PSC — AGM Information 2013

Jul 4, 2013

TSE: 2855

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2013 General Shareholders’ Meeting Meeting Agenda

Jun. 19, 2013 at 9:00am B1, No. 8, Dongxing Rd., Taipei City, Taiwan ROC

Translation – In case of any discrepancy between the Chinese and English versions, the Chinese version shall prevail.

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Table of Contents

1.	Meeting Agenda ………………………………..………	P 3
2.	Report Items ..………………………….…………..…..	P 3
3.	Items to be Approved ..………………..………….…...	P 4
4.	Items for Discussion ..………………..…………..…....	P 5
5.	Items to Elect ..………………..…………..….... ……..	P 5
6.	Extraordinary Motions ..…..…………………………...	P 6
Appendixes
I.	2012 Operating Report.…………..…………….……..…..	P 7
II.	2012 Supervisors Audit Report.………..……………….....	P10
III.	Ethical Corporate Management Best Practice Principles.......	P11
IV.	2012 Financial Statements..………………..……………..	P15
V.	2012 Earnings Distribution Plan..……………..……….......	P30
VI.	Comparison table of Amendments to” Rules and Procedures of
	Shareholders’ Meeting”…………..………..……..……..…	P31
VII.	Rules Governing the Election of Directors and Supervisors….	P37
VIII.	Rules and Procedures of Shareholders’ Meeting…………….	P39
IX.	Articles of Incorporation..………………………………..….	P47
X.	Information of Employee Bonus and Board Members Compensation	P53
XI.	Shareholdings of Directors and Supervisors..……………..	P54

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1. Agenda for the 2013 General Shareholders’ Meeting

• (1) Meeting called to order (Report on the total number of shareholders and shareholder representatives in attendance)

• (2) Opening Remarks from the Chairman

• (3) Report Items

• 1) 2012 Operating Report

• 2) 2012 Supervisors Audit Report

• 3) Capital Adequacy Ratio Report

• 4) The influence of appropriated earnings and special reserve for the first-time adoption of IFRSs

• 5) Enactment of the” Ethical Corporate Management Best Practice Principles.

• (4) Items to be approved

• 1) 2012 Consolidated Financial Statements

• 2) 2012 Earnings Distribution Proposal

• (5) Items for Discussion

Amendment of the “Rules and Procedures of Shareholders’ Meeting”

• (6) Items to elect

• To by-elect the 9th Directors of the company.

• (7) Extraordinary Motions

• (8) Meeting Adjourned

2. Report Items

• (1) 2012 Operating Report

Details: The Company’s Operating Report for 2012, please see Appendix I (page7~9)

• (2) 2012 Supervisors Audit Report Details: 2012 Audit Report prepared by the Supervisors of the Company, please see Appendix II (page 10)

• (3) Capital Adequacy Ratio Report

Details: The Company’s capital adequacy ratio for March of 2013 was 551%.

• (4) The influence of distributable earnings and special reserve for the first-time adoption of IFRSs

Details: The company adopted IFRS (International Financial Reporting Standards) in 2013. Due to the doption of IFRS on January 1 2013,the deduction of NT$357,481,459 in unappropriated earning, and the unrealized revaluation increment and cumulative translation adjustments under

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stockholders' equity being legally exempted from being set aside as special reserves under retained earnings, the special reserves set aside was NT$0, hence distributable earnings underwent a net decrease of NT$357,481,459 on January 1, 2013.

• (5) Report on enactment of the” Ethical Corporate Management Best Practice Principles”

Details:

• 1) In line with FSC policies and the Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies template announced by TWSE, and also to keep up with international trends and strengthen corporate governance, we have formulated our own Ethical Corporate Management Best Practice Principles.

• 2) Refer to Appendix III (page11~14) for the provisions of the company's Ethical Corporate Management Best Practice Principles.

3. Items to be Approved

� Motion 1 (proposed by the Board of Directors)

Resolved, that the 2012 consolidated financial statements be approved.

Explanation:

• (1) The 2012 consolidated financial statements have already been successfully audited by CPA Lin Se-Kai and CPA Huang Gin-Jei of PricewaterhouseCoopers Taiwan and audited by the Supervisors of the Company.

• (2) Approve the Operating Report, the financial statements, and the consolidated financial statements. Please see Appendix I (page7~9) and Appendix IV (page15~29).

Resolution:

� Motion 2 (Proposed by the Board of Directors)

Resolved, that the 2012 earnings distribution proposal be approved.

Explanation:

• (1) Drafted in accordance with the Company Law and the Company’s Articles of Incooperation.

• (2) Our Company’s distributable earnings for 2012 were NT$702,794,986, cash dividend of NT$0.52 per share is proposed. To see the 2012 earnings distribution table, please see Appendix V (page30).

• (3) Company share buybacks, treasury share transfers, and cancellation of shares may alter the total number of outstanding company shares and thereby affect the ratio by which earnings are appropriated to shareholders. The Chairman of the Board shall be authorized to adjust the distribution ratios approved in the General Shareholders’ Meeting so as to accurately reflect the total number of outstanding shares as of date of record. Fractional currencies less than NT$1 will be allocated to Employee Welfare Committee.

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• (4) After approving the proposal of 2012 cash dividend distribution by 2013 shareholders’ meeting, the Chairman was authorized to set the record date.

Resolution:

4. Items for Discussion

Item 1 (Proposed by the Board of Directors)

Topic: that the Company’s Rules and Procedures of Shareholders’ Meeting be amended.

Explanation:

• (1) Amendment to be made in accordance with Official Letter No.1020003468 as released by TWSE on February 27, 2013.

• (2) The key amendments are as follows:

• 1) Addition to the existing provisions in Paragraph 1 and 2 of Article 6: strengthen the operations of the shareholders' meeting, safeguard the rights and interests of shareholders.

• 2) Addition to Article 7, Paragraph 2: the chairman of the shareholders' meeting shall understand the motions proposed and the company's operating situation.

• 3) Amendment to text in Article 8, Paragraph 1, and addition to Paragraph 2: to avoid the disputes at the shareholders' meeting, uninterrupted voice and video recording shall be required for the full length of the shareholders' meeting.

• 4) Amendment to Article 13, Paragraph 8: Counting of votes at the shareholders' meeting is required to be conducted publicly, the voting results and number of voting rights shall be announced on the spot.

• (3) For chart comparing the changes and related explanations, please see Appendix VI (page31~36)

Resolution:

5. Items to Elect

Topic: To by-elect the 9th Directors of the company. (Proposed by the Board of Directors)

Explanation:

• (1) Director Chang Li Hsun resigned from the company's board of directors on March 21, 2013, the vacant position on the board is intended to be filled through a by-election at the 2013 Shareholders' Meeting.

• (2) The director's term shall last from June 19, 2013 (the date of the by-election) to

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June 21, 2015 (when the 9th Board's term expires).

• (3) The company's board of director’s election shall be conducted in accordance with Article 192-1 of the Company Act, and the candidate nomination system shall be adopted. Candidates for directorship may be nominated by shareholders holding 1% or more of the total number of outstanding shares issued by the company or the board of directors, and the relevant documents required from the nominees shall be submitted in accordance with regulations.

• (4) The board has nominated Kao, Xiu-Ling as a candidate for directorship.

• (5) The academic credentials and work experience of the board's nominee are as follows, the nominated candidate has already submitted her letter of undertaking to assume directorship if elected and the director nominee's declaration.

