PSC - AGM Information 2015 | FinancialReports.eu

TSE: 2855

2015 General Shareholders’ Meeting

Meeting Agenda

Jun. 18, 2015 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.

Table of Contents

Page


1	Meeting Agenda	4
2	Report Items	4
3	Items to be Adopted	5
4	Items for Discussion	6
5	Election Items	7
6	Extraordinary Motions	7
7	Meeting Adjourned	7

Attachment: List of Candidates for 10th Directors Appendixes		8

I	2014 Business Report	11
II	2014 Supervisors Audit Report	14
III	2014 Financial Statements and Consolidated Financial Statements	15
IV	2014 Earnings Distribution Proposal	33
V	Comparison table of Amendments to ” Operating Procedures for Endorsement and Guarantee”	34
VI	Comparison table of Amendments to ” Articles of Incorporation”	36
VII	Comparison table of Amendments to ” Procedures for Engaging in Derivatives Trading”	41
VIII	Rules for Election of Directors and Supervisors	51
IX	Rules and Procedures of Shareholders’ Meeting	53
X	Articles of Incorporation	62
XI	Information on Employee Bonus sharing and Board Members Compensation	69
XII	Shareholdings of Directors and Supervisors	70

Agenda for the 2015 General Shareholders’ Meeting
Meeting called to order (Report on the total number of shareholders and shareholder representatives in attendance)
Opening Remarks from the Chairman
Report Items
2014 Business Report
2014 Supervisors Audit Report
Capital Adequacy Ratio Report

(4) Items to be Adopted

2014 Consolidated Financial Statements
2014 Earnings Distribution Proposal

(5) Items for Discussion

1) Amendment to the “Operating Procedures for Endorsement and Guarantee.”

2) Amendment to the “Articles of Incorporation“

3) Amendment to “Procedures for Engaging in Derivatives Trading”

(6) Election Items

(7) Extraordinary Motions

(8) Meeting Adjourned

Report Items

(1) 2014 Business Report

Details: The Company’s Business Report for 2014, please see Appendix I (page11)

1. 2013 Supervisors Audit Report

Details: 2014 Audit Report prepared by the Supervisors of the Company, please see Appendix II (page 4)

1. Capital Adequacy Ratio Report

Details: The Company’s capital adequacy ratio for March of 2015 was 391%.

Items to be Adopted
Motion 1 (proposed by the Board of Directors)

Resolved, that the 2014 consolidated financial statements be approved.

Topic: Adoption of the 2014 consolidated financial statements

Explanation:

(1) The 2014 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) Adoption of the Business Report, the financial statements, and the consolidated financial statements. Please see Appendix I (page11) and Appendix III (page15).

Resolution:

Motion 2 (Proposed by the Board of Directors)

Topic: Adoption of the Proposal for the 2014 earnings distribution

Explanation:

(1) The proposal for distribution of 2014 earnings are prepared In accordance with regulations and the Company’s Articles of Incorporation. Please refer to the 2014 Earnings Distribution Proposal as Appendix IV (Page33).

(2) After first being decreased by $50,224,303 as a result of actuarial losses on defined benefit plans, and then setting aside special reserve and legal reserve, unappropriated earnings available for distribution for 2014 is $1,084,983,441. Proposed cash dividend is $1,071,726,434, which is equivalent to $0.81 per share. Upon the approval of Shareholders' Meeting, it is proposed that the Board of Directors be authorized to resolve the ex-dividend date.

(3) In the event that the shares outstanding changes, it is proposed that the Chairman of the Board of Directors be authorized to adjust the amount per share to be distributed to shareholders based on the number of actual shares outstanding on the record date for distribution. Dividends of less than $1 shall be transferred to the Company's Employee Benefit Council.

(4) Please adopt.

Resolution:

4. Items for Discussion

Item 1 (Proposed by the Board of Directors)

Topic: Amendments to the “Operating Procedures for Endorsement and Guarantee”.

Explanation:

(1) In accordance with the Ordinance No. 1030020595 issued by the Financial Supervisory Commission on June 18, 2014, the Operating Procedures for Endorsement and Guarantee should be amended.

(2) For the comparison table of amendments to” Operating Procedures for Endorsement and Guarantee”, please see Appendix V (page 34).

Resolution:

Item 2 (Proposed by the Board of Directors)

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

Explanation:

(1) According to Financial Supervisory Commission’s regulation, our Company shall establish audit committee to replace supervisors. It is proposed to amend the Corporate Charter by deleting certain provisions regarding Supervisors and increasing seats of the Board of Directors board (including three independent directors).

(2) The major amendments are as follows:

1) Special meeting of shareholders shall be convened in compliance with the laws and regulations, Article 9 is amended to simplify the the wordings concerning special meeting accordingly.

2) Article 13 is to delete the wordings“will apply from the tenth Board election”

3) The establishment of audit committee and related matters is increased as Article 13-1

4) Article 12, 13, 14, 16, 18, 19, 19-1, 22 and 23 is to delete the rules.

(3) For comparison table, please see Appendix VI (page 36 )

Resolution:

Item 3 (Proposed by the Board of Directors)

Topic: Amendment to “Procedures for Engaging in Derivatives Trading” Please proceed to vote.

Explanation:

(1) “Taipei Exchange Regulations Governing Over-the-Counter Trading of Financial Derivatives by Securities Firms” was revised on December 24, 2014.

(2) Amendment is made to accommodate the relevant regulations promulgated by competent authority and the market practice.

(3) For comparison table, please see Appendix VII (page 41 )

Resolution:

E. Election item (Proposed by the Board of Directors)

Topic: To elect the 10th board of Directors of the company.

Explanation:

The term of the Company’s ninth board of directors and supervisors shall expire on June 18, 2015. The tenth board of directors shall be elected during the general shareholders meeting of this year.
In accordance with Article 13 of the Company’s bylaws, the Company shall have 19 directors, of which 4 shall be independent, 15 shall be non-independent. They shall serve a 3-year term (from their appointment at the shareholders’ meeting to be held on June 18, 2015, to June 17, 2018) and are eligible for reelection. Directors shall be elected from among the nominees listed in the roster of candidates by adopting candidate nomination system.
Election-related matters shall be handled in accordance with the Company’s Rules Governing the Election of Directors.(refer to Appendix VIII, page 51)
The election of independent and non-independent shall be held together but the votes shall be calculated separately.
The list of independent and non-independent director candidates, as vetted and approved by the board, is as the attachment:
Please cast your vote.

