PSC - Annual Report 2020 | FinancialReports.eu

Stock Code: 2855 www.pscnet.com.tw

2020 ANNUAL REPORT

Notice to readers

This English-version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.

2020 Annual Report is available at: Taiwan Stock Exchange Market Observation Post System http://mops.twse.com.tw/

Table of Content
I. A Letter to Shareholders	1
II. Company Profile	3
III. Corporate Governance	5
Business Organization	5
Directors’, Supervisors’ and Managers’ Information	7
Implementation of Corporate Governance	30
Information Regarding the Company’s Audit Fee and Independent Auditor	80
Replacement of CPA	81
Information Regarding the Company’s Chairman, President, or managers responsible for financial and
accounting affairs who have held any position in the accounting firm or its affiliates	81
Net Change in shareholdings and in shares pledged by directors, supervisors, manages, and shareholders
holding more than a 10% share in the Company	82
Information Disclosing the Relationship between any of the Company’s Top Ten Shareholders	85
Ownership of Shares in Affiliated Enterprises	86
Name and position of the employees with the top ten amounts of bonuses as well as the total amounts
of the top ten bonuses	86
Training of Directors and Supervisors	87
Manager Learning	91
IV. Capital Structure	92
Shareholders’ equity	92
Long-Term Borrowings	96
Issuance of Preferred Stocks	96
Issuance of Global Depositary Receipts	96
Issuance of Employee’s Stock Options	96
Merge and Acquisition	96
Working Capital Plans	96
V. Business Environment	97
Description of Business Activities	97
Market Conditions	116
Employee Data	122
Environmental Protection and Corporate Citizenship	123
Labor Relations & Employee Benefit	124
Material Contracts and Agreements	133

VI. Financial Information	134
Five-Year Financial Summary	134
Financial Analysis for the Past Five Years	138
Audit Committee’s Review Report on the Company’s 2020 Financial Statement	141
Financial Difficulties that will Affect the Company’s Financial Situation	142
Status of the Achievement in Financial Forecasts for the Latest Two Years	142
Methods and Assumptions used for Evaluating Fair Value of Financial Instruments	142
Hedge Accounting Applied to Financial Instruments	142
VII. Financial Status, Operating Results and Risk Management	143
Financial Status	143
Analysis of Operating Results	143
Analysis of Cash Flow	144
Effects of Major Capital Expenditures in the Most Recent Fiscal Year on Financial Operations	145
Long-term Investment Policy	145
Analysis of Risk Management	145
Other significant events	154
VIII. Other Disclosures	155
Consolidated Business Report of Affiliated Companies, Consolidated Financial Statements of Affiliated
Companies, and Reports of Affiliation	155
Private placement of marketable securities	158
Holding or disposal of the company’s shares by the subsidiaries	158
Other Necessary Supplement	158
IX. Occurrences of items that may give rises to substantial impact on shareholders’
interests and/or stock price	159
X. Financial Statements	160

I. A Letter to Shareholders

Dear Shareholders,

The overall global economy experienced depression due to COVID-19 pandemic in 2020. The U.S. has quickly pursued monetary and fiscal policies, but failure to implement timely containment measures due to underestimation of the seriousness of the pandemic has resulted in the spread of the disease and economic recession. In Europe, despite the European Central Bank’s urgent debt purchase measures, the slow finalization of fiscal policies and the implementation of the second lockdown measure have led to a significant economic downturn. However, the China government promptly adopted drastic containment measures and therefore was able to control the pandemic. In the meantime, fiscal policy and monetary policy were adopted to stabilize the economy. With the expansion of production and sales of medical equipment, a V-shaped recovery has been achieved. Domestically, according to the Directorate-General of Budget, Accounting and Statistics of the Executive Yuan, the economic growth rate has increased from 2.96% in 2019 to 3.11% in 2020, mainly due to proper control of domestic epidemic, which did not have significant impact on people’s lives. The digital transformation and long-distance business opportunity brought by global pandemic has increased the demand for semiconductor and electronic components, and eventually supported the fundamentals of economy. In Taiwan stock market, TAIEX fell from 11,997 points to 8,523 points due to panic caused by the pandemic in the first quarter of 2020. With quantitative easing measures implemented by major countries, coupled with the successful domestic containment measures, the economic fundamentals have recovered at a fast pace. TAIEX rose quarter by quarter to 14,732 points, an annual increase of 2,735 points at a rate of 22.8% .

The Company had outstanding performance in 2020, with annual revenue of NT$8,472,984 thousand, operating costs of NT$640,092 thousand, operating expenses of NT$4,310,637 thousand, non-operating net income of NT$404,341 thousand, profit before tax of NT$3,926,596 thousand, and net income of NT$3,607,518 thousand, set a new high since the establishment of the company, while the after tax EPS stood at NT$2.58, ranking 2nd among the top 12 integrated securities firms.

In brokerage business, the market share in 2020 was 3.23%, which decreased from the previous year. However, the trading in stock market was hot with surging trading volume and financing balance, resulting in a remarkable profit. In view of the future development of the internet and mobile communication technology, the Company also actively invested in the building up of digital and mobile-related services and platforms to strengthen the operation of social media, hoping to expand the customer base and enhance customer satisfaction.

In terms of the underwriting business, the Company served as lead underwriter for 8 cases and a co-underwriter for 43 cases throughout the year; the total value of underwriting was NT$3.81 billion.With the highly experienced team, the Company intends to win quality clients in industries that have forward-looking development opportunities, and intends to provide high-quality underwriting services to assist clients to achieve their goals, including going public, raising funds from the primary market, private placement, or M&A.

As for the proprietary trading business,the global financial market experienced a significant decline in the first quarter of 2020 under the impact of the pandemic outbreak. As major economies quickly adopted market-saving measures, the financial market stabilized and went high quarter by quarter. Although the dealer business suffered loss in the first quarter due to the pandemic, losses were managed by a rigorous risk-control mechanism. Later on, the loss turned into profit with surge in global stock market. The fixed income business benefited from rapid interest rate cuts and quantitative easing measures implemented by major countries, resulting in lower market interest rates and strong profit performance. In financial product business, six more ETNs were issued in 2020 and the product range was gradually expanded. We will continue to release new ones in the future with product differentiation strategy. In the futures dealer business, the Company uses econometrics to seek profit-making opportunities caused by market panics across time zones and markets.

While developing businesses to generate profit, the Company continued to maintain its good rating in corporate governance evaluations. In 2020, the Company further promoted the principle of fair client treatment in accordance with the requirements of laws and regulations from the competent authorities and further promoted the completeness of corporate governance to a higher level. From risk-management perspective, the Company continued to strive to improve the overall risk-management mechanism and inspect all risk indicators through automation so that all business activities could be developed in a safe and stable environment. The Company’s outstanding performance and market position have

President Securities Corporation

also been recognized by Taiwan Ratings. In 2020, the Company has been granted “twA” and “twA-1” for long- and shortterm credit rating, respectively, the same as the previous year.

In corporate social responsibility, the Company actively participated in community care. In 2020, the Company sponsored “Love to rural areas” financial education in Wuta Elementary School in Nan-Ao Township, Yilan County, and was awarded the Bronze medal of the Fourth CSR competition held by PwC Taiwan. In employee care, the Company continues to create a healthy workplace environment and has received recognition of “Taiwan I Sports” for three consecutive years from the Sports Administration, Ministry of Education. This year, the Company participated in the competition of Taiwan Corporate Sustainability Award for the first time and received the Corporate Sustainability Report Gold Award in the Financial and Insurance Industry Group. This shows that the Company’s Corporate Responsibility Report had addressed a considerable number of issues that are of concern to most stakeholders.

Looking forward to 2021 , governments of various countries have started the vaccination process after vaccines became available. It is believed that the disease will gradually be controlled. International trade, cargo transportation and personnel transportation can gradually return to normal. In the domestic economy, the demand for remote business opportunities and digital transformation is expected to continue, driving the growth in sales of the semiconductor industry and the electronic components industry. Directorate-General of Budget, Accounting and Statistics expects that the economic growth rate can be increased to 4.46% this year.

The performance of President Securities over the past years was proactive and steady. Faced with a future full of uncertainties, the Company shall continue to work hard to uphold our stable long-term business strategies and implement various mechanisms for risk and internal control management as we actively enhance the Company’s operating structure and competitiveness in various businesses. We aim to provide high value-added and comprehensive financial services that exceed customer expectation and maximize value for the Company and shareholders.

I hereby extend my most sincere gratitude to our shareholders for your long-term trust and support of President Securities. I wish you all good health and prosperity.

Chairman: Lin, Kuan-Chen President: Tsai, Sen-Bu

2020 Annual Report

II. Company Profile

Incorporated

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1988 1991 1995
President Securi�es Co., Ltd. was incorporated Merged with Tung-Hsin, Tung-Yung, Increased capital to NT$7.03 billion.
through the memorandum of Securi�es and Futures Commission, Ministry of Finance with the le�er No. (77) Taiwan-Finance-Securi�es-(II)- Tung-Wen, Tung-Ku, Tung-Fu, Tung-Yu, Tung-Hsing, Tung-Wang, Tung-Lai securi�es agencies. Became the first Asian securi�es company to acquire the ISO9002 service quality cer�fica�on.
20093 in November 19th. Established new branches in SanMin, Xin Taichung,
Founding capital of NT$1.4 billion increased and Hsinying, bringing the total number of branches
to actual paid-in capital of NT$3.362 billion to 16.
a�er the merger.
Amended business name to President Performed capital infusion; capital stock Established new branches in
Securi�es Corp. on March 4th. a�er infusion amounted to NT$4.02 Yenping, Taoyuan, Sanchung,
Commencement of official opera�ons on billion. Tunghsing, and Fengyuan.
April 3rd.
1996
1989 1994
2009 2007
Executed capital reduc�on through Long-term credit ra�ng was upgraded from twA-
cancella�on of treasury stock, capital to twA, and short-term credit ra�ng was
stock a�er asset reduc�on amounted to upgraded from twA-2 to twA-1.
NT$11.857 billion. Converted retained earnings to paid-in capital,
capital stock a�er infusion amounted to
NT$11.768 billion.
Obtained trust business license issued by FSC. Issued the first unsecured conver�ble corporate bond in Taiwan, and received NT$ 3 billion from the offering in May.Established PSC Xiamen business office in China on August
Converted retained earnings to paid-in 22nd.
capital, capital stock a�er infusion
amounted to NT$12.319 billion. Converted retained earnings to paid-in capital, capital stock
a�er infusion amounted to NT$12.157 billion.
2010 2008
2012 2014
Converted retained earnings to paid-in Established an Offshore Securi�es Unit (OSU) in July .
capital, capital stock a�er infusion Established new branches in Xinzhuang, Zhubei,
amounted to NT$13.231 billion. Zhunan, and Xin Taoyuan, bringing the total number
of branches to 39.
Acquired the brokerage business of Standard
Chartered Bank in Taiwan.
Established remunera�on Commi�ee.
The total branches remain 35 (including head office.) . Established an Audi�ng Commi�ee in
Converted retained earnings to paid-in capital. The June.
capital stock a�er infusion amounted to NT$13.046 Opened a new branch in Pingzhen,
billion. bringing our total number of branches to
Conducted a capital reduc�on by cancelling treasury 40 (Including our headquarters) in
stocks in December. The capital became NT$12.845 October.
billion.
2015
2011 2013
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President Securities Corporation

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1998 2000
Executed capital infusion; capital stock In August, acquired Ta Feng Securi�es Co., Ltd.
a�er infusion amounted to NT$10.18
Converted retained earnings to paid-in capital,
billion in May.
capital stock a�er infusion amounted to
NT$12.255 billion.
Executed capital infusion; capital stock a�er Obtained official approval for OTC lis�ng.
infusion amounted to NT$8.08billion. Converted retained earnings to paid-in Executed capital reduc�on through
Established new branches in Tianmu, capital, capital stock a�er infusion cancella�on of treasury stock, capital
Banqiao, Hankou, Tali, and Sanduo. The amounted to NT$10.91 billion. stock a�er asset reduc�on amounted to
business offices were increased to 26 Rated as “twBBB” and “twA-3” for long-term NT$11.279 billion.
(including head office). and short-term credits, respec�vely, by
Taiwan Ra�ng Corp.
1997 1999 2001
2006 2003
Obtained business license for wealth management.
Received the 6th annual Na�onal Charity Award, Obtained business license for structured
and was the only for-profit business en�ty among notes; Fixed Income business unit
twelve recipients. licensed as the main dealer for business
opera�on of government bonds issued by
Executed capital reduc�on through cancella�on of Central Bank of the Republic of China.
treasury stock, capital stock a�er asset reduc�on
amounted to NT$11.37 billion.
Opened East Tainan Branch, Neihu Branch and Renai Branch. The
business offices increased to 35 (including head office). Listed on TWSE in September.
Long term credit ra�ng was upgraded from twBBB to twBBB+ in Executed capital reduc�on through
September, and was again upgraded to twA- in December. cancella�on of treasury stock, capital
Executed capital reduc�on through cancella�on of treasury stock, stock a�er asset reduc�on amounted to
capital stock a�er asset reduc�on amounted to NT$11.4499 billion. NT$11.46 billion.
2004 2002
2016 2019
Conducted a capital reduc�on by canceling treasury stocks in Conducted a capital reduc�on by cancelling treasury stocks in May. A�er
February and May. The capital became NT$13.037 billion and the capital reduc�on, the total share capital was around NT$13.723
NT$12.952 billion. billion; at that �me business was terminated at Xindian Branch, bringing
Converted earnings to paid-in capital in August, growing the capital the number of branches to 35. Business was terminated at Xinzhuang
to NT$13.356 billion. Branch in July, so that the number of ac�ve branches declined to 34.
The branches in Tali, Yenping, and SanMin terminated opera�ons in The Fengyuan, Ku�ng, and Xin Taoyuan branches were closed for
October , causing that the total number of branches reduced to business in November, so that the number of branches declined to 31,
37(including our headquarters). including the Head Office.
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In August, a capitaliza�on of earnings was conducted. A�er an increase in capital, the share capital was NT$13.98 billion. In September, the first cross-strait joint venture securi�es firm, Jin Yuan President Securi�es Corpora�on Limited, was officially opened.

The branch in Zhubei terminated opera�ons in May, causing that the total number of branches reduced to 36(including our headquarters). The Company transferred earnings to paid-in capital in August. The capital a�er capital increase was NT$13.904 billion. 2017

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2020
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2020 Annual Report

III. Corporate Governance

I. Business Organization

A. Organizational Chart

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Administration Dept.
Shareholders’ Meeting
Finance Dept.
Board of Directors
Information System Dept.
Audit Committee
Risk Management
Committee Settlement & Clearing Dept.
Risk Control Office
Remuneration
Committee Financial Product Dept.
Ethical Corporate
Auditing Office
Management Practice
Team Proprietary Trading Dept.
Chairman of the Board
Fixed Income Dept.
President
Capital Market Dept.
Corporate Client Dept.
Assets & Liabilities
Management Committee
Quantitative Trading Dept.
President Office
Shareholder Services Dept.
Compliance Division
Wealth Management and
Trust Dept.
Brokerage Dept.
Global Institutional
Service Dept.
Offshore Securities Unit
Digital Business Department
E-Trade Department
Branches
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President Securities Corporation

B. Function of Each Division

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Division Function
 Accept orders from clients to buy/sell listed securities and forward to TWSE for execution.
 Accept orders from clients to buy/sell listed securities and forward to TPEx for execution.
 Manage custodial services for clients.
 Provide margin financing for securities trading.
 Securities Borrowing and Lending Business.
Brokerage  Borrowing or Lending Money in Connection with Securities Business
 Conduct Borrowing and Lending of Funds for Unrestricted Purposes.
 Accepting orders to trade Foreign Securities.
 Futures Introducing Broker Business.
 Electronic transaction operations.
 Customer service coordination process.
 Issue domestic and foreign equity warrants and conduct hedging strategies.
 Launch structured products and conduct hedging strategies.
 Convertible bond asset swap and options business.
Financial
 Trading of equity derivatives.
Products
 Exchange-traded Note (ETN) Issuance and Hedging Operations.
 New financial product design and development.
 Other derivatives financial products approved by the competent authority.
 Trading of publicly listed securities on the TWSE and TPEx, using President Securities’ own funds.
Proprietary  Trade futures and options markets as a futures trader.
Trading  Expand international investment business involving legally-permitted overseas spot/futures market
research and investments.
 Use own capital to trade domestic and foreign corporate and government bonds in the OTC market.
 Offer tendering services of Taiwan government bonds.
 Repo and Reverse-Repo transactions.
 Trade overseas and domestic convertible bonds.
Fixed Income
 Provide debt capital market services for overseas and domestic issuers.
 Provide financial market services and product to financial institutions and corporate clients.
 Provide customized structured products for clients.
 Designed Bond Exchange-Traded Notes.
 Assist corporations in application for public listing on TWSE or TPEx.
 Assess and advise clients with respect to capital increase plans and applications to convert private
Capital Market equity into publicly traded stocks.
(Underwriting)  Underwrite domestic and foreign corporate bonds and foreign financial products.
 Assist in M&A activities; provide consulting services on corporate finance and other specialized areas.
 Other various types of underwriting business and financial advisory business.
 Market making and trading of futures and options contracts on the TAIFEX.
 Market making and trading of legally-permitted foreign futures and options contracts.
Quantitative  ETF arbitrage, market making, hedging, and trading.
Trading  Spot and futures arbitrage and trading.
 Structured products issuing and trading.
 Spread and volatility arbitrage of domestic and foreign futures/options products.
 Coordinate shareholder services on behalf of publicly listed companies.
 Assist in the coordination of shareholders’ meetings.
Shareholder
 Coordinate the distribution of cash and/or stock dividends to shareholders.
Services
 Manage the issuance and delivery of tax forms to shareholders.
 Respond to shareholder enquiries and legal issues.
 Provide customers with wealth management consulting.
 Provide a variety of trading services and products for wealth management, including domestic and
Wealth overseas funds, foreign bonds, structured products, and bonds with repurchasing agreements.
Management &
 Conduct asset allocation for customers through trusts.
Trust
 Negotiable securities trust lending business.
 Employee Stock Ownership Trust business.
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2020 Annual Report

