,214

-

10,606,865

1

11,548,345

-

RIGHT-OF-USE ASSETS (Note 16)

4,876,806

-

4,899,638

-

5,025,123

-

INTANGIBLE ASSETS

500,531

-

461,140

-

483,405

-

DEFERRED TAX ASSETS (Note 34)

20,098,511

1

17,773,544

1

14,991,401

1

OTHER ASSETS (Note 17)

15,449,198

1

7,886,366

-

9,772,460

-

SEPARATE ACCOUNT PRODUCT ASSETS (Note 36)

119,961,900

5

115,525,739

5

107,267,130

5

TOTAL

$

2,463,315,715

100

$

2,408,075,203

100

$

2,360,248,253

100

LIABILITIES AND EQUITY

PAYABLES (Notes 18 and 42)

$

13,637,156

-

$

14,306,200

1

$

11,366,103

1

CURRENT TAX LIABILITIES (Note 42)

6,895

-

6,895

-

288,601

-

FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS

(Notes 20 and 42)

17,227,297

1

5,612,137

-

5,628,772

-

BONDS PAYABLE (Notes 19 and 42)

20,000,000

1

20,000,000

1

10,000,000

1

LEASE LIABILITIES (Note 16)

1,990,722

-

1,959,693

-

2,027,526

-

INSURANCE LIABILITIES (Note 21)

2,087,729,396

85

2,071,434,364

86

2,078,356,779

88

FOREIGN EXCHANGE VALUATION RESERVE (Note 22)

13,896,058

-

9,768,788

-

9,534,483

-

PROVISIONS (Note 23)

138,867

-

146,416

-

164,261

-

DEFERRED TAX LIABILITIES (Note 34)

16,733,148

1

11,980,157

1

6,853,419

-

OTHER LIABILITIES (Note 42)

1,195,021

-

8,997,759

-

2,269,291

-

SEPARATE ACCOUNT PRODUCT LIABILITIES (Note 36)

119,961,900

5

115,525,739

5

107,267,130

5

Total liabilities

2,292,516,460

93

2,259,738,148

94

2,233,756,365

95

EQUITY

Common stock (Note 25)

49,206,531

2

49,206,531

2

49,206,531

2

Capital surplus (Note 26)

7,432,105

-

7,414,749

-

7,364,821

-

Retained earnings (Note 27)

Legal capital reserve

28,254,445

1

28,254,445

1

24,841,402

1

Special capital reserve

79,155,498

3

79,155,498

3

63,444,149

3

Unappropriated retained earnings

16,368,654

1

11,219,583

1

19,958,025

1

123,778,597

5

118,629,526

5

108,243,576

5

Other equity

(9,617,978)

-

(26,913,751)

(1)

(38,323,040)

(2)

Total equity

170,799,255

7

148,337,055

6

126,491,888

5

TOTAL

$

2,463,315,715

100

$

2,408,075,203

100

$

2,360,248,253

100

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

- 3 -

KGI LIFE INSURANCE CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

For the Three Months Ended March 31

2024

2023

Amount

%

Amount

%

OPERATING REVENUE

Direct premium income

$ 33,140,511

55

$ 37,193,152

70

Deduct: Reinsurance expenses

(561,111)

(1)

(414,656)

(1)

Net changes in unearned premium reserve

503,355

1

270,123

1

Retained earned premium (Notes 31 and 42)

33,082,755

55

37,048,619

70

Reinsurance commission received

97,584

-

71,578

-

Fee income (Note 42)

385,760

-

340,716

1

Net investment incomes (losses) (Notes 8, 29, 30

and 42)

Interest income

16,235,166

27

15,381,435

29

Gains (losses) on financial assets and liabilities at

fair value through profit or loss

(10,422,213)

(17)

23,352,437

44

Net gains from derecognition of financial assets at

amortized cost

147,881

-

1,432,433

3

Realized gains on financial assets at fair value

through other comprehensive income

165,041

-

202,689

-

Share of profit of associates and joint ventures

accounted for using equity method

72,529

-

127,382

-

Foreign exchange gains (losses)

37,376,251

62

(9,489,564)

(18)

Net changes in foreign exchange valuation reserve

(4,127,270)

(7)

1,352,444

2

Gains on investment property

181,847

-

390,485

1

Expected credit impairment reversal on

investments

875

-

22,679

-

Other impairment loss and reversal on investments

(3,622)

-

(6,744)

-

Losses on reclassification using overlay approach

(18,564,445)

(30)

(20,377,928)

(38)

Separate account product revenue (Note 36)

5,856,271

10

3,354,967

6

Total operating revenue

60,484,410

100

53,203,628

100

OPERATING COSTS

Insurance claim payments (Note 42)

(46,916,025)

(78)

(44,299,464)

(83)

Deduct: Claims recovered from reinsures

291,055

1

209,235

-

Retained claim payments (Note 32)

(46,624,970)

(77)

(44,090,229)

(83)

Net changes in insurance liabilities (Note 21)

3,213,437

5

(846,221)

(2)

Underwriting expenses

(1,979)