5. Extraordinary Motions

6. Meeting Adjourned

Attachment: List of Candidates for 10th Directors


Title	Name	Education	Experience	Current Positions	Number of shares owned	Remarks
Director	LIN,CHUNG-SHEN	* Department of Business Administration ,FuJen Catholic University	* Vice General Manager of Nanlien International Corporation * Taipei Financial Department Assistant General Manager of Uni-President Enterprises Corporation * Chief Finance Officer of Uni-President Enterprises Corporation * Chinese Professional Management Association Manager Excellence Award 2012 * General Manager of President Tokyo Corporation	* General Manager of President Tokyo Corporation.	37,104,849	Kai Nan Investment Co.,Ltd
Director	LIN,KUAN-CHEN	* Taiwan Provincial Junior College of Physical Education	* Vice Chairman of President Securities Corp. * Vice Chairman and General Manager of President Securities Corp. * Managing Director of President Securities Corp. * General Manager of President Securities Corp.	* General Manager of President Securities Corp.	3,000,000	N/A
Director	CHENG,KAO-HUEI	* Tainan Commercial Vocational School	* Chairman of Tainan Spinning Co., Ltd. * Chairman of Nan Fan Housing Development Co., Ltd. * Chairman of Prince Housing & Development Corp. * Chairman of ScinoPharm Taiwan, Ltd. * Director of Uni-President Enterprises Corporation	* Chairman of Tainan Spinning Co., Ltd. * Chairman of Nan Fan Housing Development Co., Ltd. * Chairman of Prince Housing & Development Corp. * Chairman of ScinoPharm Taiwan, Ltd. * Director of Uni-President Enterprises Corporation	2,615,171	N/A
Director	KAO, SHIOW-LING	* Marymount College U.S.A	* Chairman/ General Manager of KAO, Chuan Investment Corporation * Chairman of Being spa * Chairman of Hankyu Department Stores * Chairman of President Pharmaceutical Corp. * Chairman of Tongzheng Development Co., Ltd * Chairman of President Drugstore Business Corp.	* Chairman/ General Manager of KAO, Chuan Investment Corporation * Chairman of Being spa * Chairman of Hankyu Department Stores * Chairman of President Pharmaceutical Corp. * Chairman of Tongzheng Development Co., Ltd * Chairman of President Drugstore Business Corp.	3,529,286	N/A
Director	TENE, WEN- HWI	* Ph.D, University of San Francisco * Master’s Degree in Education ,Harvard University * Bachelor Degree ,George Washington University	* Assistant Professor of National Taipei University of Education * Chairman of Cayenne Entertainment Technology Co., Ltd.	* Assistant Professor of National Taipei University of Education * Chairman of Cayenne Entertainment Technology Co., Ltd.	1,482,995	N/A
Director	CHANG,MING CHEN	* Accounting Department of Soochow University	* Accountant Manager of Leg Horn Investment Co., Ltd * Director of Leg Horn Investment Co., Ltd	* Accountant Manager of Leg Horn Investment Co., Ltd * Director of Leg Horn Investment Co., Ltd	11,558,644	Kai Nan Investment Co., Ltd
Director	PI , CHIEN-KUO	-	* General Manager of Hui Tung Investment Co., Ltd Assistant * Director of Hui Tung Investment Co., Ltd	* Director of Hui Tung Investment Co., Ltd	9,501,348	Hui Tung Investment Co., Ltd
Director	TU, LI-YANG	* National Tainan Girls’ Senior High School	* Chairman of Ta Leh Investment Holding Co., Ltd * Supervisor of De Xing Long Co., Ltd	* Chairman of Ta Leh Investment Holding Co., Ltd * Supervisor of De Xing Long Co., Ltd	6,681,624	Ta Leh Investment Holding Co., Ltd
Director	LEE , SHY-LOU	* Taiwan Provincial Institute of Agriculture	* Chairman of De Long warehousing stevedoring	* Chairman of De Long warehousing stevedoring	7,806,955	N/A
Director	DUH, BOR-TSANG	* MBA, Ut Dallas University	* Chairman of Shun Fu tai Co., Ltd * Chairman of Yue Rong Technology Co., Ltd * Chairman of Ming,Yang semiconductor corporation	* Chairman of Shun Fu tai Co., Ltd * Chairman of Yue Rong Technology Co., Ltd * Chairman of Ming,Yang semiconductor corporation	3,903,130	N/A
Director	LEE, SHU-FEN	* Ming Chuan Commercial High School	* Deputy Section Manager/Account Assistant General Manager/Auditing Office Manager of Eternal Materials Co., Ltd Business Section	* Deputy Section Manager/Account Assistant General Manager/Auditing Office Manager of Eternal Materials Co., Ltd Business Section	5,023,285	China F.R.P. Corporation
Director	LIU, TSUNG-YI	* MBA, National Taiwan University	* Manager of President International Development Corporation * Investment plan Assistant General Manager of Uni-President Enterprises Corporation	* Investment plan Assistant General Manager of Uni-President Enterprises Corporation	37,104,849	Kai Nan Investment Co., Ltd
Director	LIN, CHENG-TE	* MBA, National Taipei University	* Manager of Uni-President Enterprises Corporation	* Manager of Uni-President Enterprises Corporation	37,104,849	Kai Nan Investment Co., Ltd
Director	HSIEH HUNG,HUI-TZU	* MBA,National Cheng-kung University	* Administration Management Dept. Vice General Manager of President International Development Corporation * Administration Management Center Vice General Manager of ScinoPharm Taiwan, Ltd. * Chief Audit Executive Assistant General Manager of President Chain Store Corp.	* Chief Audit Executive Assistant General Manager of President Chain Store Corp.	37,104,849	Kai Nan Investment Co., Ltd
Director	LU,LI-AN	* Master‘s Degree in Finance , National Sun Yat-sen University	* Manager of Uni-President Enterprises Corporation	* Manager of Uni-President Enterprises Corporation	37,104,849	Kai Nan Investment Co., Ltd
Independent Director	WU ,TSAI-YI	* Ph.D, in Management Science, Tamkang University	* Dean of Taiwan Research Institute * National Council for Sustainable Development committee member * Director of Taiwan Power Company * Independent Director of President Securities Corp.	* Dean of Taiwan Research Institute * National Council for Sustainable Development committee member * Director of Taiwan Power Company * Independent Director of President Securities Corp.	0	N/A
Independent Director	LEE , KWANG CHOU	* Agricultural Economics Department , National Chung Hsing University	* Agent, Assistant Manager, Deputy Manager/Manage all branches of business First Commercial Bank * Assistant General Manager and Manager of Grand Commercial Bank * Business consultant CTBC Bank Co. Ltd. * Independent Director of President Securities Corp.	* Independent Director of President Securities Corp.	0	N/A
Independent Director	FU, KAI- YUN	* Taiwan Provincial Tainan Commercial Vocational School	* Finance Center Manager and Kaohsiung branch Manager of Grand Commercial Bank Kaohsiung District Corporation * Independent Director of President Securities Corp.	* Independent Director of President Securities Corp.	0	N/A
Independent Director	Liang, Yann Ping	* Master’s Degree in Finance, George Washington University	* Vice General Manager of Polaris International Securities Investment Trust Co., Ltd. * Vice General Manager of Hua Nan Investment * Assistant Professor of Department of Finance, Shin Hsin University	* Assistant Professor of Department of Finance, Shin Hsin University	0	N/A

Appendix I

2014 Business Report

Macroeconomic Forces and Business Strategy

Looking back on 2014, we see clearly the effects that stimulus measures had on foreign stock markets and on the Taiwan stock market in the second half of the year. The TAIEX reached its peak for the year of 9,594 in July. In the second half of the year, however, international political factors, the Ebola scare, and domestic food safety scandals, all worked together to destabilize the domestic markets. The result was a year that saw a high of 9,594 and a low of 8,230 on the index, for a range of 8.1%. Accordingly, President implemented strict risk management controls, stable investment strategies, diversification of investments, all of which worked to rake in strong profits of NT$1.583 billion for 2014, or EPS of NT$1.2, putting President in the number two position among the top-10 largest brokerage houses in Taiwan, and proving our team’s ability to deliver superior results even in the face of difficult markets.

Actual Status and Results Achieved

Looking at our brokerage business, President held an average market share for 2014 of 3.38%, giving us a ranking of 8th place within the industry. Going forward, we will continue to stake out a solid place within the domestic market, while at the same time moving to take advantage of newly-authorized domestic and international business areas; we will also continue to expand our product offerings and sales channels and increase the contribution from such products to our bottom line. We will combine these efforts with reputable business practices, exceptional service, a diverse product range, and improved channel value, so as to create stable profits and market share.

As for our underwriting business, we acted as lead underwriter on 4 issues, and as secondary underwriter on 40 issues, placing us in the 6th spot in the industry in terms of lead underwriter. Our underwriting team will continue to serve as an important conduit between our clients and the capital markets, working with them at every stage of their business expansion to provide professional advice and services. Indeed, we will continue to enthusiastically service existing clients, while actively pursuing potential new clients.

Looking at our proprietary trading department in 2014, we saw the global economy recovering, the four major US indices reaching new highs, Taiwan’s FSC implementing new stimulus policies, all of which together helped push the TAIEX higher. In the second half of the year, however, domestic markets were rocked by several food safety scandals and the threat of an Ebola outbreak. Despite this, our proprietary trading department was able to stay on top of the market and select only premium stocks, and was then able to couple this with prudent risk control measures, and diversified global investment targets that diversified exposure. In the end, our team was able to produce superior returns that outperformed the broader market for the year, which translated into stable profits for the company.

Looking at our bond trading business, with the world economy improving and central banks around the world maintaining a low interest rate policies, the bond market remained bullish, making for solid trading volumes and attractive arbitrage opportunities. Plus, changes in global economic factors and government policies translated into strong profits from foreign currency-denominated bonds. With the US FED expected to raise interest rates in 2015, we will continue to monitor macroeconomic trends in search of stable investment targets and profit opportunities.

Looking at our derivatives business, President ranked 9th in the industry in terms of number of warrants issued and dollar value of warrants issued, with both our warrant sales efforts and the efficiency of our issues seeing a noticeable improvement. Going forward, we will continue to issue quality warrants, build our brand image, and expand our product line to enhance profitability. As for our futures business, a bullish market combined with positive governmental policies translated into good trading opportunities in 2014, which, in turn, resulted in stable profits. Going forward, we will continue to expand our range of trading strategies and range of contracts available for trading, with the aim of producing stable returns, reduced portfolio risk, enhanced risk controls, all of which together translates into profitability for President Securities, overall.

Execution Outcome of Profit and Loss

In 2014, average daily trading volume on the TWSE was NT$120.1 billion, which represented a 23.8% increase over the previous year. With trading volumes rising, the global economy recovering, monetary policies loosening, President was able to convert all of these positive factors into impressive profits of NT$4.377 billion for the year, with operating costs and expenses of NT$3.216 billion, and non-operating income of NT$606 million. After-tax profit came in at NT$1.583 billion, or EPS of NT$1.2, putting President Securities 2nd among the 11 largest domestic brokerage houses and easily meeting our forecasts for the year. In 2015, we intend to continue to pursue good opportunities throughout the company, to efficiently allocate resources, and to achieve our forecasted goals.

Profitability Analysis

In 2014, both domestic and foreign equity markets experienced volatility, with ups and downs often difficult to predict. Despite this, President’s outstanding team, with its solid experience in the markets, its keen judgment, and its prudent risk controls, was, once again, able to turn in exceptional performance. President Securities’ overall after-tax profits came in at NT$1.583 billion, or EPS of NT$1.2, ranking it 2nd among the 11 largest domestic brokerage houses. ROA came in at 3.16%, for a 3rd place ranking, and ROE came in at 6.97%, also for a 3rd place ranking.

