IBF Financial : The Company's independent directors raised opinion to the first proposals in the 24th meeting of the 7th term of Board of Directors.

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Provided by: IBF Financial Holdings Co., Ltd.
SEQ_NO	2	Date of announcement	2022/07/27	Time of announcement	18:39:56
Subject	The Company's independent directors raised opinion to the first proposals in the 24th meeting of the 7th term of Board of Directors.
Date of events	2022/07/27	To which item it meets	paragraph 44
Statement	1.Meeting date of the board of directors, audit committee or remuneration committee:2022/07/27 2.Contents of the resolution made by the board of directors, audit committee or remuneration committee (please enter "board of directors","audit committee"or "remuneration committee"):Board of Directors 3.Name and resume of independent director(s) or member(s) of the audit/remuneration committee that expressed an objection or reserved opinion: Ching-Sung Wu/Independent Director of IBF Financial Holdings Wei-Lung Chen/Independent Director of IBF Financial Holdings 4.Motion(s) against which the objection or qualified opinion was expressed: Authorization for a capital increase in cash by issuing common shares. (the first proposal) 5.Objection or reserved opinion by the aforementioned independent director(s) or member(s) of the audit/remuneration committee: Ching-Sung Wu/Independent Director of IBF Financial Holdings (the first proposal): (1)The number of shares to be issued for the capital increase in this case shall not exceed 350 million ordinary shares. If the total amount of capital increase is NTD3 billion, it might mean that the subscription price for issuance will be as low as NTD8.5 with a substantial discount, which will damage shareholders' rights and interests. This shall be an extremely unlikely situation. The Company's business planning shall basically be conducted under a reasonable market condition assessment and market logic. (2)Based on the proposed amount of capital increase, the number and price of shares to be issued, there are doubts about the issuance at a discount. I intend to express an objection to this case. Wei-Lung Chen/Independent Director of IBF Financial Holdings (the first proposal): (1)The Company's autonomy in capital increase in cash shall not be damaged by the share exchange agreement. (2)The Company's application for merger and acquisition of Entie Commercial Bank, Ltd. by executing a share exchange agreement has been determined by the Financial Supervisory Commission on January 27, 2022 that the application shall be postponed, and the application was officially rejected. As of today, the Company has not held a board meeting to discuss whether to restart another merger and acquisition case. In other words, there is no merger and acquisition case in progress at present. As the share exchange agreement originally executed by the parties is no longer applied since the application was rejected by the competent authority,there is no such rules that the fundraising shall be subject to the negotiation with or agreement by the counterparty "before the share exchange record date", or further, after the fundraising takes effect, the application of the transaction price adjustment shall be subject to the negotiation with he counterparty. (3)In the proposal, it is emphasized that, when the Company conducts a capital increase, the Company shall negotiate with Entie Commercial Bank, Ltd., in advance, and shall negotiate the "transaction price adjustment" afterwards both of which violate the Company's "autonomy" for fundraising.This is also a challenge to the exercise of public authority by the competent authority for dismissing the merger case. The validity of the share exchange agreement shall be clarified before proceeding. (4)According to Explanations 3 and 4 of the Proposal, the number of shares to be issued in this case is 350,000,000 shares, and the total amount of fundraising is capped at NTD3 billion. That being the case, this capital increase case might be issued at a discount, and the languages of "issuance shall not be lower than the par value" shall be added; otherwise, it is not favorable to the normal development of financial holding company and causes damages to the interests of shareholders. 6.Countermeasures:The proposal is approved after voting. 7.Any other matters that need to be specified: The other 2 independent directors approved this case, with the following reason: Shihchen Joseph Jao/Independent Director of IBF Financial Holdings: (the first proposal): (1)The Company's double leverage ratio at the end of June this year was as high as 122.3%, the debt-to-equity ratio was 23.76%, and the capital adequacy ratio was only 137.41%. Compared with the peers and the requirements of the competent authority, there is considerable room for improvement. (2)In addition to the factors of the financial structure mentioned above, in terms of business considerations, there is also a need to strengthen the capital structure. At present, the US CPI has repeatedly reached new highs, and the rise in interest rates may be inevitable. The economic outlook is also not optimistic. Under this major premise, the Company shall do the preparation from the beginning, and shall have the capacity to support its subsidiaries when necessary. Taking a step back, when the interest rate rises to a considerable level, the Company shall also take the opportunity to increase the investment position, so as to cultivate profit margins in the future. (3)Financial institutions are different from general industries. A solid financial structure is necessary for a responsible financial institution. Accordingly, the Company has a need to increase capital regardless of financial or business considerations. I therefore support the speedy progress of this case. Chen Shu Chuan/Independent Director of IBF Financial Holdings: (the first proposal): As of the end of June 2022, in comparison with peers, our financial holding company's double leverage ratio and debt-to-equity ratio may be further strengthened. Once the capital is increased, we may shift funds on the business development and future investment plans of the bills, securities and venture capital of subsidiaries of the financial holding company to strengthen their profitability and competitiveness. The global economic growth continues deteriorating, the COVID-19 epidemic is treacherous and changeable, the war between Russia and Ukraine continues, and the global central banks are racing to raise interest rates and the exchange rates to combat inflation and the strong US dollar. Various factors affecting the deterioration of the global financial market and economic outlook are changing rapidly and uncontrollable. These external risk factors threaten the operational development, competitiveness of our financial holding company from time to time. In view of this, it is imperative to actively strengthen the financial structure of our inancial holding company in order to be in line with international supervision standards and strengthen the ability to survive and compete. The proposal explanation of this case has clearly stated that this is for "supporting working capital", "strengthening the financial structure" and responding to the needs of future investment in subsidiaries and business expansion. I fully support the promotion of the capital increase plan.