PSC - AGM Information 2014 | FinancialReports.eu

TSE: 2855

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2014 General Shareholders’ Meeting Meeting Agenda

Jun. 18, 2014 at 9:00am

B1, No. 8, Dongxing Rd., Taipei City, Taiwan, R.O.C.

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

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		Page
1	Meeting Agenda	3
2	Report Items .	3
3	Items to be Approved .	3
4	Items for Discussion	4
5	Extraordinary Motions	6
6	Meeting Adjourned	6
Appendixes
I	2013 Operating Report	7
II	2013 Supervisors Audit Report	9
III	2013 Financial Statements and Consolidated Financial	10
	Statements .
IV	2013 Earnings Distribution Proposal	27
V	Comparison table of Amendments to ” Procedures for	28
	the Acquisition or Disposal of Assets”
VI	Comparison table of Amendments to ” Articles of	29
	Incorporation”
VII	Comparison table of Amendments to ” Rules and	31
	Procedures of Shareholders’ Meeting”
VIII	Comparison table of Amendments to ” Rules for	33
	Election of Directors and Supervisors”
IX	Rules and Procedures of Shareholders’ Meeting	35
X	Articles of Incorporation	44
XI	Information on Employee Bonus sharing and Board	49
	Members Compensation
XII	Shareholdings of Directors and Supervisors	50

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1. Agenda for the 2014 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) 2013 Operating Report
2) 2013 Supervisors Audit Report
3) Capital Adequacy Ratio Report
(4) Items to be approved
1) 2013 Financial Statements and Consolidated Financial Statements
2) 2013 Earnings Distribution Proposal
(5) Items for Discussion
1) Amendment to the “Procedures for the Acquisition or Disposal of Assets.”
2) Amendment to the “Articles of Incorporation“
3) Amendment to “Rules and Procedures of Shareholders’ Meeting”
4) Amendment to the “Rules for Election of Directors and Supervisors”
(6) Extraordinary Motions
(7) Meeting Adjourned

2. Report Items

(1) 2013 Operating Report

Details: The Company’s Operating Report for 2013, please see Appendix I (page7)

(2) 2013 Supervisors Audit Report
Details: 2013 Audit Report prepared by the Supervisors of the Company, please see Appendix II (page 9)
(3) Capital Adequacy Ratio Report Details: The Company’s capital adequacy ratio for March of 2014 was 478%.

3. Items to be Approved

� Motion 1 (proposed by the Board of Directors)

Resolved, that the 2013 consolidated financial statements be approved.

Explanation:

(1) The 2013 consolidated financial statements have already been successfully audited by CPA Lin Se-Kai and CPA Huang Gin-Jei of

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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) and Appendix III (page10).

Resolution:

� Motion 2 (Proposed by the Board of Directors)

Resolved, that the 2013 earnings distribution proposal be approved.

Explanation:

(1) Drafted in accordance with the Company Law and the Company’s Articles of Incorporation. The 2013 earnings distribution table, please see Appendix IV (page27).
(2) Our Company’s distributable earnings for 2013 were NT$996,139,669, and the cash dividend of NT$979,108,100 (NT$0.74 per share) are proposed. The Chairman was authorized to set the record date after the proposal of 2013 dividend distribution is resoluted by 2014 shareholders’ meeting.
(3) In addition to setting aside legal reserve and special reserve in accordance with regulations, unappropriated earnings available for distribution of 2013 has been affected by the following items due to adoption of T-IFRSs:
1) Unappropriated earnings as of January 1, 2013 had been reduced by NT$357,481,459 as a result of the adoption of T-IFRSs.
2) In 2013, unappropriated earnings was decreased by $5,800,133 as a result of actuarial losses on defined benefit plans (included in other comprehensive income)
3) Special reserve of $286,895,456 was reversed in accordance with Jin Guan Zheng Fa Letter No.1010012865.
(4) If the total number of outstanding company shares is altered, 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.

Resolution:

4. Items for Discussion

Item 1 (Proposed by the Board of Directors)

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Topic: that the Company’s Procedures fo ~~r A~~ cquisition or Disposal of Assets be amended.

Explanation:

(1) In accordance with the order issued by FSC(order number Jin Guan Zheng Fa No. 10200053073 of Dec. 30th, 2013), the Procedures for Acquisition or Disposal of Assets should be amended.

(2) For chart comparing the changes, please see Appendix V (page 28). Resolution:

Item 2 (Proposed by the Board of Directors)

Topic: Amendment to the Articles of Incorporation. Please proceed to vote. Explanation:

(1) According to FSC’s regulation (order number Jin Guan Zheng No. 1020004592), international financial business regulations, and securities regulations on foreign exchange transactions, the company hereby proposes to amend the Corporate Charter.
(2) The major amendments are as follows:
1) Increase additional business items with response to the authority’s adjustment on international securities and foreign exchange transactions. (refer Article 2.1 )
2) Adjustment on seats of the Board of Directors. (refer Article 13 )
3) Increase audit committee’s rights. (refer Article 17.1 )
4) The date of this amendment. (refer Article 26 )
(3) For chart comparing the changes, please see Appendix VI (page 29 )

Resolution:

Item 3 (Proposed by the Board of Directors)

Topic: Amendment to the Rules of Procedure for Shareholder Meetings. Please proceed to vote.

Explanation:

(1) According to amendments of related authorities’ laws and the set-up of audit committees, the company hereby proposes to amend the Rules of Procedure for Shareholder Meetings.
(2) The major amendments are as follows:
1) In order to conform to the needs of commercial practice, the company amends video and audio recording methods. (refer Article 8 )
2) In order to conform to the amendment of related laws, the outcome of shareholders’ voting rights exercise must be delivered two days prior to the meeting. (refer Article 13.3 )
3) To safeguard the interests of shareholders’ voting rights through electronic voting, amendments are made on Article 13.6 and deletion of Article 15.4.
4) In order to conform to the regulations of laws, the audit committee is being set up to replace the supervisors. All rules apply accordingly. (increase Article 19.2 )
(3) For chart comparing the changes, please see Appendix VII (page 31 )

Explanation:

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Item 4 (Proposed by the Board of Directors)

Topic: Amendment to the election of the Board of Directors and the supervisors. Please proceed to vote.

Explanation:

(1) According to the authorities’ laws, the company must elect audit committees to replace the supervisors. Hereby amend the name of election to the Election of Directors
(2) The major amendments are as follows:
- 1) Delete the regulations of supervisors with regard to the replacement of audit committees. (refer Article 1 、 2 、 3 、 3-1 、 4 、 10 )
- 2) The voting system of Board election will conform to the needs of commercial practice. (refer Article3.1)
- 3) Shareholders can exercise voting rights either through present or electronic. (refer Article3.2)
- 4) The adjustment of supervisors’ regulations will cease to apply till the tenth Board election. (refer Article11)
(3) For chart comparing the changes, please see Appendix VIII (page 33 )

5. Extraordinary Motions

6. Meeting Adjourned

Appendixes

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Appendix I

2013 Operating Report

Macro Environment and Business Strategy

Looking back 2013, benefited from the new transaction tax in the first half year, and QE scale down in later half said by FED chairman Bernanke, Taiwan stock market index stayed between 8,400 points and 7,600 points. Affected by repeatedly disturbing from QE, recovery of the States’ economy, Dow Jones’ reaching record high, and FSC’s policy to stimulate the market, Taiwan stock market index ended at 8,612 points, rising up to 11.85% . Our company’s business has been stable and continually creates profit due to well risk management and strategic development. After-tax earning in 2013 was NT$1.362 billion and earnings per share was NT$1.03, ranked top 1 among 11 securities companies for two consecutive years. It is evidential that our company’s management team has excellent performance.

Execution and the Outcome

For brokerage business, annual average brokerage market share achieved 3.44% ranked 8 in overall market. Brokerage department holds integrity to control cost and expand new business, such as discretionary investment services, insurance, fund, and overseas sub-brokerage business. It is our purpose to provide excellent customer service and multiple operations to raise the value and profit of the company.

For underwriting business, the overall cases were 62 in 2013, ranked top 4 among competitors. We choose cases discreetly and focus on credit risks, helping well-organized companies raising capital or publicly listed. Our team gain stable profit through strict risk management and will continue to seek clients with promising future.

For proprietary trading business, the high volatility index of last year had made the trade difficult. Our proprietary trading team followed the trend and properly controlled the risk, through niche stocks, value investing, and hedging strategies, to limit risks effectively. The team has performed better than overall market and brought great profit.

For bond business, there is limited volatility in bond markets. In addition to the macro-economic situation and debt trading, market trading and arbitrage opportunities are also the key elements of our focus. Our company will keep tracking financial and policy changes, increasing investment share in low-risk bonds with proper risk control, and continuously seeking profitable opportunities.

For derivatives business, numbers and amount of warrants issued ranked 9 in the market. As for options business, due to poor economy and the disturbance of policy, option volatility still remains low and limited. We will strictly control the risk while maintaining profit through strategic management in the future.

Execution Outcome of Profit and Loss

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The annual revenue in 2013 was NT$3,879,401,000. Operating expense was NT$2,739,067,000. The daily average volume 95.7 billion in 2013 rose 1.27%, compared to 94.5 billion in 2012. However, the daily volume was still less than one hundred billion. Under such circumstance, the trading team still managed to subsidiaries and provided great earnings. In 2013 the overall after-tax earnings reached NT$1.362 billion, EPS NT$1.03.Annual budget achieving rate was135%. It was difficult to have such outstanding performance under the interference of policies and QE exit.

Analysis of Profitability

In 2013 the management team had great performance. Net profit before-tax reached 1.467 billion. Net profit after-tax reached 1.362 billion. Earnings per share after-tax (EPS) was NT$1.03, ranked top one among 11 securities companies. Our ROA was 2.99% ranked top one, and ROE was 6.19% also ranked top one reaching record high for past three years,

Future Directions

ECFA is expected to launch in 2014. With the policies that simulate stock market and the stabilized effects on QE exit, the global economy is expected to be recovering. Aiming to create stable profit, our company will continue to escalate economic scale, raise channel value, and enhance risk control management. With this year government’s rapid open to securities business and loosening restrictions on international securities and foreign currency transactions, our management team will utilize existing advantages and successful business model to expand overseas business and customers. We will provide more diversified financial products to meet customers’ one-stop service. In terms of business strategy, in addition to improving business flexibility and innovation ability, we will integrate securities group resources, expand cross strait service area, develop various related businesses, plan future policy blueprint, and increase efficiency, to maximize profit for the company and shareholders.