II. Directors’, Supervisors’ and Managers’ Information

A. Directors

1. Information Regarding Directors

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April 19, 2021
Executives, Directors or
Shareholding
Shareholding when Spouse & Minor Supervisors Who are Spouses
Title Nationality Name ElectedDate Gender (Until)Term Date (FirstElected) Elected Current Shareholding Shareholding Arrangementby Nominee Experience (Education) Current Position with PSC and Other Company or within Two Degrees of Kinship
Shares % Shares % Shares % Shares % Title Name Relation
Kai Nan
Investment 2018.6.21 2021.6.20 2000.6.8 39,831,460 2.85 40,628,089 2.90 0 0 0 0 NA NA NA NA NA
Co., Ltd.
1. National Taiwan Sport University 1. PSC: NA
2. Vice Chairman and President of President 2. Other Company:
Securities Corporation
• Chairman:
3. Chairman of President Futures Corp. Richness Cereal Trading Co., Ltd.
Chairman 4. Director of Taiwan Futures Exchange • Director:
Delegate: 5. Chairman of Richness Cereal Trading Co., President Futures Corp., Taiwan
Republic of China Lin, Kuan-Chen 2018.6.21 M 2021.6.20 2018.6.21 3,000,000 0.22 3,100,000 0.22 1,020,000 0.70 0 0 6. Director and President of Fonmau Cereal Ltd. Futures Exchange, Q-WARE Systems & Services Corp., President Securities (HK) Ltd., President Securities (BVI) NA NA NA
Industrial Co., Ltd. Ltd., President Securities (Nominee)
7. Director of Q-WARE Systems & Services Ltd., President Wealth Management
Corp. (HONG KONG) Ltd., Jin Yuan
President Securities Ltd.
8. Director of President Securities Corporation • Director and President:
Fonmau Cereal Industrial Co., Ltd.
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Executives, Directors or
Shareholding
Shareholding when Spouse & Minor Supervisors Who are Spouses
Title Nationality Name ElectedDate Gender (Until)Term Date (FirstElected) Elected Current Shareholding Shareholding Arrangementby Nominee Experience (Education) Current Position with PSC and Other Company or within Two Degrees of Kinship
Shares % Shares % Shares % Shares % Title Name Relation
Kai Nan
Investment 2018.6.21 2021.6.20 2000.6.8 39,831,460 2.85 40,628,089 2.90 0 0 0 0 NA NA NA NA NA
Co., Ltd.
1. Ph.D. in Finance, National Chung Hsing 1. PSC: NA
University, R.O.C.
2. Other Company:
2. MBA of National Taiwan University,
R.O.C. • Vice President:
3. Manager of President International Uni-President Enterprises Corp.
Development Corp. • President:
4. Manager of Uni-President Enterprises Champ Green (Shanghai) Consulting
Corp., Treasury Division Co., Ltd.
5. Vice President of Uni-President Enterprises • Director and President:
Corp., Business Integration Division
United Advisor Venture Management
6. Director of President Securities Corporation Ltd.
7. Director of President International • Director:
Development Corp.
President International Development
8. Director of Presco Netmarketing, Inc. Corp., Presco Netmarketing, Inc.,
9. Director of Kuang Chuan Dairy Co., Ltd. Kuang Chuan Dairy Co., Ltd., Kuang
Chuan Foods Ltd., Tait Marketing
10. Director of Kuang Chuan Foods Ltd. & Distribution Co., Ltd., Changhua
11. Director of Tait Marketing & Distribution County Chang Chun-Ya Private
Director Co., Ltd. Social Welfare Charity Foundation,
Delegate: 12. Director of Changhua County Chang Yantai North Andre Juice Co., Ltd.,
Republic of China Liu, Tsung-Yi 2018.6.21 M 2021.6.20 2015.6.18 0 0 0 0 0 0 0 0 Chun-Ya Private Social Welfare Charity Foundation Champ Green Capital Limited, SMS Capital Management Ltd., SMS Investment Management Co., Ltd., NA NA NA
13. Director of Yantai North Andre Juice Co., SMS Capital Co., Ltd., Shanghai
Ltd. Shunfeng Restaurant Group Co., Ltd.,
14. Director of Champ Green Capital Huasui Tomato Investment Company,
Woongjin Foods Co., Ltd., Daeyoung
15. Director of SMS Capital Management Ltd. Foods Co., Ltd., Uni-president(Korea)
16. Director of SMS Investment Management Co., Ltd.
Co., Ltd.
17. Director of SMS Capital Co., Ltd.
18. Director of Shanghai Shunfeng Restaurant
Group Co., Ltd.
19. Director of Huasui Tomato Investment
Company
20. Director of Woongjin Foods Co., Ltd.
21. Director of Daeyoung Foods Co., Ltd.
22. Director of Uni-President(Korea) Co., Ltd.
23. President of Champ Green (Shanghai)
Consulting Co., Ltd.
24. Director and President of United Advisor
Venture Management Ltd.
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Executives, Directors or
Shareholding
Shareholding when Spouse & Minor Supervisors Who are Spouses
Title Nationality Name ElectedDate Gender (Until)Term Date (FirstElected) Elected Current Shareholding Shareholding Arrangementby Nominee Experience (Education) Current Position with PSC and Other Company or within Two Degrees of Kinship
Shares % Shares % Shares % Shares % Title Name Relation
1. MBA of University of Strathclyde 1. PSC: NA
2. CFO of Uni-President Enterprises Corp. 2. Other Company:
3. CFO of Uni-President China Holdings Ltd. • Director:
4. Director of President Securities Corporation Uni-President China Holdings
Ltd. , President Enterprises (China)
5. Director of President Enterprises (China) Investment Co., Ltd. , Uni-President
Investment Co., Ltd. Hong Kong Holdings Limited, Uni-
President (Vietnam) Co., Ltd.,
President International Development
Republic of China Chen, Kuo-Delegate: 2018.6.21 M 2021.6.20 2017.11.3 0 0 0 0 0 0 0 0 Corp.Ltd. , Uni-President (Singapore) Pte. NA NA NA
Hui • Chairman:
Kai Yu (BVI) Investment Co., Ltd. 、
Tone Ren Enterprise Co., Ltd.
• Supervisor:
Champ Green (Shanghai) Consulting
Co., Ltd., United Advisor Venture
Management Co., Ltd.
• Vice President:
Uni-President Enterprises Corp.
1. M.S., Dept. of Business Administration, 1. PSC: NA
National Cheng Kung University
2. Other Company:
2. Vice President of ScinoPharm Taiwan Ltd.
(Administraion Center ) • Vice President (Secretarial the Board
of Directors)
Director Delegate: 3. Vice President of President International President Chain Store Corp.
Republic of China Hong, Hui-Hsieh 2018.6.21 F 2021.6.20 2001.3.21 54,569 0 55,660 0 17,892 0 0 0 4. Chief Audit Officer of President Chain Development Corp.(F&A Divison) NA NA NA
Tzu Store Corp.
5. Director of President Securities Corporation
1. Master of Business Administration/Institute 1. PSC: NA
of Financial Management, National Sun
Yat-sen University 2. Other Company:
2. Vice President of IBT Securities Co., Ltd. • Vice President of Administration:
ScinoPharm Taiwan Ltd.
3. Assistant Manager of Taiwan International
Securities Corporation • Director:
4. Division Head of Treasury Division, Uni- President Transnet Corp.
Republic of Delegate: 2018.6.21 F 2021.6.20 2015.6.18 0 0 0 0 0 0 0 0 President Enterprises Corp. • Supervisor : NA NA NA
China Lu, Li-An 5. Director of President Transnet Corp., Tong Kuan Enterprise Co., Ltd.
President Collect Service Corp.
6. Supervisor of Tong Kuan Enterprise Co.,
Ltd.
7. Director of President Securities Corporation
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Executives, Directors or
Shareholding
Shareholding when Spouse & Minor Supervisors Who are Spouses
Title Nationality Name ElectedDate Gender (Until)Term Date (FirstElected) Elected Current Shareholding Shareholding Arrangementby Nominee Experience (Education) Current Position with PSC and Other Company or within Two Degrees of Kinship
Shares % Shares % Shares % Shares % Title Name Relation
Hui Tung
Investment 2018.6.21 2021.6.20 1994.10.29 10,199,544 0.73 10,403,534 0.74 0 0 0 0 NA NA NA NA NA
Co., Ltd.
1. Department of International Business 1. PSC: NA
Soochow University
2. Other Company:
2. Vice Chairman of Hui Tung Enterprise
Corp. • Chairman:
Chieforce Corp.
Director 3. Director of HHB Geriatric Healthcare Corp. • Vice Chairman:
Republic of China Delegate: Lee, Chi- 2018.6.21 M 2021.6.20 2018.6.21 0 0 0 0 0 0 0 0 4. Director of Hui Tung Investment Co., Ltd.5. Director of Japan Asia Specialities Co., Ltd. • Director:Hui Tung Enterprise Corp. NA NA NA
Ming
6. Director of President Securities Corporation Hui Tung Investment Co., Ltd. , HHB
Geriatric Healthcare Corp. , Japan
Asia Specialities Co., Ltd., Zhao
Tung Corp., Chao Tung Corp., Union
Chinese Corp., Chang Kun Housing
Corp., Point Deco Co., Ltd., Huai Ren
International Co., Ltd.
Leg Horn
Investment 2018.6.21 2021.6.20 1988.11.26 12,408,018 0.89 12,656,178 0.90 0 0 0 0 NA NA NA NA NA
Co., Ltd.
1. BBA in Business Administration, Soochow 1. PSC: NA
Director University 2. Other Company:
Delegate: 2. Accounting Manager of Leg Horn
Republic of China Chang, Ming- 2018.6.21 F 2021.6.20 1990.3.30 1,185,670 0.08 1,209,383 0.09 0 0 0 0 Investment Co., Ltd. • Director and Accounting Manager:Leg Horn Investment Co., Ltd. NA NA NA
Chen 3. Director of Leg Horn Investment Co., Ltd.
4. Director of President Securities Corporation
Ta Le
Investment
2018.6.21 2021.6.20 2000.6.8 7,172,615 0.51 7,316,067 0.52 0 0 0 0 NA NA NA NA NA
Holding
Co., Ltd.
1. National Tainan Girl’s Senior High School 1. PSC: NA
2. Chairman of Ta Le Investment Holding 2. Other Company:
Director Co., Ltd.
• Chairman:
Republic of China Delegate: Tu, Li- 2018.6.21 F 2021.6.20 2000.6.8 0 0 514,104 0.04 0 0 0 0 3. Director of Litz's Enterprise Ltd.4. Director of Strong Team International Inc. Ta Le Investment Holding Co., Ltd., Litz’s Enterprise Ltd. NA NA NA
Yang 5. Director of President Securities Corporation • Director:
Strong Team International Inc., Kao’s
Express Warehouse & Stevedoring Co.,
Ltd.
11
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Executives, Directors or
Shareholding
Shareholding when Spouse & Minor Supervisors Who are Spouses
Title Nationality Name ElectedDate Gender (Until)Term Date (FirstElected) Elected Current Shareholding Shareholding Arrangementby Nominee Experience (Education) Current Position with PSC and Other Company or within Two Degrees of Kinship
Shares % Shares % Shares % Shares % Title Name Relation
China F.R.P
2018.6.21 2021.6.20 1994.10.29 5,392,415 0.39 10,200,000 0.73 0 0 0 0 NA NA NA NA NA
Corp.
1. Ming Chuan University 1. PSC: NA
2. Accounting Deputy Manager, Auditing 2. Other Company:
Director Manager of Eternal Materials Co., Ltd.
Delegate: • Consultant:
Republic of China Lee, Shu- 2018.6.21 F 2021.6.20 2015.6.18 0 0 0 0 0 0 0 0 3. Director of President Securities Corporation China F.R.P Corporation NA NA NA
Fen • Employee:
Kao Ying-Shih Chinese Culture
Collection Educational Foundation of
Kaohsiung.
1. Master of Business Administration, 1. PSC: NA
University of Dallas
2. Other Company:
2. Chairman of Shun Fu Tai Industrial Co.,
Ltd. • Chairman:
Shun Fu Tai Industrial Co., Ltd. , Yao-
3. Chairman of Yao-Jun Technology Inc. Jun Technology Inc.
Director Republic of China Duh, Bor-Tsang 2018.6.21 M 2021.6.20 2012.6.22 4,189,946 0.30 4,273,744 0.31 2,244,898 0.16 0 0 4. Chairman of My-Semi Inc.5. Director of President Securities Corporation • Director:My-Semi Inc., Midori Inc. , NANTEX NA NA NA
Industry Co., Ltd.
6. Director of Shin Lin Investment Inc.Morioka Investment Inc., Lillian , • Supervisor:
Investment Co., Ltd. , Midori Inc. Lillian Investment Co., Ltd.
7. Supervisor of Konten Networks Inc. ,
NANTEX Industry Co., Ltd.
1. National Pingtung University of Science 1. PSC: NA
and Technology of Forestry
2. Other Company:
2. Chairman of Teh Long Warehousing &
Director Republic of China Lee, Shy-Lou 2018.6.21 M (Note2) 1997.6.23 8,380,640 0.60 8,548,252 0.61 0 0 0 0 Stevedoring Co., Ltd. • Chairman:Teh Long Warehousing & Stevedoring NA NA NA
3. Chairman of Grown Field Co., Ltd. Co., Ltd. , Grown Field Co., Ltd.
4. Director of President Securities Corporation
1. Golden Gate University, MBA in Finance 1. PSC: NA
2. Chairman of United Investment Ptd. Ltd. 2. Other Company:
3. Assistant Vice President of Tainan Spinning • Chairman:
Co., Ltd. United Investment Pte. Ltd., United
Investment Pte. Ltd.(Taipei)
4. Director of President Securities Corporation
• Director and President:
T.S. Retail and Distribution Co.
Director Republic of China Jing-YauJuang, 2018.6.21 M 2021.6.20 2018.6.21 3,000 0 3,060 0 0 0 0 0 • Director: NA NA NA
Q-Ware Systems & Services Corp.,
Eten Technologies Inc., NANTEX
Industry Co., Ltd., Nan Fan
Development Co., Ltd., Nan Fan
Housing Co., Ltd., Universal Venture
Capital Investment Corp.
• Assistant Vice President:
Tainan Spinning Co., Ltd.
12
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Executives, Directors or
Shareholding
Shareholding when Spouse & Minor Supervisors Who are Spouses
Title Nationality Name ElectedDate Gender (Until)Term Date (FirstElected) Elected Current Shareholding Shareholding Arrangementby Nominee Experience (Education) Current Position with PSC and Other Company or within Two Degrees of Kinship
Shares % Shares % Shares % Shares % Title Name Relation
1. MBA, George Washington University 1. PSC: Member of Audit Committee
/ Remuneration Committee / Risk
2. Department of Finance, Shih Hsin Management Committee , Supervisory
University Associate Professor / Assistant personnel of Trust
Professor
2. Other Company:
3. Independent Director of President Securities
Independent Republic of Liang, 2018.6.21 F 2021.6.20 2015.6.18 0 0 0 0 0 0 0 0 Corporation • Associate Professor: NA NA NA
Director China Yann-Ping 4. Vice President of Hua Nan Investment Shih Hsin University
Trust • Member of Self-disciplinary
5. Vice President of Polaris Securities Committee:
Investment Trust Unique Satellite Television (USTV)
6. Chairman of Department of Finance,
MingDao University
1. Ph.D. in Law, Chinese Culture University 1. PSC: Member of Audit Committee
/ Remuneration Committee / Risk
2. Vice Chariman of China Petrochemical Management Committee
Development Corporation
2. Other Company:
3. Chariman of The First Leasing Corp.
• Chairman:
4. Chairman of Bo-Meng Investment Co., Ltd.
The First Leasing Corp. , Bo-Meng
5. Independent Director of President Securities Investment Co., Ltd.
Independent Republic of Pai, Chun- 2018.6.21 M 2021.6.20 2018.6.21 0 0 0 0 0 0 0 0 Corporation • Vice Chairman: NA NA NA
Director China Nan 6. Independent Director of Megaforce China Petrochemical Development
Company Ltd. Corporation
7. Director of Core Pacific City Co., Ltd. • Independent Director:
8. Director of Taivex Therapeutics Megaforce Company Ltd.
Corporation • Director:
9. Director of Wei Lih Food Industrial Co., Wei Lih Food Industrial Co., Ltd.,
Ltd. Taivex Therapeutics Corporation, BES
Engineering Corp.
1. The University of Iowa, MBA 1. PSC: Member of Audit Committee
/ Remuneration Committee / Risk
2. Executive Vice President of Chunghwa Management Committee
Telecom Co., Ltd.
2. Other Company:
3. Director of Chunghwa Investment
Company • Venture partner:
Independent Director Republic of China Yung-FongSong, 2018.6.21 M 2021.6.20 2018.6.21 0 0 0 0 0 0 0 0 4. President of Chunghwa Investment Leadsun Investment & Asset Management Ltd. NA NA NA
Company
• Supervisor:
5. Director and President of Deutsche Bank Zhi Nong Green Power Investment
Taiwan Co., Ltd.
6. Independent Director of President Securities
Corporation
1. Department of Economics, Soochow 1. PSC: Member of Audit Committee
University / Remuneration Committee / Risk
Management Committee/Offshore
2. Independent Director of Himax Technologies, Inc. Structured Products review teamSupervisory personnel of Trust ,
Independent Republic of Horng, Yuan- 2018.6.21 M 2021.6.20 2018.6.21 0 0 0 0 0 0 0 0 3. Vice President of Finance Division of China Steel Corporation 2. Other Company: NA NA NA
Director China Chuan 4. Chairman of Gains Investment Corp. • Independent Director:
Himax Technologies, Inc.
5. Director of Kaohsiung Rapid Transit
Corporation
6. Independent Director of President Securities
Corporation
13
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Note 1: The shareholding ratio was calculated based on the 1,399,837,829 shares of the share capital of President Securities Corporation.

Note 2: Director Lee, Shy-Lou resigned on 2020.10.15. Note 3: The information above is based on April 1, 2021. And the shareholding condition is based on April 19, 2021.

