Integrity, Accountability, Creativity Cathay Financial Holdings Financial Cathay Contents Letter to Shareholders ...................................................................................................... 04 Overview of Cathay Financial Holding Co., Ltd Company Profle .......................................................................................................................05 Organizational Chart ................................................................................................................06 Group Affliates .........................................................................................................................06 Board of Directors, Independent Directors and Key Management .....................................07 Capital and Shares ....................................................................................................................07 2015 Business Plan ....................................................................................................................08 Contents Overview of Subsidiaries Cathay Life Insurance Co., Ltd. Cathay Securities Message from the President ............................... 10 Investment Trust Co., Ltd. Message from the Chairman ............................. 30 Company Profle .................................................. 11 Company Profle ................................................. 31 Business Scope ................................................... 13 Business Scope .................................................. 33 2015 Business Plan and Operational Targets .... 14 2015 Business Plan and Operational Targets .... 33 Cathay United Bank Co., Ltd. Cathay Venture Inc. Message from the Chairman .............................. 16 Company Profle ................................................. 34 Company Profle .................................................. 17 Business Scope ................................................... 34 Business Scope ................................................... 19 2015 Business Plan .............................................. 35 2015 Business Plan and Operational Targets .... 20 Cathay Century Insurance Co., Ltd. Overseas Branches and Ofces .......... 36 Message from the Chairman ............................. 22 Te Year in Review 2014 ....................... 38 Company Profle ................................................. 23 Honors and Accolades ........................... 40 Business Scope .................................................... 24 2015 Business Plan and Operational Targets .... 25 Financial Report ........................................ 42 t/5%64%&YDIBOHF3BUF t/5%64%&YDIBOHF3BUF Cathay Securities Corporation Message from the Chairman ............................. 26 Company Profle ................................................. 27 Business Scope ................................................... 28 2015 Business Plan and Operational Targets .... 