PSC — AGM Information 2014

Jun 26, 2014

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

==> picture [247 x 28] intentionally omitted <==

Meeting Notice of 2014 General Shareholders’ Meeting

• Time and Date: 9:00 AM, June 18[th] , 2014,

• Place: B1, No. 8, Dongxing Rd., Taipei City, Taiwan ROC

• Total outstanding PSC shares: 1,323,119,054 shares. Total shares represented by shareholders present in person or by proxy: 966,230,229 shares (of which, 103,284,520 shares voted via electronic transmission). Percentage of shares held by shareholders present in person or by proxy: 73.03%.

• Chairman: A-Hua Deng, the Chairman of the Board of Directors

• Director present in person: Lin, Kuan-Chen

• Supervisor present in person: Lu, Li-An

• Recorder: Chiung-Huang Huang

A. Chairman's Address (omitted)

B. Report Items

• (1) 2013 Operating Report Details: The Company’s Operating Report for 2013, please see Appendix I

• (2) 2013 Supervisors Audit Report Details: 2013 Audit Report prepared by the Supervisors of the Company, please see Appendix II

• (3) Capital Adequacy Ratio Report

• Details: The Company’s capital adequacy ratio for March of 2014 was 478%.

C. Items to be Approved

1. Item 1 (proposed by the Board of Directors)

Topic: 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 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 and Appendix III

• As shares voted against the proposal via electronic transmission were

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received, the chairman announced to put the proposal to vote for resolution.

• Voting Result: 964,852,374 shares were represented at the time of voting. 948,249,529 shares voted for the proposal (of which 87,974,094 shares exercised via electronic transmission); 362 shares voted against the proposal (of which 362 shares exercised via electronic transmission). 15,310,064 shares abstain from voting (of which 15,310,064 shares exercised via electronic transmission).

• 98.28% of the shares were cast in favor of this proposal, which was more than 50% of the shares represented at the time of voting.

RESOLVED, that the above proposal be and hereby were accepted as submitted.

2. Item 2 (Proposed by the Board of Directors)

Topic: 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.

• (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.

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• As shares voted against the proposal via electronic transmission were received, the chairman announced to put the proposal to vote for resolution.

• Voting Result: 966,230,229 shares were represented at the time of voting. 948,247,103 shares voted for the proposal (of which 87,971,668 shares exercised via electronic transmission); 2,788 shares voted against the proposal (of which 2,788 shares exercised via electronic transmission). 15,310,064 shares abstain from voting (of which 15,310,064 shares exercised via electronic transmission).

• 98.14% of the shares were cast in favor of this proposal, which was more than 50% of the shares represented at the time of voting.

RESOLVED, that the above proposal be and hereby were accepted as submitted.

D. Items for Discussion

Item 1 (Proposed by the Board of Directors)

Topic: Amendment to the Company’s Procedures for Acquisition or Disposal of Assets.

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.

• As shares voted against the proposal via electronic transmission were received, the chairman announced to put the proposal to vote for resolution.

• Voting Result: 966,230,229 shares were represented at the time of voting. 948,235,972 shares voted for the proposal (of which 87,960,537 shares exercised via electronic transmission); 364 shares voted against the proposal (of which 364 shares exercised via electronic transmission). 15,323,619 shares abstain from voting (of which 15,323,619 shares exercised via electronic transmission).

• 98.14% of the shares were cast in favor of this proposal, which was more than 50% of the shares represented at the time of voting.

RESOLVED, that the above proposal be and hereby were accepted as submitted.

Item 2 (Proposed by the Board of Directors)

Topic: Amendment to the Articles of Incorporation.

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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) Set-up of audit committee and increase its right. (refer Article 17.1 )

• 4) The date of this amendment. (refer Article 26 )

• (3) For chart comparing the changes, please see Appendix VI.

• As shares voted against the proposal via electronic transmission were received, the chairman announced to put the proposal to vote for resolution.