Future Directions

Looking ahead to 2015, we expect the roll out of the “Large Trading Account Tax” to negatively affect our bottom line, while, on the other hand, domestic regulators will continue to push ahead with planned stimulus measures. We expect to see continued strengthening in the US economy, which should drive recovery in the overall global economy. Accordingly, President will continue to pursue stable, long-term investment targets, improved sales channels, a diversified global strategy, and strengthened risk control measures. As the FSC opens up new business areas through liberalized regulations, President will be ready to expand the range of products we offer and the scope of our business. Our management team will endeavor to better integrate all departments within the company, to improve products and services, to enhance our online operations, and to bolster our cross-selling ability, all with the aim of becoming a well-rounded financial institution. The President Securities Group will optimize the integration of its resources, expand its roster of talented people, enhance our competitiveness, and raise overall operating performance. Indeed, we will continue to march forward with purpose in creating value for the company and for shareholders.

Chairman of the Board President Head of Accounting Dept.

Teng, A-Hua Lin, Kuan-Chen An, Chi-Li

APPENDIX II

President Securities Corporation

Supervisors Audit Report

The board of directors has compiled and submitted the Company's 2014 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 2015 shareholders’ meeting

Supervisor

LU, LI-AN

CHUANG, TSAI-FA

CHINA F.R.P. CORPORATION

Representative LEE, SHU-FEN

Taipei, Taiwan, R.O.C.

March 26, 2015

APPENDIX III

Report of Independent Accountants Translated from Chinese

PWCR14003119

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, 2014 and 2013, and the related statements of comprehensive income, of changes in equity and of cash flows for the years ended December 31, 2014 and 2013. 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, 2014 and 2013 and their financial performance and cash flows for the years ended December 31, 2014 and 2013 in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Firms” and “Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants”.

PricewaterhouseCoopers, Taiwan

March 24, 2015

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.

PRESIDENT SECURITIES CORPORATION

BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


		December 31, 2014			December 31, 2013
ASSETS	Note	Amount		%		Amount		%
Current assets
Cash and cash equivalents	6(1)	$	2,893,011	5		$	2,970,022	6
Financial assets at fair value through profit or loss - current	6(2)		21,718,683	38			18,473,118	36
Available-for-sale financial assets - current	6(3)		-	-			349,870	1
Bonds purchased under resale agreements	6(4)		1,502,364	3			184,897	-
Margin loans receivable	6(5)		13,408,762	24			11,516,164	22
Refinancing security deposits			219	-			24,695	-
Receivables from refinance guaranty			1,670	-			59,634	-
Receivables from security lending			12,224	-			29,993	-
Security lending deposits			11,042	-			49,617	-
Notes receivable			994	-			3,360	-
Accounts receivable - net	6(6)		5,942,910	10			7,999,363	16
Accounts receivable - related parties	6(6)		4,504	-			3,476	-
Prepayments			24,102	-			24,786	-
Other receivables	6(7)		303,344	1			123,542	-
Other current assets	6(8)		2,260,110	4			2,231,308	4
Total current assets			48,083,939	85			44,043,845	85
Noncurrent assets
Financial assets at fair value through profit or loss - noncurrent	6(2)		50,518	-			50,174	-
Financial assets at cost - noncurrent	6(9)		18,293	-			40,644	-
Investments in associates	6(10)		4,410,508	8			3,999,602	8
Property and equipment	6(11)		2,393,640	4			2,409,970	5
Investment property	6(12)		283,104	1			285,204	-
Intangible assets			115,878	-			13,644	-
Deferred tax assets	6(41)		45,472	-			51,668	-
Other assets - noncurrent	6(13)		1,106,126	2			1,028,708	2
Total noncurrent assets			8,423,539	15			7,879,614	15
TOTAL ASSETS		$	56,507,478	100		$	51,923,459	100

(Continued)

PRESIDENT SECURITIES CORPORATION

BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


		December 31, 2014			December 31, 2013
LIABILITIES AND EQUITY	Note	Amount		%		Amount		%
Current liabilities
Short-term loans	6(14)	$	6,630,058	12		$	2,450,000	5
Commercial papers payable	6(15)		3,749,032	7			6,947,845	14
Financial liabilities at fair value through profit or loss - current	6(16)		2,067,573	4			1,232,154	2
Bonds sold under repurchase agreements	6(17)		9,084,470	16			6,272,115	12
Deposits on short sales			1,519,052	3			1,235,843	2
Short sale proceeds payable			1,842,391	3			1,599,806	3
Guarantee deposit received on borrowed securities			935,571	2			529,309	1
Accounts payable	6(18)		5,797,954	10			7,837,542	15
Advance receipts			89	-			138	-
Collections on behalf of third parties			268,094	-			426,335	1
Other payables	6(19)		1,084,899	2			836,175	2
Other financial liabilities - current	6(20)		294,585	-			93,398	-
Current tax liability	6(41)		132,115	-			62,311	-
Other current liabilities			2,538	-			2,160	-
Total current liabilities			33,408,421	59			29,525,131	57
Noncurrent liabilities
Deferred tax liability	6(41)		46,608	-			13,473	-
Other liabilities - noncurrent	6(21)		19,825	-			19,575	-
Total noncurrent liabilities			66,433	-			33,048	-
Total liabilities			33,474,854	59			29,558,179	57
Equity attributable to owners of the parent company
Capital
Common stock	6(23)		13,231,191	23			13,231,191	25
Capital reserve			256,116	1			256,116	1
Retained earnings	6(24)
Legal reserve			2,173,255	4			2,071,935	4
Special reserve			5,708,547	10			5,792,801	11
Unappropriated earnings			1,549,976	3			1,013,206	2
Other equity			113,539	-			31	-
Total equity			23,032,624	41			22,365,280	43
TOTAL LIABILITIES AND EQUITY		$	56,507,478	100		$	51,923,459	100

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

PRESIDENT SECURITIES CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

EXCEPT FOR EARNINGS PER SHARE AMOUNT)

			For the years ended December 31,
			2014							2013
	Note		Amount				%			Amount				%
Revenues
Securities brokerage fees	6(25)		$	1,486,244			34			$	1,232,808			32
Underwriting fees	6(26)			51,230			1				70,408			2
Gains on trading of securities	6(27)			935,794			21				960,464			25
Interest income	6(28)			998,753			23				733,748			19
Gain on valuation of trading securities	6(29)			96,762			2				287,536			7
Gain on short covering and trading securities - RS financing covering	6(30)			195			-				94,983			2
Loss(gain) on valuation of borrowed securities and bonds with resale agreements	6(31)	(		52,378	)	(	1	)			4,438			-
Gain on warrants issuance	6(32)			246,305			6				17,548			-
Gain on derivative financial instruments	6(33)			186,983			4				178,153			5
Other operating income	6(34)			426,964			10				299,315			8
Total revenues				4,376,852			100				3,879,401			100
Expenses
Handling charges	6(35)	(		198,077	)	(	5	)	(		191,785	)	(	5	)
Interest expenses	6(36)	(		159,670	)	(	4	)	(		105,599	)	(	3	)
Securities commission expense		(		311	)		-		(		426	)		-
Clearing charges		(		17,152	)		-		(		37,563	)	(	1	)
Employee benefits	6(37)	(		1,707,450	)	(	39	)	(		1,452,531	)	(	37	)
Depreciation and amortization	6(38)	(		101,985	)	(	2	)	(		95,865	)	(	3	)
Other operating expenses	6(39)	(		1,031,010	)	(	24	)	(		855,298	)	(	22	)
Total expenditures and expenses		(		3,215,655	)	(	74	)	(		2,739,067	)	(	71	)

(Continued)

PRESIDENT SECURITIES CORPORATION

STATEMENTS OF COMPREHENSIVE INCOME

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

(EXCEPT FOR EARNINGS PER SHARE AMOUNT)

			For the years ended December 31,
			2014							2013
	Note		Amount				%			Amount				%
Non-operating gains and losses
Share of the profit or loss of associates and joint ventures accounted for using the equity method			$	401,814			9			$	268,377			7
Other gains and losses	6(40)			204,385			5				58,961			2
Total non-operating gains and losses				606,199			14				327,338			9
Profit before tax				1,767,396			40				1,467,672			38
Income tax expense	6(41)	(		184,227	)	(	4	)	(		105,957	)	(	3	)
Net income				1,583,169			36				1,361,715			35
Other comprehensive income (loss)
Translation gain and loss on the financial statements of foreign operating entities				130,913			3				46,966			1
Unrealized (loss) gain on financial instruments		(		27,750	)		-				26,616			1
Net actuarial loss on defined benefit plans		(		52,127	)	(	1	)		(	7,089	)		-
Other comprehensive income of associates and joint ventures accounted for under equity method				3,386			-				83			-
Income tax benefit relating to components of other comprehensive income				8,862			-				1,205			-
Current other comprehensive income (post-tax)				63,284			2				67,781			2
Total current comprehensive income			$	1,646,453			38			$	1,429,496			37
Earnings per share	6(42)
Basic earnings per share (in dollars)			$	1.20						$	1.03
Diluted earnings per share (in dollars)			$	1.20						$	1.03