2. Major Shareholders of PSCʹs Institutional Shareholders

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April 19, 2021
PSC's Institutional
Major Shareholders of PSC's Institutional Shareholders (Holding Percentage) (Note2)
Shareholders (Note1)
Leg Horn Investment Co.,
Chang, Pin-Tang (45.05%), Chang, Benjamin Pin-Yen (49.25%)
Ltd.
Hui Tung Investment Co.,
Lee, Tong-Liang (44.88%), Hsu, Jui-Chung (15%), Lee, Pei-Shan (12.44%), Lee, Chi-Hung (12.44%), Lee, Chi-Ming (12.44%)
Ltd.
Ta Le Investment Holding Lee Ou Yang, Li-Chen (27.69%), Tu, Li-Yang (3.62%), Lee, Chia-Rong (4.62%), Lee, Yee-Ching(53.84%), Kao, Kuo-Lun(3.08%), Lee, Agnes(1%), Litz’s
Co., Ltd. Enterprise Ltd.(6.15%)
Kai Nan Investment Co., Ltd. Uni-President Enterprises Corp. (100%)
Canking Investment Co., Ltd. Teng, Wen-Hwi (26.35%), Teng, Jun-Tse (26.69%), Teng, Wen-Hsuan (26.35%), Yang, Yu-Chiao (10.67%)
Kao, Ying-Shih (23.39%), Jia Cheng Enterprise Ltd.(20.85%), Kao, Kuo-Lun(15.04%), Fumao Investment Co., Ltd.(7.25%), Lee, Chia-Rong (3.8%), Wu
China F.R.P Corp.
Hong, Siao-Gui (2.5%), Kao, Fu-Yu(2.5%), Yang, Chin-Lan(2.5%), Kao, Fu-Ting(2.00%), Wu, Su-Yun (1.45%)
Note 1: As the Company’s Directors and Supervisors belong to institutional shareholder representatives, the name of the institutional shareholders.
Note 2: The name of the major shareholders of the institutional shareholders and their shareholding ratio. If the major shareholders are corporations, their information is listed in the table below.
Institutional Shareholders of the Major Shareholders
April 19, 2021
Institutional Shareholders Major Shareholders of the Institutional Shareholders (Holding Percentage) (Note)
Kao Chyuan Inv. Co., Ltd. (4.93%), HSBC in custody for BNP Paribas Wealth Management Hong Kong Branch (3.04%), Hou, Po-Ming (2.60%),
Uni-President Enterprises Hou, Po-Yu (2.27%), Citi in custody for Government of Singapore-GOS-EFMC (2.17%), Cathay Life Insurance Co.,Ltd. (2.07%), Kao, Shiow-Ling
Corp. (1.64%), JP Morgan Chase Bank N.A. Taipei Branch in custody for Saudi Arabian Monetary Agency (1.64%), HSBC for Yungwang limited partnership
Fund Agency (1.49%), Vanguard Total International Stock Index Fund , a series of Vanguard Star Funds (1.43%)
Lee, Chia-Rong (7.21%), Ou Yang, Li-Chen (12.65%), Lee, Yee-Ching (15.39%), Lee, Wen-Fa (2.88%), Wu, Mei-Ying (2.88%), Ta Le Investment
Litz’s Enterprise Ltd.
Holding Co., Ltd.(49.37%), Kao, Fu-Yu(1.923%), Kao, Fu-Ting(1.923%), Kao, Fu-Cheng (1.923%), Lee, Alexander (1.923%), Lee, Agnes (1.923%)
Kao, Ying-Shih (3.07%), Kao, Kuo-Lun (7.44%), Lee, Chia-Rong (9%), New Genius Ltd (60%), Strong Team International Inc. (12%), Phuket
Jia Cheng Enterprise Ltd.
Investments Limited (9%)
Fumao Investment Co., Ltd. Jia Cheng Enterprise Ltd.(28.37%), Strong Team International Inc. (71.62%)
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Note: Name and holding percentage of the top ten shareholders of the Company’s institutional shareholders.

3. Professional qualifications and independence analysis of directors

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Criteria Meet One of the Following Professional Qualification Requirements, Together with at Least Five Years Work Experience Independence Criteria (Note) Number of Other
Public Companies
An Instructor or Higher Position A Judge, Public Prosecutor, Attorney, Have Work Experience in in Which the
Academic Department Related to the Law, Finance, Accounting, or Other Business Needs of the Company in in a Department of Commerce, Specialist Who has Passed a National Examination and been Awarded a Other Professional or Technical Certified Public Accountant, or Necessary for the Business Accounting, or Otherwise the Areas of Commerce, Law, Finance, or 1 2 3 4 5 6 7 8 9 10 11 12 ConcurrentlyServing as an Independent Individual is
Name a Public or Private Junior College, College or University Certificate in a Profession Necessary for the Business of the Company of the Company Director
Lin, Kuan-Chen Delegate of Kai P P P P P P P P 0
Nan Investment Co., Ltd.
Liu, Tsung-Yi Delegate of Kai P P P P P P P P P P 0
Nan Investment Co., Ltd.
Chen, Kuo-Hui Delegate of Kai P P P P P P P P P P 0
Nan Investment Co., Ltd.
Hsieh Hong, Hui-Tzu Delegate P P P P P P P P P P 0
of Kai Nan Investment Co., Ltd.
Lu, Li-An Delegate of Kai Nan P P P P P P P P P P 0
Investment Co., Ltd.
Chen, Ching-Yi Delegate of Kai P P P P P P P P P P 0
Nan Investment Co., Ltd.
Chen, Yi-Ling Delegate of Kai P P P P P P P P P P P 0
Nan Investment Co., Ltd.
Teng, Wen-Hwi Delegate of P P P P P P P P P P P 0
Canking Investment Co., Ltd.
Lee, Chi-Ming Delegate of Hui P P P P P P P P P P P 0
Tung Investment Co., Ltd.
Chang, Ming-Chen Delegate of P P P P P P P P P P P 0
Leg Horn Investment Co., Ltd.
Tu, Li-Yang Delegate of Ta Le P P P P P P P P P P P 0
Investment Holding Co., Ltd.
Lee, Shu-Fen Delegate of China P P P P P P P P P P P 0
F.R.P Corp.
Duh, Bor-Tsang P P P P P P P P P P P 0
Lee, Shy-Lou (Note1) P P P P P P P P P P P 0
Juang, Jing-Yau P P P P P P P P P P P P 0
Liang, Yann-Ping P P P P P P P P P P P P P P 0
Pai, Chun-Nan P P P P P P P P P P P P P P 1
Song, Yung-Fong P P P P P P P P P P P P P 0
Horng, Yuan-Chuan P P P P P P P P P P P P P 1
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Note1: Director Lee, Shy-Lou resigned on 2020.10.15.

Note2: Please tick the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during the term of office. Explanation of independence criteria 1 to 12 are as follows: 1.Not an employee of the Company or any of its affiliates.
2.Not a director or supervisor of the Company or any of its affiliates. (However, if the independent directors engaged concurrently by the Company, its parent company, and its subsidiary or a subsidiary under the same parent company in accordance with this Act or local laws and regulations, this requirement shall not apply).
3.Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.
4.Not a manager of the 1st subparagraph, or a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship of the persons 2nd and 3rd subparagraphs above.
5.Not a director, supervisor, or employee of a corporate shareholder who directly holds more than 5% of the Company’s total issued shares, who is among the top five shareholders, or who designates his or her representative to serve as a director or supervisor of the Company in accordance with Paragraph 1 or 2, Article 27 of the Company Act; (however, if the independent directors engaged concurrently by the Company, its parent company, and its subsidiary or a subsidiary under the same parent company in accordance with this Act or local laws and regulations, this requirement shall not apply).
6.Not a director, supervisor, or employee of another company where a majority of the Company’s director seats or voting shares and those of another company are controlled by the same person; (however, if the independent directors engaged concurrently by the Company, its parent company, and its subsidiary or a subsidiary under the same parent company in accordance with this Act or local laws and regulations, this requirement shall not apply.)
7.Not a director (or a managing director), supervisor, or employee of another company or institution where the Chairman, the President, or person holding an equivalent position of the Company and a person in an equivalent position at another company or institution are the same person or spouses; (however, if the independent directors engaged concurrently by the Company, its parent company, and its subsidiary or a subsidiary under the same parent company in accordance with this Act or local laws and regulations, this requirement shall not apply.)
8.Not a director, supervisor, officer, or shareholder holding 5% or more of the shares, of a specified company or institution which has a financial or business relationship with the Company.(However, if a specific company or institution holds more than 20% and no more than 50% of the total issued shares of the Company and if the independent directors engaged concurrently by the Company, its parent company, and its subsidiary or a subsidiary under the same parent company in accordance with this Act or local laws and regulations, this requirement shall not apply.)
9.Not a professional individual, or a spouse, who is an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that provides auditing services, commercial, legal, financial, accounting services or consultation to the Company or to any affiliate of the Company, the cumulative amount of payments obtained in the past two years has not exceeded NT$ 500,000. These restrictions do not apply to people whose duties are performed in accordance with the Securities and Exchange Act and the Business Mergers And Acquisitions Act or members of the Tender Offer Review Committee or the M&A Special Committee.
10.Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company.
11.Not been a person of any conditions defined in Article 30 of the Company Act.
12.Not a governmental, juridical person or its representative as defined in Article 27 of the Company Act.

B. Information regarding directors, supervisors, management team and branch manager

													April 1, 2021	April 1, 2021	April 1, 2021	April 1, 2021
Title	Nationality/ Country of Origin	Name	Gender	Date Elected	Current Shareholding		Spouse & Minor Shareholding		Shareholding by Nominee Arrangement		Experience (Education)	Other Position	Managers who are Spouses or Within Two Degrees of Kinship			The status of obtaining employee stock option certificates by Managers
					Shares	%	Shares	%	Shares	%			Title	Name	Relation
President Republic Of China Tsai, Sen-Bu M 2018.06.29					319,526 0.02 0 0 0 0 1. Vice President of President Securities Corporation 2. Senior Deputy Manager of China Bills Finance Corp. 1. Director of President Futures Corp. 2. Director of President Securities (HK) Ltd. 3. Director of President Securities (BVI) Ltd. 4. Director of President Securities (Nominee) Ltd. 5. Director of President Wealth Management (HK) Ltd. 6. Director of Jin Yuan President Securities Ltd.								NA NA NA NA
Proprietary Trading Department Executive Vice President Republic Of China Yang , Kai-Chih M 2018.08.29					139,151 0.01 0 0 0 0 1. Vice President of President Securities. 2. Assistant Vice President of President Securities. N/A								NA NA NA NA