Name ofShareholder	Kao,Xiu-Ling	Kao,Xiu-Ling
AccountNumber	1840
NumberofSharesHeld	3,529,286
Attendance/Study	Marymount College University ofSouthernCalifornia
WorkingExperience
Chairman&President /Kao-chyuan Inv.Co.,Ltd		Present
Chairman / BEING spa		Dec.13, 2011-Dec.12, 2014
Director/President ChainStore Corp.		Jun. 21,2012-Jun. 20,2015
Director/ Ton Yi industrial Corp.		Jun. 30, 2010-Jun. 29, 2013
Director/ ScinoPharm Taiwan Ltd.		Jun. 13,2012-Jun. 12,2015
Director/ President International Development Corp.		Jun. 7, 2012-Jun. 6, 2015
Director/PresidentPharmaceuticalCompany		Jun. 22,2010-Jun. 21,2013
Director/PresidentDrugstoreBusiness Corp.		Sep.5,2011- Apr.,2014
Director/ Uni-President Department Store Corp.		Apr. 20, 2012-Jun. 19, 2015
Director/Dream-MallCo.,Ltd.		Jun. 4,2010-Jun.3,2013
Director/ Uni-president Development Corp.		Jun. 4, 2010-Jun. 3, 2013

• (6) The board of directors has reviewed the qualifications of nominated candidate Kao, Xiu-Ling and found them to be in line with relevant legal provisions.

• (7) Shareholders shall elect a director from the list of candidates as reviewed and approved by the board of directors, refer to the company's Rules Governing the Election of Directors and Supervisors, Appendix VII (Page37~38) for details on relevant electoral matters.

• (8) Please proceed with the election

Result of election:

6. Extraordinary Motions

7. Meeting Adjourned

Appendixes

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Appendix I

2012 Operating Report

The macro environment Economy and Our Operating Policy

After the presidential elections in early 2012, the stock market soared to 8,171 points. Immediately following that, a number of events (including the capital gains tax controversy, rising domestic oil and electricity prices, worries over debt defaults in Europe and the US's double-dip recession) caused the market to fall to 6,857 points. During the second half of 2012, a number of political and economic factors resulted in the market undergoing a correction and closing for the year at 7,700 points, rising only 8.88%. Under the momentum of this correction, the company's businesses continued to operate stably and its risk control mechanisms were taken into account. In control of market trend developments, the company actively generated profits. For 2012, it posted an after-tax profit of NT$1.114 billion and EPS of NT$0.84, ranking first among the 12 major securities firms. Thus amid a correction that saw no significant gains, the company's excellent management team still managed to achieve outstanding results.

Current Status of Business Operations and Results Achieved

On the brokerage front, the impact of the capital gains tax controversy caused a significant decline in overall trading volume. The brokerage division continued operations prudently and achieved an average brokerage market share of 3.67% (8th in the market) for the year. As trading volume in the stock market continued to shrink and in a tough operating environment, the company actively raised its operational efficiency and developed alternative sources of income. It worked to enhance the capability of its teams and information systems, provided quality customer service and a wide range of financial products for investors, improved the performance of its businesses, and generated stable profits for the company.

On the underwriting front, our company conducted 52 underwriting deals in 2012, giving us an overall 3rd place ranking within that industry. In deciding which companies to work with, we use strict screening methods that allow us to focus only on companies in particularly strong sectors and to focus on company with healthy credit ratings. We then work with these good companies to help them list on the TWSE or GTSM. Going forward, our professional team will continue to work tirelessly to land high-quality clients with bright futures.

On the proprietary trading front, the impact of the capital gains tax controversy and rising oil and electricity prices dragged down market indexes in the first quarter. This was followed by a correction and significant tightening of trading volume. With a poor investment climate and tougher operating environment, the company strived to diversify risk and minimize losses in the second half of the year. Relying on the quality of its excellent operating model and risk control, the division strategically mastered trend developments, generated proprietary trading profits, significantly outperformed the market for the year, and continued contributing to profits in an outstanding manner.

On the bond front, Taiwan's bond market has seen lower trading volumes and lower

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market volatility. Aside from a continued focus on the overall economic situation and conditions in Taiwan's bond market, and having a good grip on market trading and arbitrage opportunities, the bond division also branched out into overseas bond markets to develop new profit sources, and the results have been satisfactory. With risk control at a suitable level and through the proper use of various trading tools, the division will continue to seek profit opportunities arising from volatility in the global financial market.

On the options front, market volatility had been significantly reduced due to the above mentioned capital gains tax controversy, rising domestic oil and electricity prices and debt crises in Europe and the US. However, by practicing various forms of operating flexibility, the division took advantage of opportunities arising from volatility to generate good levels of profits. Going forward, options operations will continue to be based on various forms of operating flexibility and strict risk control in order to achieve profit targets.

On the derivatives front, we were ranked 8th in the issuance market. As for warrant issuance, the capital gains tax controversy resulted in a lower market trading volume, higher hedging costs and options operating losses, hence profits from warrants were less than expected.

Attainment of Operating Forecasts

The company’s 2012 total revenue came to a total of NT$3.668 billion and with operating expenses of NT$2.773 billion. The average daily TAIEX turnover of 2012 was NT$94.5 billion, a marginal decline of 24.58% on YOY basis than 125.3 billion of 2011. The disruptive nature of capital gains tax policies and the shrinking of average daily volumes created a challenging operating environment in 2012. But with the company's businesses developing in a balanced manner and despite the brokerage business experiencing a shrinkage in trading volume that reduced profits, the company was able to make substantial gains overall due to the outstanding performance of its proprietary trading team. Overall after-tax profit was NT$1.114 billion, which is not an easy feat considering the double impact of policy and economic factors that affect the financial environment.

Profitability Analysis

2012 pre-tax profit reached NT$1.22 billion, for an after-tax profit of NT$1.113 billion. Our earnings per share came in at NT$0.84, giving us an overall rank of 1st among the 12 largest domestic securities firms. Our Return on Assets is 3.03% ranked #1 and Return on Equity is 5.24%, Ranked #3 among the 12 major domestic securities firms.

Future Direction of Operations

Uni-President Securities Group has securities, futures, asset management, capital management, insurance agency and personal insurance agency divisions under its wing. All of them enhance the securities group's brand and professional image, and thus leave a lasting impression in the eyes of investors. In the coming year, we will actively promote our wealth management business and work on developing new

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businesses. Taking advantage of the group's integration and cost saving strengths, we will provide customers with better service standards while the team works actively on innovating, improving and diversifying products and services, strengthening customer development capabilities, solidifying the company's operating base, pursuing stable business growth, and raising the company's market position and profitability.

The impact of capital gains taxation and the economic environment, as well as the rapidly changing financial landscape, have created a challenging environment for securities firms to operate in. Yet even so, the company will continue to uphold its integrity, provide professional and quality services, actively explore new markets and strengthen its risk control mechanism. Over this period when securities firms are facing slim profit margins, we hope to generate substantial profits while continuing to integrate resources within the group, crafting the operating principles of its businesses, and turning ourselves into a complete financial services institution.

With increasing cross-straits interaction between financial authorities on both sides, the company's overall management team will utilize its strengths and successful operation model and take advantage of the government's policies to pursue opportunities in a proactive and stable manner, expand on development opportunities in the Greater China market, continue seeking stable profits, live up to its shareholders' expectations, and create company and shareholder value.

Chairman of the Board President Head of Accounting Dept. Teng, A-Hua Lin, Kuan-Chen An, Chi-Li

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APPENDIX II

President Securities Corporation Supervisors Audit Report

The board of directors has compiled and submitted the Company's 2012 business report, earnings distribution plan and financial reports (including the consolidated financial reports). The above business report, earnings distribution plan and financial reports (including the consolidated financial reports) have been audited and determined to be conformed to Company Law and other relevant laws by the undersigned. In accordance with Article 219 of the Company Law, we hereby submit this report.