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

PRESIDENT SECURITIES CORPORATION

STATEMENTS OF CHANGES IN EQUITY

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)



			Retained earnings			Other equity
Note	Common stock	Capital reserve	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	Total equity


For the year ended December 31, 2013
Balance as of January 1, 2013		$ 13,231,191	$ 256,116	$ 1,960,558		$ 5,482,607			$ 766,885		(	$ 74,685	)		$ 1,134			$ 21,623,806
Appropriations of earnings:
Legal reserve	6(24)	-	-	111,377		-		(	111,377	)		-			-			-
Special reserve	6(24)	-	-	-		310,194		(	310,194	)		-			-			-
Cash dividends	6(24)	-	-	-		-		(	688,022	)		-			-		(	688,022	)
Net income for the year		-	-	-		-			1,361,715			-			-			1,361,715
Other comprehensive income for the year		-	-	-		-		(	5,801	)		46,966			26,616			67,781
Balance at December 31, 2013		$ 13,231,191	$ 256,116	$ 2,071,935		$ 5,792,801			$ 1,013,206		(	$ 27,719	)		$ 27,750			$ 22,365,280
For the year ended December 31, 2014
Balance as of January 1, 2014		$ 13,231,191	$ 256,116	$ 2,071,935		$ 5,792,801			$ 1,013,206		(	$ 27,719	)		$ 27,750			$ 22,365,280
Appropriations of earnings:
Legal reserve	6(24)	-	-	101,320		-		(	101,320	)		-			-			-
Special reserve	6(24)	-	-	-		202,641		(	202,641	)		-			-			-
Reversal of special reserve	6(24)	-	-	-	(	286,895	)		286,895			-			-			-
Cash dividends	6(24)	-	-	-		-		(	979,109	)		-			-		(	979,109	)
Net income for the year		-	-	-		-			1,583,169			-			-			1,583,169
Other comprehensive income for the year		-	-	-		-		(	50,224	)		130,913		(	17,405	)		63,284
Balance at December 31, 2014		$ 13,231,191	$ 256,116	$ 2,173,255		$ 5,708,547			$ 1,549,976			$ 103,194			$ 10,345			$ 23,032,624

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

PRESIDENT SECURITIES CORPORATION

STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


			For the years ended December 31,
	Note			2014				2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit before tax			$	1,767,396			$	1,467,672
Adjustments to reconcile profit before tax to net cash (used in) provided by operating activities:
Income and expenses without cash flow impact
Depreciation	6(38)			91,307				94,133
Amortization	6(38)			10,678				1,732
Write-off of bad debts classified as income	6(6)	(		353	)	(		512	)
Provision for bad debts	6(5)			2,638				12,846
Gain on valuation of trading securities– current	6(2)(29)	(		96,762	)	(		287,536	)
Financial expense	6(36)			159,670				105,599
Interest income	6(28)(40)	(		1,056,518	)	(		770,454	)
Dividend income	6(34)	(		254,921	)	(		131,725	)
Share of the profit of associates and joint ventures accounted for using the equity method	6(10)	(		401,814	)	(		268,377	)
Loss on disposal of property and equipment	6(11)			-				394
(Gain) loss on valuation of open-ended funds and money-market instruments	6(2)	(		3,839	)	(		2,697	)
Loss on impairment of financial assets at cost	6(9)			448				-
Impairment loss on financial assets measured at cost	6(9)			-				5,600
Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss	6(2)	(		3,147,221	)	(		1,637,095	)
Available-for-sale financial assets – current	6(3)			322,120		(		105,204	)
Bonds purchased under resale agreements	6(4)	(		1,317,467	)	(		184,897	)
Margin loans receivable	6(5)	(		1,895,243	)	(		1,744,158	)
Refinancing security deposits				24,476		(		24,321	)
Receivables from refinance guaranty				57,964		(		46,733	)
Receivables from security lending				17,769				15,810
Security lending deposits				38,575		(		8,235	)
Notes receivable				2,366		(		1,842	)
Accounts receivable	6(6)			2,131,138		(		2,897,399	)
Accounts receivable-related parties	6(6)	(		1,028	)			1,119
Prepayments				684		(		251	)
Other receivables	6(7)	(		286,446	)			380
Other current assets	6(8)	(		28,802	)			467,346
Changes in operating liabilities
Financial liabilities at fair value through profit or loss – current	6(16)			835,419				783,891
Bonds sold under repurchase agreements	6(17)			2,812,355		(		1,707,598	)
Deposits on short sales				283,209		(		9,174	)
Short sale proceeds payable				242,585		(		6,971	)
Guarantee deposit received on borrowed securities				406,262		(		614,980	)
Accounts payable	6(18)	(		2,046,005	)			2,725,624
Advance receipts		(		49	)	(		6,657	)
Collections on behalf of third parties		(		158,241	)			167,952
Other payables	6(19)			348,265				32,407
Other financial liabilities – current	6(20)			201,187		(		28,199	)
Other current liabilities				378		(		428	)

(Continued)

PRESIDENT SECURITIES CORPORATION

STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


			For the years ended December 31,
	Note			2014				2013
Cash used in operations		(	$	937,820	)	(	$	4,597,544	)
Dividends received				376,708				276,297
Interest received				988,888				777,630
Income tax paid		(		66,230	)	(		70,827	)
Net cash provided by (used in) operating activities				361,546		(		3,614,444	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from capital reduction of financial assets measured at cost	6(9)			21,903				6,600
Acquisition of investments in associates				-		(		300,000	)
Acquisition of property and equipment	6(11)	(		32,482	)	(		14,197	)
Acquisition of intangible assets		(		104,297	)	(		8,605	)
(Increase) decrease in other non-current assets	6(13)	(		147,731	)			39,574
Increase in prepayment for equipment	6(13)	(		30,656	)	(		39,423	)
Net cash used in investing activities		(		293,263	)	(		316,051	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in short-term loans	6(14)			4,180,058				50,000
(Decrease) increase in commercial papers payable	6(15)	(		3,200,000	)			4,950,000
Increase (decrease) in other non-current liabilities	6(21)			70		(		10,754	)
Distribution of cash dividends	6(24)	(		979,109	)	(		688,022	)
Interest paid		(		149,760	)	(		102,236	)
Net cash provided by financing activities		(		148,741	)			4,198,988
Effect of exchange rate changes				3,447				-
Net (decrease) increase in cash and cash equivalents		(		77,011	)			268,493
Cash and cash equivalents, beginning of year				2,970,022				2,701,529
Cash and cash equivalents, end of year			$	2,893,011			$	2,970,022

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 2014 (from January 1, 2014 to December 31, 2014) 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

Responsible person: DENG, A-HUA

March 24, 2015

Report of Independent Accountants Translated from Chinese

PWCR14003193

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, 2014 and 2013, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended. These consolidated financial statements are the responsibility of the Group’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, 2014 and 2013, and their financial performance and cash flows for the years then ended, 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, 2014 and 2013 on which we have issued an unqualified opinion thereon.

PricewaterhouseCoopers, Taiwan

March 24, 2015

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.

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


		December 31, 2014			December 31, 2013
ASSETS	Note	Amount		%	Amount		%
Current assets
Cash and cash equivalents	6(1)	$	6,355,219	10	$	5,287,484	9
Financial assets at fair value through profit or loss - current	6(2)		22,714,617	35		19,714,198	34
Available-for-sale financial assets - current	6(3)		-	-		349,870	1
Bonds purchased under resale agreements	6(4)		1,502,364	2		184,897	-
Margin loans receivable	6(5)		13,408,762	21		11,516,164	20
Refinancing security deposits			219	-		24,695	-
Receivables from refinance guaranty			1,670	-		59,634	-
Customer margin account	6(6)		5,569,228	8		4,917,434	8
Receivables from security lending			12,224	-		29,993	-
Security lending deposits			11,042	-		49,617	-
Notes receivable			994	-		3,360	-
Accounts receivable	6(7)		6,905,877	11		8,379,629	14
Prepayments			27,794	-		54,278	-
Other receivables	6(8)		354,054	-		173,323	-
Current tax assets			1,590	-		2,676	-
Other current assets	6(9)		3,106,558	5		3,297,457	6
Total current assets			59,972,212	92		54,044,709	92
Noncurrent assets
Financial assets at fair value through profit or loss - noncurrent	6(2)		50,518	-		50,174	-
Financial assets at cost - noncurrent	6(10)		49,408	-		71,759	-
Available-for-sale financial assets - noncurrent	6(3)		56,115	-		-	-
Investments in associates	6(11)		426,021	1		401,608	1
Property and equipment	6(12)		2,562,705	4		2,583,250	4
Investment property	6(13)		283,104	1		285,204	1
Intangible assets			160,276	-		25,648	-
Deferred tax assets	6(42)		47,451	-		53,466	-
Other assets - noncurrent	6(14)		1,339,736	2		1,267,158	2
Total noncurrent assets			4,975,334	8		4,738,267	8
TOTAL ASSETS		$	64,947,546	100	$	58,782,976	100
LIABILITIES AND EQUITY
Current liabilities
Short-term loans	6(15)	$	8,760,977	14	$	3,479,260	6
Commercial papers payable	6(16)		3,749,032	6		6,947,845	12
Financial liabilities at fair value through profit or loss - current	6(17)		2,068,250	3		1,232,154	2
Bonds sold under repurchase agreements	6(18)		9,084,470	14		6,272,115	11
Deposits on short sales			1,519,052	2		1,235,843	2