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 2013 business report, earnings distribution proposal and financial statements (including the financial statements and consolidated financial statements). The above business report, earnings distribution proposal and financial statements (including the financial statements and consolidated financial statements) 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 2014 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, 2014

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APPENDIX III

Report of Independent Accountants Translated from Chinese

PWCR13003401

To the Board of Directors and Shareholders of President Securities Corporation

We have audited the accompanying balance sheets of President Securities Corporation as of December 31, 2013, December 31, 2012 and January 1, 2012, and the related statements of comprehensive income, of changes in equity and of cash flows for the years ended December 31, 2013 and 2012. 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 "Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants" and generally accepted auditing standards in the Republic of China. Those standards 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 financial statements referred to above present fairly, in all material respects, the financial position of President Securities Corporation as of December 31, 2013, December 31, 2012 and January 1, 2012 and their financial performance and cash flows for the years ended December 31, 2013 and 2012 in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Firms”.

PricewaterhouseCoopers, Taiwan

March 26, 2014

The accompanying 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 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 BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

ASSETS	December31,2013 Amount % $ 2,970,022 6 18,473,118 36 349,870 1 184,897 - 11,516,164 22 24,695 - 59,634 - 29,993 - 49,617 - 3,360 - 7,999,363 16 3,476 - 24,786 - 123,542 - 2,231,308 4 44,043,845 85 50,174 - 40,644 - 3,999,602 8 2,409,970 5 285,204 - 13,644 - 51,668 - 1,028,708 2 7,879,614 15 $ 51,923,459 100 $ 2,450,000 5 6,947,845 14 1,232,154 2 6,272,115 12 1,235,843 2	December31,2012 Amount % $ 2,701,529 6 16,551,570 37 218,050 - - - 9,772,570 22 374 - 12,901 - 45,803 - 41,382 - 1,518 - 5,139,221 11 4,595 - 24,535 - 354,696 1 2,698,654 6 37,567,398 83 50,885 - 52,844 - 3,516,978 8 2,474,059 6 287,304 1 - - 37,241 - 1,056,860 2 7,476,171 17 $ 45,043,569 100 $ 2,400,000 5 1,999,639 4 448,263 1 7,979,713 18 1,245,017 3	January1,2012	January1,2012
	Amount $ 2,970,022 18,473,118 349,870 184,897 11,516,164 24,695 59,634 29,993 49,617 3,360 7,999,363 3,476 24,786 123,542 2,231,308 44,043,845 50,174 40,644 3,999,602 2,409,970 285,204 13,644 51,668 1,028,708 7,879,614 $ 51,923,459 $ 2,450,000 6,947,845 1,232,154 6,272,115 1,235,843	Amount $ 2,701,529 16,551,570 218,050 - 9,772,570 374 12,901 45,803 41,382 1,518 5,139,221 4,595 24,535 354,696 2,698,654 37,567,398 50,885 52,844 3,516,978 2,474,059 287,304 - 37,241 1,056,860 7,476,171 $ 45,043,569 $ 2,400,000 1,999,639 448,263 7,979,713 1,245,017	Amount $ 1,773,140 14,424,054 746,733 230,044 10,683,585 2,820 36,522 176,124 160,393 1,630 4,010,832 6,474 20,565 16,284 3,129,337 35,418,537 51,635 67,627 3,631,728 2,480,255 289,404 - 62,572 1,205,825 7,789,046 $ 43,207,583 $ 2,650,000 1,499,781 427,195 8,616,273 1,478,215	%
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Available-for-sale financial assets - current Bonds purchased under resale agreements Margin loans receivable Refinancing security deposits Receivables from refinance guaranty Receivables from security lending Security lending deposits Notes receivable Accounts receivable - net Accounts receivable - related parties Prepayments Other receivables Other current assets Total current assets Noncurrent assets Financial assets at fair value through profit or loss - noncurrent Financial assets at cost - noncurrent Investments in associates Property and equipment Investment property Intangible assets Deferred tax assets Other assets - noncurrent Total noncurrent assets TOTAL ASSETS LIABILITIES AND EQUITY				4 33 2 1 25 - - 1 - - 9 - - - 7
				82
				- - 8 6 1 - - 3
				18
				100
				6 3 1 20 3
Current liabilities Short-term loans Commercial papers payable Financial liabilities at fair value through profit or loss - current Bonds sold under repurchase agreements Deposits on short sales

(Continued)

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PRESIDENT SECURITIES CORPORATION BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

LIABILITIES AND EQUITY	Note 6(18) 6(19) 6(20) 6(41) 6(41) 6(21) 6(23) 6(24)	December31,2013 Amount % $ 1,599,806 3 529,309 1 7,837,542 15 138 - 426,335 1 836,175 2 93,398 - 62,311 - 2,160 - 29,525,131 57 13,473 - 19,575 - 33,048 - 29,558,179 57 13,231,191 25 256,116 1 2,071,935 4 5,792,801 11 1,013,206 2 31 - 22,365,280 43 $ 51,923,459 100	December31,2012 Amount % $ 1,606,777 4 1,144,289 3 5,106,741 11 6,795 - 258,383 1 1,042,200 2 121,597 - 27,432 - 2,588 - 23,389,434 52 - - 30,329 - 30,329 - 23,419,763 52 13,231,191 29 256,116 1 1,960,558 4 5,482,607 12 766,885 2 ( 73,551) - 21,623,806 48 $ 45,043,569 100	January1,2012 Amount % $ 1,741,022 4 1,795,332 4 3,287,607 8 34 - 230,571 1 711,463 2 83,498 - 46,209 - 3,101 - 22,570,301 52 - - 145,146 1 145,146 1 22,715,447 53 12,845,816 30 409,826 1 1,903,868 4 5,198,754 12 122,078 - 11,794 - 20,492,136 47 $ 43,207,583 100
		Amount $ 1,599,806 529,309 7,837,542 138 426,335 836,175 93,398 62,311 2,160 29,525,131 13,473 19,575 33,048 29,558,179 13,231,191 256,116 2,071,935 5,792,801 1,013,206 31 22,365,280 $ 51,923,459	Amount $ 1,606,777 1,144,289 5,106,741 6,795 258,383 1,042,200 121,597 27,432 2,588 23,389,434 - 30,329 30,329 23,419,763 13,231,191 256,116 1,960,558 5,482,607 766,885 ( 73,551) 21,623,806 $ 45,043,569	Amount $ 1,741,022 1,795,332 3,287,607 34 230,571 711,463 83,498 46,209 3,101 22,570,301 - 145,146 145,146 22,715,447 12,845,816 409,826 1,903,868 5,198,754 122,078 11,794 20,492,136 $ 43,207,583
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 Current tax liability Other current liabilities Total current liabilities Noncurrent liabilities Deferred tax liability Other liabilities - noncurrent Total noncurrent liabilities Total liabilities Equity attributable to owners of the parent company Capital Common stock Capital reserve Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity Total equity TOTAL LIABILITIES AND EQUITY

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

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PRESIDENT SECURITIES CORPORATION STATEMENTS OF COMPREHENSIVE INCOME (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) EXCEPT FOR EARNINGS PER SHARE AMOUNT)

Revenues
Securities brokerage fees
Underwriting fees
Gains on trading of securities
Interest income
Gain on valuation of trading securities
Gain (loss) on short covering and trading securities - RS financing covering
Gain (loss) on valuation of borrowed securities and bonds with resale agreements
Gain on warrants issuance
Gain on derivative financial instruments
Other operating income
Total revenues
Expenses
Handling charges
Interest expenses
Futures commission expense
Clearing charges
Employee benefits
Depreciation and amortization
Other operating expenses
Total expenditures and expenses

For theyears ended December 31,
2013
2012
Note
Amount
%
Amount
%
6(25)
$ 1,232,808
32
$ 1,333,504
38
6(26)
70,408
2
89,033
3
6(27)
960,464
25
380,520
11
6(28)
733,748
19
816,411
23
6(29)
287,536
7
137,016
4
6(30)
94,983
2
2,606
-
6(31)
4,438
-
(
17,164 ) (
1 )
6(32)
17,548
-
80,255
2
6(33)
178,153
5
342,003
10
6(34)
299,315
8
371,243
10
3,879,401
100
3,535,427
100
6(35)
(
191,785) (
5) (
166,364 ) (
5 )
6(36)
(
105,599) (
3) (
131,172 ) (
4 )
(
426)
-
(
708 )
-
(
37,563) (
1) (
29,542 ) (
1 )
6(37)
(
1,452,531) (
37) (
1,449,407 ) (
41 )
6(38)
(
95,865) (
3) (
91,488 ) (
2 )
6(39)
(
855,298)(
22)(
765,499 )(
22 )
(
2,739,067)(
71)(
2,634,180 )(
75 )

(Continued)

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PRESIDENT SECURITIES CORPORATION STATEMENTS OF COMPREHENSIVE INCOME (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (EXCEPT FOR EARNINGS PER SHARE AMOUNT)

Non-operating gains and losses Share of the profit or loss of associates and joint ventures accounted for using the equity method Other gains and losses Total non-operating gains and losses Profit before tax Income tax expense Income from continuing operations Income from discontinued operations Net income Other comprehensive income (loss) Translation gain and loss on the financial statements of foreign operating entities Unrealized gain (loss) on financial instruments Net actuarial (loss) gains on defined benefit plans Other comprehensive (loss) income of associates and joint ventures accounted for under equity method Income tax benefit (expense) relating to components of other comprehensive income Current other comprehensive income (loss) (post-tax) Total current comprehensive income Earnings per share Basic earnings per share (in dollars) Diluted earnings per share (in dollars)	For the 2013 Note Amount $ 268,377 6(40) 58,961 327,338 1,467,672 6(41) ( 105,957) 1,361,715 - 1,361,715 46,966 26,616 ( 7,089) 83 1,205 67,781 $ 1,429,496 6(42) $ $	For the	years ended December 31,	years ended December 31,
		2013		2012
		$

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

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PRESIDENT SECURITIES CORPORATION