Sincerely yours, President Securities Corporation’s 2013 shareholders’ meeting

Supervisor

LU, LI-AN

CHUANG, TSAI-FA

CHINA F.R.P. CORPORATION Representative LEE, SHU-FEN

Taipei, Taiwan, R.O.C. March 28, 2013

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APPENDIX III

Ethical Corporate Management Best Practice Principles for President Securities Corp.

(Approved by the board of directors on Aug.23, 2012)

	Article 1	The Ethical Corporate Management Best Practice Principles
	Purpose of enactment and applicable scope	("Principles") enacted to establish a corporate culture of ethical management and sound development, and offer a reference framework for establishing good commercial practices. The Principles shall apply to the Company’s subsidiaries, any foundation to which the Company’ direct or indirect contribution of funds exceeds 50% of the total funds received, and other institutions or juridical persons which are substantially controlled by the company ("business group").
	Article 2 Prohibition of unethical conduct	When engaging in commercial activities, directors, supervisors, managers, employees of the Company or persons having substantial control over such companies ("substantial controllers") shall not directly or indirectly offer, promise to offer, request or accept any improper benefits, nor commit unethical acts including breach of ethics, illegal acts, or breach of fiduciary duty ("unethical conduct") for purposes of acquiring or maintaining benefits.
		Parties referred to in the preceding paragraph include civil servants, political candidates, political parties or members of political parties, state-run or private-owned businesses or institutions, and their directors, supervisors, managers, employees or substantial controllers orother interested parties.
	Article 3 The types of benefits	"Benefits" in the Principles means any valuable things, including money, endowments, commissions, positions, services, preferential treatment or rebates of any type or in any name. Benefits received or given occasionally in accordance with accepted social customs and that do not adversely affect specific rights and obligations shall be excluded.
	Article 4 Legal compliance	The Company shall comply with the Company Act, Securities and Exchange Act, Business Entity Accounting Act, Political Donations Act, Anti-Corruption Statute, Government Procurement Act, Act on Recusal of Public Servants Due to Conflicts of Interest, TWSE/GTSM-listing rules, or other laws or regulations regarding commercial activities, as the underlying basic premise to facilitate ethicalcorporatemanagement.
	Article 5 Policy	The Company shall abide by the operational philosophies of honesty, transparency and responsibility, base policies on the principle of good faith and establish good corporate governance and risk control and management mechanism so as to create an operationalenvironmentforsustainable development.
	Article 6	The Company’s board of directors and the management level shall undertake torigorously and thoroughly enforce suchpoliciesfor

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	The commitment and executions	internal management and external commercial activities.	internal management and external commercial activities.
	Article 7 Engaging in commercial activities under ethics	The Company shall engage in commercial activities in a fair and transparent manner. Prior to any commercial transactions, the Company shall take into consideration the legality of their agents, suppliers, clients or other trading counterparties, and their records of unethical conduct, if any. It is advisable not to have any dealings with persons who have any records of unethical conduct. When entering into contracts with other parties, the Company shall
		include in such contracts provisions demanding ethical corporate management policy compliance, and that in the event the trading counterparties are suspected of engaging in unethical conduct, the Companymay at any time terminate orcancelthe contracts.
	Article 8 Prohibition of offering and acceptance of bribery	When conducting business, the Company and their directors, supervisors, managers, employees and substantial controllers, shall not directly or indirectly offer, promise to offer, request or accept any improper benefits, including rebates, commissions, grease payments, or offer or accept improper benefits in other ways to or from clients, agents, contractors, suppliers, public servants, or other interested parties, unless the laws of the territories where the companies operate permit so.
	Article 9 Prohibition of	When directly or indirectly offering a donation to political parties or organizations or individuals participating in political activities, the Company and their directors, supervisors, managers, employees
	offering illegal political donations	and substantial controllers, shall comply with the Political Donations Act and their own relevant internal operational procedures, and shall not make such donations in exchange for commercial gains or business advantages.
	Article 10 Prohibition of improper charitable donation or sponsorship	When making or offering donations and sponsorship, the Company and their directors, supervisors, managers, employees and substantial controllers shall comply with relevant laws and regulations and internal operational procedures, and shall not surreptitiously engage in bribery.
	Article 11 Prohibition of unreasonable presents, hospitality or other improper benefits.	The Company and their directors, supervisors, managers, employees and substantial controllers shall not directly or indirectly offer or accept any unreasonable presents, hospitality or other improper benefits to establish business relationship or influence commercial transactions.
	Article 12 Organization and responsibility	The board of directors of the Company shall exercise the due care of good administrators to urge the Company to prevent unethical conduct, always review the results of the preventive measures and continually make adjustments so as to ensure thorough implementation of its ethical corporate management policies. To achieve sound ethicalcorporatemanagement,Auditing Office of

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		the Company is in charge of establishing and enforcing the ethical corporate management policies and prevention program and reporting to the board ofdirectors onaregularbasis.	the Company is in charge of establishing and enforcing the ethical corporate management policies and prevention program and reporting to the board ofdirectors onaregularbasis.
	Article 13 Legal compliance for business operation	The Company and their directors, supervisors, managers, employees and substantial controllers shall comply with laws and regulations and the prevention program when conducting business.
	Article 14	The Company shall promulgate policies for preventing conflicts of interests and offer appropriate means for directors, supervisors and
	The avoidance of conflicts of interest of directors and mangers	managers to voluntarily explain whether their interests would potentially conflict with those of the companies. The Company 's directors shall exercise a high degree of self-discipline, a director may present his opinion and answer relevant questions but is prohibited from participating in discussion of or voting on any proposal where the director or the juristic person that the director represents is an interested party, and such participation is likely to prejudice the interests of the Company; neither shall a director vote on such proposal as a proxy of another director in such circumstances. The directors shall practice self-discipline and must not support one another in improper dealings. The Company 's directors, supervisors and managers shall not take advantage of their positions in the companies to obtain improper benefits for themselves, their spouses, parents, children or any
		otherperson.
	Article 15 Accounting and internal control	The Company shall establish effective accounting systems and internal control systems for business activities which may at a higher risk of being involved in an unethical conduct, not have under-the-table accounts or keep secret accounts, and conduct reviews regularly so as to ensure that the design and enforcement of the systems are showing results. Internal auditors of the Company shall periodically examine the companies' compliance with the foregoing and prepare audit reports and submit the same to the board ofdirectors.
	Article 16 Education training and review	The Company shall periodically organize training and awareness programs for directors, supervisors, managers, employees, and substantial controllers, and convey to the companies' commercial transaction counterparties so they understand the companies' resolve to implement ethical corporate management, the related policies, prevention program and the consequences of committing unethical conduct. The Company shall apply the policies of ethical corporate management when creating its employee performance appraisal system and human resource policies to establish a clear and effectivereward and discipline system.
	Article 17 Report and discipline	The Company shall have in place a formal channel for receiving reports on unethical conduct and keep the reporter's identity and content of the report confidential. The Company shallestablishawell-defined disciplinary and

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		complaint system to handle violation of the ethical corporate management rules, and immediately disclose on the Company's internal website the offender's job title, name, date the violation was committed,violating act andhowthematter washandled.
	Article 18 Disclosure of information	The Company shall disclose the status of the enforcement of their own ethical corporate management best practice principles on their company websites, annual reports and prospectuses.
	Article 19	The Company shall at all times monitor the development of relevant local and international regulations concerning ethical corporate
	Review and amendment to the Principles	management, and encourage directors, supervisors, managers and employees to make suggestions so as to review and improve their ethical corporate management best practice principles and achieve better resultsfrom implementing the principles.
	Article 20 Enforcement	The principles of the Company shall be implemented after the board of directors grants the approval, and shall be sent to the supervisors and reported at a shareholders' meeting. The same procedure shall befollowedwhenthe principleshave beenamended.