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Current Spouse & Minor Shareholding Managers who are Spouses or The status
by Nominee of obtaining
Nationality/ Shareholding Shareholding Within Two Degrees of Kinship
Title Country of Name Gender Date Elected Arrangement Experience (Education) Other Position employee
stock option
Origin
Shares % Shares % Shares % Title Name Relation certificates by
Managers
1. Director of President Securities (HK) Ltd.
2. Director of President Securities (BVI) Ltd.
1. Assistant Vice President of
3. Director of President Securities (Nominee)
MasterLink Securities Corp. Ltd.
Finance Department Vice Republic Of An, Chi-Li F 2004.06.30 159,364 0.01 0 0 0 0 2. SVP of Ta Chong Bank LTD. 4. Director of President Wealth Management NA NA NA NA
President China 3. Head of Treasury of Barclays Bank (HK) Ltd.
PLC
5. Supervisor of President Insurance Agency
4. Treasurer of Societe Generale Co., Ltd
6. Chief supervisor of Jin Yuan President
Securities Ltd.
Quantitative 1. Vice President of Oriental Securities
Trading Department Vice Republic Of China Huang, Jung-Jen M 2009.03.26 109,503 0.01 0 0 0 0 2. Assistant Vice President of N/A NA NA NA NA
MasterLink Securities
President
1. Professional Vice President of
Financial Product Republic Of President Securities
Department Vice Pu, Chien-Heng M 2019.03.22 0 0 0 0 0 0 N/A NA NA NA NA
President China 2. Assistant Manager of Capital
Securities
Capital Market 1. Vice President of Taishin Securities
Republic Of
Department Vice China Wei, Chih-Hsu M 2020.11.10 0 0 0 0 0 0 2. Sales Assistant Vice President of Director of Fortune Industries Inc. NA NA NA NA
President Taiwan Securities
1. Senior Assistant Vice President of
Fixed Income Department Vice Republic Of Yeh, Ming- M 2020.12.24 0 0 0 0 0 0 President Securities. N/A NA NA NA NA
President China Chieh 2. Assistant Vice President of President
Securities.
Shareholder 1. Assistant Vice President of President
Services Republic Of Chueh, Chih- Securities
M 2021.04.01 95,182 0.01 0 0 0 0 N/A NA NA NA NA
Department Sales China Chung 2. Senior Vice President of Capital
Vice President Securities
President Office 1. Vice President of President Securities
Project Vice Republic Of China Lin, Chung-Heng M 2015.11.23 689,022 0.05 0 0 0 0 2. Special Assistant of Uni-President N/A NA NA NA NA
President Asset Management Corp.
1. Senior Manager of President
Auditing Office Republic Of Huang, Sha-Mei F 2018.03.14 0 0 0 0 0 0 Securities N/A NA NA NA NA
Chief Auditor China 2. Senior Project Manager of President
Securities
Administration 1. Assistant Vice President of President
Department Senior Republic Of Securities Director of President Insurance Agency Co.,
Yu, Hung-Chieh M 2018.07.01 839 0 0 0 0 0 NA NA NA NA
Assistant Vice China 2. Special Assistant of President Ltd.
President Securities
Information
1. Assistant Vice President of President
System Republic Of Securities
Department Senior Lin, Jung-Hui M 2020.07.01 86 0 0 0 0 0 Director of President Futures Corp. NA NA NA NA
Assistant Vice China 2. Senior Manager of President
Securities
President
17
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Current Spouse & Minor Shareholding Managers who are Spouses or The status
by Nominee of obtaining
Nationality/ Shareholding Shareholding Within Two Degrees of Kinship
Title Country of Name Gender Date Elected Arrangement Experience (Education) Other Position employee
stock option
Origin
Shares % Shares % Shares % Title Name Relation certificates by
Managers
Settlement
& Clearing 1. Assistant Vice President of President
Department Republic Of Wu, Sheng-Yu M 2019.06.18 16,424 0 0 0 0 0 Futures Corp. N/A NA NA NA NA
China
Assistant Vice 2. Manager of President Futures Corp.
President
1. Manager, Deputy Manager of
Compliance Republic Of President Securities
Division Assistant Hung, Ying-Che M 2008.03.19 55,741 0 0 0 0 0 N/A NA NA NA NA
Vice President China 2. Legal Specialist of Sam Shin Trading
Co. Ltd.
President Office
Corporate 1. Senior Manager of President
Governance Republic Of Chen, Nai-Chen F 2019.05.03 389 0 0 0 0 0 Securities Director (Representative of President NA NA NA NA
Assistant Vice China 2. Manager of President Securities Securities) of HuaVI Venture Capital Co.,Ltd.
President
Capital Market
1. Senior Manager of President
Department Republic Of Chang, Chin- M 2013.06.01 0 0 0 0 0 0 Securities N/A NA NA NA NA
Assistant Vice China Yung
President 2. Manager of President Securities
Finance
1. Senior Manager of President
Department Republic Of Su, Wei-Lun M 2016.06.20 0 0 0 0 0 0 Securities N/A NA NA NA NA
Assistant Vice China
President 2. Manager of President Securities
Financial Product
1. Senior Manager of President
Department Assistant Vice Republic Of China Chang, Chung-Lin M 2016.08.01 0 0 0 0 0 0 Securities Director of Shan Ben Engineering Co., Ltd. NA NA NA NA
President 2. Manager of President Securities
Shareholder
Services 1. Senior Manager of President
Department Republic Of Chang,Shao- M 2016.09.01 209 0 0 0 0 0 Securities N/A NA NA NA NA
China Ping
Assistant Vice 2. Manager of President Securities
President
Quantitative
Trading 1. Senior Manager of President
Department Republic Of Lee, Chien-Hsin M 2019.03.01 0 0 0 0 0 0 Securities N/A NA NA NA NA
China
Assistant Vice 2. Manager of Waterland Futures
President
Quantitative 1. Professional Assistant Vice President
Trading Department Republic Of Chien, Pang- M 2019.05.01 0 0 0 0 0 0 of President Securities N/A NA NA NA NA
Assistant Vice China Yen 2. Senior Professional Manager of IBF
Futures
President
Capital Market
1. Senior Manager of President
Department Republic Of Chen, Chia- M 2019.07.01 0 0 0 0 0 0 Securities N/A NA NA NA NA
Assistant Vice China Chang
President 2. Manager of President Securities
1. Assistant Vice President of President
Corporate Client Republic Of Securities.
Dept. Assistant Chen, Min-Ping F 2020.01.01 0 0 0 0 0 0 N/A NA NA NA NA
Vice President China 2. Sales Assistant Vice President of
President Securities
18
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Current Spouse & Minor Shareholding Managers who are Spouses or The status
by Nominee of obtaining
Nationality/ Shareholding Shareholding Within Two Degrees of Kinship
Title Country of Name Gender Date Elected Arrangement Experience (Education) Other Position employee
stock option
Origin
Shares % Shares % Shares % Title Name Relation certificates by
Managers
Capital Market
1. Senior Manager of President
Department Republic Of Chiang, Chang- M 2020.04.10 0 0 0 0 0 0 Securities N/A NA NA NA NA
Assistant Vice China Kuen
President 2. Manager of President Securities
Information
System 1. Senior Manager of President
Department Republic Of Hu, I-Der M 2020.07.01 119 0 0 0 0 0 Securities N/A NA NA NA NA
China
Assistant Vice 2. Manager of President Securities
President
Capital Market 1. Assistant Vice President of Taishin
Department Republic Of Securities
Lin, Wei- Hung M 2021.03.04 0 0 0 0 0 0 N/A NA NA NA NA
Assistant Vice China 2. Manager of Mercuries Life
President Insurance
Risk Control 1. Senior Manager of President
Office Republic Of Chang, Ping- M 2015.11.09 15,392 0 0 0 0 0 Securities N/A NA NA NA NA
China Chuan
Senior Manager 2. Manager of President Securities
Brokerage 1. Supervisor Vice President of
Department Senior Republic Of Chang, Hung- M 2019.06.18 1,433 0 0 0 0 0 President Securities N/A NA NA NA NA
Assistant Vice China Shuo 2. Assistant Vice President of Hua Nan
President Financial Holdings
Brokerage 1. Assistant Vice President of President
Department Republic Of Lin, Li-Lin F 2014.04.01 6,232 0 0 0 0 0 Securities N/A NA NA NA NA
China
District Supervisor 2. Manager of Dafeng Securities
Brokerage 1. Assistant Vice President of Mega
Department Republic Of Chien, Chia- M 2020.03.01 0 0 0 0 0 0 Securities N/A NA NA NA NA
China Nan
District Supervisor 2. Manager of KGI Securities
Brokerage 1. Branch Assistant Vice President of
Department Vice Republic Of Liao, Chen-Yin F 2020.04.01 0 0 0 0 0 0 President Securities N/A NA NA NA NA
China
District Supervisor 2. Manager of President Securities
Brokerage 1. Branch Assistant Vice President of
Department Vice Republic Of Lee, Chin-Yi M 2020.12.01 0 0 0 0 0 0 President Securities N/A NA NA NA NA
China
District Supervisor 2. Manager of President Securities
Brokerage 1. District Assistant Vice President of
Department Republic Of Chiu, Shyh- M 2018.10.01 0 0 0 0 0 0 President Securities N/A NA NA NA NA
Assistant Vice China Tyng 2. Assistant Vice President of President
President Securities
Brokerage 1. Senior Assistant Vice President of
Department Republic Of Jung, Yi- M 2020.06.16 0 0 0 0 0 0 O-Bank N/A NA NA NA NA
Assistant Vice China Chiang 2. Assistant Vice President of Yuanta
President Securities
Brokerage
1. Senior Manager President of Entie
Department Republic Of Liao, Ling -Yun F 2020.07.07 0 0 0 0 0 0 Commercial Bank, Ltd. N/A NA NA NA NA
Assistant Vice China
2. Vice President of BNP Paribas
President
19
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Current Spouse & Minor Shareholding Managers who are Spouses or The status
by Nominee of obtaining
Nationality/ Shareholding Shareholding Within Two Degrees of Kinship
Title Country of Name Gender Date Elected Arrangement Experience (Education) Other Position employee
stock option
Origin
Shares % Shares % Shares % Title Name Relation certificates by
Managers
Global
1. Sales Vice President of MasterLink
Institutional Republic Of Securities Corp.
Service Dept. Lee, Ming-Yuh M 2020.06.22 0 0 0 0 0 0 N/A NA NA NA NA
Senior Assistant China 2. Senior Assistant Vice President of
Asia Securities
Vice President
Brokerage
1. Sales Manager President of Cathay
Department Debit Republic Of Chu, Chen-Pu M 2020.07.01 0 0 0 0 0 0 Securities Corp. N/A NA NA NA NA
Center Assistant China
Vice President 2. Specialist of Fubon Securities
Digital Business 1. Senior Project Manager of President
Dept.Senior Republic Of Tsai, Chen-Yuan M 2020.04.01 0 0 0 0 0 0 Securities N/A NA NA NA NA
China
Manager 2. Manager of President Securities
Wealth 1. Deputy Manager of President
Securities
Management and
Republic Of
Trust Department Wang, Fong-Ju F 2021.04.01 0 0 0 0 0 0 2. Senior Assistant Manager of N/A NA NA NA NA
China
Assistant Deputy President Securities
Manager
Tunghsing Equity Republic Of Chen, Chih- 1. Manager of President Securities
Department M 2018.12.01 0 0 0 0 0 0 N/A NA NA NA NA
Manager China Lung 2. Manager of President Futures Corp.
Tunghsing Equity 1. Manager of President Securities
Republic Of
Department China Tsai, Shu-Mei F 2016.04.01 6,743 0 0 0 0 0 2. Senior Deputy Manager of President N/A NA NA NA NA
Manager Securities
1. Assistant Vice President of KGI
Kaohsiung Branch Republic Of Wu, Huan- M 2013.04.01 0 0 0 0 0 0 Securities N/A NA NA NA NA
Manager China Chung
2. Manager of Taiwan Securities
Dunnan Branch Republic Of Chiang, Chia- F 2020.04.01 0 0 0 0 0 0 1. Manager of CTBC Securities N/A NA NA NA NA
Manager China Jung 2. Manager of Ta Chong Securities
1. Manager of President Securities
Zhongli Branch Manager Republic Of China Chiang, Tsong-Shyan M 2007.12.19 0 0 0 0 0 0 2. Manager of Kurn Bern Machinery N/A NA NA NA NA
Company
1. Assistant Vice President of President
Chengzhong Republic Of Chu, Po-Lin M 2020.09.01 0 0 0 0 0 0 Securities N/A NA NA NA NA
Branch Manager China 2. Senior Manager of President
Securities
1. Deputy Manager of President
Chengzhong Republic Of Chao, Cheng M 2019.11.06 0 0 0 0 0 0 Securities N/A NA NA NA NA
Branch Manager China 2. Deputy Manager of Concords
Securities
1. Deputy Manager of President
Tainan Branch Republic Of Securities
Hsieh,Chia-Hsi M 2019.01.01 0 0 0 0 0 0 N/A NA NA NA NA
Manager China 2. Sales Assistant Manager of President
Securities
20
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Current Spouse & Minor Shareholding Managers who are Spouses or The status
by Nominee of obtaining
Nationality/ Shareholding Shareholding Within Two Degrees of Kinship
Title Country of Name Gender Date Elected Arrangement Experience (Education) Other Position employee
stock option
Origin
Shares % Shares % Shares % Title Name Relation certificates by
Managers
1. Branch Assistant Vice President of
Taichung Branch Republic Of Liao, Chen-Yin F 2001.11.12 0 0 0 0 0 0 President Securities N/A NA NA NA NA
Manager China
2. Manager of President Securities
1. Manager of President Securities
Taichung Branch Manager Republic Of China Fang, Wu-Hsin M 2016.10.01 285 0 0 0 0 0 2. Deputy Manager of President N/A NA NA NA NA
Securities
1. Branch Assistant Vice President of
Hsinchu Branch Republic Of Lee, Chin-Yi M 2014.09.01 0 0 0 0 0 0 President Securities N/A NA NA NA NA
Manager China
2. Manager of President Securities
1. Assistant Vice President of CTBC
Chiayi Branch Republic Of Tai, Kuo-Chun M 2005.06.01 0 0 5,227 0 0 0 Securities N/A NA NA NA NA
Manager China
2. Manager of Yuanta Securities
1. Sales Manager of President Securities
Pingtung Branch Manager Republic Of China Wang, Chien-Min M 2009.04.01 0 0 0 0 0 0 2. Deputy Manager of President N/A NA NA NA NA
Securities
1. Deputy Manager of President
Keelung Branch Republic Of Yu, Ping-Tse M 2019.04.01 0 0 0 0 0 0 Securities N/A NA NA NA NA
Manager China 2. Sales Executive of Hua Nan
Securities
Yonghe Branch Republic Of Wu, Han-Chang M 2021.01.01 0 0 0 0 0 0 1. Vice Manager of Mega Securities N/A NA NA NA NA
Manager China 2. Manager of KGI Securities
1. Manager of President Securities
Xin Taichung Branch Manager Republic Of China Yang, Kuo-Chen M 2011.01.01 0 0 0 0 0 0 2. Deputy Manager of SAMPO N/A NA NA NA NA
Securities
1. Deputy Manager of President
Hsinying Branch Republic Of Hsiao, Po-Ming M 2016.04.01 0 0 0 0 0 0 Securities N/A NA NA NA NA
Manager China
2. Sales of President Securities
1. Manager of Yuanta core pacific
Changhua Branch Republic Of Yu, Fu-Tsun M 2018.01.01 0 0 0 0 0 0 Securities N/A NA NA NA NA
Manager China
2. Sales of Yuanta Securities
1. Senior Deputy Manager of KGI
Taoyuan Branch Republic Of Hsiao, Ju-Un F 2019.04.01 0 0 0 0 0 0 Securities N/A NA NA NA NA
Manager China 2. Deputy Manager of SinoPac
Securities
1. Sales Manager of President Futures
Yuanlin Branch Republic Of Chen, Hung- M 2019.10.01 0 0 0 0 0 0 Corp. N/A NA NA NA NA
Manager China Tsai 2. Sales Deputy Manager of President
Futures Corp.
Sanchung Branch Republic Of Chang, Shih- M 2019.01.01 0 0 0 0 0 0 1. Manager of Concord Securities. N/A NA NA NA NA
Manager China Min 2. Sales Manager of President Securities
1. Deputy Manager of Yuanta Securities
Shilin Branch Republic Of
Manager China Hsu, Fu-Chiang M 2014.10.01 0 0 0 0 0 0 2. Senior Deputy Manager of KGI N/A NA NA NA NA
Securities
21
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Current Spouse & Minor Shareholding Managers who are Spouses or The status
by Nominee of obtaining
Nationality/ Shareholding Shareholding Within Two Degrees of Kinship
Title Country of Name Gender Date Elected Arrangement Experience (Education) Other Position employee
stock option
Origin
Shares % Shares % Shares % Title Name Relation certificates by
Managers
Panchiao Branch Republic Of 1. Manager of KGI Securities
Lo, Shih-Hong M 2019.04.01 0 0 0 0 0 0 N/A NA NA NA NA
Manager China 2. Manager of Capital Securities
Sanduo Branch Republic Of 1. Manager of President Securities
Tsai, Yi-Chen F 2006.03.21 0 0 0 0 0 0 N/A NA NA NA NA
Manager China 2. Sales Manager of SinoPac Holding
Szichih Branch Republic Of 1. Manager of President Securities
Huang, Ming-Fa M 2019.04.01 0 0 0 0 0 0 N/A NA NA NA NA
Manager China 2. Deputy Manager of Yuanta Securities
Ilan Branch Republic Of Chiang, Jen- F 2014.12.01 0 0 0 0 0 0 1. Manager of KGI Securities N/A NA NA NA NA
Manager China Chu 2. Manager of Capital Securities
1. Senior Assistant Vice President of Jih
Nanjing Branch Republic Of Chou, Da- M 2019.11.06 0 0 0 0 0 0 Sun Securities N/A NA NA NA NA
Manager China Kuang
2. Vice President of Pacific Securities
1. Sales Manager of President Securities
Kinmen Branch Republic Of
Manager China Chung, Hui-Ju F 2016.07.01 0 0 0 0 0 0 2. Sales Deputy Manager of President N/A NA NA NA NA
Securities
Tucheng Branch Republic Of Kao, Ming- M 2020.09.01 0 0 0 0 0 0 1. Manager of President Securities N/A NA NA NA NA
Manager China Chou 2. Manager of KGI Securities
1. Manager of President Securities
Songjiang Branch Manager Republic Of China Lin, Yu-Ju M 2020.09.01 0 0 0 0 0 0 2. Senior Deputy Manager of KGI N/A NA NA NA NA
Securities
Songjiang Branch Republic Of Chang, Chih- M 2021.01.01 0 0 0 0 0 0 1. Manager of President Securities N/A NA NA NA NA
Manager China Hsiang 2. Sales Manager of Hua Nan Securities
1. Manager of President Securities
Neihu Branch Manager Republic Of China Tseng, Chien-Ming M 2020.06.19 0 0 0 0 0 0 2. Professional Deputy Manager of N/A NA NA NA NA
Bank Sinopac.
1. Manager of Mega Securities
Renai Branch Republic Of
Manager China Liu, Yi-Chun M 2020.05.11 0 0 0 0 0 0 2. Sales Assistant Vice President of N/A NA NA NA NA
KGI Securities
1. Manager of Standard Chartered
Pingzhen Branch Manager Republic Of China Li, Shu-Jung F 2015.10.26 0 0 0 0 0 0 2. Bank Teller of Standard Chartered N/A NA NA NA NA
Bank
1. Deputy Manager of Jih Sun
Zhunan Branch Republic Of Securities
Su,Yung-Sheng M 2016.04.01 0 0 0 0 0 0 N/A NA NA NA NA
Manager China 2. Sales Assistant Manager of Polaris
Securities
1. Supervisor Vice President of
Offshore Securities Unit Branch Republic Of Chang, Hung- M 2020.11.10 1,433 0 0 0 0 0 President Securities N/A NA NA NA NA
China Shuo 2. Assistant Vice President of Hua Nan
Manager
Financial Holdings
22
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Note 1: The persentages of shares are calculated based on PSC's capital: 1,399,837,829 shares

Note 2: The information above is based on April 1, 2021, and the shareholding condition is based on April 19, 2021.

C. Remuneration of Directors, Supervisors, President, Vice Presidents, and Chief Auditor

1. Remuneration of Directors

1.1 Remuneration of Directors (disclosing the name of each individual )

Unit: NT$ thousands

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Remuneration Relevant Remuneration Received by Directors Who are Also Employees
Ratio of Total
Remuneration Ratio of Total Compensation Compensation
Compensation Base Severance Pay (B) Bonus to Directors (C) Allowances (D) (A+B+C+D) to Net Income (%) Salary, Bonuses, and Allowances Severance Pay (F) Profit Sharing- Employee Bonus (G) (A+B+C+D+E+F+G) to Net Income (%) from an Invested Paid to Directors
Title Name (A) (E) Company Other
than the Company’s
PSC PSC Subsidiary and
PSC Group PSC Group PSC Group PSC Group PSC Group PSC Group PSC Group PSC Group parent conmpany
Cash Stock Cash Stock
Director Kai Nan Investment 33,386 33,386 - - 42,712 42,712 1,871 1,871 2.1613% 2.1613% - - - - - - - - 2.1613% 2.1613% None
Co., Ltd.
Except for the information disclosed above, the remuneration received by the Directors of the Company for providing services for all companies listed in the consolidated statements in the most recent year (such as
serving as a non-employee consultant): 0
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Note 1: The following are delegates of Kai Nan Investment Co., Ltd.: Chairman: Lin, Kuan-Chen; Directors: Liu, Tsung-Yi, Chen, Kuo-Hui, Hsieh Hong, Hui-Tzu, Lu, Li-An, Chen, Ching-Yi, Chen, Yi-Ling Note 2: Compensation was calculated as of December 31, 2020; Compensation distribution proposal is based on said earnings. Note 3: Total remuneration paid to drivers is NT$1.788 million, which was not included in consideration.

1.2 Remuneration of Directors (Independent Directors Included)

Unit: NT$ thousands

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Remuneration Relevant Remuneration Received by Directors Who are Also Employees
Ratio of Total Ratio of Total Compensation
Remuneration Compensation Paid to Directors
Compensation Base Severance Pay (B) Directors (C)Bonus to Allowances (D) (A+B+C+D) to Net Income (%) Salary, Bonuses, and Allowances Severance Pay (F) Profit Sharing- Employee Bonus (G) Employee Stock Exercisable New Restricted Employee (A+B+C+D+E+F+G) to Net Income (%) from an Invested Company
Title Name (A) (E) Options (H) Shares (I) Other than the
Company’s
PSC PSC Subsidiary
PSC Group PSC Group PSC Group PSC Group PSC Group PSC Group PSC Group PSC Group PSC Group PSC Group and parent
conmpany
Cash Stock Cash Stock
Chang, Ming-
Chen
Director Delegate of
Leg Horn
Investment
Co.,Ltd. 2,804 2,804 - - 39,092 39,092 772 772 1.1828% 1.1828% - - - - - - - - - - - - 1.1828% 1.1828% None
Lee, Chi-Ming
Delegate of
Director Hui Tung
Investment
Co.,Ltd.
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			Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Remuneration	Ratio of Total	Ratio of Total		Relevant Rem	Relevant Rem	Relevant Rem	Relevant Rem	uneration Received by Directors Who are Also Employees	uneration Received by Directors Who are Also Employees	uneration Received by Directors Who are Also Employees	uneration Received by Directors Who are Also Employees	uneration Received by Directors Who are Also Employees	uneration Received by Directors Who are Also Employees	uneration Received by Directors Who are Also Employees	uneration Received by Directors Who are Also Employees	uneration Received by Directors Who are Also Employees	Ratio of Total Compensation (A+B+C+D+E+F+G) to Net Income (%)	Ratio of Total Compensation (A+B+C+D+E+F+G) to Net Income (%)
Title	Name		Base Compensation (A)		Severance Pay (B)		Bonus to Directors (C)		Allowances (D)		Remuneration (A+B+C+D) to Net Income (%)			Salary, Bonuses, and Allowances (E)		Severance Pay (F)			Profit Sharing- Employee Bonus (G)				Exercisable Employee Stock Options (H)		New Restricted Employee Shares (I)
			PSC	Group	PSC	Group	PSC	Group	PSC	Group	PSC	Group		PSC	Group	PSC	Group		PSC		PSC		PSC	Group	PSC	Group	PSC	Group
																			Cash	Stock	Cash	Stock
Director Tu, Li-Yang Delegate of Ta Le Investment Holding Co., Ltd.
Director Teng, Wen-Hwi Delegate of Canking Investment Co., Ltd.													same as the last page
Director Lee, Shu-Fen Delegate of China F.R.P. Corp.
Director Lee, Shy-Lou
Director Duh, Bor-Tsang
Director Juang, Jing-Yau
Independent Director Liang, Yann- Ping		5,760 5,760 - - - - 1,262 1,262 0.1946% 0.1946%											- - - -					- - - - - - - - 0.1946% 0.1946% None
Independent Director Pai, Chun-Nan
Independent Director Song, Yung- Fong
Independent Director Horng, Yuan- Chuan
1. Description of independent directors’ remuneration payment policy, system, standards, and structure, as well as the relationship between the amount of remuneration and their responsibilities, risks, and time invested: The Company’s policies and standards related to the payment of remuneration for Independent Directors are based on the Company’s Articles of Incorporation and the degree of an Independent Directors’ contribution to and participation in operations with reference to the standards in the industry. 2. Except for the information disclosed above, the remuneration received by the Directors of the Company for providing services for all companies listed in the consolidated statements in the most recent year (such as serving as a non-employee consultant): 0 3. Director Lee, Shy-Lou resigned on 2020.10.15.