STATEMENTS OF CHANGES IN EQUITY

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

For the year ended December 31, 2012 Balance as of January 1, 2012 Appropriations of earnings: Legal reserve Special reserve Stock dividends Change in capital reserve: Capital reserve transferred to capital Difference between proceeds from disposal of subsidiary and carrying amount Net income for the year Other comprehensive income for the year Balance at December 31, 2012 For the year ended December 31, 2013 Balance as of January 1, 2013 Appropriations of earnings: Legal reserve Special reserve Cash dividends Net income for the year Other comprehensive income for the year Balance at December 31, 2013		Share capital		Capital reserve				Retained earnings				Other	equity	equity		Total equity
		Common stock				Legal reserve		Special reserve		Unappropriated earnings		Translation gain and loss on the financial statements of foreign operating entities		Unrealized gain or loss on financial instruments
		$ 12,845,816 - - 231,225 154,150 - - - $ 13,231,191 $ 13,231,191 - - - - - $ 13,231,191		$ 409,826 - - - ( 154,150 ) 440 - - $ 256,116 $ 256,116 - - - - - $ 256,116		$ 1,903,868 56,690 - - - - - - $ 1,960,558 $ 1,960,558 111,377 - - - - $ 2,071,935		$ 5,198,754 - 283,853 - - - - - $ 5,482,607 $ 5,482,607 - 310,194 - - - $ 5,792,801		$ 122,078 ( 56,690 ) ( 283,853 ) ( 231,225 ) - - 1,170,034 46,541 $ 766,885 $ 766,885 ( 111,377 ) ( 310,194 ) ( 688,022 ) 1,361,715 ( 5,801 ) $ 1,013,206		$ - - - - - - - ( 74,685 ) ($ 74,685 ) ($ 74,685 ) - - - - 46,966 ($ 27,719 )				$ 20,492,136 - - - - 440 1,170,034 ( 38,804 ) $ 21,623,806 $ 21,623,806 - - ( 688,022 ) 1,361,715 67,781 $ 22,365,280

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

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PRESIDENT SECURITIES CORPORATION STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

			For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,
			2013		2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit before tax from continuing operations		$	1,467,672	$	1,285,421
Income from discontinued operations before tax			-		-
Profit before tax			1,467,672		1,285,421
Adjustments to reconcile profit before tax to net cash (used
in) provided by operating activities:
Income and expenses without cash flow impact
Depreciation			94,133		91,488
Amortization			1,732		-
Write-off of bad debts classified as income	(		512 )	(	2,594 )
Provision for bad debts			12,846		331
Gain on valuation of trading securities	(		287,536 )	(	137,016 )
Financial expense			105,599		131,172
Interest income	(		770,454 )	(	851,126 )
Dividend income	(		131,725 )	(	158,211 )
Share of the profit of associates and joint ventures
accounted for using the equity method	(		268,377 )	(	122,845 )
Loss on disposal of property and equipment			394		-
Income (loss) on valuation of open-ended funds and
money-market instruments			2,697	(	25,427 )
Impairment loss on financial assets measured at cost			5,600		-
Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss	(		1,637,095 )	(	1,970,718 )
Available-for-sale financial assets – current	(		105,204 )		518,023
Bonds purchased under resale agreements	(		184,897 )		230,044
Margin loans receivable	(		1,744,158 )		910,678
Refinancing security deposits	(		24,321 )		2,446
Receivables from refinance guaranty	(		46,733 )		23,621
Receivables from security lending			15,810		130,321
Security lending deposits	(		8,235 )		119,011
Notes receivable	(		1,842 )		112
Accounts receivable	(		2,897,399 )	(	1,205,846 )
Accounts receivable-related parties			1,119		1,879
Prepayments	(		251 )	(	3,970 )
Other receivables			380		2,161
Other current assets			467,346		430,683
Changes in operating liabilities
Financial liabilities at fair value through profit or loss –
current			783,891		21,068
Bonds sold under repurchase agreements	(		1,707,598 )	(	636,560 )
Deposits on short sales	(		9,174 )	(	233,198 )
Short sale proceeds payable	(		6,971 )	(	134,245 )
Guarantee deposit received on borrowed securities	(		614,980 )	(	651,043 )
Accounts payable			2,725,624		1,817,556
Advance receipts	(		6,657 )		6,761
Collections on behalf of third parties			167,952		27,812
Other payables			32,407	(	10,564 )
Other financial liabilities – current	(		28,199 )		38,099
Other current liabilities	(		428 )	(	513 )
(Continued)

～16～

PRESIDENT SECURITIES CORPORATION STATEMENTS OF CASH FLOWS (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

			For the years ended December	For the years ended December	For the years ended December	31,
			2013			2012
Cash used in operations	(	$	4,597,544 )	(	$	355,189 )
Dividends received			276,297			299,578
Interest received			777,630			949,131
Income tax paid	(		70,827 )	(		117,869 )
Net cash (used in) provided by operating activities	(		3,614,444 )			775,651
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment			6,600			14,783
Proceeds from capital reduction of financial assets measured
at cost	(		300,000 )			-
Acquisition of property and equipment	(		14,197 )	(		33,811 )
Changes in intangible assets	(		8,605 )			-
Decrease in other non-current assets			39,574			141,810
Increase in prepayment for equipment	(		39,423 )	(		42,226 )
Net cash (used in) provided by investing activities	(		316,051 )			80,556
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in short-term loans			50,000	(		250,000 )
Increase in commercial papers payable			4,950,000			500,000
Decrease in other non-current liabilities	(		10,754 )	(		61,664 )
Cash dividends paid	(		688,022 )			-
Disposal of subsidiaries (without loss of control)			-			12,540
Interest paid	(		102,236 )	(		128,694 )
Net cash provided by financing activities			4,198,988			72,182
Net increase in cash and cash equivalents			268,493			928,389
Cash and cash equivalents, beginning of year			2,701,529			1,773,140
Cash and cash equivalents, end of year		$	2,970,022		$	2,701,529

~17~

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

PRESIDENT SECURITIES CORPORATION AND ITS SUBSIDIARIES

Declaration of Consolidated Financial Statements of Affiliated Enterprises

The companies included in the consolidated financial statements of affiliated enterprises prepared by the Company for 2013 (from January 1, 2013 to December 31, 2013) in accordance with Article 33 of the “Regulations Governing the Preparation of Financial Reports by Securities Firms” and “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are identical with those to be included in the consolidated financial statements of the parent company and subsidiaries in accordance with IAS 27, “Consolidated and Separate Financial Statements” The relevant information to be disclosed in the consolidated financial statements of affiliated enterprises has already been disclosed in the consolidated financial statements of the parent company and subsidiaries. Therefore, the Company does not prepare the consolidated financial statements of affiliated enterprises separately.

Hereby declare

PRESIDENT SECURITIES CORPORATION AND

ITS SUBSIDIARIES

Responsible person: DENG, A-HUA

March 26, 2014

~18~

PWCR13003402

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, 2013, December 31, 2012 and January 1, 2012, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years ended December 31, 2013 and 2012. These 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 "Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants" and generally accepted auditing standards in the Republic of China. Those standards 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 consolidated 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 consolidated financial statements referred to above present fairly, in all material respects, the financial position of President Securities Corporation and its subsidiaries as of December 31, 2013, December 31, 2012 and January 1, 2012 and their financial performance and cash flows for the years ended December 31, 2013 and 2012 in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Firms”, “Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants”, and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

We have audited the parent company only financial statements of President Securities Corporation as of and for the years ended December 31, 2013 and 2012 on which we have issued an unqualified opinion thereon.

PricewaterhouseCoopers, Taiwan

March 26, 2014

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.

～19～

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

ASSETS	December31,2012 Amount % $ 4,933,426 9 17,791,194 34 218,050 - - - 9,772,570 19 374 - 12,901 - 5,637,662 11 45,803 - 41,382 - 1,674 - 5,499,832 10 28,722 - 412,497 1 2,364 - 3,651,539 7 48,049,990 91 50,885 - 83,244 - 407,188 1 2,653,310 5 287,304 1 - - 38,137 - 1,278,199 2 4,798,267 9 $ 52,848,257 100 $ 3,816,336 7 1,999,639 4 448,956 1 7,979,713 15 1,245,017 2	January1,2012	January1,2012
	Amount $ 4,933,426 17,791,194 218,050 - 9,772,570 374 12,901 5,637,662 45,803 41,382 1,674 5,499,832 28,722 412,497 2,364 3,651,539 48,049,990 50,885 83,244 407,188 2,653,310 287,304 - 38,137 1,278,199 4,798,267 $ 52,848,257 $ 3,816,336 1,999,639 448,956 7,979,713 1,245,017	Amount $ 4,002,165 15,420,684 746,733 230,044 10,683,585 2,820 36,522 5,234,807 176,124 160,393 1,630 4,134,181 23,663 83,254 113 4,098,046 45,034,764 51,635 98,027 385,300 2,657,258 289,404 - 64,301 1,459,352 5,005,277 $ 50,040,041 $ 3,620,887 1,499,781 427,237 8,616,273 1,478,214	%
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Available-for-sale financial assets - current Bonds purchased under resale agreements 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 Other receivables Current tax assets Other current assets Total current assets Noncurrent assets Financial assets at fair value through profit or loss - noncurrent Financial assets at cost - noncurrent Investments in associates Property and equipment Investment property Intangible assets Deferred tax assets Other assets - noncurrent Total noncurrent assets TOTAL ASSETS LIABILITIES AND EQUITY			8 31 2 1 21 - - 11 - - - 8 - - - 8
			90
			- - 1 5 1 - - 3
			10
			100
			7 3 1 17 3
Current liabilities Short-term loans Commercial papers payable Financial liabilities at fair value through profit or loss - current Bonds sold under repurchase agreements Deposits on short sales

～20～

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

LIABILITIESAND EQUITY	December 31, 2013 December 31, 2012 Amount % Amount % $ 1,599,806 3 $ 1,606,777 3 529,309 1 1,144,289 2 4,917,434 8 5,637,662 11 8,598,138 15 5,729,612 11 450 - 7,162 - 428,091 1 259,893 1 951,286 1 1,138,984 2 93,398 - 121,597 - 64,432 - 28,166 - 4,600 - 5,020 - 36,354,161 62 31,168,823 59 14,210 - 176 - 8,402 - 16,007 - 22,612 - 16,183 - 36,376,773 62 31,185,006 59 13,231,191 22 13,231,191 25 256,116 - 256,116 1 2,071,935 4 1,960,558 4 5,792,801 10 5,482,607 10 1,013,206 2 766,885 1 31 - ( 73,551) - 22,365,280 38 21,623,806 41 40,923 - 39,445 - 22,406,203 38 21,663,251 41 $ 58,782,976 100 $ 52,848,257 100	January 1, 2012	January 1, 2012
	Amount $ 1,599,806 529,309 4,917,434 8,598,138 450 428,091 951,286 93,398 64,432 4,600 36,354,161 14,210 8,402 22,612 36,376,773 13,231,191 256,116 2,071,935 5,792,801 1,013,206 31 22,365,280 40,923 22,406,203 $ 58,782,976	Amount $ 1,741,022 1,795,332 5,234,807 3,822,042 75 234,018 788,228 83,498 46,937 3,122 29,391,473 1,001 128,038 129,039 29,520,512 12,845,816 409,826 1,903,868 5,198,754 122,078 11,794 20,492,136 27,393 20,519,529 $ 50,040,041	%
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 Current tax liability Other current liabilities Total current liabilities Noncurrent liabilities Deferred tax liability Other liabilities-noncurrent Total noncurrent liabilities Total liabilities Equity attributable to owners of the parent company Capital Common stock Capital reserve Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity Total Non-controlling interests Total equity TOTAL LIABILITIES AND EQUITY			4 4 10 8 - - 2 - - -
			59
			- -
			-
			59
			26 1 4 10 - -
			41
			-
			41
			100