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APPENDIX IV

2012

Financial Statements

Report of Independent Accountants Translated from Chinese

To the Board of Directors and Shareholders of President Securities Corporation

We have audited the accompanying non-consolidated balance sheets of President Securities Corporation as of December 31, 2012 and 2011, and the related non-consolidated statements of income, of changes in shareholders' equity and of cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

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

In our opinion, the non-consolidated financial statements referred to above present fairly, in all material respects, the financial position of President Securities Corporation as of December 31, 2012 and 2011, and the results of its operations and its cash flows for the years then ended in conformity with the "Rules Governing the Preparation of Financial Statements by Securities Firms", "Rules Governing the Preparation of Financial Statements by Futures Commission Merchants", and generally accepted accounting principles in the Republic of China.

We have also audited the consolidated financial statements of President Securities Corporation and its subsidiaries (not presented herein) as of and for the years ended December 31, 2012 and 2011. In our report dated March 26, 2013, we expressed an unqualified opinion on those consolidated financial statements.

PricewaterhouseCoopers, Taiwan

March 26, 2013

---

The accompanying non-consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally

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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 financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying non-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 applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept liability for the use of, or reliance on, the English translation or for any errors or misunderstanding that may derive from the translation.

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PRESIDENT SECURITIES CORPORATION

NON-CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2012 AND 2011

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

	ASSETS Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Bonds purchased under resale agreements	2012 Amount % $ 2,701,529 7 16,556,741 41 - -	2011 Amount % $ 1,773,140 4 14,437,899 36 230,044 1
	Margin loans receivable Refinancing security deposits Receivables from refinance guaranty Receivables from security lending Security lending deposits Notes receivable Accounts receivable - net Prepayments Prepaid pension expenses - current Other receivables Restricted assets Deferred tax assets - current Available-for-sale financial assets - current Total current assets Funds and investments Investments accounted for under the euit method	9,772,570 24 374 - 12,901 - 45,803 - 41,382 - 1,518 - 380,252 1 24,535 - 140,524 - 625,158 2 2,614,256 6 10,072 - 218,050 1 33,145,665 82 3528171 9	10,683,585 27 2,820 - 36,522 - 176,124 1 160,393 - 1,630 - 337,609 1 20,565 - 118,016 - 368,356 1 3,121,236 8 17,166 - 746,733 2 32,231,838 81 3650879 9
	qy Available-for-sale financial assets - non-current Financial assets at fair value through profit or loss - non-current Total funds and investments Fixed assets Land Buildings Equipment Prepayments for equipment Leasehold improvements Less: accumulated depreciation Total fixed assets Other assets Operating guarantee deposits Exchange clearing deposits Deposits-out Rental assets Idle assets Deferred tax assets - non-current Total other assets Securities brokerage debit accounts - net TOTAL ASSETS	,, 52,844 - 50,885 - 3,631,900 9 1,573,570 4 1,025,395 3 200,174 - 2,415 - 101,570 - ( 426,650 ) ( 1 ) 2,476,474 6 702,000 2 286,961 1 65,484 - 249,127 - 38,177 - 1,088 - 1,342,837 3 - - $ 40,596,876 100	,, 67,627 - 51,635 - 3,770,141 9 1,573,570 4 1,033,570 3 180,302 - 9,570 - 69,334 - ( 376,521 ) ( 1 ) 2,489,825 6 702,000 2 427,941 1 66,314 - 250,985 1 38,419 - 1,156 - 1,486,815 4 84,661 - $ 40,063,280 100

(Continued)

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PRESIDENT SECURITIES CORPORATION

NON-CONSOLIDATED BALANCE SHEETS (CONTINUED) DECEMBER 31, 2012 AND 2011 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

	LIABILITIES AND SHAREHOLDERS'EQUITY Current liabilities Short-term loans Commercial papers payable Bonds sold under repurchase agreements	2012 Amount % $ 2,400,000 6 1,999,639 5 7,979,713 20	2011 Amount % $ 2,650,000 7 1,499,781 4 8,616,273 21
	Financial liabilities at fair value through profit or loss - current Deposits on short sales Short sale proceeds payable Guarantee deposit received on borrowed securities Accounts payable Advance receipts Collections on behalf of third parties Other payables Other financial liabilities - current Total current liabilities Other liabilities Deposits-in Securities brokerage credit accounts - net Total liabilities SHAREHOLDERS’EQUITY Capital	448,263 1 1,245,017 3 1,606,777 4 1,144,289 3 474,578 1 6,795 - 258,383 - 1,073,944 3 121,597 - 18,758,995 46 21,476 - 48,902 - 18,829,373 46	427,195 1 1,478,214 4 1,741,022 4 1,795,332 4 33,935 - 34 - 230,571 1 737,126 2 83,498 - 19,292,981 48 29,126 - - - 19,322,107 48
	Common stock 13,231,191 33 12,845,816 32 Capital reserve Common stock 25,524 - 13,558 - Treasury stock 230,152 1 396,268 1 Retained earnings Legal reserve 1,960,558 5 1,903,868 5 Special reserve 5,482,607 13 5,198,754 13 Unappropriated earnings 1,124,366 3 582,364 1 Other adjustments to shareholders' equity Cumulative translation adjustments ( 288,029) ( 1) ( 211,249) - Unrealized gain or loss on financial instruments 1,134 - 11,794 - Total shareholders’equity 21,767,503 54 20,741,173 52 Commitments Subsequent events Other disclosure items TOTAL LIABILITIES AND SHAREHOLDERS'EQUITY $ 40,596,876 100 $ 40,063,280 100

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PRESIDENT SECURITIES CORPORATION

NON-CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS

EXCEPT FOR EARNINGS PER SHARE AMOUNT)

Revenues Securities brokerage fees Security lending Underwriting fees	2012	% 33 1 2	2011	% 40 1 1
	Amount $ 1,333,211 49,330 89,033		Amount $ 1,876,280 60,465 47,544
Gain on trading of securities - dealer Gain on trading of securities - underwriter Stock custodian income Interest income Dividend income Gain on valuation of trading securities Gain on short covering and trading securities - RS financing covering Gain on valuation of borrowed securities and bonds with resale agreements Gain on warrants issuance Commissions on futures Gain on derivative financial instruments - futures Other operating income Non-operating income Expenses Handling charges - brokerage ( Handling charges - dealing (	337,538 64,668 80,329 816,411 154,397 128,342 2,606 - 108,814 55,167 408,406 39,567 402,403 4,070,222 94,174 ) 70,781 )	8 2 2 20 4 3 - - 3 1 10 1 10 100 ( 2) ( ( 2) (	386,549 27,230 77,942 1,090,529 205,370 - 41,461 15,277 241,246 75,390 223,659 46,176 246,812 4,661,930 145,017 ) 100,715 )	8 1 2 23 5 - 1 - 5 2 5 1 5 100 ( 3) ( 2)
Service charges - refinancing ( Loss on trading of securities - hedging ( Interest expense ( Loss on valuation of trading securities Loss on valuation of borrowed securities and bonds with resale agreements ( Warrants issuance expenses ( Securities commission fees ( Clearing charges ( Loss on derivative financial instruments - OTC ( Operating expenses ( Other operating expenses ( Non-operating expenses ( ( Income before income tax Income tax expense ( Net income Basic earnings per share ( in dollars ) Net income Diluted earnings per share ( in dollars ) Net income	1,409 ) 21,686 ) 78,303 ) - 17,164 ) 28,559 ) 708 ) 29,542 ) 66,403 ) 2,363,194 ) 1,045 ) 77,230 ) 2,850,198 ) 1,220,024 106,254 ) $ 1,113,770 Before Income tax $ 0.92 $ 0.92	- ( - ( ( 2) ( - ( - ( 1) ( - ( ( 1) ( ( 2) ( ( 58) ( - ( ( 2 ) ( ( 70 ) ( 30 ( 3 ) ( 27 After Income tax $ 0.84 $ 0.84	1,942 ) 259,672 ) 45,731 ) 329,259 ) - 35,656 ) 670 ) 47,445 ) 76,270 ) 2,760,287 ) 1,947 ) 166,343 ) 3,970,954 ) 690,976 124,081 ) $ 566,895 Before Income tax $ 0.52 $ 0.52	- ( 5) ( 1) ( 7) - ( 1) - ( 1) ( 2) ( 59) - ( 4 ) ( 85 ) 15 ( 3 ) 12 After Income tax $ 0.43 $ 0.43