(Continued)

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (CONTINUED)

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


		December 31, 2014			December 31, 2013
LIABILITIES AND EQUITY	Note	Amount		%	Amount		%
Short sale proceeds payable		$	1,842,391	3	$	1,599,806	3
Guarantee deposit received on borrowed securities			935,571	1		529,309	1
Futures traders' equity	6(6)		5,553,149	9		4,917,434	8
Accounts payable	6(19)		6,435,497	10		8,598,138	15
Advance receipts			484	-		450	-
Collections on behalf of third parties			269,955	-		428,091	1
Other payables	6(20)		1,159,281	2		951,286	1
Other financial liabilities - current	6(21)		294,585	-		93,398	-
Current tax liability	6(42)		134,160	-		64,432	-
Other current liabilities			5,132	-		4,600	-
Total current liabilities			41,811,986	64		36,354,161	62
Noncurrent liabilities
Deferred tax liability	6(42)		49,100	-		14,210	-
Other liabilities-noncurrent	6(22)		10,984	-		8,402	-
Total noncurrent liabilities			60,084	-		22,612	-
Total liabilities			41,872,070	64		36,376,773	62
Equity attributable to owners of the parent company
Capital
Common stock			13,231,191	20		13,231,191	22
Capital reserve			256,116	1		256,116	-
Retained earnings	6(25)
Legal reserve			2,173,255	3		2,071,935	4
Special reserve			5,708,547	9		5,792,801	10
Unappropriated earnings			1,549,976	3		1,013,206	2
Other equity			113,539	-		31	-
Total			23,032,624	36		22,365,280	38
Non-controlling interests			42,852	-		40,923	-
Total equity			23,075,476	36		22,406,203	38
TOTAL LIABILITIES AND EQUITY		$	64,947,546	100	$	58,782,976	100

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

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

(EXCEPT FOR EARNINGS PER SHARE AMOUNT)


			For the years ended December 31,
			2014							2013
	Note		Amount				%			Amount				%
Revenues
Securities brokerage fees	6(26)		$	2,132,591			41			$	1,804,151			39
Underwriting fees	6(27)			51,230			1				70,408			2
Gains on trading of securities	6(28)			948,258			19				1,015,852			22
Interest income	6(29)			1,051,309			20				788,232			17
Gain on valuation of trading securities	6(30)			111,138			2				303,088			7
Gain on short covering and trading securities - RS financing covering	6(31)			195			-				94,983			2
(Loss) gain on valuation of borrowed securities and bonds with resale agreements	6(32)	(		52,378	)	(	1	)			4,438			-
Gain on warrants issuance	6(33)			246,305			5				17,548			-
Gain on derivative financial instruments	6(34)			195,678			4				206,920			4
Other operating income	6(35)			478,971			9				307,698			7
Total revenues				5,163,297			100				4,613,318			100
Expenses
Handling charges	6(36)	(		311,754	)	(	6	)	(		276,165	)	(	6	)
Interest expenses	6(37)	(		178,055	)	(	4	)	(		126,838	)	(	3	)
Futures commission expense		(		73,655	)	(	1	)	(		92,254	)	(	2	)
Clearing charges		(		90,731	)	(	2	)	(		91,219	)	(	2	)
Employee benefits	6(38)	(		1,978,845	)	(	38	)	(		1,713,704	)	(	37	)
Depreciation and amortization	6(39)	(		117,581	)	(	2	)	(		114,547	)	(	3	)
Other operating expenses	6(40)	(		1,175,651	)	(	23	)	(		984,888	)	(	21	)
Total expenditures and expenses		(		3,926,272	)	(	76	)	(		3,399,615	)	(	74	)

(Continued)

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

(EXCEPT FOR EARNINGS PER SHARE AMOUNT)

			For the years ended December 31,
			2014							2013
	Note		Amount				%			Amount				%
Non-operating gains and losses
Share of the profit or loss of associates and joint ventures accounted for using the equity method	6(11)		$	71,854			2			$	55,919			1
Other gains and losses	6(41)			482,484			9				219,865			5
Total non-operating gains and losses				554,338			11				275,784			6
Profit before tax				1,791,363			35				1,489,487			32
Income tax expense	6(42)	(		204,082	)	(	4	)	(		124,034	)	(	2	)
Net income				1,587,281			31				1,365,453			30
Other comprehensive income
Translation gain on the financial statements of foreign operating entities				130,913			2				46,966			1
Unrealized (loss) gain on financial instruments		(		17,051	)		-				26,616			-
Net actuarial losses on defined benefit plans		(		55,315	)	(	1	)	(		9,756	)		-
Other comprehensive (loss) income of associates and joint ventures accounted for under equity method		(		4,384	)		-				2,205			-
Income tax benefit relating to components of other comprehensive income				9,404			-				1,659			-
Current other comprehensive income (post-tax)				63,567			1				67,690			1
Total current comprehensive income			$	1,650,848			32			$	1,433,143			31
Income attributable to:
Parent company			$	1,583,169			31			$	1,361,715			30
Non-controlling interests			$	4,112			-			$	3,738			-
Current comprehensive income attributable to:
Parent company			$	1,646,453			32			$	1,429,496			31
Non-controlling interests			$	4,395			-			$	3,647			-
Earnings per share	6(43)
Basic earnings per share (in dollars)			$	1.20						$	1.03
Diluted earnings per share (in dollars)			$	1.20						$	1.03

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

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)



	Equity attributable to owners of the parent company
			Retained earnings			Other equity
Note	Common stock	Capital reserve	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	Total	Non-controlling interest	Total equity


For the year ended December 31, 2013
Balance as of January 1, 2013		$ 13,231,191	$ 256,116	$ 1,960,558		$ 5,482,607			$ 766,885		(	$ 74,685	)		$ 1,134			$ 21,623,806 136			$ 39,445			$ 21,663,251
Appropriations of 2012 earnings:
Legal reserve	6(25)	-	-	111,377		-		(	111,377	)		-			-			-			-			-
Special reserve	6(25)	-	-	-		310,194		(	310,194	)		-			-			-			-			-
Cash dividends on common stock	6(25)	-	-	-		-		(	688,022	)		-			-		(	688,022	)		-		(	688,022	)
Net income for the year		-	-	-		-			1,361,715			-			-			1,361,715			3,738			1,365,453
Other comprehensive income for the year		-	-	-		-		(	5,801	)		46,966			26,616			67,781		(	91	)		67,690
Changes in non-controlling interests		-	-	-		-			-			-			-			-		(	2,169	)	(	2,169	)
Balance at December 31, 2013		$ 13,231,191	$ 256,116	$ 2,071,935		$ 5,792,801			$ 1,013,206		(	$ 27,719	)		$ 27,750			$ 22,365,280 136			$ 40,923			$ 22,406,203
For the year ended December 31, 2014
Balance as of January 1, 2014		$ 13,231,191	$ 256,116	$ 2,071,935		$ 5,792,801			$ 1,013,206		(	$ 27,719	)		$ 27,750			$ 22,365,280			$ 40,923			$ 22,406,203
Appropriations of 2013 earnings:
Legal reserve	6(25)	-	-	101,320		-		(	101,320	)		-			-			-			-			-
Special reserve	6(25)	-	-	-		202,641		(	202,641	)		-			-			-			-			-
Reversal of special reserve	6(25)	-	-	-	(	286,895	)		286,895			-			-			-			-			-
Cash dividends on common stock	6(25)	-	-	-		-		(	979,109	)		-			-		(	979,109	)		-		(	979,109	)
Net income for the year		-	-	-		-			1,583,169			-			-			1,583,169			4,112			1,587,281
Other comprehensive income for the year		-	-	-		-		(	50,224	)		130,913		(	17,405	)		63,284			283			63,567
Changes in non-controlling interests		-	-	-		-			-			-			-			-		(	2,466	)	(	2,466	)
Balance at December 31, 2014		$ 13,231,191	$ 256,116	$ 2,173,255		$ 5,708,547			$ 1,549,976			$ 103,194			$ 10,345			$ 23,032,624			$ 42,852			$ 23,075,476