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

～21～

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) EXCEPT FOR EARNINGS PER SHARE AMOUNT)

Revenues
Securities brokerage fees
Underwriting fees
Gains (losses) on trading of securities
Interest 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
Gain on derivative financial instruments
Other operating income
Total revenues
Expenses
Handling charges
Interest expenses
Futures commission expense
Clearing charges
Employee benefits
Depreciation and amortization
Other operating expenses
Total expenditures and expenses

For theyears ended December 31,
2013
2012
Note
Amount
%
Amount
%
6(26)
$ 1,804,151
39
$ 1,861,544
45
6(27)
70,408
2
89,033
2
6(28)
1,015,852
22
413,973
10
6(29)
788,232
17
865,232
21
6(30)
303,088
7
74,720
2
6(31)
94,983
2
2,606
-
6(32)
4,438
-
(
17,164 )
-
6(33)
17,548
-
80,256
2
6(34)
206,920
4
350,182
9
6(35)
307,698
7
364,711
9
4,613,318
100
4,085,093
100
6(36)
(
276,165 ) (
6 ) (
256,486 ) (
6 )
6(37)
(
126,838 ) (
3 ) (
151,360 ) (
4 )
(
92,254 ) (
2 ) (
81,932 ) (
2 )
(
91,219 ) (
2 ) (
86,132 ) (
2 )
6(38)
(
1,713,704 ) (
37 ) (
1,681,717 ) (
41 )
6(39)
(
114,547 ) (
3 ) (
111,530 ) (
3 )
6(40)
(
984,888 )(
21 ) (
941,713 ) (
23 )
(
3,399,615 )(
74 ) (
3,310,870 ) (
81 )

(Continued)

～22～

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (EXCEPT FOR EARNINGS PER SHARE AMOUNT)

Non-operating gains and losses Share of the profit or loss of associates and joint ventures accounted for using the equity method Other gains and losses Total non-operating gains and losses Profit before tax Income tax expense Income from continuing operations Income from discontinued operations Net income Other comprehensive income (loss) Translation gain and loss on the financial statements of foreign operating entities Unrealized gain (loss) on financial instruments Net actuarial (losses) gains on defined benefit plans Other comprehensive (loss) income of associates and joint ventures accounted for under equity method Income tax benefit (expense) relating to components of other comprehensive income Current other comprehensive income (loss) (post-tax) Total current comprehensive income Income attributable to: Parent company Non-controlling interests Current comprehensive income attributable to: Parent company Non-controlling interests Earnings per share Basic earnings per share (in dollars) Diluted earnings per share (in dollars)	Note 6(11) 6(41) 6(42) ( ( 6(43)	For the years ended December 31,	For the years ended December 31,
		2013	2012
		Amount $ 55,919 219,865 275,784 1,489,487 124,034 ) 1,365,453 - 1,365,453 46,966 26,616 9,756 ) 2,205 1,659 67,690 $ 1,433,143 $ 1,361,715 $ 3,738 $ 1,429,496 $ 3,647 $
		$

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

～23～

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

			(EXPRESSED IN THOUSANDS	(EXPRESSED IN THOUSANDS	OF NEW TAIWAN DOLLARS)	OF NEW TAIWAN DOLLARS)	OF NEW TAIWAN DOLLARS)
For the year ended December 31,			Equityattributable to owner		s of theparent company						Non-controlling interest	Totalequity
	Share capital	Capital reserve		Retained earnings			Other	equity		Total
	Commonstock		Legal reserve	Special reserve		Unappropriated earnings	Translation gain and loss on the financial statements of foreign operating entities		Unrealized gain or loss on financial instruments
	$ 12,845,816 - - 231,225 154,150 - - - - $ 13,231,191 $ 13,231,191 - - - - - - $ 13,231,191	$ 409,826 - - - ( 154,150 ) 440 - - - $ 256,116 $ 256,116 - - - - - - $ 256,116							$ 11,794 - - - - - - ( 10,660 ) - $ 1,134 $ 1,134 - - - - 26,616 - $ 27,750		$ 27,393 - - - - - 3,152 120 8,780 $ 39,445 $ 39,445 - - - 3,738 ( 91 ) ( 2,169 ) $ 40,923	$ 20,519,529 - - - - 440 1,173,186 ( 38,684 ) 8,780 $ 21,663,251 $ 21,663,251 - - ( 688,022 ) 1,365,453 67,690 ( 2,169 ) $ 22,406,203
2012 Balance as of January 1, 2012 Appropriations of 2012 earnings: Legal reserve Special reserve Stock dividends Change in capital reserve: Retained earnings transferred to capital Difference between proceeds from disposal of subsidiary and carrying amount Net income for the year Other comprehensive income for the year Changes in non-controlling interests Balance at December 31, 2012 For the year ended December 31,
2013 Balance as of January 1, 2013 Appropriations of 2013 earnings: Legal reserve Special reserve Cash dividends Net income for the year Other comprehensive income for the year Changes in non-controlling interests Balance at December 31, 2013

～24～

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

			For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,
			2013		2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit before tax from continuing operations		$	1,489,487	$	1,305,778
Income from discontinued operations before tax			-		-
Profit before tax			1,489,487		1,305,778
Adjustments to reconcile profit before tax to net cash (used
in) provided by operating activities:
Income and expenses without cash flow impact
Depreciation			103,752		103,161
Amortization			10,795		8,369
Write-off of bad debts classified as income	(		512 )	(	2,594 )
Provision for bad debts			12,846		331
Gain on valuation of trading securities	(		303,088 )	(	74,720 )
Financial expense			126,838		151,360
Interest income	(		932,506 )	(	1,008,563 )
Dividend income	(		143,868 )	(	171,198 )
Share of the profit of associates and joint ventures
accounted for using the equity method	(		55,919 )	(	71,805 )
Loss on disposal of property and equipment			402		193
Income on valuation of open-ended funds and
money-market instruments			3,850	(	82,604 )
Impairment loss on financial assets measured at cost			5,600		-
Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss	(		1,624,152 )	(	2,218,830 )
Available-for-sale financial assets - current	(		105,204 )		518,023
Bonds purchased under resale agreements	(		184,897 )		230,044
Margin loans receivable	(		1,744,158 )		910,678
Refinancing security deposits	(		24,321 )		2,446
Receivables from refinance guaranty	(		46,733 )		23,621
Customer margin account			720,228	(	402,855 )
Receivables from security lending			15,810		130,321
Security lending deposits	(		8,235 )		119,011
Notes receivable	(		1,686 )	(	44 )
Accounts receivable	(		2,917,055 )	(	1,443,122 )
Prepayments	(		25,556 )	(	5,059 )
Other receivables			5,809		18,072
Other current assets			354,082		446,507
Changes in operating liabilities
Financial liabilities at fair value through profit or loss -
current			783,198		21,719
Bonds sold under repurchase agreements	(		1,707,598 )	(	636,560 )
Deposits on short sales	(		9,174 )	(	233,197 )
Short sale proceeds payable	(		6,971 )	(	134,245 )
Guarantee deposit received on borrowed securities	(		614,980 )	(	651,043 )
Futures traders' equity	(		720,228 )		402,855
Accounts payable			2,863,349		1,905,992
Advance receipts	(		6,712 )		7,087
Collections on behalf of third parties			168,198		25,875
Other payables			51,016		9,781
Other financial liabilities - current	(		28,199 )		38,099
Other current liabilities	(		420 )		1,898
(Continued)

～25～

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

	For the years ended December 31, 2013 2012 Cash used in operations ( $ 4,496,912 ) ( $ 755,218 ) Dividends received 219,408 208,652 Interest received 942,208 1,099,823
	Income tax paid ( 87,716 ) ( 138,065 ) Net cash (used in) provided by operating activities ( 3,423,012 ) 415,192 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and equipment ( 715 ) - Proceeds from capital reduction of financial assets measured at cost 6,600 14,783 Acquisition of property and equipment ( 17,629 ) ( 39,960 ) Changes in intangible assets ( 11,867 ) - Decrease in other non-current assets 3,708 159,570 Increase in prepayment for equipment ( 41,364 ) ( 44,694 ) Net cash (used in) provided by investing activities ( 61,267 ) 89,699 CASH FLOWS FROM FINANCING ACTIVITIES
	: (Decrease) increase in short-term loans ( 337,076 ) 195,449 Increase in commercial papers payable 4,950,000 500,000 Decrease in other non-current liabilities ( 7,605 ) ( 54,514 ) Cash dividends paid ( 688,022 ) - Disposal of subsidiaries (without loss of control) - 12,540 Changes in non-controlling interest ( 2,169 ) ( 3,320 ) Interest paid ( 123,757 ) ( 149,100 ) Net cash provided by financing activities 3,791,371 501,055 Effect of exchange rate changes 46,966 ( 74,685 ) Net increase in cash and cash equivalents 354,058 931,261 Cash and cash equivalents, beginning of year 4,933,426 4,002,165 Cash and cash equivalents, end of year $ 5,287,484 $ 4,933,426

For the years ended December 31,
2013
2012
Cash used in operations
( $ 4,496,912 )
( $ 755,218 )
Dividends received
219,408
208,652
Interest received
942,208
1,099,823

Income tax paid
(
87,716 )
(
138,065 )
Net cash (used in) provided by operating activities
(
3,423,012 )
415,192
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment
(
715 )
-
Proceeds from capital reduction of financial assets measured
at cost
6,600
14,783
Acquisition of property and equipment
(
17,629 )
(
39,960 )
Changes in intangible assets
(
11,867 )
-
Decrease in other non-current assets
3,708
159,570
Increase in prepayment for equipment
(
41,364 )
(
44,694 )
Net cash (used in) provided by investing activities
(
61,267 )
89,699
CASH FLOWS FROM FINANCING ACTIVITIES