-

(816)

-

Commission expenses (Note 42)

(3,116,020)

(5)

(3,482,490)

(7)

Finance costs (Note 42)

(218,005)

-

(85,719)

-

Other operating costs

(33,141)

-

(37,193)

-

Separate account product expenses (Note 36)

(5,856,271)

(10)

(3,354,967)

(6)

Total operating costs

(52,636,949)

(87)

(51,897,635)

(98)

(Continued)

- 4 -

KGI LIFE INSURANCE CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

For the Three Months Ended March 31

2024

2023

Amount

%

Amount

%

OPERATING EXPENSES (Notes 33 and 42)

General expenses

$ (775,416)

(1)

$ (849,248)

(2)

Administrative expenses

(1,089,544)

(2)

(698,647)

(1)

Employee training expenses

(3,545)

-

(4,351)

-

Non-investments expected credit impairment losses

and reversal

438

-

(1,932)

-

Total operating expenses

(1,868,067)

(3)

(1,554,178)

(3)

OPERATING INCOME (LOSS)

5,979,394

10

(248,185)

(1)

NON-OPERATING INCOME AND EXPENSES

(Note 42)

6,977

-

574

-

INCOME (LOSS) FROM CONTINUING

OPERATIONS BEFORE INCOME TAX

5,986,371

10

(247,611)

(1)

INCOME TAX (EXPENSES) BENEFIT (Note 34)

(837,300)

(2)

568,700

1

NET INCOME

5,149,071

8

321,089

-

OTHER COMPREHENSIVE INCOME (LOSS), NET

OF TAX (Note 28)

Items that will not be reclassified subsequently to

profit or loss

Gain on property revaluation

-

-

288

-

Valuation gains (losses) on equity instruments at

fair value through other comprehensive income

1,394,129

2

(248,427)

-

Income taxes relating to items that are not be

reclassified

(266,513)

-

257,132

-

Items that are or may be reclassified subsequently to

profit or loss

Gains (losses) on debt instruments at fair value

through other comprehensive income

(1,638,541)

(3)

(38,398)

-

Share of other comprehensive income of

associates and joint ventures accounted for

using equity method, components of other

comprehensive income that will be reclassified

to profit or loss

136

-

426

-

(Continued)

- 5 -

KGI LIFE INSURANCE CO., LTD.

STATEMENTS OF COMPREHENSIVE INCOME

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

For the Three Months Ended March 31

2024

2023

Amount

%

Amount

%

Other comprehensive profits (losses) reclassified

using overlay approach

$

18,564,445

31

$

20,377,928

38

Income taxes relating to items that are or may be

reclassified subsequently to profit or loss

(757,883)

(1)

(842,698)

(1)

Other comprehensive income (loss), net of tax

17,295,773

29

19,506,251

37

TOTAL COMPREHENSIVE INCOME (LOSS)

$

22,444,844

37

$

19,827,340

37

EARNINGS PER SHARE (Note 35)

Basic earnings per share

$ 1.05

$ 0.07

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

(Concluded)

- 6 -

KGI LIFE INSURANCE CO., LTD.

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

Other Equity

Unrealized

Valuation Gains

(Losses) on

Other

Financial Assets

Comprehensive

Retained Earnings

at Fair Value

Income

Unappropriated

Through Other

Property

Reclassified

Legal Capital

Special Capital

Retained

Comprehensive

Income for

Revaluation

Using Overlay

Common Stock

Capital Surplus

Reserve

Reserve

Earnings

Income

Hedging

Surplus

Approach

Total

BALANCE ON JANUARY 1, 2023

$

49,206,531

$

7,336,659

$

24,841,402

$

63,444,149

$

19,270,321

$

(537,217)

$

3,301

$

1,940,337

$

(58,845,541)

$ 106,659,942

Net income for the three months ended March 31, 2023

-

-

-

-

321,089

-

-

-

-

321,089

Other comprehensive income (loss) for the three months

ended March 31, 2023

-

-

-

-

-

(22,318)

426

230

19,527,913

19,506,251

Total comprehensive income (loss) for the three months

ended March 31, 2023

-

-

-

-

321,089

(22,318)

426

230

19,527,913

19,827,340

Changes in investments in associates and joint ventures

accounted for using equity method

-

(14)

-

-

-

-

-

-

-

(14)

Share-based payment transaction

-

28,176

-

-

-

-

-

-

-

28,176

Disposal of equity instruments at fair value through other

comprehensive income

-

-

-

-

390,171

(390,171)

-

-

-

-

Net changes in special reserve

-

-

-

-

(23,556)

-

-

-

-

(23,556)

BALANCE ON MARCH 31, 2023

$

49,206,531

$

7,364,821

$

24,841,402

$

63,444,149

$

19,958,025

$

(949,706)

$

3,727

$

1,940,567

$

(39,317,628)

$ 126,491,888

BALANCE ON JANUARY 1, 2024

$

49,206,531

$

7,414,749

$

28,254,445

$

79,155,498

$

11,219,583

$

(2,626,542)