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

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


	Note			For the year ended December 31, 2014				For the year ended December 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit before tax			$	1,791,363			$	1,489,487
Adjustments to reconcile profit before tax to net cash provided by (used in) operating activities:
Income and expenses without cash flow impact
Depreciation	6(39)			99,490				103,752
Amortization	6(39)			18,091				10,795
Write-off of bad debts classified as income	6(7)	(		353	)	(		512	)
Provision for bad debts	6(7)			2,638				12,846
Gain on valuation of trading securities - current	6(2),(30)	(		111,138	)	(		303,088	)
Financial expense	6(37)			178,055				126,838
Interest income	6(29),(41)	(		1,300,487	)	(		932,506	)
Dividend income	6(35)	(		266,970	)	(		143,868	)
Share of the profit of associates and joint ventures accounted for using the equity method	6(11)	(		71,854	)	(		55,919	)
Loss on disposal of property and equipment	6(12)			2				402
Loss on disposal of investment (financial assets measured at cost)	6(10)			448				-
(Gain) loss on valuation of open-ended funds and money-market instruments	6(41)	(		4,531	)			3,850
Loss on impairment of financial assets at cost	6(10)			-				5,600
Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss	6(2)	(		2,887,007	)	(		1,624,152	)
Available-for-sale financial assets - current	6(3)			322,120		(		105,204	)
Bonds purchased under resale agreements	6(4)	(		1,317,467	)	(		184,897	)
Margin loans receivable	6(5)	(		1,895,243	)	(		1,744,158	)
Refinancing security deposits				24,476		(		24,321	)
Receivables from refinance guaranty				57,964		(		46,733	)
Customer margin account	6(6)	(		651,794	)			720,228
Receivables from security lending				17,769				15,810
Security lending deposits				38,575		(		8,235	)
Notes receivable				2,366		(		1,686	)
Accounts receivable	6(7)			1,548,437		(		2,917,055	)
Prepayments				26,484		(		25,556	)
Other receivables	6(8)	(		288,473	)			5,809
Other current assets	6(9)			190,899				354,082
Changes in operating liabilities
Financial liabilities at fair value through profit or loss - current	6(17)			836,096				783,198
Bonds sold under repurchase agreements	6(18)			2,812,355		(		1,707,598	)
Deposits on short sales				283,209		(		9,174	)
Short sale proceeds payable				242,585		(		6,971	)
Guarantee deposit received on borrowed securities				406,262		(		614,980	)
Futures traders' equity				635,715		(		720,228	)
Accounts payable	6(19)	(		2,169,058	)			2,863,349
Advance receipts				34		(		6,712	)
Collections on behalf of third parties		(		158,136	)			168,198
Other payables	6(20)			307,120				51,016
Other financial liabilities - current	6(21)			201,187		(		28,199	)
Other current liabilities				532		(		420	)

(Continued)

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)


	Note			For the year ended December 31, 2014				For the year ended December 31, 2013
Cash used in operations		(	$	1,078,239	)	(	$	4,496,912	)
Dividends received				310,042				219,408
Interest received				1,233,955				942,208
Income tax paid		(		82,959	)	(		87,716	)
Net cash provided by (used in) operating activities				382,799		(		3,423,012	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of available-for-sale financial assets - noncurrent	6(3)	(		45,416	)			-
Acquisition of financial assets at cost	6(10)			-		(		715	)
Proceeds from capital reduction of financial assets measured at cost	6(10)			21,903				6,600
Acquisition of property and equipment	6(12)	(		36,025	)	(		17,629	)
Proceeds from disposal of property and equipment				56				-
Acquisition of intangible assets		(		143,252	)	(		11,867	)
(Increase) decrease in other non-current assets	6(14)	(		146,510	)			3,708
Increase in prepayment for equipment	6(14)	(		31,490	)	(		41,364	)
Net cash used in investing activities		(		380,734	)	(		61,267	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in short-term loans	6(15)			5,281,717		(		337,076	)
(Decrease) increase in commercial papers payable	6(16)	(		3,200,000	)			4,950,000
Increase (decrease) in other non-current liabilities	6(22)			2,402		(		7,605	)
Distribution of cash dividend	6(25)	(		979,109	)	(		688,022	)
Changes in non-controlling interest		(		2,466	)	(		2,169	)
Interest paid		(		167,729	)	(		123,757	)
Net cash provided by financing activities				934,815				3,791,371
Effect of exchange rate changes				130,855				46,966
Net increase in cash and cash equivalents				1,067,735				354,058
Cash and cash equivalents, beginning of year				5,287,484				4,933,426
Cash and cash equivalents, end of year			$	6,355,219			$	5,287,484

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

APPENDIX IV


President Securities Corporation
2014 Earnings Distribution Proposal
	Unit:：NT$
Unappropriated earnings as of January 1, 2014 (Note 1)	$17,031,569
Less：Adjustment to unappropriated earnings of 2014 (Note 2)	(50,224,303)
Unappropriated earnings after adjustment	(33,192,734)
Add ：Net profit after tax of 2014	1,583,169,079
Subtotal	1,013,206,019
Less：Legal Reserve (10%) (Note 3)	(154,997,635)
Special Reserve (20%) (Note 3)	(309,995,269)
Unappropriated earnings Available for Distribution	1,084,983,441
Distribution items
─ Cash dividend (NT$ 0.81 / per share)	1,071,726,434
Unappropriated earnings as of December 31, 2014	13,257,007
Remarks：
Remuneration for Directors and Supervisors	$33,843,993
Employee cash bonuses	22,562,661
Total	$56,406,654

Note 1: The amount of unappropriated earnings in the earning distributions resolved by the shareholders’ meeting of 2014

Note 2: The Company adopted T-IFRSs in 2013 and unappropriated earnings was decreased by $50,224,303 due to actuarial loss from defined benefits plan (included in other comprehensive income).

Note 3: According to Article 237 of the Company Act, Jingshan 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.

Note 4: Prior years’ unappropriated earnings shall not be appropriated unless the current year’s unappropriated earnings is insufficient for distribution.

Note 5: Total common shares outstanding as of December 31, 2014 was 1,323,119,054 shares.

APPENDIX V

Comparison table of Amendments to” Operating Procedures for Endorsement and Guarantee”


Article	Amendment	Original Articles
Article 3	The Company may only provide endorsement and/or guarantee to the following enterprise: 1. any foreign securities subsidiary whose issued voting shares are more than fifty percent owned directly or indirectly by the Company due to the need for underwriting business. 2. any foreign subsidiary whose issued voting shares is one hundred percent owned directly or indirectly by the Company and who is registered in the country which is a member of The International Organization of Securities Commissions due to the need for issuing offshore call (put) warrants. 3. any foreign subsidiary whose issued voting shares are more than fifty percent owned directly or indirectly by the Company need facility loan of the local financial institution due to business course. 4. any enterprise permitted by law.	The Company may provide endorsement and/or guarantee to any foreign securities subsidiary whose shares are fifty percent or more owned directly or indirectly by the Company or any enterprise permitted by law. The endorsement or guarantee benefit receiver and its business categories shall be subject to the rules of the competent authority.
Article 4	The total amount of guarantee made by the Company shall not exceed twenty percent the Company's net worth and the total amount of guarantees made to any single subsidiary shall not the exceed the total amount. When making guarantees to others, the company shall evaluate carefully and take into full consideration of each independent director’s opinion when making guarantees and shall record each independent director’s explicit opinion for assent or dissent and the reasons for dissent in the meeting minutes of the Board of Directors. It shall make guarantees by the preceding paragraph by getting the Board of Directors’ approval or the Chairman’s decision in accordance with this procedure and then reporting to the Board of Directors for further ratification. In case the company owns directly or indirectly one hundred percent of the issued voting shares of the guarantee, the prescribed procedure could be waived excepting getting the Board of Directors’ ratification after making guarantee.	The total amount of guarantee made by the Company shall not exceed twenty percent the Company's net worth and the total amount of guarantees made to any single subsidiary shall not the exceed the total amount. When making guarantees to others, the company shall evaluate carefully and may delegate the General Manager and Chairman of the Board to facilitate execution and then report the performances to the meeting of Board of Directors for retrospective ratification. The Company shall take into full consideration of each independent director’s opinion when making guarantees and shall record each independent director’s explicit opinion for assent or dissent and the reasons for dissent in the meeting minutes of the Board of Directors.
Article 5	For the needs of business, the subsidiary meets the qualification requirements set out in Article 3 shall have the guarantee application form forwarded to the general manager and chairman for approval after having it reviewed by the finance department and then proceeds in accordance with Article 4.	For the needs of business, the subsidiary meets the qualification requirements set out in Article 3 shall have the guarantee application form forwarded to the general manager and chairman for approval after having it submitted to the finance department.