:
(Decrease) increase in short-term loans
(
337,076 )
195,449
Increase in commercial papers payable
4,950,000
500,000
Decrease in other non-current liabilities
(
7,605 )
(
54,514 )
Cash dividends paid
(
688,022 )
-
Disposal of subsidiaries (without loss of control)
-
12,540
Changes in non-controlling interest
(
2,169 )
(
3,320 )
Interest paid
(
123,757 )
(
149,100 )
Net cash provided by financing activities
3,791,371
501,055
Effect of exchange rate changes
46,966
(
74,685 )
Net increase in cash and cash equivalents
354,058
931,261
Cash and cash equivalents, beginning of year
4,933,426
4,002,165
Cash and cash equivalents, end of year
$ 5,287,484
$ 4,933,426

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

APPENDIX IV

President Securities Corporation 2013 Earnings Distribution Proposal

	President Securities Corporation 2013 Earnings Distribution Proposal
		Unit:：NT$ $14,773,077 (357,481,459) (342,708,382)
	Unappropriated earnings as ofJanuary1,2013 (Note1)	$14,773,077
	Less：Adjustment due to first-time adoption of T-IFRSs(Note 2)	(357,481,459)
	Unappropriated earnings afteradjustment as ofJanuary1,2013	(342,708,382)

	Less：Adjustment to unappropriated earnings of 2013(Note 3)	(5,800,133)
	Unappropriated earnings afteradjustment	(348,508,515)
	Add：Netprofit after tax of 2013	1,361,714,534
	Subtotal	1,013,206,019
	Less：Legal Reserve(10%) (Note 4)	(101,320,602)
	Special Reserve (20%) (Note4)	(202,641,204)
	Add：Reversal of Special reserve(Note 5)	286,895,456
	Unappropriated earningsAvailablefor Distribution	996,139,669
	Distribution items
	─ Cashdividend (NT$ 0.74/ pershare)	979,108,100

	Unappropriated earnings as of December31,2013	17,031,569
	Remarks：
	Remuneration for Directors and Supervisors	$30,919,203
	Employee cashbonuses	20,612,802
	Total	$51,532,005

Note1: The amount of unappropriated earnings in the earning distributions resolved by the shareholders’ meeting of 2013.
Note2: The Company adopted T-IFRSs from 2013 and unappropriated earnings was decreased by $357,481,459.
Note3: Due to first-time adoption of T-IFRSs, unappropriated earning was decreased by $5,800,133 due to actuarial loss from defined benefits plan (included in other comprehensive income).
Note4: According to Article 237 of the Company Act, Jing Shan Letter No.10102268370 and No.10202433490, Paragraph 1 of Article 41 of the Securities and Exchange Act, Article 14 of Regulations Governing Securities Firms, and Article 23 of the Company’s Article of Incorporation, 10% and 20% were set aside as legal reserve and special reserve.
Note5: According to Jing Guan Zheng Fa Letter No.1010012865, special reserve of $286,895,456 was reversed. (Reversing special reserve net of previous years’ translation gain and loss on the financial statements of foreign operating entities and unrealized gain or loss on financial instruments)
Note 6: Prior years’ unappropriated earnings shall not be appropriated unless the current year’s unappropriated earnings is insufficient for distribution.
Note 7: Total common shares outstanding as of December 31, 2013 was 1,323,119,054 shares.

APPENDIX V

Comparison Table of Amendments to “Procedures for the Acquisition or Disposal of Assets “

This amendment is In accordance with the order issued by FSC (order number Jin Guan Zheng Fa No. 1020053073 of Dec. 30, 2013).

Translation of full text in English is not enclosed herewith. For the relevant content, please refer to the Regulations Governing the Acquisition and Disposal of Assets by Public Companies, amended on Dec. 30, 2013, from the Law Source Retrieving System of Taiwan, Republic of China Stock Exchange and Futures Trading

==> picture [595 x 212] intentionally omitted <==

APPENDIX VI

Comparison table of Amendments to” Articles of Incorporation”

Article	Amendment	Amendment	Original Articles
	Chapter I Summary

Article 2-1	The scope of business of the Corporation shall be as follows: 1. To underwrite valuable securities 2. To buy and sell valuable securities in centralized trading markets as a principal; 3. To be consigned to buy and sell valuable securities in centralized trading markets; 4. To buy and sell valuable securities in its own business location; 5. To be consigned to buy and sell valuable securities in its own business location; 6. To act as an agent for stock affairs in valuable securities;		The scope of business of the Corporation shall be as follows: 1. To underwrite valuable securities 2. To buy and sell valuable securities in centralized trading markets as a principal; 3. To be consigned to buy and sell valuable securities in centralized trading markets; 4. To buy and sell valuable securities in its own business location; 5. To be consigned to buy and sell valuable securities in its own business location;
	7. 8. 9. 10. 11. 12. 13. 14.	To engage in short-buy and margin sales for trading in valuable securities; To render aid in futures trading; To be consigned to buy and sell foreign valuable securities; To engage concurrently in proprietary futures trading; To engage concurrently in trustee; To engage international securities business ; To engage foreign currency exchange business authorized by Central Bank; To engage in other securities related businesses as approved by the competent authorities.	6. To act as an agent for stock affairs in valuable securities; 7. To engage in short-buy and margin sales for trading in valuable securities; 8. To render aid in futures trading; 9. To be consigned to buy and sell foreign valuable securities; 10. To engage concurrently in proprietary futures trading. 11. To engage concurrently in trustee 12. To engage in other securities related businesses as approved by the competent authorities.
	Chapter IV Directors and Supervisors
Article 13	The Company has fifteen directors (three independent and twelve non-independent directors) and 3 supervisors.Since the tenth Board of Meeting, the company will set 19		The Company has fifteen directors (three independent and twelve non-independent directors) and three supervisors, to be elected by shareholders’

	directors, among them has 4 independent directors, 15 non-independent directors. Supervisors will be replaced by Audit Committee. Directors have three-year tenure of office and eligible for reelection. The candidates’ qualifications shall live up to requirements of Company Law, Securities Trading Law and related	meeting from among the persons with disposing capacity, both having three-year tenure of office and eligible for reelection. The candidates’ qualifications shall live up to requirements of Company Law, Securities Trading Law and related regulations.
	regulations. Directors shall be elected from among the nominees listed in the roster of candidates by adopting candidate nomination system. The election of independent and non-independent shall be held together but the votes shall be calculated separately.	Directorsand supervisors shall be elected from among the nominees listed in the roster of candidates by adopting candidate nomination system. The election of independent and non-independent shall be held together but the votes shall be calculated separately.
Article 17-1	The Board of Directors may, complying with the law or taking into account the necessity, set up any functional committees whose functions, responsibilities, qualifications of	The Board of Directors may, complying with the law or taking into account the necessity, set up any functional committees whose functions, responsibilities,
	committee members, process of exercising the power and so forth to be formulated by the board of directors. The company will set up an audit committee, formed by independent directors, since the tenth Board of Meeting. The related procedures will be decided by the Board of Meeting. Its exercise of rights and instructions should follow the regulation of related laws and company’s articles.	qualifications of committee members, process of exercising the power and so forth to be formulated by the board of directors.
Article 26	These Articles were duly established on November 26,1988 and the first amendment was approved on December 28, 1988;------------ ; the twentyforth amendment onJune 18, 2014 。	These Articles were duly established on November 26,1988 and the first amendment was approved on December 28, 1988;------------ ; the twenty third amendment on June 22,2012。

APPENDIX VII

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

		Original Articles The company shall make uninterrupted audio and video recordings of the entire meeting from the time when the accepting shareholders report, said recordings shall include the shareholder reporting process, meeting process and vote counting process. In case a shareholder elects to exercise his/her/its voting power by way of electronic transmission, his/her declaration of intention shall be served to the company five days prior to the scheduled meeting date of the
Article	Amendment	Original Articles
8-1	The company shallrecord the entire meeting either through audio or video.	The company shall make uninterrupted audio and video recordings of the entire meeting from the time when the accepting shareholders report, said recordings shall include the shareholder reporting process, meeting process and vote counting process.
13-3	In case a shareholder elects to exercise his/her/its voting power by way of electronic transmission, his/her declaration of intention shall be served to the company two	In case a shareholder elects to exercise his/her/its voting power by way of electronic transmission, his/her declaration of intention shall be served to the company five days prior to the scheduled meeting date of the
	days prior to the scheduled meeting date of the shareholders' meeting, whereas if two or more declarations of the same intention are served to the company, the first declaration of such intention received shall prevail; unless an explicit statement to revoke the previous declaration is made in the declaration which comes later.	shareholders' meeting, whereas if two or more declarations of the same intention are served to the company, the first declaration of such intention received shall prevail; unless an explicit statement to revoke the previous declaration is made in the declaration which comes later.
13-6	Upon voting for resolution on a proposal, if no opposition is expressed by shareholders present at the meeting,and shareholders either through electronic or written form, in response to the chairperson’s invitation for opinion on that proposal, the resolution shall be deemed adopted unanimously and operate as	Upon voting for resolution on a proposal, if no opposition is expressed by any of the shareholders present at the meeting in response to the chairperson’s invitation for opinion on that proposal, the resolution shall be deemed adopted unanimously and operate as one adopted by voting. In case an opposition is expressed, the proposal shall be voted in accordance with the preceding paragraph.

	one adopted by voting. In case an opposition is expressed, the proposal shall be voted in accordance with the preceding paragraph.
15-4	Delete this item	Where the resolution is adopted as a result of no opposition expressed in response to the chairperson’s request for opinion, the meeting minutes shall indicate such resolution as“adopted
		unanimously on the chairman’s request for opinion”for the method of adopting resolutions provided in the preceding paragraph. Notwithstanding, where the resolution is adopted by voting as a result of an opposition expressed in response to the chairperson’s request for opinion, the meeting minutes shall indicate the resolution as adopted by voting and the number of approving votes and the percentage against the total votes accounted for by the approving votes.
19	.(Omit)…… The fifth amendment was th	(Omit)…… The fourth amendment was approved on th
	approved on June 18,2014. The company will set up an audit committee to replace supervisors since the tenth Board of Meeting. The adjustment of supervisors’ regulations will cease to apply till the tenth Board election	June 19,2013.

APPENDIX VIII

Comparison t0able of Amendments to” Rules for Election of Directors”

	Amendment
Name	Rules for Governing the Election of Directors of President Securities Corp.	Rules for Governing the Election of Directorsand Supervisors of President Securities Corp.
Article
1	Election of directors of the President Securities Corporation (hereinafter referred to as the Corporation), unless otherwise provided in the Company Act, Securities and Exchange Act or the Corporation’s bylaws, shall be conducted in accordance with theserules.		Election of directorsand supervisors of the President Securities Corporation (hereinafter referred to as the Corporation), unless otherwise provided in the Company Act, Securities and Exchange Act or the Corporation’s bylaws, shall be conducted in accordance with these rules.