19

PRESIDENT SECURITIES CORPORATION

NON-CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Balance as of January 1, 2011 Appropriations of 2010 earnings: Legal reserve Special reserve Cash dividends Stock dividends Net income for the year ended December 31, 2011 Unrealized loss on financial instruments Cumulative translation adjustments Reserve for trading loss and default transferred to special reserve (including investees) Treasury stock transactions Treasury stock retired ( Balance as of December 31, 2011 Balance as of January 1, 2012 Appropriations of 2011 earnings: Legal reserve Special reserve Stock dividends Stock dividends from capital reserve Net income for the year ended December 31, 2012 Unrealized loss on financial instruments Cumulative translation adjustments Balance as of December 31, 2012	Common Stock $ 12,319,334 -	Capital Reserve $ 399,809 -		Retained Earnings	Unappropriated Retained Earnings $ 1,812,870 180,334 ) 320366 )		Cumulative Translation Adjustments ($ 285,973) -	Treasury Stock ($ 291,722) -	Unrealized Gain or Loss on Financial Instruments Total $ 256,992 $ 20,462,027 - - - - - ( 569,579 ) - - - 566,895 245,198 ) ( 245,198 ) - 74,724 - 351,205 - 101,099 - - $ 11,794 $ 20,741,173 $ 11,794 $ 20,741,173 - - - - - - - - - 1,113,770 10,660 ) ( 10,660 ) - ( 76,780 ) $ 1,134 $ 21,767,503
			Legal Reserve $ 1,723,534 180,334	Special Reserve $ 4,527,183 - ( 320366
	- - 727,122 - - - - - 200,640 ) $ 12,845,816 $ 12,845,816 -	- - - - - - - 4,318 5,699 $ 409,826 $ 409,826 -	- - - - - - - - - $ 1,903,868 $ 1,903,868 56,690	, - ( - ( - - - 351,205 - - $ 5,198,754 $ 5,198,754 - (	, 569,579 ) 727,122 ) 566,895 - - - - - $ 582,364 $ 582,364 56,690 )		- - - - - 74,724 - - - ($ 211,249 ) ($ 211,249) -	- - - - - ( - - 96,781 194,941 $ - $ - -
	- 231,225 154,150 - - - $ 13,231,191	- - ( 154,150 ) - - - $ 255,676	- - - - - - $ 1,960,558	283,853 ( - ( - - - - $ 5,482,607	283,853 ) 231,225 ) - 1,113,770 - - $ 1,124,366		- - - - - ( 76,780 ) ($ 288,029 )	- - - - - ( - $ -

20

PRESIDENT SECURITIES CORPORATION

NON-CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation (including rental and idle assets) (Income) loss on valuation of open-ended funds and money-market	2012 $ 1,113,770 91,488	2011 $ 566,895 86,187
instruments ( (Income) loss on valuation of trading securities ( Write-off of bad debts classified as income ( Provision for bad debts Income on long-term investments accounted for under the equity method ( Cash dividends received from long-term investments at equity method Gain on sales of investments under equity method ( Gain on disposal of fixed assets Discount on bonds payable Changes in assets and liabilities: Financial assets at fair value through profit or loss - current ( Bonds purchased under resale agreements Margin loans receivable Refinancing security deposits Receivables from refinance guaranty	25,427 ) 128,342 ) 2,594 ) ( 331 119,487 ) ( 153,234 358 ) - ( - 1,964,324 ) ( 230,044 910,678 2,446 ( 23,621 (	23,241 329,259 223 ) 6,427 25,186 ) 94,400 - 3 ) 26,463 18,624 ) 268,044 8,677,479 2,745 ) 25,059 )
Receivables from security lending Security lending deposits Notes receivable Accounts receivable ( Prepayments ( Prepaid pension expenses - current ( Other receivables Deferred tax assets Available-for-sale financial assets - current Bonds sold under repurchase agreements ( Financial liabilities at fair value through profit or loss - current Deposits on short sales ( Short sale proceeds payable ( Guarantee deposit received on borrowed securities ( Accounts payable Advance receipts Collections on behalf of third parties Other payables ( Other financial liabilities - current Securities brokerage (Credit) debit accounts - net Net cash provided by operating activities	130,321 ( 119,011 ( 112 ( 40,243 ) ( 3,970 ) 22,508 ) ( 83,656 ( 7,162 518,023 636,560 ) 21,068 ( 233,197 ) ( 134,245 ) ( 651,043 ) 440,643 ( 6,761 27,812 ( 3,440 ) ( 38,099 ( 133,563 ( 86,105	168,726 ) 153,710 ) 250 ) 190,508 ) 7,929 19,147 ) 14,285 ) 3,611 626,368 5,156,741 362,868 ) 89,586 ) 233,263 ) 631,028 1,223,805 ) 10 31,387 ) 552,161 ) 191,835 ) 84,850 ) 13,115,861

(Continued)

～21～

PRESIDENT SECURITIES CORPORATION

NON-CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES: Decrease (increase) in restricted assets - current Proceeds from sales of investments accounted for under equity method Return of share capital due to capital reduction in available-for-sale financial assets	2012 $ 506,980 ( 12,540 14,783	2011 $ 862,374 ) - 14,496
Acquisition of fixed assets ( Proceeds from disposal of fixed assets Changes in clearing and settlement fund Changes in refundable deposits Net cash provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Increase (decrease) in short-term loans ( Increase (decrease) in commercial papers payable (Decrease) increase in deposits-in ( Payments for redeemed bonds Cash dividends paid Treasury stock transactions Net cash provided by (used in) financing activities Net increase in cash and cash equivalents Beginning balance of cash and cash equivalents	76,037 ) ( - 140,980 830 600,076 ( 250,000 ) ( 499,858 ( 7,650 ) - ( - ( - 242,208 ( 928,389 1,773,140	68,951 ) 3 2,090 91,817 822,919 ) 4,210,000 ) 4,748,604 ) 10,397 2,357,600 ) 569,579 ) 101,099 11,774,287 ) 518,655 1,254,485
Ending balance of cash and cash equivalents SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for interest Cash paid for income tax	$ 2,701,529 $ 128,694 $ 117,869	$ 1,773,140 $ 134,364 $ 334,332

～22～

Report of Independent Accountants Translated from Chinese

To the Board of Directors and Shareholders of President Securities Corporation

We have audited the accompanying consolidated balance sheets of President Securities Corporation and its subsidiaries as of December 31, 2012 and 2011, and the related consolidated statements of income, of changes in shareholders' equity and of cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the "Rules Governing the Examination of Financial Statements by Certified Public Accountants" and generally accepted auditing standards in the Republic of China. Those standards and rules require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of 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 President Securities Corporation and its subsidiaries of December 31, 2012 and 2011, and the consolidated results of its operations and its consolidated cash flows for the years then ended in conformity with the "Rules Governing the Preparation of Financial Statements by Securities Firms", "Rules Governing the Preparation of Financial Statements by Futures Commission Merchants", and generally accepted accounting principles in the Republic of China.