III. Corporate Governance

Range of remuneration for directors

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Name of Directors
Total of (A+B+C+D) Total of (A+B+C+D+E+F+G)
Range of Remuneration
Companies in the Companies in
The company consolidated financial The company the consolidated
statements financial statements
Delegate of Kai Nan Investment Co., Ltd.
: Liu, Tsung-Yi, Hsieh Hong, Hui-Tzu,
Lu, Li-An, Chen, Kuo-Hui, Chen, Ching-
Yi, Chen, Yi-Ling / Delegate of Canking
Investment Co., Ltd. : Teng, Wen-Hwi /
Under NT$ 1,000,000 Delegate of Leg Horn Investment Co., Ltd. same as left same as left same as left
: Chang, Ming-Chen / Delegate of Hui
Tung Investment Co., Ltd. : Lee, Chi-Ming
/ Delegate of Ta Le Investment Holding
Co., Ltd. : Tu, Li-Yang / Delegate of China
F.R.P Corp : Lee, Shu-Fen
NT$1,000,000 ~ NT$2,000,000 Liang, Yann-Ping / Pai, Chun-Nan / Song, Yung-Fong / Horng, Yuan-Chuan same as left same as left same as left
NT$2,000,000 ~ NT$3,500,000 0 0 0 0
NT$3,500,000 ~ NT$5,000,000 Lee, Shy-Lou same as left same as left same as left
Canking Investment Co., Ltd. / China
F.R.P Corp / Ta Le Investment Holding
NT$5,000,000 ~ NT$10,000,000 Co., Ltd. / Leg Horn Investment Co., Ltd. same as left same as left same as left
/ Hui Tung Investment Co., Ltd. / Juang,
Jing-Yau / Duh, Bor-Tsang
NT$10,000,000~ NT$15,000,000 0 0 0 0
NT$15,000,000 ~ NT$30,000,000 0 0 0 0
NT$30,000,000 ~ NT$50,000,000 Kai Nan Investment Co., Ltd. / Delegate of Kai same as left same as left same as left
Nan Investment Co., Ltd. : Lin, Kuan-Chen
NT$50,000,000 ~ NT$100,000,000 0 0 0 0
Over NT$100,000,000 0 0 0 0
Total 25 25 25 25
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2. Remuneration of the President, Vice Presidents, and Chief Auditor

Unit: NT$ thousands

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Ratio of total Number of Number of Whether or not
Salary(A) Severance Pay Bonuses and Profit Sharing- Employee compensation employee stock restricted stock any compensation
(B) Allowances (C) Compensation (D) (A+B+C+D) to net option certificates unit is received from
Title Name income (%) other re-invested
businesses than
PSC Group PSC Group PSC Group PSC Group PSC Group PSC Group PSC Group subsidiaries or
Cash Stock Cash Stock parant company
President Tsai, Sen-Bu
Executive
Vice Yang , Kai-Chih
President
Vice
President An, Chi-Li
Vice
President Huang, Jun-Jen 15,690 15,690 660 660 128,829 128,829 2,221 0 2,221 0 4.0859% 4.0859% 0 0 0 0 None
Vice
President Pu, Chien-Heng
Vice Wei, Chih-Hsu
President (Note2)
Vice Yeh, Ming-Chieh
President (Note3)
Chief Auditor Huang, Sha-Mei
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Note 1: Compensation was calculated as of December 31, 2020; Employee remuneration was estamated based on 2020 estamated statements.

Note 2: Vice Presiden Wei, Chih-Hsu was appointed on October 15, 2020.

Note 3: Vice Presiden Yeh, Ming-Chieh was appointed on December 24, 2020.

President Securities Corporation

Range of remuneration for president and vice president

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Name of President and Vice President
Range of Remuneration
Companies in the consolidated
The company
financial statements
Under NT$ 1,000,000 Yeh, Ming-Chieh Yeh, Ming-Chieh
NT$1,000,000 ~ NT$2,000,000 Wei, Chih-Hsu Wei, Chih-Hsu
NT$2,000,000 ~ NT$3,500,000 0 0
NT$3,500,000 ~ NT$5,000,000 0 0
NT$5,000,000 ~ NT$10,000,000 An, Chi-Li, Huang, Sha-Mei An, Chi-Li, Huang, Sha-Mei
NT$10,000,000 ~ NT$15,000,000 0 0
NT$15,000,000 ~ NT$30,000,000 Pu, Chien-Heng Pu, Chien-Heng
Tsai, Sen-Bu, Yang, Kai-Chih, Tsai, Sen-Bu, Yang, Kai-Chih,
NT$30,000,000 ~ NT$50,000,000
Huang, Jun-Jen Huang, Jun-Jen
NT$50,000,000 ~ NT$100,000,000 0 0
Over NT$100,000,000 0 0
Total 8 8
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D. Comparison of Remuneration for Directors, Supervisors, President and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, President and Vice Presidents

(1) Ratio of total remuneration paid to directors, supervisors, president and vice presidents to net income

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Year To directors(Note1) To president and vice presidents (Note1)
2019 3.67% 3.53%
2020 3.54% 4.09%
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Note1: Ratio of total remuneration to net income (%)

(2) The policies, standards, and portfolios for the payment of remuneration, and the procedures for determining remuneration

The policy and standards for the Directors’ and Supervisors’ remuneration are set out in accordance with the Company’s Articles of Incorporation.

The President’s and Vice Presidents’ remuneration are paid in accordance with the remuneration-related regulations of the Company. The principles of the remuneration system are based on the operating performance and contribution of each unit to share the Company’s operating results. The Company also adopts professional institutions to understand the market standards and refers to the remuneration standards in the industry to set remuneration policies by considering the factors of competitiveness, motivation, and reasonableness and bring the Company’s overall annual remuneration at the average level of the industry.

(3) The correlation with risks and business performance

The reasonableness of the remuneration paid to the Directors, Supervisors, President and Vice Presidents shall be reviewed on a regular basis. In addition to considering their contributions to the Company’s operational performance, the Company will also consider the degrees of risk they pose to the Company and adjust the remuneration accordingly.

2020 Annual Report

III. Corporate Governance

E. President’s, senior vice presidents’ and senior managers’ remuneration

Unit: NT$ thousands

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Employee Compensation Employee Ratio of Total
Title Name - in Stock (Fair Market Compensation Total Amount to Net
Value) - in Cash Income(%)
President Tsai, Sen-Bu
Proprietary Trading Department
Yang, Kai-Chih
Executive Vice President
Finance Department Vice President An, Chi-Li
Quantitative Trading Department
Huang, Jung-Jen
Vice President
Financial Product Department Vice
Pu, Chien-Heng
President
Capital Market Department Vice
Wei, Chih-Hsu
President
Fixed Income Department Vice
Yeh, Ming-Chieh
President
Shareholder Sevices Department
Chueh, Chih-Chung
Sales Vice President
President Office Project Vice
Lin, Chung-Heng
President
Auditing Office Chief Auditor Huang, Sha-Mei
Administration Department Senior
Yu, Hung-Chieh
Assistant Vice President
Information System Department
Lin, Jung-Hui
Senior Assistant Vice President
Compliance Division Assistant Vice
Hung, Ying-Che
President
President Office Corporate
Governance Assistant Vice Chen, Nai-Chen 0 13,129 13,129 0.3362
President
Capital Market Department
Chang, Chin-Yung
Assistant Vice President
Finance Department Assistant Vice
Su, Wei-Lun
President
Financial Product Department
Chang, Chung-Lin
Assistant Vice President
Shareholder Services Department
Chang, Shao-Ping
Assistant Vice President
Settlement & Clearing Department
Wu, Sheng-Yu
Assistant Vice President
Quantitative Trading Department
Lee, Chien-Hsin
Assistant Vice President
Quantitative Trading Department
Chien, Pang-Yen
Assistant Vice President
Capital Market Department
Chen, Chia-Chang
Assistant Vice President
Corporate Client Department
Chen, Min-Ping
Assistant Vice President
Capital Market Department
Chiang, Chang-Kuen
Assistant Vice President
Information System Department
Hu, I-Der
Assistant Vice President
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President Securities Corporation

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Employee Compensation Employee Ratio of Total
Title Name - in Stock (Fair Market Compensation Total Amount to Net
Value) - in Cash Income(%)
Capital Market Department
Lin, Wei-Hung
Assistant Vice President
Risk Control Office
Chang, Ping-Chuan
Senior Manager
Brokerage Department Senior
Chang, Hung-Shuo
Assistant Vice President
Brokerage Department
Lin, Li-Lin
District Supervisor
Brokerage Department
Chien, Chia-Nan
District Supervisor
Brokerage Department
Liao, Chen-Yin
Vice District Supervisor
Brokerage Department
Lee, Chin-Yi
Vice District Supervisor
Brokerage Department Assistant
Chiu, Shyh-Tyng
Vice President
Brokerage Department Assistant
Jung, Yi-Chiang
Vice President
Brokerage Department Assistant
Liao, Ling-Yun
Vice President
Global Institutional Service
Department Senior Assistant Vice Lee, Ming-Yuh
President
Brokerage Department Debit Center
Chu, Chen-Pu
Assistant Vice President
Digital Business Department Senior
Tsai, Chen-Yuan
Manager
Wealth Manager and Trust
Department Senior Deputy Wang, Fong-Ju
Manager
Tunghsing Equity Department
Chen, Chih-Lung
Manager
Tunghsing Equity Department
Tsai, Shu-Mei (same as the last page)
Manager
Kaohsiung Branch Manager Wu, Huan-Chung
Dunnan Branch Manager Chiang, Chia-Jung
Zhongli Branch Manager Chiang, Tsong-Shyan
Chengzhong Branch Manager Chu, Po-Lin
Chengzhong Branch Manager Chao, Cheng
Tainan Branch Manager Hsieh, Chia-Hsi
Taichung Branch Manager Liao, Chen-Yin
Taichung Branch Manager Fang, Wu-Hsin
Hsinchu Branch Manager Lee, Chin-Yi
Chiayi Branch Manager Tai, Kuo-Chun
----- End of picture text -----

2020 Annual Report

III. Corporate Governance

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Employee Compensation Employee Ratio of Total
Title Name - in Stock (Fair Market Compensation Total Amount to Net
Value) - in Cash Income(%)
Pingtung Branch Manager Wang, Chien-Min
Keelung Branch Manager Yu, Ping-Tse
Yonghe Branch Manager Wu, Han-Chang
Xin Taichung Branch Manager Yang, Kuo-Chen
Hsinying Branch Manager Hsiao, Po-Ming
Changhua Branch Manager Yu, Fu-Tsun
Taoyuan Branch Manager Hsiao, Ju-Un
Yuanlin Branch Manager Chen, Hung-Tsai
Sanchung Branch Manager Chang, Shih-Min
Shilin Branch Manager Hsu, Fu-Chiang
Panchiao Branch Manager Lo, Shih-Hong
Sanduo Branch Manager Tsai, Yi-Chen (same as the last page)
Szichih Branch Manager Huang, Ming-Fa
Ilan Branch Manager Chiang, Jen-Chu
Nanjing Branch Manager Chou, Da-Kuang
Kinmen Branch Manager Chung, Hui-Ju
Tucheng Branch Manager Kao, Ming-Chou
Songjiang Branch Manager Lin, Yu-Ju
Songjiang Branch Manager Chang, Chih-Hsiang
Neihu Branch Manager Tseng, Chien-Ming
Renai Branch Manager Liu, Yi-Chun
Pingzhen Branch Manager Li, Shu-Jung
Zhunan Branch Manager Su, Yung-Sheng
Offshore Securities Unit Branch
Chang, Hung-Shuo
Manager
----- End of picture text -----

President Securities Corporation

III. Implementation of Corporate Governance

A. Board of Directors Meeting

Total of 6 meetings of the board of directors were held in the year of 2020. Directors’ attendance condition:

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Attendance
Title Name in Person By Proxy Attendance rate (%) Remark
Lin, Kuan-Chen Delegate
Chairman of Kai Nan Investment Co., 6 0 100% None
Ltd.
Liu, Tsung-Yi Delegate of
Director Kai Nan Investment Co., 6 0 100% None
Ltd.
Chen, Kuo-Hui Delegate of
Director Kai Nan Investment Co., 6 0 100% None
Ltd.
Hsieh Hong, Hui-Tzu
Director Delegate of Kai Nan 6 0 100% None
Investment Co., Ltd.
Director Lu, Li-An Delegate of Kai 5 1 83% None
Nan Investment Co., Ltd.
Chen, Ching-Yi Delegate
Director of Kai Nan Investment Co., 6 0 100% None
Ltd.
Chen, Yi-Ling Delegate of
Director Kai Nan Investment Co., 6 0 100% None
Ltd.
Teng, Wen-Hwi Delegate
Director of Canking Investment Co., 6 0 100% None
Ltd.
Lee, Chi-Ming Delegate of
Director Hui Tung Investment Co., 6 0 100% None
Ltd.
Chang, Ming-Chen Delegate
Director of Leg Horn Investment Co., 6 0 100% None
Ltd.
Tu, Li-Yang Delegate of Ta
Director Le Investment Holding Co., 6 0 100% None
Ltd.
Director Lee, Shu-Fen Delegate of 6 0 100% None
China F.R.P Corp.
Director Duh, Bor-Tsang 6 0 100% None
Resigned on 2020.10.15
Director Lee, Shy-Lou 2 2 50% 4 board meetings were held
during the term of office.
Director Juang, Jing-Yau 5 1 83% None
Independent Director Liang, Yann-Ping 6 0 100% None
Independent Pai, Chun-Nan 6 0 100% None
Director
Independent Director Song, Yung-Fong 6 0 100% None
Independent Director Horng, Yuan-Chuan 6 0 100% None
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2020 Annual Report

III. Corporate Governance

Other mentionable items:

A. If any of the following circumstances occur, the dates of the meetings, sessions, contents of motion, all independent directors’ opinions and the company’s response should be specified:
Matters referred to in Article 14-3 of the Securities and Exchange Act: PSC held 8 board meetings over the past fiscal year and the contents of the resolutions were on page 76 to page 80 of the annual report. Did not have any matters listed in Article 14-3 of the Securities and Exchange Act or other matters not passed by the independent directors.
Other matters involving objections or expressed reservations by independent directors that were recorded or stated in writing that require a resolution by the board of directors: None.
B. If there are directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: .
For the 9th proposal at the 13th meeting of 11th Board of Directors, regarding overseas development and appoint Chairman Lin, Kuan-Chen as a board member of joint capital securities company - Jin Yuan President Securities Corporation Ltd., the board passed the proposal of relieveing the non-compete limitation for the directors on March 26 meeting. In accordance with the provisions of Article 209 of the Company Act, “A director who does anything for himself or on behalf of another person that is within the scope of the company’s business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.” Therefore, the proposal regarding Chairman Lin will be further discussed at the shareholders’ meeting. In accordance with the provisions of Article 15 of the Company’s Rules Governing Board Meetings, the Chairman of the Board desigated Liu, Tsung-Yi as the acting chairman to preside over the matters related to discussing this proposal. Chairman Lin, Kuan-Chen left the meeting because he was not allowed to participate in the discussion of and voting on this proposal. The proposal has been passed unanimously by the members of the Directors who were present without any objection (the Chairman had recused himself from voting).
In regard to the first proposal at the 14th meeting of the 11th Board of Directors regarding obtaining the equity price of overseas investees from President Securities (BVI) Ltd., the Company’s Board of Directors passed a proposal designed to obtain the overseas equity held by President Securities (BVI) Ltd. and to conduct liquidation of President Securities (BVI) Ltd. on March 26, 2020. These overseas businesses included President Securities (HK) Ltd. (PSHK), President Wealth Management (Hong Kong) Ltd. (PWM), and President Securities Corporation (PSN); the Company planned to acquire the total net value of PSHK, PWM, and PSN held by PSBVI as of March 31, 2020, with the transaction price of US$46,152,306 (in line with the value range in the concluded valuation report). This proposal is a transaction with a related party, which shall be handled in accordance with the provisions of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies. Chairman Lin, as a PSBVI director, was an interested party in this proposal; therefore, he recused himself from the discussion of and voting on this proposal when it was submitted. According to Article 15 of the Company’s Rules of Procedures for the Board of Directors Meetings, the Chairman appointed Director Liu, Tsung-Yi as the acting chair to preside over the discussion of the proposal. Chairman Lin, Kuan-Chen left the venue and was not allowed to participate in the discussion and voting related to this proposal. This proposal has been passed unanimously by the Directors present at the meeting (with the Chairman recused).
For the 16th proposal at the 19th meeting of 11th Board of Directors, regarding the proposal of relieveing the non-compete clause of the Company's Directors. The Company has authorized Chairman Lin, Kuan-Chen to act as a Director in the joint venture company Jin Yuan President Securities Corporation Ltd. This has been endorsed by the Board of Directors on March 26, 2020 for record. According to Article 209, Paragraph 1 of the Company Act: ”A director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval”. The proposal of relieveing the non-compete clause for the 12th Director candidate Kuan-Chen Lin to act as the Director of Jin Yuan President Securities Corporation Ltd. In accordance with the provisions of Article 15 of the Company’s Rules Governing Board Meetings,the Chairman of the Board desigated Liu, Tsung-Yi as the acting chairman to preside over the matters related to discussing this proposal. Chairman Lin, Kuan-Chen left the meeting because he was not allowed to participate in the discussion of and voting on this proposal. The proposal has been passed unanimously by the members of the Directors who were present without any objection (the Chairman had recused himself from voting).

President Securities Corporation

For the 23rd proposal for the review of the nomination of 12th Directors and Independent Directors at the 19th Board meeting of the 11th Board of Directors, in accordance with the provisions of Article 15 of the Company's Rules of Meetings, the current Directors and Independent Directors, who have personal interest in nominated candidates for Directors and Independent Directors under review, shall recuse themselves from the review session (as shown below).All nominees have submitted the details of their education, experience, current position, juristic person represented, and other evidences to the Board of Directors for review. Independent Director Pai, Chun-Nan acted on behalf of Chairman KuanChen Lin as chair to host the review when the Chairman recused himself from the review session.The chairman has the assent of all the members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion.(Avoidance of directors had recused himself from voting.)