2	Election of directors of the Corporation shall be conducted at the shareholders’ meeting.		Election of directorsand supervisors of the Corporation shall be conducted at the shareholders’ meeting.
3	Election of directors of the Corporation shall be conducted through cumulative voting; each share shall confer voting rights equal in number to the number of directors to be elected; votes may be cast for a single candidate or allocated to multiple candidates.		Election of directorsand supervisors of the Corporation shall be conducted through cumulative voting; each share shall confer voting rights equal in number to the number of directors and supervisors to be elected; votes may be cast for a single candidate or allocated to multiple candidates.
3-1	Election of directors of the Corporation shall be conducted using the candidate nomination system. The Corporation’s independent directors and non-independent directors shall be concurrently elected, but with their ballots separately calculated.		Election of directorsand supervisors of the Corporation shall be conducted using the candidate nomination system. The Corporation’s independent directors and non-independent directors shall be concurrently elected, but with their ballots separatelyprinted and calculated.

3-2	For election of directors, shareholders can exercise voting rights either through present or electronic.	(addition)
4	At an election of directors of the Corporation as conducted in accordance with the quota as provided by the by laws, candidates that receive the hihest number of votin	At an election of directorsand supervisors of the Corporation as conducted in accordance with the quota as provided by the by laws, candidates that receive the highest number of votin rihts shall be
	g g rights shall be elected as directors. When two or more candidates receive identical number of votes and the number of elected candidates exceeds the stipulated number of posts, said candidates shall draw lots to decide the appointments, and the chairperson shall draw lots on behalf of non-attendee(s).	g g elected as directorsand supervisors . A candidate concurrently elected as a director and supervisor shall, at his or her own discretion, decide to serve as either a director or supervisor, the post left vacant by said decision shall be filled by the candidate with the second highest number of votes after the abovementioned candidate. When two or more candidates receive identical number of votes and the number of elected candidates exceeds the stipulated number of posts, said
		candidates shall draw lots to decide the appointments, and the chairperson shall draw lots on behalf of non-attendee(s).
10	The Board of Directors shall respectively issue notices of appointment to elected directors and supervisors.	The Board of Directors shall respectively issue notices of appointment to elected directors and supervisors.
11	These rules are required to be passed at a shareholders’ meeting before their implementation; any amendment to these rules are also required to be approved at a shareholders’ meeting. The company will set up an audit committees to replace supervisors since the tenth Board of Meeting. The adjustment of supervisors’ regulations will cease to apply till the tenth Board election	These rules are required to be passed at a shareholders’ meeting before their implementation; any amendment to these rules are also required to be approved at a shareholders’ meeting.

Appendix IX

President Securities Corp. Rules and Procedures of Shareholders’ Meeting

Article01. These Rules are prescribed in accordance with Article 5 of the Corporate Governance Best-Practice Principles for TSE/GTSM Listed Companies for the purpose of establishing good governance, strengthening the supervisory functions and administration by the shareholders’ meeting.
Article02. Except as otherwise provided by the laws and regulations or the Articles of Incorporation of the Company, the shareholders’ meetings of the Company shall be in accordance with these Rules.
Article03. Except as otherwise provided by the laws and regulations, the shareholders’ meeting of the Company shall be convened by the Board of Directors.
The company shall prepare electronic files of the meeting announcement, proxy form, explanatory materials relating to proposals for ratification, matters for deliberation, election or dismissal of directors or supervisors, and other matters on the shareholders’ meeting agenda, and upload them to the MOPS website thirty (30) days prior to a regular shareholders’ meeting or fifteen (15) days prior to a temporary shareholders’ meeting Twenty-one (21)days before a company is to convene an ordinary shareholders’ meeting, or fifteen (15) days before an temporary shareholders' meeting, it shall prepare an electronic file of the shareholders’ meeting agenda handbook and the supplemental materials, and upload it to the MOPS website. Fifteen (15) days before a company is to convene a shareholders’ meeting, it shall prepare the shareholders’ meeting agenda handbook and supplemental materials and make them available for the shareholders to obtain and review at any time. In addition, the handbook shall be displayed at the company and its stock registrar and transfer agent, and distributed on-site at the meeting.

The meeting notice and the public announcement of the shareholders meeting shall expressly indicate the reasons for convening the meeting. The meeting notice can be served by means of electricity facilities if agreed by the noticed party .

Election or dismissal of directors, supervisors, proposed amendment to the Articles of Incorporation, proposed dissolution, merger, or split of the Company, event(s) of the conditions provided in the first paragraph of Article 185 of the Company Act, or Article 26-1, or Article 43-6 of the Securities And Exchange Act must be indicated item by item in the reasons for convening the meeting in the meeting notice and none of them can be proposed by way of extempore motion.

A shareholder who holds 1% or more of the total issued shares of the Company may propose in writing one and only one proposal in advance to be included in the agenda for discussion and resolution at the shareholders meeting. All additional proposals, if any, proposed by the shareholder shall be excluded from the agenda. The Board of Directors may decide to exclude from the agenda any proposal proposed by the shareholder which runs into any of the conditions provided in the fourth paragraph of Article 172 -1 of the Company Act.

The Company shall make public announcement about when and where to submit proposal prior to the commencement date of the suspension of transfer of shares in the Company and the opening period for proposal acceptance shall not less than 10 days.

The proposal proposed by the shareholder shall be written in not more than 300 Chinese characters or shall otherwise be excluded from the agenda. The shareholder who has proposed a proposal shall personally attend the general shareholders meeting and participate in the discussion of his/her proposal or he/she may duly designate a proxy to act on his/her behalf at the meeting.

The Company shall give a notice to the shareholder prior to the meeting date regarding the Company’s handling of the proposal he/she has proposed. The Company shall, item by item, indicate in the meeting notice all of the proposals submitted in conformity to this Article and the reasons why the other proposals are excluded from the agenda.

Article04. The shareholder may designate a proxy to attend the shareholders meeting on his/her behalf by signing and indicating the scope of authority in the proxy form prepared by the Company.

Each shareholder may sign one and only one proxy form to designate one and only one proxy. The signed proxy form must be served to the Company five days prior to the meeting day. In case of multiple signed proxies from the same shareholder, the first one served to the Company shall prevail except when the shareholder has expressed to cancel the proxy.

The shareholder who, after his/her signed proxy has been served to the Company, is to attend the meeting in person or to exercise his/her voting power by way of electronic transmission shall notify the Company in writing no later than two days prior to the meeting day of his/her intention to cancel his/her signed proxy or the ballots cast by his/her designated proxy present at the meeting shall govern for the purpose of vote counting.

Article05. The shareholders meeting shall be convened at the place where the Company is located or any other appropriate place convenient for

shareholders to attend and shall commence no earlier than 9:00AM and no later than 3:00PM on the meeting date. The venue, date and hour of the meeting shall be determined in consideration of the opinion of the independent director.

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 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.

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 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 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 the meeting.

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 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.

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/or the relevant personnel to attend the shareholders’ meeting without the right to vote.

Article08. The company shall make uninterrupted audio and video recordings of the entire meeting from the time when the 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.

Article09. Whether the shareholders’ meeting meets the quorum shall be determined based on the total amount of shares represented at the meeting which shall be counted according to the numbers of attendance cards received plus voting power exercised by way of electronic transmission.

The chairperson shall call the meeting to order as scheduled, provided that where the number of shares represented at the meeting accounts for less than the majority of the total issued shares, the chairperson may announce to postpone calling the meeting to order twice and only twice for a total duration of not more than one hour. If the quorum is still not met after the above postponement duration has expired and the total number of shares represented at the meeting still accounts for less than one third of the total issued shares of the Company, the chairperson shall announce to abort the meeting.

If the quorum is still not met after the meeting has been twice postponed as provided in the preceding paragraph but the number of shares represented at the meeting exceeds one third of the total issued shares of the Company, temporary resolutions may be adopted in accordance with the

first paragraph of Article 175 of the Company Act, in which case, the temporary resolutions adopted shall be notified to all shareholders and the shareholders meeting shall reconvene within one month.

If, before the meeting ends, the total shares represented at the meeting account for half or more of the total issued shares of the Company, the chairperson may submit the temporary resolution adopted to the meeting for voting pursuant to Article 174 of the Company Act.

Article10. Where the shareholders’ meeting is convened by the Board of Directors, the agenda shall be determined by the Board of Directors and the meeting shall proceed according to the agenda except otherwise changed by the resolution adopted by the shareholders’ meeting.

Where the shareholders’ meeting is convened by any person legally authorized to do so other than the Board of Director, the preceding paragraph shall apply.

The chairperson shall not forthwith announce to adjourn the meeting before the agenda provided in the two preceding paragraphs (including extempore motions) is duly completed except on the resolution adopted by the shareholders’ meeting for him/her to do so. In the event the chairperson announces to adjourn the meeting in contravention to these Rules, the other members of the Board of Directors present shall promptly assist the shareholders present at the meeting to duly elect, by a majority vote, one from among the directors present to preside to continue the meeting.

The chairperson shall allow sufficient time for explanation to be given and discussion on each proposal on the agenda and each amendment or extempore motion proposed by the shareholders. The chairperson may announce to conclude the discussion as he/she sees fit and submit the proposal to voting for resolution.

Article11. The shareholder shall fill out the speaking request form floor before making statement at the meeting and he/she will indicate the gist of his/her statement to make, shareholder account number (or attendance card number) and shareholder name. The chairperson will decide the order for the shareholders to make their statement.

The shareholder who has only filled out the speaking request form floor without actually doing so shall be deemed not having made any statement. In case of any discrepancy between the gist of statement indicated in the shareholder’s speaking request and the actual statement made, the actual statement made shall govern.

The shareholder may speak on each proposal twice and only twice for not more than five minutes each except otherwise approved by the chairperson, provided that the chairperson may stop at any time the shareholder from taking the floor if such shareholder has acted in contravention of these Rules or is making statement out of the scope of the

proposal being discussed.

No shareholder may interrupt the shareholder taking the floor without the consent of both of the chairperson and the shareholder taking the floor. The chairperson shall restrain any shareholder from acting in breach of the above.

An institutional shareholder who is represented by two or more appointed representatives at the meeting will have its statement on the same proposal made (if any) by one and only one of its appointed representatives.