$

2,067

$

2,290,273

$

(26,579,549)

$ 148,337,055

Net income for the three months ended March 31, 2024

-

-

-

-

5,149,071

-

-

-

-

5,149,071

Other comprehensive income (loss) for the three months

ended March 31, 2024

-

-

-

-

-

(191,460)

136

-

17,487,097

17,295,773

Total comprehensive income (loss) for the three months

ended March 31, 2024

-

-

-

-

5,149,071

(191,460)

136

-

17,487,097

22,444,844

Share-based payment transaction

-

17,356

-

-

-

-

-

-

-

17,356

BALANCE ON MARCH 31, 2024

$

49,206,531

$

7,432,105

$

28,254,445

$

79,155,498

$

16,368,654

$

(2,818,002)

$

2,203

$

2,290,273

$

(9,092,452)

$ 170,799,255

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

- 7 -

KGI LIFE INSURANCE CO., LTD.

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

For the Three Months Ended

March 31

2024

2023

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss) before income tax

$ 5,986,371

$

(247,611)

Adjustments to reconcile profit (loss)

Depreciation expense

158,903

161,821

Amortization expense

71,441

69,847

Net losses (gains) on financial assets and liabilities at fair value

through profit or loss

12,435,932

(21,598,548)

Net gains on financial assets at fair value through other

comprehensive income

(150,404)

(182,401)

Net gains on financial assets at amortized cost

(144,775)

(1,420,061)

Interest expenses

227,436

94,893

Interest income

(16,235,166)

(15,381,435)

Dividend income

(2,019,388)

(1,764,070)

Net changes in insurance liabilities

16,315,096

(4,247,790)

Net changes in foreign exchange valuation reserve

4,127,270

(1,352,444)

Net changes in provisions

(638)

5,026

Expected credit impairment reversal gains on investments

(875)

(22,679)

Expected credit impairment losses (reversal gains) on

non-investments

(438)

1,932

Share-based payments

17,356

28,176

Share of profit (loss) of associates and joint ventures accounted for

using equity method

(72,529)

(127,382)

Losses on reclassification using overlay approach

18,564,445

20,377,928

Losses on disposal or scrapping of property and equipment

6

2

Gains on disposal of investment property

(9,908)

(25,384)

Losses (gains) on valuation of investment property

137,853

(12,402)

Other items

-

(3)

Changes in operating assets and liabilities

Increase in financial assets at fair value through profit or loss

(16,248,357)

(28,236,102)

Decrease (increase) in financial assets at fair value through other

comprehensive income

2,018,687

(20,886,613)

Decrease (increase) in financial assets at amortized cost

(42,784,524)

33,252,292

Decrease in notes receivable

52,962

18,455

Decrease (increase) in other receivables

750,828

(6,218,863)

Decrease (increase) in prepaid expenses and other prepayments

91,883

(74,408)

Decrease (increase) in refundable deposits

(50,557)

3,411,963

Decrease (increase) in reinsurance assets

(105,001)

107,206

Decrease (increase) in other assets

(2,364)

2,941

Increase in notes payable

-

62

Increase (decrease) in life insurance proceeds payable

13,425

(10,636)

Decrease in other payables

(683,297)

(687,607)

Increase (decrease) in due to reinsurers and ceding companies

9,242

(111,367)

(Continued)

- 8 -

KGI LIFE INSURANCE CO., LTD.

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

For the Three Months Ended

March 31

2024

2023

Decrease in commissions payable

$

(165,976)

$

(46,729)

Increase (decrease) in accounts collected in advance

(228,657)

38,332

Increase (decrease) in guarantee deposits received

(7,428,129)

162,711

Increase (decrease) in other liabilities

(145,952)

29,944

Decrease in provision for employee benefits

(6,911)

(4,099)

Cash flows generated used in operations

(25,504,710)

(44,895,103)

Interest received

10,227,854

12,759,978

Dividends received

1,874,943

1,611,721

Interest paid

(67,067)

(13,870)

Income taxes paid

(37,897)

(52,885)

Net cash flows used in operating activities

(13,506,877)

(30,590,159)

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of investments accounted for using equity method

(132,000)

(136,269)

Proceeds from capital reduction of investments accounted for using

equity method

-

35,700

Acquisition of property and equipment

(76,918)

(96,673)

Acquisition of intangible assets

(67,709)

(38,044)

Decrease (increase) in loans

(60,880)

402,099

Acquisition of investment property

(13,030)

(3,080)

Disposal of investment property

111,445

166,805

Net cash flows used in investing activities

(239,092)

330,538

CASH FLOWS FROM FINANCING ACTIVITIES

Principle repayment of lease liabilities

(22,597)

(35,279)

DECREASE IN CASH AND CASH EQUIVALENTS

(13,768,566)

(30,294,900)

CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE

PERIOD

49,203,474

91,256,425

CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD

$

35,434,908

$

60,961,525

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

(Concluded)

- 9 -

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CDFH – China Development Financial Holding Corp. published this content on 28 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 June 2024 04:04:34 UTC.