PricewaterhouseCoopers

March 26 2013

---

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles 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 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 applications in practice.

～23～

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2012 AND 2011 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

	ASSETS Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Bonds purchased under resale agreements	2012 Amount % $ 4,933,426 10 17,796,364 37 - -	2011 Amount % $ 4,002,165 9 15,385,022 33 230,044 1
	Margin loans receivable Refinancing security deposits Receivables from refinance guaranty Customer margin account Receivables from security lending Security lending deposits Notes receivable Accounts receivable - net Prepayments Prepaid pension expenses - current Other receivables Restricted assets Deferred tax assets - current Available-for-sale financial assets - current Total current assets	9,772,570 21 374 - 12,901 - 5,637,662 12 45,803 - 41,382 - 1,674 - 378,104 1 28,722 - 142,048 - 683,252 1 2,977,337 6 9,743 - 218,050 1 42,679,412 89	10,683,585 23 2,820 - 36,522 - 5,234,807 11 176,124 - 160,393 - 1,630 - 332,970 1 23,698 - 119,561 - 486,073 1 3,592,959 8 16,546 - 746,733 2 41,231,652 89
	Funds and investments Investments accounted for under the equity method Available-for-sale financial assets - non-current Financial assets at fair value through profit or loss - non-current Total funds and investments Fixed assets Land Buildings Equipment Prepayments for equipment Leasehold improvements Less: accumulated depreciation Total fixed assets Deffered pension cost Other assets Operating guarantee deposits Exchange clearing deposits Deposits-out Deferred debits Rental assets Idle assets Deferred tax assets - non-current Total other assets Securities brokerage debit accounts - net TOTAL ASSETS	417,280 1 83,244 - 50,885 - 551,409 1 1,680,129 4 1,099,486 2 268,470 1 3,959 - 117,603 - ( 512,378 ) ( 1 ) 2,657,269 6 1,166 - 842,000 2 364,961 1 36,363 - 29,879 - 249,127 - 38,177 - 1,462 - 1,561,969 3 298,612 - $ 47,749,837 100	395,805 1 98,027 - 51,635 - 545,467 1 1,680,129 4 1,107,661 2 236,631 1 18,263 - 85,463 - ( 452,626 ) ( 1 ) 2,675,521 6 902 - 842,000 2 505,941 1 57,997 - 33,578 - 250,985 1 38,419 - 695 - 1,729,615 4 181,679 - $ 46,364,836 100

(Continued)

～24～

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) DECEMBER 31, 2012 AND 2011

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

	LIABILITIES AND SHAREHOLDERS'EQUITY Current liabilities Short-term loans Commercial papers payable Bonds sold under reurchase areements	2012 Amount % $ 3,816,336 8 1,999,639 4 7979713 17	2011 Amount % $ 3,620,887 8 1,499,781 3 8616273 19
	p g Financial liabilities at fair value through profit or loss - current Deposits on short sales Short sale proceeds payable Guarantee deposit received on borrowed securities Futures traders' equity Accounts payable Advance receipts Collections on behalf of third parties Other payables Other financial liabilities - current Total current liabilities Other liabilities Deposits-in Total other liabilities Total liabilities SHAREHOLDERS’EQUITY	,, 448,956 1 1,245,017 3 1,606,777 3 1,144,289 2 5,637,662 12 494,514 1 7,179 - 258,385 1 1,177,886 2 121,597 - 25,937,950 54 4,845 - 4,845 - 25,942,795 54	,, 427,237 1 1,478,214 3 1,741,022 4 1,795,332 4 5,234,807 11 46,917 - 45 - 230,578 - 816,953 2 83,498 - 25,591,544 55 4,533 - 4,533 - 25,596,077 55
	Common stock 13,231,191 28 12,845,816 28 Capital reserve Common stock 25,524 - 13,558 - Treasury stock 230,152 1 396,268 1 Retained earnings Legal reserve 1,960,558 4 1,903,868 4 Special reserve 5,482,607 12 5,198,754 11 Unappropriated earnings 1,124,366 2 582,364 1 Other adjustments to shareholders' equity Cumulative translation adjustments ( 288,029) ( 1) ( 211,249) - Unrealized gain or loss on financial instruments 1,134 - 11,794 - Minority interest 39,539 - 27,586 - Total shareholders’equity 21,807,042 46 20,768,759 45 TOTAL LIABILITIES AND SHAREHOLDERS'EQUITY $ 47,749,837 100 $ 46,364,836 100

.

～25～

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS

EXCEPT FOR EARNINGS PER SHARE AMOUNT)

Revenues Securities brokerage fees Security lending Underwriting fees Gain on trading of securities - dealer	2012	% 39 1 2 8	2011	% 46 1 1 7
	Amount $ 1,861,251 49,330 89,033 370991		Amount $ 2,521,355 60,465 47,544 394731
Gain on trading of securities - underwriter Stock custodian income Interest income Dividend income Gain on valuation of trading securities Gain on short covering and trading securities - RS financing covering Gain on valuation of borrowed securities and bonds with resale agreements Gain on warrants issuance Revenue from consignment of clearing and settlement Gain on derivative financial instruments - futures Revenue from futures advisory Other operating income Non-operating income Expenses Handling charges - brokerage ( Handling charges - dealing (	, 64,668 80,329 865,232 157,283 66,045 2,606 - 108,814 12 416,585 12,140 73,694 556,495 4,774,508 178,311 ) 76,766 )	1 2 18 3 1 - - 2 - 9 - 2 12 100 ( 4) ( ( 2) (	, 27,230 77,942 1,107,484 211,974 - 41,461 15,277 241,246 135 201,010 9,683 69,083 446,876 5,473,496 232,676) 109,633)	1 2 20 4 - 1 - 4 - 4 - 1 8 100 ( 4) ( 2)
Service charges - refinancing ( Loss on trading of securities - hedging ( Interest expense ( Loss on valuation of trading securities Loss on valuation of borrowed securities and bonds with resale agreements ( Warrants issuance expenses ( Futures commission expense ( Clearing charges ( Loss on derivative financial instruments - OTC ( Operating expenses ( Other operating expenses ( Non-operating expenses ( ( Income before income tax Income tax expense ( Consolidated net income Consolidated net income attributable to: Parent company Minority interest income Basic earnings per share ( in dollars ) Consolidated net income Minority interest income Net income Diluted earnings per share ( in dollars ) Consolidated net income Minority interest income Net income .	1,409 ) 21,686 ) 78,303 ) - 17,164 ) 28,559 ) 81,932 ) 86,132 ) 66,403 ) 2,795,012 ) 1,203 ) 101,799 ) 3,534,679 ) 1,239,829 122,969 ) $ 1,116,860 $ 1,113,770 3,090 $ 1,116,860 Before Income tax $ 0.92 - $ 0.92 $ 0.92 - $ 0.92	- ( - ( ( 2) ( - ( - ( 1) ( ( 2) ( ( 2) ( ( 1) ( ( 58) ( - ( ( 2 ) ( ( 74 ) ( 26 ( 3 ) ( 23 23 - 23 After Income tax $ 0.84 - $ 0.84 $ 0.84 - $ 0.84	1,942 ) 259,672 ) 45,731 ) 401,438 ) - 35,656 ) 87,898 ) 110,406) 76,270 ) 3,188,066) 29,880 ) 183,781 ) 4,763,049 ) 710,447 140,247 ) $ 570,200 $ 566,895 3,305 $ 570,200 Before Income tax $ 0.52 - $ 0.52 $ 0.52 - $ 0.52	- ( 5) ( 1) ( 7) - ( 1) ( 2) ( 2) ( 1) ( 58) ( 1) ( 3 ) ( 87 ) 13 ( 3 ) 10 10 - 10 After Income tax $ 0.43 - $ 0.43 $ 0.43 - $ 0.43