The chairperson may personally respond to the statement made by the shareholder or appoint the relevant personnel to do so.

Article12. The votes at the shareholders’ meeting will be counted based on the number of shares.

The non-voting shares represented at the meeting shall be disregarded for the purpose of counting votes for adopting the resolution.

Shareholders who have personal conflict of interests against the Company on certain proposal shall not vote on that proposal, either for himself/herself or for another shareholder by proxy.

The non-voting shares provided in the preceding paragraph shall be excluded from the calculation of voting shares represented at the meeting.

Except trust businesses or stock affair agency approved by the competent securities authority, a proxy acting on behalf of two or more shareholders at the meeting will have the voting right by proxy representing not exceeding 3% of the total issued shares of the Company. Any vote cast by the proxy in excess of the said representation limit will be ignored.

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.

In case a shareholder elects to exercise his/her/its voting power by way of electronic transmission, his/her declaration of intention shall be served to the company five days prior to the scheduled meeting date of the

shareholders' meeting, whereas if two or more declarations of the same intention are served to the company, the first declaration of such intention received shall prevail; unless an explicit statement to revoke the previous declaration is made in the declaration which comes later.

In case a shareholder who has exercised his/her voting power by way of electronic transmission intends to attend the shareholders' meeting in person, he/she shall serve a separate declaration of intention to rescind his/her previous declaration of intention made in exercising the voting power two days prior to the meeting date of the scheduled shareholders' meeting and in the same manner previously used in exercising his/her/its voting power. In the absence of a timely rescission of the previous declaration of intention, the voting power exercised by way of electronic transmission shall prevail.

In case a shareholder has exercised his/her voting power by way of electronic transmission, and has also authorized a proxy to attend the shareholders' meeting in his/her behalf, then the voting power exercised by the authorized proxy for the said shareholder shall prevail. Except as otherwise provided by the Company Act or the Articles of Incorporation of the Company, the resolution of a shareholders meeting shall be adopted by the majority vote represented at the meeting. For the purpose of voting, the chairperson shall announce the total number of votes represented and currently present at the meeting or appoint a personnel to do so each time before calling for voting on each proposal. The resolutions, whether agreement/disagreement/waiver, shall be uploaded to the MOPS website on the day which shareholder’ meeting was held.

Upon voting for resolution on a proposal, if no opposition is expressed by any of the shareholders present at the meeting in response to the chairperson’s invitation for opinion on that proposal, the resolution shall be deemed adopted unanimously and operate as one adopted by voting. In case an opposition is expressed, the proposal shall be voted in accordance with the preceding paragraph.

Where there is revision or substitute proposal on the same proposal, the chairperson shall combine them with that proposal for the purpose of determining their order of voting. If one of the proposals is adopted, the other proposals shall be deemed vetoed and no voting on them will be necessary.

The chairperson shall appoint vote supervisor and vote counter during the voting and the vote supervisor shall also be a shareholder. The vote counting for voting or election motions at the shareholders' meeting shall be conducted publicly at the meeting venue, after vote counting has been completed, the voting results shall be announced on the spot (including the tallied number of votes) and recorded accordingly.

Article14. The election of a director and or supervisor shall be in accordance with the relevant bylaw of the Company and the result of the election, including list of elected directors and supervisors and the number of votes they received, shall be announced on site.

The ballots of the election provided in the preceding paragraph shall be sealed and signed by the personnel supervising the voting and properly 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.

Article15. Each resolution adopted by the shareholders’ meeting must be taken down in the meeting minutes which must be signed or impressed with the seal of the chairperson with a copy thereof sent to the shareholders each within twenty (20) after the end of the meeting.

The Company may publish the meeting minutes provided in the preceding paragraph on the MOPS website.

The meeting minutes shall accurately indicate the year, month, date, venue, name of the chairperson, method of adopting resolutions, gist of the proceeding and the conclusion of the meeting and shall be properly kept throughout the standing of the Company.

Where the resolution is adopted as a result of no opposition expressed in response to the chairperson’s request for opinion, the meeting minutes shall indicate such resolution as “adopted unanimously on the chairman’s request for opinion” for the method of adopting resolutions provided in the preceding paragraph. Notwithstanding, where the resolution is adopted by voting as a result of an opposition expressed in response to the chairperson’s request for opinion, the meeting minutes shall indicate the resolution as adopted by voting and the number of approving votes and the percentage against the total votes accounted for by the approving votes.

Article16. The Company shall count the number of shares represented by the requesters and proxies present at the meeting, produce and clearly display at the meeting a statistic statement thereof according to the required form.

For each resolution adopted the publication of which is required by law or which belongs to the TWSE-required material information, the Company shall, within the applicable time limit, transmit it to the MOPS.

Article17. The working staff of the meeting shall each wear an ID tag or badge.

The chairperson may direct the order-maintaining personnel or security guard to maintain the order of the meeting. The order-maintaining personnel or security guard shall each wear a badge or ID tag bearing their designation when performing their functions at the meeting.

The chairperson may stop the shareholder from making statements by

using any equipment other than those readily facilitated by the meeting (if any).

If the shareholder ignores the chairperson’s request for him/her to retrain himself/herself from acting in contravention of these Rules at the cost of the proceeding of the meeting, the chairperson may direct the order-maintaining personnel or security guard at the meeting to escort such shareholder out of the venue of the meeting.

Article18. The chairperson may call the meeting to a break as he/she sees fit. In the event of force majeure. the chairperson may suspend the meeting and announce the appropriate date and hour to resume the meeting. In the event that the venue of the shareholders’ meeting is kept from being available for use before the agenda (including extempore motions) is discussed in full, the shareholders’ meeting may adopt the resolution for continuing the meeting elsewhere. The shareholders’ meeting may adopt the resolution pursuant to Article 182 of the Company Act to re-schedule or resume the meeting within five days.
Article19. These Rules and all subsequent amendments shall come into force after being adopted by the shareholders’ meeting.

These Rules were duly established on April 16[th] ,1998 and the first amendment was approved on June 25[th] ,2010. The second amendment was approved on June 24[th] ,2011. The third amendment was approved on June 22[th] ,2012. The fourth amendment was approved on June 19[th] ,2013.

Appendix X

ARTICLES OF INCORPORATION OF PRESIDENT SECURITIES CORP.

Chapter I General Provisions

Article 1:

This Company is duly incorporated under the provisions set forth Company Law regarding companies limited by shares in the full name of PRESIDENT SECURITIES CORP. (Hereinafter referred to as the Company).

Article 2:

The Company shall engage in the following business:

H301011, a securities dealer.
H408011, an aid on futures transaction
H401011, a futures dealer
H105011, a trustee

Article 2-1

The scope of business of the Corporation shall be as follows:

To underwriter valuable securities
To buy and sell valuable securities in centralized trading markets as a principal;
To be consigned to buy and sell valuable securities in centralized trading markets;
To buy and sell valuable securities in its own business location;
To be consigned to buy and sell valuable securities in its own business location;
To act as an agent for stock affairs in valuable securities;
To engage in short-buy and margin sales for trading in valuable securities;
To render aid in futures trading;
To be consigned to buy and sell foreign valuable securities;
To engage concurrently in proprietary futures trading.
To engage concurrently in trustee
To engage in other securities related businesses as approved by the competent authorities.

Article 2-2:

The Company may, within the scope as permitted by law, render guarantee services to subsidiaries.

Article 3:

The Company is headquartered in Taipei and may have branches duly set in appropriate locations elsewhere as approved by the government.

Article 4:

This article was deleted.

Chapter II Shares

Article 5:

The Company has New Taiwan Dollars Fifteen Billion Only, divided into 1.5 billion shares at Ten New Taiwan Dollars par value for which the board of directors is authorized with full powers to issue in installments.

Article 5-1:

When the Company acts as a shareholder of limited liabilities, the total amount of external investment by the Company is free of the maximum limitation at 40% of the paid-in capital as set forth in Article 13 of the Company Law.

Article 6:

The share certificates hereof shall be duly signed and sealed by three directors, affixed with Company seal and duly authenticated by the competent authorities or their authorized organization before issuance.

The company may be exempted from printing any share certificate or it may either print a single share certificate or a consolidated share certificate for the shares issued. The Company shall appoint a centralized securities custody institution to make recordation of the issue of such shares.

Article 7:

For transfer of the Company’s shares, both the shareholder and the transferee shall jointly apply hereto for transfer procedures and entry into roster of shareholders, provided, that no transfer of shares shall be made within one month prior to a shareholders' regular meeting or fifteen days prior to an extraordinary meeting or within five days prior to allocation of dividend, bonus or other interests.

Article 8:

The share certificates hereof are the registered ones. The shareholders hereof shall have their names and addresses duly registered into roster of shareholders and have their impression cards of registered seals filed herein. The same is required in case of a change. The stock affairs of the Company shall be duly handled according to “Regulations Governing Stock Affairs of Public Offering Companies” promulgated by the competent authorities of the government except as otherwise provided by the laws and securities regulations.

Chapter III Shareholders' meeting

Article 9:

The shareholders' meeting hereof is in regular and extraordinary ones. The former is called once per annum within six months from closing of each fiscal year. The latter may be duly called by the board of directors as resolved by the board of directors or as requested in writing by shareholders having continually held a minimum of 3% of the total issued shares.

A shareholders’ meeting may be duly called when the supervisors consider it necessary.

In the event a shareholders’ meeting cannot be held due to share transfer by the directors or supervisors or other reasons, it may be duly called by shareholders having held a minimum of 3% of the total issued shares with a permit obtained from the local competent authorities of the government.

Article 10:

The notices to a shareholders’ meeting shall be duly served to shareholders in accordance with Company Law or other laws concerned.

Article 11:

Each share hereof is entitled to one voting power. A shareholder who is unavailable to attend a shareholders' meeting may duly issue a power of attorney with the Company provided form with scope of authorized power to appoint a proxy for the meeting. In the event a proxy is authorized by two or more shareholders, the voting power

exceeding 3% of the total issued shares shall be discarded.

The aforementioned power of attorney shall be served to the Company five days in advance of the Company. In case of multiple authorization, it shall be taken on the first come first served basis unless the preceding authorization is declared withdrawn.

Article 12:

The following issues are subject to resolutions to be adopted in the shareholders’ meeting:

Establishment and amendment of the Articles of Incorporation.
Election of directors and supervisors.
Approval of reports worked out by the board of directors & supervisors and profit allocation of profit and coverage of loss.
Increase, decrease of capital.
Major affairs otherwise and issues as required by the Company.

Unless otherwise provided for in the Company Law, resolutions in the shareholders' meeting shall be adopted by a majority vote in the meeting attended by shareholders representing a majority of the total issued shares.