29 2014 Annual Report 2014 Annual Letter to Shareholders The global economy steadily got back on track in 2014. In spite of increasingly volatile fnancial markets, Cathay Financial Holding as a whole turned in a strong performance thanks to the concerted efforts of our colleagues. *O $BUIBZ'JOBODJBM)PMEJOHTSFDPSEFESFDPSECSFBLJOHDPOTPMJEBUFEQSPåUBGUFSUBYPG64CJMMJPO BOEFBSOJOHTQFSTIBSFPG/50VSNBKPSTVCTJEJBSJFT $BUIBZ-JGF*OTVSBODFBOE$BUIBZ6OJUFE#BOL BMTP SFDPSEFESFDPSECSFBLJOHQSPåUTGPSUIFZFBS$BUIBZ-JGF*OTVSBODFSFDPSEFEBDPOTPMJEBUFEQSPå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secured its position as the second largest non-life insurance company in the market in terms of premium income. $BUIBZ4FDVSJUJFT*OWFTUNFOU5SVTUSFDPSEFE64CJMMJPOJOBTTFUTVOEFSNBOBHFNFOU NBLJOHJUUIFMBSHFTU TFDVSJUJFTJOWFTUNFOUUSVTUDPNQBOZJO5BJXBO$BUIBZ4FDVSJUJFTSFDPSEFESFDPSECSFBLJOHQSPåUBGUFSUBYBTXFMM as record-breaking earnings per share in 2014. All business operations showed stable growth. Cathay Financial Holdings Financial Cathay *OUFSNTPGPWFSTFBTFYQBOTJPO XFDPOUJOVFEUPFYQBOEPVSQSFTFODFBOEEFWFMPQOFXCVTJOFTTFTJO PWFSTFBTNBSLFUT*O$IJOB UIF4IBOHIBJ#SBODIPG$BUIBZ6OJUFE#BOLSFQPSUFESFDPSEIJHIQSPåUTJO The Shanghai Minhang Sub-Branch, Shanghai Pilot Free Trade Zone Sub-Branch, and Qingdao Branch opened for business in 2014. Approval has also been received from the Financial Supervisory Commission to open a Shenzhen Branch and a Shanghai Jiading Sub-Branch. Plans are also in place to apply for the etablishment of a TVCTJEJBSZCBOLJO$IJOBBOEUPDPOUJOVFUPFYQBOEUIFTDBMFPGPVSCVTJOFTTBOECSBODIOFUXPSLJOUIF(SFBUFS $IJOBSFHJPOJOPSEFSUPQSPWJEFNPSFDPNQSFIFOTJWFTFSWJDFTUPPVSDVTUPNFST3FHBSEJOHUIFJOTVSBODF CVTJOFTT $BUIBZ-VKJB[VJ-JGF*OTVSBODFIBEPGGJDFT IFBEPGGJDFBOECSBODIFT BOETBMFTBOETFSWJDF BHFODJFTBDSPTT$IJOB XIJMF$BUIBZ$FOUVSZ*OTVSBODFIBTFTUBCMJTIFEPGåDFTBOEFYUFOEFEJUTSFBDIJOUP NBKPSQSPWJODFTJODFOUSBMXFTUFSO$IJOBBTPGZFBSFOE*OUIFGVUVSF XFXJMMGPDVTPVSFGGPSUTPOJNQSPWJOH UIFQSPEVDUJWJUZPGPVSTBMFTGPSDF BEKVTUJOHPVSPSHBOJ[BUJPOBMTUSVDUVSFBOEFYQBOEJOHPVSQSFTFODFUPEFWFMPQ brand recognition in the China market. "TGPSPVSFYQBOTJPOJO4PVUIFBTU"TJB $BUIBZ6OJUFE#BOLBMSFBEZIBTTFUVQPGåDFTJOFJHIUPVUPGUFO "4&"/DPVOUSJFT JODMVEJOH7JFUOBN $BNCPEJB 5IBJMBOE 4JOHBQPSF .BMBZTJB UIF1IJMJQQJOFT #VSNB BOE -BPT"QQSPWBMIBTCFFOSFDFJWFEGSPNUIFMPDBMSFHVMBUPSJO*OEPOFTJBUPPQFOBSFQSFTFOUBUJWFPGåDFJO+BLBSUB *OEPOFTJB BOEGSPNUIF'JOBODJBM4VQFSWJTPSZ$PNNJTTJPOUPPQFOB.BOJMB#SBODIJOUIF1IJMJQQJOFT"TB SFTVMU $BUIBZ6OJUFE#BOLXJMMCFBCMFUPGVSUIFSFYUFOEJUTSFBDIJO4PVUIFBTU"TJBBOECVJMEBOFYUFOTJWF PWFSTFBTPQFSBUJPOBMQMBUGPSN$BUIBZ-JGF*OTVSBODFQMBOTUPNBLFFRVJUZJOWFTUNFOUTJOCBOLTJONPSF EFWFMPQFE"4&"/DPVOUSJFT TVDIBTUIF1IJMJQQJOFTBOE*OEPOFTJB UPTUSFOHUIFO$BUIBZ'JOBODJBM)PMEJOHTh CVTJOFTTQPSUGPMJP'VSUIFSNPSF $BUIBZ-JGF*OTVSBODFIBTFTUBCMJTIFEBQSFTFODFJOTJYNBKPSQSPWJODFTBOE NVOJDJQBMJUJFTJO7JFUOBNBOE$BUIBZ$FOUVSZ*OTVSBODFIBTBMTPTFUVQBIFBEPGåDFBOECSBODIPGåDFTJOCPUI )P$IJ.JOI$JUZBOE)BOPJ5IF7JFUOBNJOTVSBODFNBSLFUQSFTFOUTTJHOJåDBOUHSPXUIQPUFOUJBMGPSVT We have also made signifcant progress in building our asset management business. In addition