～26～

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Common Stock Balance as of January 1, 2011 $ 12,319,334 Appropriations of 2010 earnings: Legal reserve - Special reserve - Cash dividends - Stock dividends 727,122 Consolidated net income for the year ended December 31, 2011 - Unrealized loss on financial instruments - Cumulative translation adjustments - Reserve for trading loss and default transferred to special reserve (including investees) - Treasury stock transactions - Treasury stock retired ( 200,640) Changes inminority interest - Balance as of December 31, 2011 $ 12,845,816 Balance as of January 1, 2012 $ 12,845,816 Appropriations of 2011 earnings: Legal reserve - Special reserve - Stock dividends 231,225 Consolidated net income for the year ended December 31, 2012 - Stock dividends from capital reserve 154,150 Unrealized loss on financial instruments - Cumulative translation adjustments - Changes inminority interest - Balance as of December 31, 2012 $ 13,231,191	Common Stock $ 12,319,334 -	Capital Reserve $ 399,809 -		Retained Earnings	Unappropriated Retained Earnings $ 1,812,870 180,334 )	Cumulative Translation Adjustments ($ 285,973) -	Treasury Stock ($ 291,722) -	Unrealized Gain or Loss on Financial Instruments $ 256,992 -	Minority Interest $ 23,870 - - - - 3,305 - - 1,813 - - ( 1,402 )	Total $ 20,485,897 - - ( 569,579 ) - 570,200 ( 245,198 ) 74,724 353,018 101,099 - ( 1,402 )
			Legal Reserve $ 1,723,534 180,334	Special Reserve $ 4,527,183 - (
		- - - - - - - 4,318 5,699 - $ 409,826 $ 409,826	- - - - - - - - - - $ 1,903,868 $ 1,903,868	320,366 - ( - ( - - - 351,205 - - - $ 5,198,754 $ 5,198,754	320,366 ) 569,579 ) 727,122 ) 566,895 - - - - - - $ 582,364 $ 582,364	- - - - - 74,724 - - - - ($ 211,249 ) ($ 211,249)	- - - - - ( - - 96,781 194,941 - $ - $ -	- - - - 245,198 ) - - - - - $ 11,794 $ 11,794
									$ 27,586 $ 27,586 - - - 3,090 - - - 8,863 $ 39,539	$ 20,768,759 $ 20,768,759 - - - 1,116,860 - ( 10,660 ) ( 76,780 ) 8,863
	- - 231,225 - 154,150 - - - $ 13,231,191	- - - - ( 154,150 ) - - - $ 255,676	56,690 - - - - - - - $ 1,960,558	- ( 283,853 ( - ( - - - - - $ 5,482,607	56,690 ) 283,853 ) 231,225 ) 1,113,770 - - - - $ 1,124,366	- - - - - - ( 76,780 ) - ($ 288,029 )	- - - - - - ( - - $ -	- - - - - 10,660 ) - - $ 1,134
										$ 21,807,042

～27～

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM OPERATING ACTIVITIES: Consolidated net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation (including rental and idle assets) Amortization	CASH FLOWS FROM OPERATING ACTIVITIES: Consolidated net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation (including rental and idle assets) Amortization	2012 $ 1,116,860 103,161 8,369	2011 $ 570,200 96,783 5,696
(Income) loss on valuation of open-ended funds and money-market instruments ( (Income) loss on valuation of trading securities ( Write-off of bad debts classified as income ( Provision for bad debts Income on long-term investments accounted for under the equity method ( Cash dividends received from long-term investments at equity method Loss on disposal of fixed assets Reverse of reserve for loss on bad debt Discount on bonds payable Changes in assets and liabilities: Financial assets at fair value through profit or loss - current ( Bonds purchased under resale agreements Margin loans receivable Refinancing security deposits Receivables from refinance uarant		82,604 ) 66,045 ) 2,594 ) ( 331 70,780 ) ( 49,306 193 - ( - 2,261,943 ) 230,044 910,678 2,446 ( 23621 (	25,843 401,438 223 ) 6,427 54,298 ) 32,599 48 27,808 ) 26,463 162,438 268,044 8,677,479 2,745 ) 25059 )
gy Customer margin account ( Receivables from security lending Security lending deposits Notes receivable ( Accounts receivable ( Prepayments ( Prepaid pension expenses - current ( Other receivables Deferred tax assets Available-for-sale financial assets – current Deferred pension cost ( Bonds sold under repurchase agreements ( Financial liabilities at fair value through profit or loss - current Deposits on short sales ( Short sale proceeds payable ( Guarantee deposit received on borrowed securities ( Futures traders' equity Accounts payable Advance receipts Collections on behalf of third parties Other payables Other financial liabilities - current Securities brokerage (credit) debit accounts - net ( Net cash (used in) provided by operating activities (		, 402,855 ) ( 130,321 ( 119,011 ( 44 ) ( 42,734 ) ( 5,024 ) 22,487 ) ( 143,879 ( 6,036 518,023 264 ) ( 636,560 ) 21,719 ( 233,197 ) ( 134,245 ) ( 651,043 ) 402,855 447,597 ( 7,134 27,807 ( 20,674 ( 38,099 ( 116,933 ) 401,188 )	, 604,699 ) 168,726 ) 153,710 ) 250 ) 190,435 ) 9,327 19,256 ) 56,158 ) 6,519 626,368 239 ) 5,156,741 363,258 ) 89,586 ) 233,263 ) 631,028 604,699 1,224,757 ) 17 31,380 ) 701,507 ) 191,835 ) 106,454 13,275,419
	(

(Continued)

～28～

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

CASH FLOWS FROM INVESTING ACTIVITIES: Decrease (increase) in restricted assets - current Return of share capital due to capital reduction in available-for-sale financial assets Acquisition of fixed assets (	2012 $ 615,622 ( 14,783 84,650 ) (	2011 $ 971,494 ) 14,496 85,417 )
Proceeds from disposal of fixed assets Changes in operation guaranteed deposits Changes in clearing and settlement fund Changes in refundable deposits Changes in deferred debits ( Net cash provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES: Increase (decrease) in short-term loans Increase (decrease) in commercial papers payable Payments for redeemed bonds Increase (decrease) in deposits-in Treasury stock transactions Cash dividends paid Changes inminority interest Net cash provided by (used in) financing activities	- - ( 140,980 21,634 3,622 ) ( 704,747 ( 195,449 ( 499,858 ( - ( 312 ( - - ( 8,863 ( 704,482	3 10,000 ) 2,090 70,796 7,503 ) 987,029 ) 3,977,186 ) 4,748,604 ) 2,357,600 ) 1,729 ) 101,099 569,579 ) 1,402 ) (11,555,001)
Effect of exchange rate changes ( Net increase in cash and cash equivalents Beginning balance of cash and cash equivalents Ending balance of cash and cash equivalents SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for interest Cash paid for income tax	76,780 ) 931,261 4,002,165 $ 4,933,426 $ 149,100 $ 138,065	74,723 808,112 3,194,053 $ 4,002,165 $ 151,166 $ 351,773