Chapter IV Directors and supervisors

Article 13:

The Company has fifteen directors (three independent and twelve non-independent directors) and three supervisors, to be elected by shareholders’ meeting from among the persons with disposing capacity, both having three-year tenure of office and eligible for reelection. The candidates’ qualifications shall live up to requirements of Company Law, Securities Trading Law and related regulations.

Directors and supervisors shall be elected from among the nominees listed in the roster of candidates by adopting candidate nomination system.

The election of independent and non-independent shall be held together but the votes shall be calculated separately.

Article 14:

The total registered shares held by all directors, supervisors shall not be less than specified percentage and the shareholding and auditing shall be subject to requirements promulgated by the competent authorities of the government.

Article 15:

By attendance of two-thirds majority of directors and a majority vote of the attending directors, three~five managing directors shall be elected and, in the same manner, one chairman shall be duly elected. In case of no managing directors, one chairman and one vice chairman shall be elected from among directors in the same manner. The chairman shall chair the shareholders’ meeting, board of directors meeting and board of managing directors meeting internally, and represent the Company externally.

Article 16:

Meetings of the board of directors shall be convened by the chairman of the board of directors. Unless otherwise provided for in the Company Law, the resolutions in the board of directors meeting shall be adopted by a majority vote in the meeting attended by a majority of directors.

The Convene Notice of the meeting of board may serve to the directors and supervisors by writing, E-mail or facsimile.

In the chairman’s absence, the vice chairman shall act in the place. In absence of

both, the chairman shall appoint a managing director to act in place otherwise one managing director shall be elected from among themselves to act in the place. A director unavailable to the meeting may duly authorize another director to attend a board meeting on his behalf.

Article 17:

The board of directors shall have the following functions:

To work out the Company’s business plans;
To work out organizational regulations, major articles and contracts;
To work out budgeting and account closing;
To propose for capital increase, decrease;
To propose profit allocation or loss coverage;
To appoint, discharge managerial officers and key staff;
To resolve establishment and dissolution of a branch;
To resolve major business affairs otherwise;
To exercise other functions endowed by laws and shareholders’ meeting.

Article 17-1:

The Board of Directors may, complying with the law or taking into account the necessity, set up any functional committees whose functions, responsibilities, qualifications of committee members, process of exercising the power and so forth to be formulated by the board of directors.

Article 18:

The supervisors shall have the following functions:

To audit the Company’s financial standings;
To audit the Company’s books, documents and accounts;
To inquire into the Company’s business performance;
To review budgeting and account closing;
To audit issues regarding profit allocation or loss coverage.
To exercise other functions as endowed by laws.

Article 19:

The board of directors is authorized to determine the remuneration for directors and supervisors taking into account the extent and value of the participation for the management of the Corporation and the standards of the industry. Independent directors receive fixed monthly compensation and shall not participate in the allocation of remuneration to directors and supervisors set forth in Article 23.

Article 19-1

The Company may act as a policyholder of liability insurance for the benefit of directors, supervisors, and managers. The board of directors is authorized to determine the limit of liability and the related matters.

Chapter V Managerial officers

Article 20:

The Company has one president to enforce issues as resolved in the board of directors and take charge of overall business operation of the Company, to be nominated by the chairman and duly appointed and discharged in the board of directors. The Company has a certain number of vice president, be nominated by the president and duly appointed and discharged in the board of directors.

Chapter VI Accounting

Article 21:

The fiscal year hereof is beginning January 1 until December 31 each calendar year.

Article 22:

Upon closing of each fiscal year, the board of directors shall work out the following documents according to Article 228 of the Company Law to be audited by supervisors thirty days in advance of shareholders' regular meeting and the supervisors shall issue a report accordingly to be approved by the shareholders' meeting:

Business report
Financial statements
Proposals of profit allocation or loss coverage

Article 23:

From the profit earned by the Company upon annual account closing, the sum to pay all taxes and make up previous loss, if any, shall be first withheld, then 10% for legal reserves, 20% as special reserves, set aside or reverse special reserves in accordance with other laws or regulations and together with retained earnings, shall be determined by the shareholders’ meeting and be duly allocated at the following ratios:

Remuneration to directors, supervisors 3% 2. Bonus to employees 2% 3. Bonus to employees 95%

The profit may be retained and not allocated if the total allocable profit is not up to 5% of the paid-in capital.

Article 23-1:

The Company takes a policy of dividend payment to maintain sound long-term financial structure and stabilize continual growth to maximize benefits to shareholders, in the following manners:

The total amount of dividend shall not be below 70% of the allocable profit as per the preceding article.
Out of the dividend which can be allocated according to the preceding article, stock dividend shall not be below 50% and cash dividend shall not exceed 50%.
The dividend may be allocated in stock dividend in full when the Company is in major investment or development policies.

Chapter VII Bylaws

Article 24:

The organizational rules and operational rules shall be separately worked out by the board of directors.

Article 25:

Any matters inadequately provided for herein shall be subject to Company Law and managerial regulations concerned.

Article 26:

These Articles were duly established on November 26,1988 and the first amendment was approved on December 28, 1988;------------ ; the twenty third amendment on June 。 22, 2012

Appendix XI

Information on Employee Bonus Sharing and Board Members Compensation

In accordance with the order issued by the FSC on March 30, 2007 (order number Jin Guan Zheng No. 0960013218), the proposal for the distribution of earnings approved by the Board of Directors is as follows:

It is proposed that a total of NT$51,532,005 be appropriated with NT$20,612,802 to employees as bonus, and NT$30,919,203 for director/ supervisor compensation. Employee bonus will be appropriated in cash.
It was estimated that a total of NT$51,532,005 be appropriated for 2013 with NT$20,612,802 to employee bonus and NT$30,919,203 to director/ supervisor compensation. There is no difference between the estimates and the actual for above mentioned bonus and compensation.

Appendix XII

Shareholdings of Directors and Supervisors

In accordance with Article 26 of the Securities and Exchange Act: The aggregate minimum shareholding for all directors is 32,000,000 shares. The aggregate minimum shareholding for all supervisors is 3,200,000 shares.
As of the date of record for the General Shareholder Meeting, i.e., April 20, 2014, the total shareholdings of directors and supervisors were as follows:

Title	Name	Shares Held	Shares Ratio
Chairman	CANKING INVESTMENT CO., LTD	15,760,694	1.19%
Director	LIN,KUAN-CHEN	3,000,000	0.23%
Director	CHENG, KAO-HUEI	2,615,171	0.20%
Director	LEG HORN INVESTMENT CO.,LTD	11,558,644	0.87%
Director	DUH, BOR-TSANG	3,903,130	0.30%
Director	HUI TUNG INVESTMENT COLTD	9,501,348	0.72%
	.,
Director	LEE , SHY-LOU	7,806,955	0.59%
Director	TA LEH INVESTMENT HOLDING CO.,LTD	6,681,624	0.50%
Director	KAI NAN INVESTMENT CO.,LTD	37,104,849	2.80%
Director	KAO, XIU-LING	3,529,286	0.27%
Independent Director	WU,TSAI-YI	0	0.00%
Independent Director	LEE, KWANG- CHOU	0	0.00%
Independent Director	FU, KAI- YUN	0	0.00%
TOTAL		101,461,701	7.67%
Supervisor	LU, LI-AN	0	0.00%
Supervisor	CHUANG, TSAI-FA	0	0.00%
Supervisor	CHINA F.R.P. CORPORATION	5,073,285	0.38%
TOTAL		5,073,285	0.38%

AI assistant

PSC — AGM Information 2014

52209_rns_2014-06-26_2943bf53-dca9-4a61-bcdf-601117f0ab9c.pdf

2014 General Shareholders’ Meeting Meeting Agenda

Table of Contents

1. Agenda for the 2014 General Shareholders’ Meeting

2. Report Items

3. Items to be Approved

� Motion 1 (proposed by the Board of Directors)

� Motion 2 (Proposed by the Board of Directors)

4. Items for Discussion

Item 1 (Proposed by the Board of Directors)

Item 2 (Proposed by the Board of Directors)

Item 3 (Proposed by the Board of Directors)

Item 4 (Proposed by the Board of Directors)

5. Extraordinary Motions

6. Meeting Adjourned

Appendixes

2013 Operating Report

Macro Environment and Business Strategy

Execution and the Outcome

Execution Outcome of Profit and Loss

Analysis of Profitability

Future Directions

President Securities Corporation Supervisors Audit Report

Report of Independent Accountants Translated from Chinese

PricewaterhouseCoopers, Taiwan

PRESIDENT SECURITIES CORPORATION BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

PRESIDENT SECURITIES CORPORATION BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

PRESIDENT SECURITIES CORPORATION STATEMENTS OF COMPREHENSIVE INCOME (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) EXCEPT FOR EARNINGS PER SHARE AMOUNT)

PRESIDENT SECURITIES CORPORATION STATEMENTS OF COMPREHENSIVE INCOME (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (EXCEPT FOR EARNINGS PER SHARE AMOUNT)

PRESIDENT SECURITIES CORPORATION

STATEMENTS OF CHANGES IN EQUITY

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

PRESIDENT SECURITIES CORPORATION STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

PRESIDENT SECURITIES CORPORATION STATEMENTS OF CASH FLOWS (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

PRESIDENT SECURITIES CORPORATION AND ITS SUBSIDIARIES

Declaration of Consolidated Financial Statements of Affiliated Enterprises

Report of Independent Accountants Translated from Chinese

PricewaterhouseCoopers, Taiwan

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) EXCEPT FOR EARNINGS PER SHARE AMOUNT)

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS) (EXCEPT FOR EARNINGS PER SHARE AMOUNT)

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

President Securities Corporation 2013 Earnings Distribution Proposal

Comparison Table of Amendments to “Procedures for the Acquisition or Disposal of Assets “

APPENDIX VI

Comparison table of Amendments to” Articles of Incorporation”

APPENDIX VII

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

Comparison t0able of Amendments to” Rules for Election of Directors”

President Securities Corp. Rules and Procedures of Shareholders’ Meeting

ARTICLES OF INCORPORATION OF PRESIDENT SECURITIES CORP.

Chapter I General Provisions

Article 1:

Article 2:

Article 2-1

Article 2-2:

Article 3:

Article 4:

Chapter II Shares

Article 5:

Article 5-1:

Article 6:

Article 7:

Article 8:

Chapter III Shareholders' meeting

Article 9:

Article 10:

Article 11:

Article 12:

Chapter IV Directors and supervisors

PSC AGM Information 2014