to Cathay $POOJOH"TTFU.BOBHFNFOU-JNJUFEJO)POH,POHBOE$%#4$BUIBZ"TTFU.BOBHFNFOU PVSKPJOUWFOUVSF JO$IJOB $BUIBZ'JOBODJBM)PMEJOHTQMBOTUPBDRVJSFUIF64DPNQBOZ $POOJOH)PMEJOHT$PSQ5IJTJTBO JNQPSUBOUTUFQUPXBSETCVJMEJOHBHMPCBMBTTFUNBOBHFNFOUQMBUGPSNTQBOOJOHUIF64 &VSPQF BOE"TJBBOE realizing our core strategy of having three engines of growth - "Insurance + Banking + Asset Management". We have identifed three engines of growth - "Insurance + Banking + Asset Management" - as our core strategy to seek continued growth and work towards our goal of becoming a leading financial institution in UIF"TJB1BDJåDSFHJPO-PPLJOHGPSXBSEUP $BUIBZ'JOBODJBM)PMEJOHTXJMMDPOUJOVFUPGPDVTPOEFMJWFSJOH steady growth and maintaining our market leading position by adhering to our core values of "Integrity, Accountability and Creativity" as we strive to create value for our shareholders who have continued to support us over the past years. Chairman Hong-Tu Tsai 4 Overview of Cathay Financial Holding Co., Ltd Organizational Chart Shareholders Audit Committee Remuneration Committee Board of Directors Corporate Sustainability Committee Strategic Management Committee Chairman Operations Management Committee Service Quality Committee Risk Management Committee President Personal Information Management Committee Cathay Financial Holdings Financial Cathay Auditing Strategic Marketing Economic Financial Administration Risk Mgmt. Information Project Div. Planning Dept. Planning Div. Research Div. Div. Div. Div. Div. Planning Div. Compliance Dept. Public Relations Dept. Investors Relations Dept. Integrated Marketing Dept. Direct Marketing Planning Dept. Accounting Dept. Financial Planning Dept. Administration Dept. Legal Dept. Group Affliates Cathay Financial Holding Co., Ltd. Cathay United Cathay Century Cathay Life Cathay Cathay Securities Cathay Securities Cathay Conning Bank Co., Ltd. Insurance Co., Ltd. Insurance Co., Ltd. Venture Inc. Corporation Investment Trust Co., Ltd. Asset Management Co., Ltd. Indovina Bank Cathay Lujiazui Life Insurance Cathay Insurance Cathay Futures Co., Ltd. Limited Co.,Ltd. (China) Company Limited Seaward Card Cathay Insurance Cathay Securities Investment Cathay Investment Consulting Co., Ltd. (Vietnam) Co., Ltd. Consulting Co., Ltd. (Shanghai) Co., Ltd. Cathay United Bank Cathay Insurance (Cambodia) (Bermuda) Co., Ltd. Corporation Limited Cathay Life Insurance (Vietnam) Co., Ltd. Lin Yuan (Shanghai) Real Estate Co., Ltd. 6 Board of Directors, Independent Directors and Key Management Name Education Experience Hong-Tu Tsai +% 4PVUIFSO.FUIPEJTU6OJWFSTJUZ 64" $IBJSNBO $BUIBZ-JGF*OTVSBODF Cheng-Ta Tsai #" $IJOFTF$VMUVSF6OJWFSTJUZ .BOBHJOH%JSFDUPS $BUIBZ-JGF*OTVSBODF Cheng-Chiu Tsai ." ,FJP6OJWFSTJUZ +BQBO Chairman, Cathay Century Insurance $IBJSNBOBOE$IJFG&YFDVUJWF0GåDFS $*5*$ 1FUFS7,XPL 1I% 6$#FSLFMFZ 64" ,"8")#BOL-JNJUFE $IBJSNBO $*5*$3FTPVSDFT)PMEJOHT-JNJUFE Board of Directors Chi-Wei Joong #" ,FBO$PMMFHFPG/FX+FSTFZ 64" President, CMB Credit Card Center Tsu-Pei Chen #" /BUJPOBM$IFOHDIJ6OJWFSTJUZ $IBJSNBO