APPENDIX VI

Comparison table of Amendments to” Articles of Incorporation”


Article	Amendment	Original Articles
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 when considering it is necessary.	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 12	The following issues are subject to resolutions to be adopted in the shareholders’ meeting: 1. Establishment and amendment of the Articles of Incorporation. 2. Election of directors. 3. Approval of reports worked out by the board of directors and profit allocation of profit and coverage of loss. 4. Increase, decrease of capital. 5. 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.	The following issues are subject to resolutions to be adopted in the shareholders’ meeting: 1. Establishment and amendment of the Articles of Incorporation. 2. Election of directors and supervisors. 3. Approval of reports worked out by the board of directors & supervisors and profit allocation of profit and coverage of loss. 4. Increase, decrease of capital. 5. 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	Chapter IV Directors and supervisors
Article 13	The Company has nineteen directors (four independent and fifteen non-independent directors), 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 and Exchange 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.	The Company has fifteen directors (three independent and twelve non-independent directors) and three supervisors, Starting from the tenth board of directors, the Company shall has nineteen directors including four independent directors and fifteen non-independent directors, and establish Audit Committee to replace 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 13-1	The Company according to Article14-4, Securities and Exchange Law, establish the Audit Committee, composed of the entire number of independent directors. Audit Committee and among independent directors shall compliance and follow by internal rules in this company and the Government related regulations.	(New item)
Article 14	The total registered shares held by all directors 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.	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 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 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.	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 18	(Delete this item)	The supervisors shall have the following functions: 1. To audit the Company’s financial standings; 2. To audit the Company’s books, documents and accounts; 3. To inquire into the Company’s business performance; 4. To review budgeting and account closing; 5. To audit issues regarding profit allocation or loss coverage. 6. To exercise other functions as endowed by laws.
Article 19	The board of directors is authorized to determine the remuneration for directors 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.	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 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 Audit Committee thirty days in advance of shareholders' regular meeting and the Audit Committee shall issue a report accordingly to be approved by the shareholders' meeting: 1. Business report 2. Financial statements 3. Proposals of profit allocation or loss coverage	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: 1. Business report 2. Financial statements 3. 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: 1.Remuneration to directors 3% 2.Bonus to employees2% 3. Bonus to employees95% The profit may be retained and not allocated if the total allocable profit is not up to 5% of the paid-in capital.	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: 1.Remuneration to directors, supervisors 3% 2.Bonus to employees2% 3. Bonus to employees95% The profit may be retained and not allocated if the total allocable profit is not up to 5% of the paid-in capital.
Article 26	These Articles were duly established on November 26,1988 and the first amendment was approved on December 28, 1988; ------------; the twenty fifth amendment on June 18, 2015.	These Articles were duly established on November 26, 1988 and the first amendment was approved on December 28, 1988; ------------; the twenty fourth amendment on June 18, 2014.

APPENDIX VII

Comparison table of Amendments to” Procedures for Engaging in Derivatives Trading”


Article	Amendment	Original Articles
Article 1	Financial derivative products represent new products and a new business area within the financial markets. In order to respond to the risks created by this new business area, to efficiently manage our assets and liabilities, and to reduce exposure to fluctuations foreign exchange rates, interest rates, and equity markets, not to mention protecting shareholders rights and our company’s competitiveness, we hereby set forth this set of procedures (hereafter, “Procedures”), in accordance with the “Guidelines for the Purchase or Sale of Assets by Public Companies” published by the Financial Supervisory Commission (“FSC”) in accordance with Articles 36 and 38 of the Securities and Exchange Act (“SEA”).	Financial derivative products represent new products and a new business area within the financial markets. In order to respond to the risks created by this new business area, to efficiently manage our assets and liabilities, and to reduce exposure to fluctuations foreign exchange rates, interest rates, and equity markets, not to mention protecting shareholders rights and our company’s competitiveness, we hereby set forth this set of procedures (hereafter, “Procedures”), in accordance with the “Guidelines for the Purchase or Sale of Assets by Public Companies” published by the Financial Supervisory Commission, Executive Yuan (“FSC”) in accordance with Articles 36 and 38 of the Securities and Exchange Act (“SEA”).
Article 3	Article 3: Trading Principles 1. Division of Responsibilities The Company will adhere to the following division of responsibilities with regards to the trading of derivative products: 1. Board of Directors Assign the Head of the Risk Control Division to monitor all derivatives trading and assess whether such activities adhere to applicable policies at all times. 1. President The President should ensure that the derivative products traded are in line with the Company’s goals and policies and should address any anomalies discovered. 1. Assets and Liabilities Management Committee (ALCO) This committee is tasked with determining trading limits for each department. 1. Derivative Products Business Division 2. Responsible for setting derivative trading strategies, for setting position limits for the whole of the Company, for credit risk analysis, for loss analysis, all with the aim of creating a stable information management system that can adequately control risk and respond to abnormal events. 3. Responsible for collecting market information, for determining market direction and risks, for being familiar with financial products and applicable laws and regulations. 4. Responsible for determining optimal portfolio allocations and for reducing risk exposure based on the Company’s current position. 5. Responsible for providing all company trading tickets and receipts. 6. Settlement Department 7. Confirms every trading order against every order ticket and completes each transaction. 8. Checks and saves copies of all trading orders. 9. Risk Control Division 10. Responsible for overseeing and recordation of all master agreements entered into with trading counterparties, plus all schedules, and related information, and for preparing the same for inspection by the regulators. 11. Prepares monthly trading statistics in accordance with the format required by the regulators for derivatives trading. 12. Records trading statistics on a daily basis and confirms whether each trade is for “Hedging” or “Non-hedging” purposes; calculates all realized or expected profits and losses so as to get an accurate picture of the Company’s open positions so as to provide accurate hedging data. 13. Compiles monthly data on derivative trades already booked, including both already realized or expected profits or losses, and prepares regular financial reports in accordance with the format stipulated by the regulators, and publishes key derivatives trading data. . 14. Manages derivatives trading risk, fund access limits, profit and loss snapshots, exceptional events, and then evaluates and proposes necessary adjustments to risk management guidelines. 15. Where the Company trades derivative products for which it acted as the issuer of the underlying security, the Company will adhere to all applicable laws and regulations. 16. Evaluation of Performance 17. Performance is based on the profit targets predicted by the unit conducting a particular trade prior to entering the trade, and is evaluated on a regular basis. 18. An evaluation of open derivative positions should be conducted each month by the unit that initiated the position or by the Risk Control Division, and an evaluation should be conducted at least twice a month to determine whether any hedging measures are warranted for the position, and a report should be submitted to the President outlining profits or losses and the management of the position value. 19. The President should evaluate all data submitted to his/her office by various departments and by the Auditing Department and determine whether current risk control measures are appropriate and effective. 20. The President should stay on top of all derivative trading risks and, when market reports denote abnormal events (such as where losses on a position have exceeded applicable limits), should assemble all relevant department heads so as to formulate an appropriate course of action. 5. Trading Limits The Company treats its derivative trading as either “Hedging” or “Non-hedging”, based on the nature of the trade. The ALCO sets position limits and loss limits for each type of trade based on the needs of the Company and on the total value of the underling.	Article 3: Trading Principles 1. Division of Responsibilities The Company will adhere to the following division of responsibilities with regards to the trading of derivative products: 1. Board of Directors Assign high-level management personnel to monitor all derivatives trading and assess whether such activities adhere to applicable policies at all times. 1. President The President should ensure that the derivative products traded are in line with the Company’s goals and policies and should address any anomalies discovered. 1. Assets and Liabilities Management Committee (ALCO) 2. Responsible for determining derivative trading position limits for each counter party and for the whole of the Company. 3. Responsible for determining trading loss limits for each counter party and for the whole of the Company. 4. Responsible for report above mentioned limits for the Board of Director’s approval. 5. Derivative Products Business Division 6. Responsible for setting derivative trading strategies, for setting position limits for the whole of the Company, for credit risk analysis, for loss analysis, all with the aim of creating a stable information management system that can adequately control risk and respond to abnormal events. 7. Responsible for collecting market information, for determining market direction and risks, for being familiar with financial products and applicable laws and regulations. 8. Responsible for determining optimal portfolio allocations and for reducing risk exposure based on the Company’s current position. 9. Responsible for providing all company trading tickets and receipts. 10. Settlement Department 11. Confirms every trading order against every order ticket and completes each transaction. 12. Checks and saves copies of all trading orders. 13. Risk Control Division 14. Responsible for overseeing and recordation of all master agreements entered into with trading counterparties, plus schedules, and all kinds of confirmations and business report, and for preparing the same for inspection by the regulators. 15. Prepares monthly revenue statistics in accordance with the format required by the Financial Supervisory Commission, Executive Yuan for derivatives trading. 16. Records trading statistics on a daily basis and confirms whether each trade is for “Hedging” or “Non-hedging” purposes; calculates all realized or expected profits and losses so as to get an accurate picture of the Company’s open positions so as to provide accurate hedging data. 17. Compiles monthly data on derivative trades already booked, including both already realized or expected profits or losses, and prepares regular financial reports in accordance with the format stipulated by the Financial Supervisory Commission, Executive Yuan, and publishes key derivatives trading data. . 18. Where the Company trades derivative products for which it acted as the issuer of the underlying security, the Company will adhere to all applicable laws and regulations. 19. Evaluation of Performance 20. Performance is based on the profit targets predicted by the unit conducting a particular trade prior to entering the trade, and is evaluated on a regular basis. 21. An evaluation of open derivative positions should be conducted each month by the unit that initiated the position or by the Risk Control Division, and an evaluation should be conducted at least twice a month to determine whether any hedging measures are warranted for the position, and a report should be submitted to the President outlining profits or losses and the management of the position value. 22. The President should evaluate all data submitted to his/her office by various departments and by the Auditing Department and determine whether current risk control measures are appropriate and effective and report performance to the Board of Directors. 23. The President should stay on top of all derivative trading risks and, when market reports denote abnormal events (such as where losses on a position have exceeded applicable limits), should assemble all relevant department heads so as to formulate an appropriate course of action and report to the Board of Directors. 5. Trading Limits The Company treats its derivative trading as either “Hedging” or “Non-hedging”, based on the nature of the trade. The ALCO sets position limits and loss limits for each type of trade based on the needs of the Company and on the total value of the underling and report above mentioned limits for the Board of Director’s approval.
Article 4	Operating Procedures 1. Executing Trades: Traders initiate trades within their prescribed trading limits by filling out an order ticket which clearly states all details of the trade, which is then checked by a supervisor and then by order confirmation personnel. 2. Confirmation and settlement: 3. After the order confirmation personnel have reviewed the trade ticket, it should be forwarded to the Risk Control Division, with a copy to be sent to the division and personnel that will execute the settlement. 4. After the order settlement personnel have reviewed the identity of the counterparty, settlement should be executed, whereon and the Risk Control Division and the trade executing division are notified. 5. All other operating procedures shall adhere to the relevant business operating procedures of the company.	Operating Procedures 1. Executing Trades: Traders initiate trades within their prescribed trading limits by filling out an order ticket which clearly states all details of the trade, which is then checked by a supervisor and then by order confirmation personnel. 2. Confirmation and settlement: 3. After the order confirmation personnel have reviewed the trade ticket, it should be forwarded to the Risk Control Division, with a copy to be sent to the division and personnel that will execute the settlement. 4. After the order settlement personnel have reviewed the identity of the counterparty, settlement should be executed, whereon and the Risk Control Division and the trade executing division are notified. 5. The Risk Control Division should maintain the limits control sheet immediately right after a trade is completed, watch closely weather the total trade amount is exceeding the limits ruled and verify with the counter party. 6. All other operating procedures shall adhere to the relevant business operating procedures of the company.
Article 6	Internal Control Measures Derivative product trading should adhere to the following internal control measures: 1. No individual shall concurrently serve in more than one of the following roles: trading, trade confirmation, trade execution. 2. An order receipt should be generated immediately after a trade is completed, whereon it should be endorsed by a manager. 3. Trading values should adhere to the authorized limits prescribed by these Procedures. 4. The Settlement Department should confirm trade execution based on the trade receipt produced. 5. The Risk Control Division should ensure that total trade values do not exceed prescribed limits.	Internal Control Measures Derivative product trading should adhere to the following internal control measures: 1. No individual shall concurrently serve in more than one of the following roles: trading, trade confirmation, trade execution. 2. An order receipt should be generated immediately after a trade is completed, whereon it should be endorsed by a manager. 3. Trading values should adhere to the authorized limits prescribed by these Procedures. 4. The Settlement Department should confirm trade execution based on the trade receipt produced. 5. The Risk Control Division should verify with the counter party regularly. 6. The Risk Control Division should maintain the limits control sheet immediately right after a trade is completed and ensure that total trade values do not exceed prescribed limits.
Article 7	Internal Auditing Measures 1. Internal auditing personnel should regularly, and when necessary, evaluate the appropriateness of the internal control measures, and should produce a monthly audit report based on a monthly evaluation of the derivatives trading procedures used by the trading departments, so as to identify any serious violations of the regulations in place, and then to properly notify the Company’s Supervisor in writing, if warranted. 2. The Head of the Risk Control Division should stay on top of the controls and oversight for derivatives trading risks.	Internal Auditing Measures 1. Internal auditing personnel should regularly, and when necessary, evaluate the appropriateness of the internal control measures, and should produce a monthly audit report based on a monthly evaluation of the derivatives trading procedures used by the trading departments, so as to identify any serious violations of the regulations in place, and then to properly notify the Company’s Supervisor in writing, if warranted. 2. The Board of Directors should assign high-level management personnel to stay on top of the controls and oversight for derivatives trading risks.
Article 8	Methods for Regular Evaluations and for Handling Abnormal Events 1. The Risk Control Division should conduct regular reviews of the business units in accordance with the following principles: 2. Does the trading performance in derivative products adhere to the strategy applicable to that division and are the risks taken on within the scope of permitted risks. 3. Does current risk management measure appropriate and are they being implemented in accordance with “Guidelines for the Purchase or Sale of Assets by Public Companies” and the Procedures. 4. If the Head of the Risk Control Division discovers on his/her own or through a company audit report that an abnormal even has occurred, he/she should implement the appropriate response measures and should report the same to the Board of Directors. Where an independent director position exists, the independent director should attend the next Board of Directors meeting and should opine on said event. 5. At least once a year, the Head of the Risk Control Division should report to the Board of Directors on derivatives trading performance and risk control measures. The Board of Directors should evaluate changes in the markets and in existing products and determine appropriate strategies and procedures, and should evaluate trading performances and risk control measures.	Methods for Regular Evaluations and for Handling Abnormal Events 1. High-level management personnel assigned by the Board of Directors should conduct regular reviews of the business units in accordance with the following principles: 2. Does the trading performance in derivative products adhere to the strategy applicable to that division and are the risks taken on within the scope of permitted risks. 3. Does current risk management measure appropriate and are they being implemented in accordance with the Procedures and the Procedures. 4. If the Head of the Risk Control Division discovers on his/her own or through a company audit report that an abnormal even has occurred, he/she should implement the appropriate response measures and should report the same to the Board of Directors. Where an independent director position exists, the independent director should attend the next Board of Directors meeting and should opine on said event.