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Directors under audition/
Avoidance of interested parties
Nominee of independent director
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Directors under audition/ Nominee of independent director	Avoidance of interested parties

Delegate of Kai Nan Investment Co., Ltd.: Lin, Kuan-Chen, Liu, Tsung-Yi, Chen, Kuo-Hui, Hsieh Hong, Hui-Tzu, Lu, Li-An, Chen, Ching-Yi, Chen, Yi-Ling	Lin, Kuan-Chen, Liu, Tsung-Yi, Chen, Kuo-Hui, Hsieh Hong, Hui-Tzu, Lu, Li-An, Chen, Ching-Yi, Chen, Yi-Ling (Lin, Kuan-Chen desigated Pai, Chun-Nan as the actingchairman.)
Teng, Wen-Hwi Delegate of CankingInvestment Co.,Ltd.	Teng, Wen-Hwi
Lee, Chi-Ming Delegate of Hui Tung Investment Co., Ltd.	Lee, Chi-Ming
Chang, Ming-Chen Delegate of LegHorn Investment Co.,Ltd.	Chang, Ming-Chen
Tu, Li-Yang Delegate of Ta Le Investment HoldingCo.,Ltd.	Tu, Li-Yang
Lee, Shu-Fen Delegate of China F.R.P Corp.	Lee, Shu-Fen
Duh, Bor-Tsang	Duh, Bor-Tsang
Juang, Jing-Yau	Juang, Jing-Yau
Liang, Yann-Ping	Liang, Yann-Ping
Pai, Chun-Nan	Pai, Chun-Nan
Song, Yung-Fong	Song, Yung-Fong
Horng, Yuan-Chuan	Horng, Yuan-Chuan

C. Companies listed on stock and OTC markets shall disclose information on the evaluation cycle, period, scope, method, and content of the Board’s self (or peer) evaluation, and shall complete Schedule 2 (2) on the implementation of the evaluation of the Board of Directors: See chart B on the next page.
D. Measures taken to strengthen the functionality of the board (e.g. The Board of Directors has established an Audit Committee and a Remuneration Committee to assist the board in carrying out its various duties.) :

To strengthen the competencies of the Board of Directors and the overall risk management system, the Board of Directors set up Independent Directors and established the Audit Committee, Remuneration Committee, and Risk Management Committee to meet the governance requirements of listed companies. To enhance the implementation of corporate governance, the Company has established the “Procedures for Handling Material Internal Information”, “Corporate Social Responsibility Best Practice Principles”, “Ethical Corporate Management Best Practice Principles”, “Corporate Governance Best Practice Principles”, “The Performance Evaluation Measures of the Board of Directors” , and “The Standard Procedures of Demands of Directors”, which are implemented by relevant units on a level-by-level basis.

Note: The term of office of the 11th Board of Directors is from June 21, 2018 through June 20, 2021.

Independent director attendance is detailed below:

◎: Attendance in Person; ☆ : Proxy Attendance; ＊ : Absence

Board meetings	2020.03.26	2020.11.10	2020.12.24
Liang, Yann-Ping Pai, Chun-Nan Song, Yung-Fong Horng, Yuan-Chuan	◎ ◎ ◎ ◎ ◎ ◎ ◎ ◎ ◎ ◎ ◎ ◎	◎	◎ ◎ ◎
		◎
		◎ ◎
	◎ ◎ ◎ ◎		◎

2020 Annual Report

III. Corporate Governance

B. Evaluation of the Board of Directors

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Evaluation
Evaluation period Evaluation scope Evaluation method Content
cycle
1. Control over the Company’s goals and
tasks
2. Understanding of duties and functions of a
Director.
Internal self-evaluation of 3. Involvement in the Company’s operations
Annually 2019/7/1~2020/6/30 Board of Directors
the Board of Directors 4. Management of internal relations and
communication
5. Professional and continuing education and
training for Directors
6. Internal Control
1. Involvement in the Company’s operations
2. Improving decision-making by the Board
of Directors.
Annually 2019/7/1~2020/6/30 Individual Directors Self-evaluation of Directors 3. Composition and structure of the Board of Directors.
4. Election of Directors and their continuing
education and training
5. Internal controls
1. Composition of the Board of Directors
2. Teaching of the Board of Directors
3. Authorization of the Board of Directors
4. Supervision of the Board of Directors
Evaluation of external
times /3 year 2019/7/1~2020/6/30 Board of Directors professional institution 5. Communication od the Board of Directors
6. Internal controls and risks management
7. Self-Demanding of the Board of Directors
8. Other things like meetings of the Board of
Directors and System-supporting.
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C. Operations of the Audit Committee: Number of Meetings, Actual Attendance Rate of each Independent Director, and other mentionable items

The Company established its Audit Committee in June of 2015. The main key points of functional authority to be audited are as follows:

Adoption or amendment of internal control systems in accordance with Article 14-1 of the Securities and Exchange Act.
Evaluation of the effectiveness of internal control systems.
Adoption or amendment, pursuant to Article 36-1 of the Act, of handling procedures for financial or operational actions of material significance, such as acquisition or disposal of assets, derivatives trading, extension of monetary loans to others, and endorsements or guarantees for others.
Items involving the interests of Directors.
Major assets or derivative trading.
Major loaning of funds, making of endorsements, or provision of guarantees.
Offering, issuance, or private placement of any equity-type securities.
Appointment, dismissal, and compensation of CPAs.
Appointments and dismissal of finance managers, accounting managers, and internal audit managers.
The annual financial statements were signed or sealed by the Chairman, managers, and accounting manager while the second quarter financial statements were audited by CPAs who attested to their accuracy.
Other major items required by other companies or the competent authority.

President Securities Corporation

Total of 6 meetings of the Audit Committee were held in the year of 2020. Independent Directors’ attendance condition:

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Actually Number Number of
Actual Attendance
Title Name of Times Times Attended Remark
Rate (%) (B/A)
Attended (B) by Proxy
Independent Director Liang, Yann-Ping 6 0 100% None
Independent Director Pai, Chun-Nan 6 0 100% None
Independent Director Song, Yung-Fong 6 0 100% None
Independent Director Horng, Yuan-Chuan 6 0 100% None
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Other mentionable items:

I. If any of the following circumstances occur, the dates of meetings, sessions, contents of motion, resolutions of the Audit Committee and the Company’s response to the Audit Committee’s opinion should be specified.
Matters referred to in Article 14-5 of the Securities and Exchange Act: Total of 8 meetings were held in 2020 and 2021 to the publish date of the annual report. For matters referred to in Article 14-5 of the Securities and Exchange Act, all members present voted in favor of the resolution without any objection.
Other matters which were not approved by the Audit Committee but were approved by two-thirds or more of all directors: None.
II. If there are independent directors’ avoidance of motions in conflict of interest, the directors’ names, contents of motion, causes for avoidance and voting should be specified: None.
III. Communications between the independent directors, the Company’s internal audit supervisors and CPAs (e.g. the material items, methods and results of audits of corporate finance or operations, etc.):
A. Communications with the internal audit supervisors:
Communication methods:
(1) The Company shall compile a written report about improvements and follow-up on the deficiencies discovered in the audit in the previous month, and submit it to the independent directors for review.
(2) At each workshop on internal control deficiencies, the Company’s auditors and independent directors shall discuss and review the deficiencies in the internal control system.
(3) At each Audit Committee meeting, the internal audit supervisor shall attend the meeting to report the internal audit execution.
Summary of communication between independent directors and the internal auditors:

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Item Communication Execution period
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Item	Communication	Execution period

Written reports to independent directors	1. Summary of deficiencies identified in the audit report	2020.01~2020.12 (12 times in total)
Internal control deficiencies workshop	1. Report of deficiencies identified in internal auditing 2. Summary Report on Deficiencies from the Competent Authority	2020.01~2020.12 (6 times in total)
Audit Committee meeting	1. Internal audit report 2. Report of financial inspection deficiencies and improvement tracking	2020.01~2020.12 (6 times in total)

2020 Annual Report

III. Corporate Governance

B. Communications with the CPA:
Communication methods: The Company’s Audit Committee comprises all the independent directors. The CPA holds a meeting with the Audit Committee at least twice a year. At the meeting, the auditing of the Company’s financial status and audit results shall be reported and updates on important regulations shall also be reported.
Summary of communication between independent directors and the certified public accountant (CPA) and results of implementation:

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Date of meetings Communication and results of implementation
1. Reporting audit findings and key audit items of financial statements of 2019.
2. Reporting audit planning of 2020.
3. The CPA explains recent important regulations changes regarding the production of financial statements, amendments
to profit distribution in the Company Act, and changes in the contents of the Corporate Governance Evaluation System
2020.03.12 and its impacts.
4. The CPA explains overview of ”The International Tax Co-operation (Economic Substance) Law” and the liquidation
schedule of subsidiary in BVI.
5. Independent Directors’ suggestions: None.
6. Reporting to the Board of Directors after approval.
1. Reporting audit findings and key audit items of financial statements of 2020 Q2.
2. The CPAs reported matters on governance related to financial reporting that required communication in the first half of
2020.
2020.08.13 3. The CPAs explained the production of financial statements, advance notice for tax law changes and recent financial
reporting disclosure reminders.
4. Independent Directors’ suggestions: None.
5. Reporting to the Board of Directors after approval.
1. Reporting audit findings and key audit items of financial statements of 2020.
2. Reporting audit planning of 2021.
3. The CPA explains recent relevant regulations revision.
4. Independent Directors’ suggections:
2021.03.11 For Directors to understand the operational status of the Company’s significant investment companies, we suggest the
management team reports include operating status and performance of investment companies using the equity method.
We further recommend these results be given to the Audit Committee and Board of Directors twice a year during the
time consolidated financial reports are audited by external auditors and issued.
5. Reporting to the Board of Directors after approval.
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Note: Major Resolutions during the Auditing Meetings in 2020 and 2021 to the publish date of the annual report: Executed according to the resolution of the Audit Committee.

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Meeting Item Resolution
1. Review of the 2019 Individual Financial Report and 2019 Consolidated Financial Report.
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Meeting	Item	Resolution
	1. Review of the 2019 Individual Financial Report and 2019 Consolidated Financial Report.
2020.03.12 The 10th Auditing Meeting of the 2nd Audit Committee	2. Proposal for acquisition of overseas equity held by PSBVI and liquidation of PSBVI. 3. Accountant independence and competency evaluation. 4. Proposal for increasing capital from retained earnings for issuance of new shares. 5. Submitted the Statement of the 2019 Internal Control System. 6. Revised the Internal Control System for Information System Department. 7. Submitted the Overall Information Security Implementation Statement. 8. Amendments to the policies and strategies related to the principle of fair treatment of consumers. 9. Amended the Articles of Incorporation. 10. Proposal for amendments to the Rules Governing Board Meetings. 11. Proposal for amendments to the Audit Committee Charter. 12. Proposal for amendments to the procedures for handling the Company’s internal material information. 13. Proposal for amendments to the Company’s guidelines for financing anti-money laundering and counter-terrorism activities. 14. Revised the Company’s money laundering and terrorist financing risk assessment report. 15. Proposal for amendments to the Company’s compliance and risk evaluation report. 16. Submitted the statement of the Internal Control of anti-money laundering and counter-terrorist financing. 17. Abolition of the Company’s procedures related to derivatives transactions.	All members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion. For the 15th proposal, the independent directors suggested that when the proposal was submitted to the Board of Directors, the title shall be revised to the “Proposal for Formulation of the Company’s Procedures for Compliance Risk Evaluation Report.” The title has been revised according to the suggestion of the independent directors and the proposal has been submitted to the Board of Directors for discussion

President Securities Corporation

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Meeting Item Resolution
All members of the committee
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Meeting	Item	Resolution
		All members of the committee
2020.04.23 The 11th Auditing Meeting of the 2nd Audit Committee	1. Revised the Internal Control System for electronic account opening. 2. Audited the operating report and profit distribution of year 2019. 3. Revised the procedures for acquiring or disposing of assets. 4. Revised the Internal control system. 5. Relieved the non-compete limitation for the directors.	present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion. For the 4th proposal, the independent directors suggested that execution division within the content 1.1 of the proposal was amended to finance department, shareholder services department and compliance division. The content has been revised according to the suggestion of the independent directors and the proposal has been submitted to the Board of Directors for discussion.
2020.06.04 The 12th Auditing Meeting of the 2nd Interim Audit Committee	1. Proposal for obtaining the equity price of overseas investees from President Securities (BVI) Ltd.	All members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion. The independent directors suggested that the content of this proposal submitted to the Board meeting shall include background information related to the appraisal company, the key summary of the appraisal report, the CPAs’ clear and reasonable opinions on the appraised price, the entire transaction, and the funding process, etc. The content of the proposal has been completed and submitted to the Board of Directors for discussion in accordance with the independent directors’ suggestions.
2020.08.13 The 13th Auditing Meeting of the 2nd Audit Committee	1. Review of the 2020Q2 Individual Financial Report and 2020Q2 Consolidated Financial Report. 2. Revised the Internal Control System. 3. Amended the procedures for handling consumer disputes. 4. Amended the principles of best practices for ethical corporate management. 5. Formulated the Procedures for Ethical Management and Guidelines for Conduct. 6. Proposal for amendments to the Rules Governing Shareholders Meetings. 7. Proposal for amendments to the Rules Governing Board Meetings. 8. Proposal for amendments to the Audit Committee Charter. 9. Proposal for amendment to the Rules Governing the Scope of Powers of Independent Directors. 10. Proposal for renewal of liability insurance for Directors and key personnel.	All members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion.
2020.10.29 The 14th Auditing Meeting of the 2nd Audit Committee	1. There were only reports and no resolutions at this meeting.
2020.12.07 The 15th Auditing Meeting of the 2nd Audit Committee	1. Submitted 2021 Auditing program. 2. Amended the review operations of internal personnel’s bokerage trading. 3. The implementation of the principle of fair treatment of consumers from August to November in 2020.	All members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion.

2020 Annual Report

III. Corporate Governance

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Meeting Item Resolution
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Meeting	Item	Resolution

2021.03.11 The 16th Auditing Meeting of the 2nd Audit Committee	1. Review of the 2020 Individual Financial Report and 2020 Consolidated Financial Report. 2. Accountant independence and competency evaluation. 3. Proposal for increasing capital from retained earnings for issuance of new shares. 4. Amended the Regulations Governing the Loaning of Funds and Creation of Endorsements/ Guarantees. 5. Submitted the Statement of the 2020 Internal Control System. 6. Revised the Internal Control System for Information System Department. 7. Submitted the Overall Information Security Implementation Statement. 8. Amended the Articles of Incorporation. 9. Proposal for amendments to the Rules Governing Shareholders Meetings. 10. Amended the Corporate Governance Best Practice Principles. 11. The Company’s 2020 money laundering and terrorist financing risk assessment report. 12. The Company’s 2020 legal compliance risk evaluation report. 13. Internal Control Certification on AML/CFT and Insider Trading. 14. The implementation of the principle of fair treatment of consumers in 2020. 15. Amended the policies and strategy of the principle of fair treatment of consumers.	All members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion.
2021.04.22 The 17th Auditing Meeting of the 2nd Audit Committee	1. Amended the Statement of the 2020 Internal Control System. 2. Revised the Internal Control System for Information System Department. 3. Relieved the non-compete limitation for the Directors. 4. The implementation of the principle of fair treatment of consumers from January to March in 2021. 5. Apply to offer consignment trading of foreign securities to high-asset customers, including international securities business. 6. Apply to offer wealth-management service to high-asset customers. 7. Apply to offer proprietary trading of overseas bonds at the business premises to high-asset customers, including international securities business. 8. Audited the operating report and profit distribution of year 2020. 9. Proposal to increase the capital of Jin Yuan President Securities Corporation Ltd.	The chairman has the assent of all the members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion.

D. Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best -Practice Principles for TWSE/TPEx Listed Companies”

Evaluation Item		Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
		Yes	No	Abstract Illustration
I. Does the company establish and disclose the Corporate Governance Best-Practice Principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies”?		✓		In an effort to implement prudent corporate governance measures in line with the''Principles for Corporate Governance for Securities Firms''and with relevant laws and regulations, President Securities adopted such guidelines by the 13th meeting of the 9th Board of the company held on August 7, 2014, and will abide by said principles. The Principle was amended on March 23, 2021 for the fourth time.	None

President Securities Corporation

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Implementation Status Deviations from
“the Corporate
Governance Best-
Evaluation Item Practice Principles
Yes No Abstract Illustration for TWSE/TPEx
Listed Companies”
and Reasons
II. Shareholding structure &
shareholders’ rights
A. Does the company establish an ✓ A. 1. The Company has a spokesperson and shareholder None
internal operating procedure to deal service personnel to process shareholders’ suggestions,
with shareholders' suggestions, questions, and disputes.
doubts, disputes and litigations, and 2. The Company has established an “Investor Section”
implement based on the procedure? and “Investor Mailbox” on the Company website, which
are run by the spokesperson and dedicated personnel of
the Administration Department. Shareholders’ suggestions
or disputes are forwarded to relevant departments for
processing.
None
B. Does the company possess the list of ✓ B. PSC maintains close relationships with key shareholders
its major shareholders as well as the and assigns dedicated shareholder services personnel to
ultimate owners of those shares? continually monitor any changes in the shareholdings of
these key shareholders.
None
C. Does the company establish and ✓ C. The finance and business of our company and its
execute the risk management subsidiaries are in separate operation. In term of
and firewall system within its management right and obligation there is a clear line
conglomerate structure? between our company and its subsidiaries. All the
relations and trades are dealt with in accordance with
law. “Surveillance governing internal-control system for
subsidiaries” has also been set up as a controlling and
governing mechanism for our subsidiaries.
D. Does the company establish internal ✓ D. 1. In an effort to prevent insider trading and to protect the None
rules against insiders trading with interests of investors, we have adopted and implemented
undisclosed information? the “Material Event Internal Handling Procedures”,
which outlines clear division of responsibilities, adequate
firewall and confidentiality procedures, the disclosure of
material events, educational guidance rules, etc.
2. In order to handle the conflict of interest among internal
personnel effectively and protect the rights of customers,
the Company introduced ''Rules for inspection activity
on internal personnel engaged in brokerage trading''
requiring the cross comparison of brokerage trading
5 minutes prior to and after the brokerage trading for
personnel that have access to customer brokerage trading
details. In addition, inspections need to be undertaken on
whether or not there is any undisclosed information in
the brokerage trading engaged by the representative of
companies or the companies he represents to check for
any abnormality.
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2020 Annual Report

III. Corporate Governance

						Implementation Status	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Implementation Status	Deviations from “the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons	Deviations from “the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies” and Reasons
Evaluation Item						Yes	No		Abstract Illustration
III. Composition and Responsibilities of the Board of Directors A. Does the Board develop and implement a diversified policy for the composition of its members?						✓			A. Abiding by article 10 of our Principles for Corporate Governance, when selecting directors, President Securities uses a comprehensive approach so as to put together a professional yet independent team that can exercise its duties in an objective manner. Currently, there are 18 Directors in the Company, including 4 independent directors. Independent directors account for 22% of total Directors and are from the financial, business, legal, and industrial backgrounds; of them, there’s 3 with a term of less than 3 years and 1 with a term of 4-6 years, conforming the target of percentage and terms of years (within 3 terms). The Company also emphasize the gender equality among Directors. The target regarding percentage of female Director is 30% or above. For the current term, there are 9 female Directors including 1 Independent Director, stand for 50% of total Directors. We expect to reach our goal in later years as well. The Board of Directors is equipped with the abilities as shown in the table below.						None

					Comprehensive Abilities
	Name	Gender	1. Operational Judgement	2. Accoutning & Financial Analysis				3. Operating Management		4. Crisis Management	5. Industrial Knowledge	6. International Points of View	7. Leadership	8. Decision- making Ability		9. Risk Management Konwledge & Ability
	Lin, Kuan-Chen	M	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Liu, Tsung-Yi	M	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Chen, Kuo-Hui	M	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Hsieh Hong, Hui-Tzu	F	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Lu, Li-An	F	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Chen, Ching-Yi	F	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Chen, Yi-Ling	F	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Teng, Wen-Hwi	F	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Lee, Chi-Ming	M	✓					✓		✓	✓	✓	✓	✓		✓
	Chang, Ming-Chen	F	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Tu, Li-Yang	F	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Lee, Shu-Fen	F	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Duh, Bor-Tsang	M	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Lee, Shy-Lou(Note)	M	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Juang, Jing-Yau	M	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Liang, Yann-Ping	F	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Pai, Chun-Nan	M	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Song, Yung-Fong	M	✓	✓				✓		✓	✓	✓	✓	✓		✓
	Horng, Yuan-Chuan	M	✓	✓				✓		✓	✓		✓	✓		✓

President Securities Corporation

Implementation Status Deviations from “the Corporate
Governance Best-
Evaluation Item Practice Principles Yes No Abstract Illustration for TWSE/TPEx Listed Companies” and Reasons
B. Does the company voluntarily ✓ B. President Securities has already added independent None establish other functional directors to its Board, has established an audit committee, committees in addition to the a remuneration committee, and a risk management Remuneration Committee and the committee. Audit Committee? 1. Based on the expertise, consistency, and time-based effectiveness of the Company’s business, the Board of Directors has passed the Articles of Organization developed by the Risk Management Committee on June 26, 2008 and established the Risk Management Committee in the Board of Directors to implement supervision of day-to-day risk management. The Committee is charged with the following duties: (1) Establishment of Company risk management policies and organization and assignment of duties to related units.
(2) Establishment of the Company’s risk measurement standards.
(3) Management of limits for the Company’s overall and departmental risk.
1. The Risk Management Committee consists of three members. At least half of them are independent directors, and the committee members shall be selected via resolution of Board of Directors. The Risk Management Committee shall convene meetings at least once every quarter to assist the Board of Directors in planning and supervising the Company’s related risk management affairs. This committee shall report the implementation of risk management to the Board of Directors periodically and propose suggestions for necessary improvements.