• Voting Result: 966,230,229 shares were represented at the time of voting. 948,237,973 shares voted for the proposal (of which 87,962,538 shares exercised via electronic transmission); 363 shares voted against the proposal (of which 363 shares exercised via electronic transmission). 15,321,619 shares abstain from voting (of which 15,321,619 shares exercised via electronic transmission).

• 98.14% of the shares were cast in favor of this proposal, which was more than 50% of the shares represented at the time of voting.

RESOLVED, that the above proposal be and hereby were accepted as submitted.

Item 3 (Proposed by the Board of Directors)

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

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

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• As shares voted against the proposal via electronic transmission were received, the chairman announced to put the proposal to vote for resolution.

• Voting Result: 966,230,229 shares were represented at the time of voting. 948,237,973 shares voted for the proposal (of which 87,962,538 shares exercised via electronic transmission); 363 shares voted against the proposal (of which 363 shares exercised via electronic transmission). 15,321,619 shares abstain from voting (of which 15,321,619 shares exercised via electronic transmission).

• 98.14% of the shares were cast in favor of this proposal, which was more than 50% of the shares represented at the time of voting.

RESOLVED, that the above proposal be and hereby were accepted as submitted.

Item 4 (Proposed by the Board of Directors)

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

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

• As shares voted against the proposal via electronic transmission were received, the chairman announced to put the proposal to vote for resolution.

• Voting Result: 966,230,229 shares were represented at the time of voting. 948,237,973 shares voted for the proposal (of which 87,962,538 shares exercised via electronic transmission); 363 shares voted against the proposal (of which 363 shares exercised via electronic transmission). 15,323,619 shares abstain from voting (of which 15,323,619 shares exercised via electronic transmission).

• 98.14% of the shares were cast in favor of this proposal, which was more than 50% of the shares represented at the time of voting.

RESOLVED, that the above proposal be and hereby were accepted as submitted.

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E. Extraordinary Motions: None

F. Adjournment:

There being no other business and special motion, upon a motion duly made and seconded, the meeting was adjourned.

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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 Teng, A-Hua Lin, Kuan-Chen

Head of Accounting Dept. 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 (of which the financial statements and consolidated financial statements). The above business report, earnings distribution proposal and financial statements (of which 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	Note 6(1) 6(2) 6(3) 6(4) 6(5) 6(6) 6(6) 6(7) 6(8) 6(2) 6(9) 6(10) 6(11) 6(12) 6(41) 6(13) 6(14) 6(15) 6(16) 6(17)	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.

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.

～19～

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

ASSETS	December31,2013 Note Amount % 6(1) $ 5,287,484 9 6(2) 19,714,198 34 6(3) 349,870 1 6(4) 184,897 - 6(5) 11,516,164 20 24,695 - 59,634 - 6(6) 4,917,434 8 29,993 - 49,617 - 3,360 - 6(7) 8,379,629 14 54,278 - 6(8) 173,323 - 2,676 - 6(9) 3,297,457 6 54,044,709 92 6(2) 50,174 - 6(10) 71,759 - 6(11) 401,608 1 6(12) 2,583,250 4 6(13) 285,204 1 25,648 - 6(42) 53,466 - 6(14) 1,267,158 2 4,738,267 8 $ 58,782,976 100 6(15) $ 3,479,260 6 6(16) 6,947,845 12 6(17) 1,232,154 2 6(18) 6,272,115 11 1,235,843 2 (Continued)	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	Note 6(19) 6(20) 6(21) 6(42) 6(42) 6(22) 6(25)	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	(EXPRESSED IN THOUSANDS	OF NEW TAIWAN DOLLARS)	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

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

26

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.

27

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 <==

28

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’

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			directors, of which 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 regulations.	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.	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 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。

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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	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.

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			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.

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APPENDIX VIII

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

		Amendment			Original	Original
	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.

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	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.

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