29

APPENDIX V

President Securities Corporation 2012 Earnings Distribution Plan

Unit: ： NT$

		Unit:：NT$
	Net Income of 2012	$1,113,770,077
	Less：Legal Reserve(10%)	(111,377,008)
	：Special Reserve (20%)	(222,754,016)
	Less：Special Reserve (Note 1)	(87,440,208)
	Retained earnings available for distribution	692,198,845
	Add：Unappropriated Retained Earnings of Previous Years	10,596,141
	Retained Earnings Available for Distribution bythe end of 2012	702,794,986
	Distribution Items
	─Cash dividend(NT$ 0.52/per share)	688,021,909
	Unappropriated Retained Earnings bythe end of 2012	$14,773,077
	Remarks：
	Directors and Supervisor's remunerations	$21,727,007
	Employee Cash Bonus Distribution	14,484,672
	Total	$36,211,679

• Note 1 ： In accordance with the regulations of Article 41,Paragraph 1 of the 、

• Securities and Exchange Act the Letter No. (89)

Tai-Tsai-Zheng-1-00371 issued by the Securities and Futures Commission on 1 February 2000 and the Letter No.

• Financial ‐ Supervisory ‐ Securities ‐ 1 ‐ 0950000507 issued by the Financial Supervisory Commission on 27 January 2006.

• Note 2 ： Total common shares outstanding by December 31,2012: 1,323,119,054 shares

• Note 3 ： The prior years’ unappropriated earnings shall not be appropriated unless the current year’s appropriated earnings are insufficient.

30

APPENDIX VI

Comparison table of Amendments to” Rules and Procedures of Shareholders’ Meeting”

		Amendment	Original Articles
		Article06.	Article06.
		The company shall, in the meeting notice, state the reporting time, reporting venue and other items of importance for accepting shareholders. The abovementioned accepted shareholders shall report at least 30 minutes before the start of the meeting; the reporting venue shall be clearly identifiable and managed by an adequate number of staff who are adequately competent. Shareholders or agents authorized by shareholders (hereinafter referred to as shareholders) shall present their attendance ID, attendance cards or	(addition) The shareholder or his/her proxy who attends the meetin ma turn in his/her
		other attendance certificates at the shareholders'meeting; solicitors soliciting proxy forms shall bring along their identification documents for verification purposes. The shareholder or his/her proxy who attends the meeting may turn in his/her signed attendance card instead of signing in the attendance book. The Company shall deliver to each shareholder the agenda, annual report, attendance ID, speaking request form, ballots, other meeting materials and, where applicable, the ballots for election of directors and/or supervisors. A government agency shareholder or an institutional shareholder may be represented at the shareholders’ meeting by one or more proxies. An institution acting as the proxy for a shareholder may appoint one and only	g y signed attendance card instead of signing in the attendance book. The Company shall deliver to each shareholder the agenda, annual report, attendance ID, speaking request form, ballots, other meeting materials and, where applicable, the ballots for election of directors and/or supervisors. The shareholder shall present his/her attendance ID, signed attendance card or other pre-approved attendance documentation to attend the meeting. Those to attend the meeting as requesters shall also present their identification paper for verification. A government agency shareholder or an institutional shareholder may be represented at the shareholders’ meeting by one or more proxies. An institution acting as the proxy for a shareholder may appoint one and only

31

		Amendment	Original Articles	Original Articles
		one representative to act on behalf of the principal of the proxy at the meeting.	one representative to act on behalf of the principal of the proxy at the meeting.
		Article07. Where the shareholders meeting is convened by the Board of Directors, the meeting shall be presided by the chairman of the Board of Directors If	Article07. Where the shareholders meeting is convened by the Board of Directors, the meeting shall be presided by the chairman of the Board of Directors If the
		. the chairman is for whatever reason unable to carry out his/her functions at the meeting, the vice chairman shall act in his/her stand. If the Company has no vice chairman or the vice chairman is for whatever reason unable to carry out the function at the meeting either, the chairman shall appoint a standing director to act in his/her stand at the meeting. If the Company has no standing director, the chairman shall appoint a director to act in his/her stand. If above are not applicable, the directors or standing directors (if any) shall elect one from among themselves to preside	. chairman is for whatever reason unable to carry out his/her functions at the meeting, the vice chairman shall act in his/her stand. If the Company has no vice chairman or the vice chairman is for whatever reason unable to carry out the function at the meeting either, the chairman shall appoint a standing director to act in his/her stand at the meeting. If the Company has no standing director, the chairman shall appoint a director to act in his/her stand. If above are not applicable, the directors or standing directors (if any) shall elect one from among themselves to preside
		the meeting. Where the shareholders meeting is convened by any person legally authorized to do so other than the Board of Directors, the meeting shall be presided by the convener. If the abovementioned position of chairman be filled by a managing director or director, said managing director or director shall be one who has held office for more than six months and understands the company's financial and business conditions. The same applies if the position of chairman is held by a corporate director’s representative. Where there are two or more conveners, they shall elect one from among themselves to preside the meeting. The Company may appoint legal counsel(s), certified public	the meeting. Where the shareholders meeting is convened by any person legally authorized to do so other than the Board of Directors, the meeting shall be presided by the convener. (addition) Where there are two or more conveners, they shall elect one from among themselves to preside the meeting. The Company may appoint legal counsel(s), certified public accountant(s) and/ortherelevant personnelto attend

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		Amendment	Original Articles	Original Articles
		accountant(s) and/or the relevant personnel to attend the shareholders’ meeting without the right to vote.	the shareholders’ meeting without the right to vote.
		Article08. The company shall makeuninterrupted audio and video recordings of the entire meetin from the time when the	Article08. The whole proceeding of the shareholders’ meeting shall be video- or tae-recorded and such recordin shall
		g accepting shareholders report, said recordings shall include the shareholder reporting process, meeting process and vote counting process . The abovementioned video and audio materials shall be kept for at least one year. However, in the event that a lawsuit has been filed by shareholder(s) in accordance with Article 189 of the Company Act, said video and audio recordings shall be kept until the end of said lawsuit.	p g be kept for at least one year or up through the conclusion of the shareholder action (if any) initiated under Article 189 of the Company Act. (addition)
		Article13	Article13
		. The shareholder will have one vote for each share held except where there is limitation on the voting right or the voting right is denied by operation of the second paragraph of Article 179 of the Company Act. The voting power at a shareholders' meeting may be exercised by way of electronic transmission described in the shareholders' meeting notice. A shareholder who exercises his/her voting power at a shareholders meeting by way of electronic transmission shall be deemed to have attended the said shareholders' meeting in person, but shall be deemed to have waived his/her voting power in respective of any extemporary motion(s) and/or the amendment(s) to the contents of the original proposal(s) at the said shareholders' meeting.	. The shareholder will have one vote for each share held except where there is limitation on the voting right or the voting right is denied by operation of the second paragraph of Article 179 of the Company Act. The voting power at a shareholders' meeting may be exercised by way of electronic transmission described in the shareholders' meeting notice. A shareholder who exercises his/her voting power at a shareholders meeting by way of electronic transmission shall be deemed to have attended the said shareholders' meeting in person, but shall be deemed to have waived his/her voting power in respective of any extemporary motion(s) and/or the amendment(s) to the contents of the original proposal(s) at the said shareholders' meeting.

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