2020 Annual Report

III. Corporate Governance

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Implementation Status Deviations from
“the Corporate
Governance Best-
Evaluation Item Practice Principles
Yes No Abstract Illustration for TWSE/TPEx
Listed Companies”
and Reasons
C. Has the company formulated the ✓ C. In accordance with the “Corporate Governance Best- None
board’s performance evaluation Practice Principles for Securities Firms,” the Company
cooperated with the competent authority to promote
measures and evaluation methods?
corporate governance and adopted the “Board of Directors
Does the company conduct Performance Evaluation Measures” .
annual and regular performance According to the Measures, the Company shall conduct
an internal performance evaluation of the Board of
evaluations and report the evaluation
Directors every year; evaluation shall be performed by
results to the Board of Directors
an external professional independent institution or a team
while adopting the results as a of external experts once every three years. The Taiwan
reference for individual directors’ Corporate Governance Association was responsible for
the evaluation this time.
remuneration and nomination for re-
The evaluation results of the self-evaluation and external
election? evaluation of the Board of Directors this year are
described below, respectively:
Results of Directors’ self-evaluation are as follow:
1. Evaluation period: 2019/7/1-2020/6/30
2. Directors’ self-evaluation: A total of 25 evaluation
items were employed. Six Directors received a perfect
score (five points). The average scores of the remaining
Directors was four or more points. The performance
evaluation results of all Directors was “beyond the
standard,” indicating that the Directors have fully
demonstrated their functions as required in the
operation of the Company’s Board of Directors.
3. Performance evaluation of the Board of Directors: A
total of 40 evaluation items were employed. Except
for item 2nd and 7th got 4 points, others got 5 points,
which resulted an average score of 4.95 points; the
evaluation result was “exceeded the standard.”
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President Securities Corporation

Implementation Status Deviations from “the Corporate
Governance Best-
Evaluation Item Practice Principles Yes No Abstract Illustration for TWSE/TPEx Listed Companies” and Reasons
C. Has the company formulated the The aforementioned results of the performance evaluation board’s performance evaluation of the Board of Directors were submitted to the 18th meeting of the 11th Board of Directors on March 23, 2021
measures and evaluation methods? for reference.
Does the company conduct annual Part of external evaluation: and regular performance evaluations 1. The executive professional institution of external
and report the evaluation results evaluation: Taiwan Corporate Governance Association to the Board of Directors while 2. The reason for the independence of the external adopting the results as a reference for organization: As an independent professional individual directors’ remuneration organization for corporate governance, counseling, and evaluation, the Taiwan Corporate Governance
and nomination for re-election? Association refers to the latest corporate governance guidelines of the Organization for Economic Cooperation and Development (OECD). It considers Taiwan’s legal environment and corporate characteristics and launched the corporate governance system evaluation service in 2005. To date, it has served more than 300 companies, covering a wide variety of industries, including state-owned enterprises, publicly listed companies, and non-publicly listed companies with different shareholding structures and compositions of board of directors.
The evaluation standards and the process:
(1). Evaluation period: 2019/7/1-2020/6/30
(2). Self-evaluation period:2020/8/7-2020/8/20 (3). The documentary evaluation of Taiwan Corporate Governance Association’committees and agents: 2020/9/7
(4). Field investigation of in person Taiwan Corporate Governance Association’committees and agents: 2020/9/17
The evaluation contents and items:
(1). Composition of the Board of Directors
(2). Teaching of the Board of Directors (3). Authorization of the Board of Directors (4). Supervision of the Board of Directors (5). Communication od the Board of Directors
(6). Internal controls and risks management
(7). Self-Demanding of the Board of Directors
(8). Other things like meetings of the Board of Directors and system-supporting.

2020 Annual Report

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Implementation Status Deviations from
“the Corporate
Governance Best-
Evaluation Item Practice Principles
Yes No Abstract Illustration for TWSE/TPEx
Listed Companies”
and Reasons
C. Has the company formulated the 5. Overall evaluation:
board’s performance evaluation (1). The Company invited a third-party professional
measures and evaluation methods? independent organization to assist with the
performance evaluation of the Board of Directors.
Does the company conduct
This shows that the Company’s Board of Directors is
annual and regular performance proactive in implementing the corporate governance
evaluations and report the evaluation system and enhancing the effectiveness of the
results to the Board of Directors Board while seeking opportunities for improvement
through independent and objective inspections.
while adopting the results as a
(2). The open leadership style of the Company’s
reference for individual directors’
Chairman is conducive to the free expression
remuneration and nomination for re- of opinions of the directors and the effective
election? functioning of the Board of Directors.
(3). The Company’s independent directors have
professional backgrounds. According to the
evaluation and interview team, they interacted
with the two independent directors on important
governance issues in person and felt that the
independent directors actively fulfilled their duties
and contributed their strengths to the business.
(4). Both the Company’s Chairman and President have
experience in serving as managerial officers with a
clear division of powers and responsibilities. The
Chairman leads the Company’s Board of Directors
in establishing the Company’s vision, strategies, and
goals; the President is in charge of the Company’s
managerial departments which implement strategies
and achieve goals.
(5). The Company’s President shares the business
environment and exchanges ideas about the
Company’s strategies for developing the business
with independent directors through appropriate
channels.
6. Advices:
(1). The Company currently has 19 directors. In
addition to four independent directors, there are 12
representatives of corporate directors. The Company
is advised to consider reducing the number of
directors appropriately while increasing the number
of independent directors to more than one-third of the
total, so as to enhance the independence of the Board
of Directors.
(2). The Company regularly conducts performance
evaluations of the Board of Directors and individual
directors. The Company is also is advised to regularly
evaluate the performance of the three functional
committees under the Board of Directors, namely
the Audit, Risk Management, and Remuneration
committees, and include them in the items and scope
of the annual company evaluation while reporting the
evaluation results to the Board of Directors.
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Implementation Status Deviations from
“the Corporate
Governance Best-
Evaluation Item Practice Principles
Yes No Abstract Illustration for TWSE/TPEx
Listed Companies”
and Reasons
C. Has the company formulated the (3). The Company’s Board of Directors is advised to
board’s performance evaluation keep pace with the times and establish a strategic
development committee in accordance with the needs
measures and evaluation methods?
of corporate governance at this stage to assist the
Does the company conduct Board in taking care of the Company’s long-term
annual and regular performance development issues.
evaluations and report the evaluation The aforementioned results of the performance
evaluation of the Board of Directors were submitted
results to the Board of Directors
to the 16th meeting of the 11th Board of Directors on
while adopting the results as a November 10, 2021 for reference.
reference for individual directors’
The remuneration of the Company’s Directors shall be
remuneration and nomination for re- in accordance with the provisions of Article 23 of the
election? Articles of Incorporation. The Company shall allocate no
more than 2% of the total profit of the current year to the
Directors as a consideration and give them reasonable
remuneration based on the Company’s operational
performance and their contribution the Company’s
performance. The President and Vice President
remuneration policy was based on the Company’s
remuneration policy, the level of remuneration for such
positions in the industry, the scope of responsibility in
the Company, and their contribution to the Company’s
operational objectives. The procedures for determining
the remuneration were based on their contribution to the
business performance and the performance evaluation
measures to provide reasonable remuneration. Relevant
performance evaluation and the reasonableness of
remuneration were all reviewed by the Remuneration
Committee and the Board of Directors; the remuneration
system was reviewed at any time depending on the
actual operational situations and relevant laws and
regulations, so as to balance the Company’s sustainable
operations and risk control.
D. Does the company regularly ✓ D. Based on regulation of corporate governance of securities None
evaluate the independence of CPAs? dealers, the Board evaluates and assigns the appointment
of independent accountants annually. According to article
46 and article 47 of Certified Public Accountant Act,
“honesty, impartiality, objectivity and independence,” the
company sets up the independent items of declaration,
which issued by the certified public detached accountants.
Accountant Lin, Se-Kai, Hsiao, Chin-Mu, and Lo, Chiao-
Sen from PricewaterhouseCoopers Taiwan proved to
be qualified as CPA for company’s financial and tax
accountants.
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Implementation Status Deviations from
“the Corporate
Governance Best-
Evaluation Item Practice Principles
Yes No Abstract Illustration for TWSE/TPEx
Listed Companies”
and Reasons
IV. Does the company designate ✓ The Company’s Board of Directors adopted a resolution None
an appropriate number of on May 3, 2019, that Assistant Vice President Chen, Nai-
qualified personnel and appoint Chen at the President Office would be appointed as the
a corporate governance officer Corporate Governance Officer in charge of corporate
in charge of matters related to
governance-related affairs. Assistant Vice President Chen
corporate governance? These
has served as a supervisor in President Office related to
matters include but are not
corporate governance for more than three years, as set out in
limited to providing directors
Article 21 in accordance with Article 23 of the “Operation
and supervisors with information
needed for the execution of Directions for Compliance with the Establishment of Board
business, assisting directors and of Directors by TWSE Listed Companies and the Board’s
supervisors in complying with Exercise of Powers”. As a new officer, she will complete
laws and regulations, handling 18 hours of professional training courses and at least 12
matters related to the board of hours in a year in accordance with paragraph 2 article 24.
directors and the shareholders’ The Company’s corporate governance-related affairs are
meetings in accordance with the handled and completed by relevant departments collectively.
related laws, handling company
Corporate governance-related affairs (terms of reference)
registration and registration
shall include matters related to holding of meetings of the
changes, and keeping minutes of
Board of Directors and shareholders’ meetings, minutes
the board of directors and the
recording for meetings of the Board of Directors and
shareholders’ meetings.
shareholders’ meetings, assistance to Directors with taking
office and continuous education and training, provision of
information required for the Directors to conduct business,
assistance to Directors with compliance, and other matters
set out in the Company’s Articles of Incorporation or
contracts.
Key points for business execution in 2020:
1. Matters related to meetings of the Board of Directors
and shareholders’ meetings in accordance with the law.
2. Minutes recording for meetings of the Board of
Directors and shareholders’ meetings.
3. Assistance to the Directors with taking office and
continuous education and training.
4. Provision of the information required for the Directors
to conduct business.
5. Other matters set out in the Company’s Articles of
Incorporation or contracts.
Status of continuing education and training: A total of 12
hours of training was provided during the year. Please refer
to the table below.
Credit(s) from
Date Organization Course Credit(s) Individually
Traning
On Laws and Regulations Designed to Improve Corporate Governance:
2020.08.27 Taiwan Institute of Directors Treating Consumers Fairly, Anti-Money Laundering, and Insider Trading as 3
Examples
2020.09.04 Taiwan Corporate Governance Association [[CGP-Core] Operational Practices of the Functional Committees of the ] 3 12
Board
2020.09.18 Taiwan Corporate Governance Association [[CGP-Advanced] The Role of Institutional Investors in Improving ] 3
Corporate Governance
2020.11.10 Taiwan Institute of Directors The Prospects and Challenges of Artificial Intelligence in Taiwan in 2020 3
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President Securities Corporation

Deviations from “the Corporate Governance BestPractice Principles for TWSE/TPEx Listed Companies” and Reasons

Implementation Status Evaluation Item Yes No Abstract Illustration ✓

We have also taken steps to address corporate responsibility None concerns of our interested parties. We have established a platform with dedicated staff to handle feedback from investors, employees, clients, suppliers, competent authority and community/NGO so as to maintain strong lines of communication. This allows us to stay aware of the issues that are of importance to our interested parties. and to ensure that all of our actions are responding to the needs of our stakeholders.

V. Does the company establish a communication channel and build a designated section on its website for stakeholders, as well as handle all the issues they care for in terms of corporate social responsibilities?

A. Shareholders

Issues concerned: corporate governance, ethical business operation, compliance, risk control/auditing, transparency and disclosure of information, and operational performance

Communication methods:

(1) Company information is provided through investor emails and announcements on the official website. The Company established "the investor section" on our website to provide investors with transparent and comprehensive information. The Company also established the investor relations contact channel to respond to questions raised by shareholders.

(2) Announcements of operations and financial performance periodically and the issuance of material information in Chinese and English on the Market Observation Post System.
(3) Organization of one institutional investor conference every season to report business status to shareholders.
B. Employees

Issues concerned: operational performance, employee training, assessment, and development, employee remuneration, working hours, labor-management relations, communication channels, and occupational safety and health

Communication methods:

(1) The employee suggestion mailbox and employee complaint mailbox are used for communication.
(2) The Company organizes employee seminars every month. The Company also announces internal news reports and organizes large-scale family day events to reward employees and facilitate communication and employee exchanges.

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C. Clients

Issues concerned: communication channels, customer privacy protection and information security, brand image, operational performance, service quality, and customer satisfaction

Communication methods:

(1) The Company communicates with customers regularly through the customer service hot line and email and monthly statements are delivered every month.
(2) The Company organizes investment and wealth management seminars periodically and organizes largescale investment seminars to communicate and interact with customers.

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Implementation Status Deviations from
“the Corporate
Governance Best-
Evaluation Item Practice Principles
Yes No Abstract Illustration for TWSE/TPEx
Listed Companies”
and Reasons
V. Does the company establish a D. Suppliers
communication channel and Issues concerned: ethical business operation, risk
build a designated section on its control/auditing, and brand image
website for stakeholders, as well
Communication methods:
as handle all the issues they care
(1) The Company organizes periodic price negotiation
for in terms of corporate social
meetings, announces information on the public
responsibilities?
tendering information section on the official website,
and organizes public tendering briefings.
(2) The Company has established the ‘Supplier Evaluation
and Management Regulations’ to evaluate suppliers.
The evaluations include preliminary, periodic, and
unscheduled evaluations and classify suppliers into A,
B, C, and D categories in accordance with the results of
the evaluations, which are used as the basis for future
cooperation.
(3) The Company cooperates with suppliers to jointly
commit to fulfilling corporate social responsibilities
and sign the ‘Corporate Social Responsibilities
Commitment Letter.’ The materials used in decoration
construction and equipment procurement must be green
building materials and equipment with environmental
protection labels to increase the Company’s dedication
to environmental protection, energy conservation, and
carbon emissions reduction.
E. Competent authority
Issues concerned: ethical business operation, corporate
governance, transparency and disclosure of information,
financial and capital market functions maintenance, and
financial inclusion
Communication methods:
The Company participates in courses and seminars
organized by the government.
F. Community/NGO
Issues concerned: social welfare, responsible Investment/
sustainable finance, and environmental protection
Communication methods:
The Company organizes charity events every year.
The Company has established a stakeholder section and
corporate social responsibility section on the official website
to explain the Company’s corporate social responsibility
(CSR) ideas and policies and describe the Company’s
accomplishments including the Company’s economic,
social, and environmental achievements. The Company has
formulated the ‘Corporate Social Responsibility Report of
President Securities Corporation’ every year for publication
on the Company’s website (URL: www.pscnet.com.tw) and
publication in the Market Observation Post System.
VI. Does the company appoint a ✓ Affairs of shareholders' meetings are handled by the None
professional shareholder service Shareholder Services Department of the Company; the
agency to deal with shareholder Department obtained the certification of the Professional
affairs? Shareholder Services Institution from Taiwan Depository &
Clearing Corporation (TDCC).
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Implementation Status Deviations from
“the Corporate
Governance Best-
Evaluation Item Practice Principles
Yes No Abstract Illustration for TWSE/TPEx
Listed Companies”
and Reasons
VII. Information Disclosure
A. Does the company have a corporate ✓ A. On President Securities Corporation website, we None
website to disclose both financial have disclosed the Company’s financial and business
standings and the status of corporate information, and corporate governance. We also post
governance? periodical and non-periodical financial and operational
information on the government-operated MOPS website.
B. Does the company have other ✓ B. Our company has assigned a spokesperson to be None
information disclosure channels responsible for providing information to shareholders
(e.g. building an English website, and investors. On our website where investors and
appointing designated people to shareholders can obtain information on the following:
handle information collection and
disclosure, creating a spokesman (1) Company introduction in English and Chinese.
system, webcasting investor (2) Disclosure of company’s financial and business
conferences)? information, and corporate governance.
(3) Investor Suggestion Mailbox, which is manned
by Administration Department Personnel who are
responsible for replying to all comments received.
(4) The Company has disclosed the briefing and video files
of institutional investor conference proceedings and
other related information on the Company’s website.
C. Does the company announce and ✓ C. The Company currently announces and reports its annual Based on the
evaluation, to
release its annual financial report financial report within the time limit in accordance with
disclose financial
within two months after the end of the relevant provisions of the Securities and Exchange information in the
the fiscal year, and announce and Act, and does not announce and reports its financial financial report fully
and correctly, it is
release financial reports for the report in advance.
not yet possible to
first, second, and third quarters and complete its report
operating conditions of each month early with the
currently available
earlier that the required date?
human and system
resources.
VIII. Is there any other important ✓ A. Environmental Protection Measures None
information to facilitate a better
President Securities operate financial services and,
understanding of the company's
therefore, does not produce any environmental pollutants
corporate governance practices or waste.
(e.g., including but not limited
to employee rights, employee
wellness, investor relations, B. Investor relations
supplier relations, rights of
Our company has assigned a spokesperson to be
stakeholders, directors' and
responsible for providing information to shareholders
supervisors' training records,
and investors, and to post periodical and non-periodical
the implementation of risk
financial and operational information on the government-
management policies and operated MOPS website. The Company established “the
risk evaluation measures, the investor section” on our website to provide investors with
implementation of customer transparent and comprehensive information. The company
relations policies, and purchasing will continue to strengthen investor relations and maintain
insurance for directors and good communication and interaction with investors.
supervisors)?
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2020 Annual Report

Deviations from “the Corporate Governance BestPractice Principles for TWSE/TPEx Listed Companies” and Reasons

III. Corporate Governance

Implementation Status Evaluation Item Yes No Abstract Illustration

VIII. Is there any other important information to facilitate a better understanding of the company's corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors' and supervisors' training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors and supervisors)?