APPENDIX VIII

Rules for Governing the Election of Directors of President Securities Corp.

Amendment on June 18th,2014

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 these rules.
Election of directors of the Corporation shall be conducted at the shareholders’ meeting.
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.

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.

3-2 For election of directors, shareholders can exercise voting rights either through present or electronic.

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 highest number of voting 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).
Matters pertaining to the monitoring and counting of ballots shall be handled by ballot counters and a scrutineer as designated by the chairperson at the start of the election.
During the preparation of ballots, the Corporation shall indicate the number of voting rights on each ballot in accordance with the respective shareholder attendance identification number. This is not applicable to voters exercising their voting rights through electronic means and ballots shall not be separately prepared for such voters. Said voters shall carry out voting through the website platform as indicated in the notice of meeting.
Should a candidate be a shareholder, voters are required to fill in said candidate’s name and shareholder number in the “Candidate” column of the ballot; should a candidate be a non-shareholder, voters shall fill in said candidate’s full-name and ID number. In the event that the candidate is a shareholder that is a government agency or juristic person, voters shall fill in said government agency or juristic person’s name in the “Candidate” column of the ballot, and may also fill in the name of said government agency or juristic person’s representative. Should there be more than one representative, only one representative’s name may be included in the ballot.
A ballot shall be deemed invalid under any of the following circumstances:
Ballot cast was not prepared by the Corporation.
Blank ballot cast into the ballot box.
Handwriting is illegible.
Name (full name) of election candidate in ballot is identical to that of another shareholder, and it is not distinguished by the inclusion of a shareholder number or ID number.
Name and/or shareholder number of candidate, who is a shareholder, is inconsistent with records in shareholder register; name and/or ID number of candidate, who is a non-shareholder, is found to be inconsistent after verification.
A single ballot containing names of two or more candidates.
Other texts, excluding the name (full name) and shareholder number (ID number) of candidates, are found within the ballot. Not applicable if ballot was handled in accordance with Article VII.
Counting of votes will commence immediately after voting is completed, and election results will be announced at the meeting by the chairperson or master of ceremonies.
The Board of Directors shall respectively issue notices of appointment to elected directors.
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.

Appendix IX

Rules and Procedures of Shareholders’ Meeting of President Securities Corp.

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 16th,1998 and the first amendment was approved on June 25th,2010. The second amendment was approved on June 24th,2011. The third amendment was approved on June 22th,2012. The fourth amendment was approved on June 19th,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 be consigned to buy and sell foreign valuable securities;
To Operate securities-related business of foreign exchange and permit by the Central Bank of Republic of China. (Taiwan)
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. Starting from the tenth board of directors, the Company shall has nineteen directors including four independent directors and fifteen non-independent directors, and establish Audit Committee to replace 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 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.

Since the Tenth Board of Directors of the Company, establish the Audit Committee, composed of the entire number of independent directors, the relevant regulations of Audit Committee will decided by Board of Directors. Audit Committee and among independent directors shall compliance and follow by internal rules in this company and the Government related regulations.

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:


1.	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 fourth amendment on June 18, 2014

Appendix XI

Information on Employee Bonus Sharing and Board Members Compensation

In accordance with the order issued by the FSC on November 28, 2012(order number Jin Guan Zheng No. 1010059296), the proposal for the distribution of earnings approved by the Board of Directors is as follows:

It is proposed that a total of NT$56,406,654 be appropriated with NT$22,562,661 to employees as bonus, and NT$33,843,993 for director/ supervisor compensation. Employee bonus will be appropriated in cash.
It was estimated that a total of NT$56,406,654 be appropriated for 2014 with NT$22,562,661 to employee bonus and NT$33,843,993 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, 2015, 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 CO.,LTD	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	5,023,285	0.38%
TOTAL		5,023,285	0.38%

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