C. Employee rights and wellness

(1) To boost work efficiency and solidarity among our employees, we place particular emphasis on benefits programs and labor relations, and thus ensure employee welfare in a comprehensive manner.
(2) General accident insurance has been purchased for each of our branches and work premises so as to protect customer rights. Employer insurance has also been purchased so as to protect the interests of all employees.

D. Rights of the stakeholders

We have also taken steps to address corporate responsibility concerns of our stakeholders. We have established a platform with dedicated staff to handle feedback from investors, employees, clients, competent authority and community/NGO so as to maintain strong lines of communication. This allows us to stay aware of the issues that are of importance to our interested parties and to ensure that all of our actions are responding to the needs of our stakeholders.

E. Customer policy
'' ''
(1) Policy: 3 Goods and 1 Fair" ─"Good Quality , ''Good Credibility'', ''Good Service'', and ''Fair Price''. This is combined with ''Professional Leadership, Kind Service'', in providing all customers with comprehensive services.
(2) Implementation: We have established a Customer Services Department—The Customer Service Center, which offers customers an avenue through which to register complaints, which operates a customer service hotline which is manned by customer service specialists who help to solve customer problems, and which ensures that all account correspondence sent to clients includes clear product risk warnings.

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F. Directors training

The Company's Directors shall carry out independent studies and the Company shall also organize related corporate governance courses periodically and invite all Directors to participate in the courses. Take 2020 for example, in addition to the Directors’ individual training courses, the Company cooperated with the Taiwan Institute of Directors to jointly organize classes for all directors and managerial officers of the Company. In August, Li, Yu-Hsun, a financial legal service attorney from PwC Legal, was invited to give a lecture entitled “On Laws and Regulations Designed to Improve Corporate Governance: Taking Fair Treatment of Consumers, AntiMoney Laundering, and Insider Trading as Examples.” In addition, Wen, I-Ling, CEO of the Artificial Intelligence Foundation, was invited to lecture on “The Prospects and Challenges of Artificial Intelligence in Taiwan in 2020” in November.，to enable the Directors to further understand the spirit of corporate governance and practice. For details of the Directors' on-the-job training in 2020, please refer to Chapter 3 XI. Directors and Corporate Auditors Training.

President Securities Corporation

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Implementation Status Deviations from
“the Corporate
Governance Best-
Evaluation Item Practice Principles
Yes No Abstract Illustration for TWSE/TPEx
Listed Companies”
and Reasons
VIII. Is there any other important G. Implementation status for Risk Management Policy and
information to facilitate a better Measurement:
understanding of the company's
corporate governance practices (1) Risk Management Policy
(e.g., including but not limited i. Ensure that we can operate various types of business
to employee rights, employee from a position of solid risk management. Using
wellness, investor relations, reasonable risk tolerance levels, continue to enhance
supplier relations, rights of profitability, create shareholder value, and achieve
stakeholders, directors' and return on capital targets.
supervisors' training records,
ii. Set well-defined risk controls for every business area,
the implementation of risk
implement risk management checks and balances, set
management policies and
clear obligations for each department so as to enhance
risk evaluation measures, the
risk management effectiveness by breaking it down
implementation of customer
into manageable pieces.
relations policies, and purchasing
insurance for directors and iii. Our risk management operations take into accounts
supervisors)? all key forms of risk: market risk, credit risk, liquidity
risk, operational risk, legal risk, model risk.
(2) Risk Measurement
The company has set risk management principles. In order
to ensure that all of our organization’s businesses adhere
to our operating policies, operating goals, and capital
levels, we have set suitability evaluation policies that can
react to changes in our business and in the market:
 Market risk measurement
i. We use RiskMetrics market risk management system
to manage our company’s exposure to market risk.
In addition to producing daily risk value tables, we
perform simulation analysis and historical analysis so
as to supplement missing risk values.
ii. We evaluate the completeness of our evaluation
models on various business mareas, and review the
assumptions, parameters, and data used for various
product models, and then test that the models for the
various products are reasonable.
iii. We evaluate the effectiveness of risk control
models: regularly perform backtesting to ensure the
effectiveness of the models used.
 Credit risk measurement
i. Our company undergoes credit rating evaluations from
Moody’s, Standard & Poor’s, Fitch, Taiwan Ratings
Corp, and TCRI.
ii. Trading counterparty credit risk: we assess our
company’s maximum exposure in the event that a
trading counterparty defaults, and then use maximum
exposure limits set by the board of directors, in
determining the credit risk of a trading counterparty.
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Implementation Status Deviations from
“the Corporate
Governance Best-
Evaluation Item Practice Principles
Yes No Abstract Illustration for TWSE/TPEx
Listed Companies”
and Reasons
VIII. Is there any other important iii. Issuer’s Credit Risk: we use KMV model to perform
information to facilitate a better internal evaluations, and combine that with financial
understanding of the company’s data and stock price data, to calculate the probability
corporate governance practices of a default. Then, based on these measurements, we
(e.g., including but not limited developed “Z-Score”, an in-depth internal evaluation
to employee rights, employee of the company, and then use this to protect ourselves
wellness, investor relations, from potential credit risks and potential capital
supplier relations, rights of shortfalls.
stakeholders, directors’ and
supervisors’ training records,  Operational risk measurement
the implementation of risk
i. Operational risk is the risk that occurs when internal
management policies and
processes, employees, or systems, are inappropriate or
risk evaluation measures, the
cause errors; or risk that is caused by external factors.
implementation of customer
This type of risk is related to legal risks but not
relations policies, and purchasing
insurance for directors and strategic risk or credit risk.
supervisors)? ii. We create operations risk policy handbooks that entail
every level of operations.
iii. Through our risk report and audit report, we ensure
that risk is appropriately evaluated, disclosed, and
controlled.
(3) Risk Management
Our risk management takes into account market risk,
credit risk, liquidity risk, operational risk, legal risk,
etc., for both on-balance sheet business and off-balance
sheet businesses. Each day, every level of operations,
every manager, and every trader is given fresh figures
on position risk and key sensitivity values. Through this,
the company’s risk controls and trading strategies can
be properly analyzed and necessary alerts can initiated.
Setting risk control guidelines for each level of operations
allows for comprehensive monitoring of risk.
(4) Our Risk Management Organization
As part of our risk control measures, we have created
an independent risk control department and constructed
an integrated risk control architecture that encompasses
all facets of the organization, including the Board of
Directors, the Risk Management Committee, the President
Office, the Assets/Liabilities Management Committee, the
Risk Control Office, the Auditing Office, the Compliance
Division, the Finance Department, the Business units and
Settlement & Clearing Department. Each segment of the
company has clearly spelled-out obligations and every
level of the company has clearly defined authorities.
i. Board of Directors: Audits the company’s risk
management policy, supervises sales business
strategies, approves all business proposals and
trading permissions, is ultimately responsible for risk
management.
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President Securities Corporation

Implementation Status Deviations from “the Corporate
Governance Best-
Evaluation Item Practice Principles Yes No Abstract Illustration for TWSE/TPEx Listed Companies” and Reasons
VIII. Is there any other important ii. Risk Management Committee: Is a committee information to facilitate a better established by the Board of Directors tasked understanding of the company’s with integrating all risk management operations, corporate governance practices with supervising and assisting all the various risk (e.g., including but not limited management and related operations. The committee to employee rights, employee is also tasked with setting the various risk authorities, wellness, investor relations, limits, and targets, for a centralized supervision of the supplier relations, rights of status of all of the company’s risk management efforts. stakeholders, directors’ and iii. President Office: Supervises the daily implementation supervisors’ training records, of all of the company’s risk management operations the implementation of risk and authorizes any exceptions to the risk management management policies and protocols. risk evaluation measures, the iv. Assets/Liabilities Management Committee: Controls
implementation of customer the company’s overall asset structure, authorizes
relations policies, and purchasing trading limits for businesses collects and analyzes
insurance for directors and domestic and international interest rates, exchange
supervisors)? rates, and economic changes.
v. Risk Control Office: Is responsible for the drafting of risk policies and regulations, for monitoring market and credit risks, for monitoring liquidity risks, for compiling data on operational risk control and management, for constructing and maintaining the risk management system, for implementation of risk management systems and for ensuring company-wide regulatory compliance.
vi. Auditing Office: Sets operations risk controls, sets the standards for risk control systems, puts in place internal auditing controls, and implements daily check routines.
vii. Compliance Division: Implements legal risk controls and ensures that all businesses and risk management operations are in compliance with relevant laws and regulations. Compliance Division concurrently is responsible for anti-money laundering and counterterrorist financing, developing relevant regulations and systems, monitoring internal control and transactions, supervising the implementation by business units, holding training sessions, and reporting cases suspicious of money laundering.
viii. Finance Department: Monitors capital adequacy rates and liquidity risks, and analyzes the company’s asset/ liability structure and other key financial ratios.

2020 Annual Report

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Implementation Status Deviations from
“the Corporate
Governance Best-
Evaluation Item Practice Principles
Yes No Abstract Illustration for TWSE/TPEx
Listed Companies”
and Reasons
VIII. Is there anyother important ix. Business units: Based on the company’s risk
information to facilitate a better management policies and regulations sets risk
understanding of the company's management guidelines for various businesses, and
corporate governance practices produces a report on abnormal risk items for the Risk
(e.g., including but not limited Control Office.
to employee rights, employee x. Settlement & Clearing Department: Implementation of
wellness, investor relations, risk control and management for settlement, clearing,
supplier relations, rights of and short-sale business operations. Implementation
stakeholders, directors' and of risk management and business department risk
supervisors' training records, management for transactions.
the implementation of risk H. President Securities has already purchased liability
management policies and insurance from ACE insurance and AIG Asia Pacific
risk evaluation measures, the
Insurance Pte. Ltd. for all of its directors, and key
implementation of customer
employees (Policy Value: US$10 million; Policy Term:
relations policies, and purchasing
insurance for directors and September 1, 2020, to September 1, 2021).
supervisors)?
IX. The improvement status for the ✓ In the Corporate Governance Evaluation of 2020, the None
result of Corporate Governance Company's final evaluation score was 93.63, placing
Evaluation announced by Taiwan the Company between 6% and 20% of the total listed
Stock Exchange. companies. In the previous evaluation, for any items
where the Company did not gain any points, such as
whether the Company has disclosed the amounts of its
annual greenhouse gas emissions, water consumption, and
the total weight of waste produced in the past two years,
the Company commissioned SGS Taiwan to conduct
an inspection and review the certification process; as
a result, ISO-14064-1 certification has been obtained.
For other items that required improvement on the part
of the Company, the Company has also actively worked
to strengthen plans to improve its actions and ensure
the quality of information disclosed, so as to improve
corporate governance performance and achieve the goal
of maintaining sustainable business operations.
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E. Composition, responsibilities, and operation of the Remuneration Committee

In accordance with the “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded Over the Counter” published by the competent authority on March 18, 2011, the Company has completed the discussion and resolution of the proposal by September 30, 2011, as required. Please refer to the description of the Remuneration Committee on page 55 of the Annual Report for the information on the operations.

1. Information Regarding Remuneration Committee

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Criteria Meets One of the Following Professional Qualification Requirements, Independence Criteria (Note) Number of
Together with at Least Five Years’ Work Experience Other Public
Companies
An instructor or higher A judge, public prosecutor, in Which the
Title of commerce, law, finance, position in a department attorney, Certified Public Accountant, or other Has work experience in the areas of Individual is Remark
accounting, or other professional or technical commerce, law, Concurrently
academic department related to the business needs of the Company in a public or specialist who has passed a been awarded a certificate national examination and finance, or accounting, or otherwise necessary for the business of the 1 2 3 4 5 6 7 8 9 10 Remuneration Serving as an
private junior college, college in a profession necessary for Company Committee
or university the business of the Company Member
Name
Independent
Pai, Chun-Nan ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 1
Director
Independent
Liang, Yann-Ping ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 0
Director
Independent
Horng, Yuan-Chuan ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 1
Director
Independent
Song, Yung-Fong ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ 0
Director
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President Securities Corporation

Note1: Please tick the corresponding boxes that apply to the directors or supervisors during the two years prior to being elected or during the term of office. 1.Not an employee of the Company or any of its affiliates.
2.Not a director or supervisor of the Company or any of its affiliates. (However, if the independent directors engaged concurrently by the Company, its parent company, and its subsidiary or a subsidiary under the same parent company in accordance with this Act or local laws and regulations, this requirement shall not apply).
3.Not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.
4.Not a manager of the 1st subparagraph, or a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship of the persons 2nd and 3rd subparagraphs above.
5.Not a director, supervisor, or employee of a corporate shareholder who directly holds more than 5% of the Company’s total issued shares, who is among the top five shareholders, or who designates his or her representative to serve as a director or supervisor of the Company in accordance with Paragraph 1 or 2, Article 27 of the Company Act; (however, if the independent directors engaged concurrently by the Company, its parent company, and its subsidiary or a subsidiary under the same parent company in accordance with this Act or local laws and regulations, this requirement shall not apply).
6.Not a director, supervisor, or employee of another company where a majority of the Company’s director seats or voting shares and those of another company are controlled by the same person; (however, if the independent directors engaged concurrently by the Company, its parent company, and its subsidiary or a subsidiary under the same parent company in accordance with this Act or local laws and regulations, this requirement shall not apply.)
7.Not a director (or a managing director), supervisor, or employee of another company or institution where the Chairman, the President, or person holding an equivalent position of the Company and a person in an equivalent position at another company or institution are the same person or spouses; (however, if the independent directors engaged concurrently by the Company, its parent company, and its subsidiary or a subsidiary under the same parent company in accordance with this Act or local laws and regulations, this requirement shall not apply.)
8.Not a director, supervisor, officer, or shareholder holding 5% or more of the shares, of a specified company or institution which has a financial or business relationship with the Company.(However, if a specific company or institution holds more than 20% and no more than 50% of the total issued shares of the Company and if the independent directors engaged concurrently by the Company, its parent company, and its subsidiary or a subsidiary under the same parent company in accordance with this Act or local laws and regulations, this requirement shall not apply.)
9.Not a professional individual, or a spouse, who is an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that provides auditing services, commercial, legal, financial, accounting services or consultation to the Company or to any affiliate of the Company, the cumulative amount of payments obtained in the past two years has not exceeded NT$ 500,000. These restrictions do not apply to people whose duties are performed in accordance with the Securities and Exchange Act and the Business Mergers And Acquisitions Act or members of the Tender Offer Review Committee or the M&A Special Committee.
10.Not been a person of any conditions defined in Article 30 of the Company Act.

2. Operations of the Remuneration Committee

(1) The committee is composed of four members.
(2) Term of the committee members: From June 21, 2018 through March 11, 2021. The Remuneration Committee met 15 times (A) in the most recent year. The qualifications and attendance of the members are listed below:

Title	Name	Attendance in Person (B)	By Proxy	Attendance rate (%) (B/A) (Note)	Remark (Note)
Convener Pai, Chun-Nan 15 0 100% New appointment on 2018.6.21
Member Liang, Yann-Ping 15 0 100% Reappointment on 2018.6.21
Member Horng, Yuan-Chuan 15 0 100% New appointment on 2018.6.21
Member Song, Yung-Fong 15 0 100% New appointment on 2018.6.21
Other mentionable items: 1. If the board of directors declines to adopt or modifies a recommendation of the remuneration committee, it should specify the date of the meeting, session, content of the motion, resolution by the board of directors, and the Company’s response to the remuneration committee’s opinion (eg., the remuneration passed by the Board of Directors exceeds the recommendation of the remuneration committee, the circumstances and cause for the difference shall be specified): None. 2. Resolutions of the remuneration committee objected to by members or expressed reservations and recorded or declared in writing, the date of the meeting, session, content of the motion, all members’ opinions and the response to members’ opinion should be specified: None.

Note 1: When a member of the Remuneration Committee resigns before the end of the year, the remark column shall be annotated with the date of resignation. Actual attendance rate (%) shall be calculated based on the number of meetings held by the Remuneration Committee and the number of actual attendance during the term of service.
Note 2: When an election is held for the Remuneration Committee before end of the year, members of both the new and old committee shall be listed in separate columns and noted as new, old or re-elected members, along with the elected date, in the “Remark” column. The actual attendance rate (%) shall be calculated based on the number of meetings held during the member’s term in the Remuneration Committee and the number of actual attendance of this member.

2020 Annual Report

III. Corporate Governance

(3) 2020 remuneration committee proposal discussion and resolution:

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Remuneration Committee Item Resolution
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Remuneration Committee	Item	Resolution

2020.03.12 The 9th Meeting of the 4th Remuneration Committee	1. The proposal for 2019 bonus distribution ratio for employees and directors. 2. The proposal for 2019 bonus allocation for employees and directors.	Proposal 1: All members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion. Proposal 2: All members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion.
2020.04.23 The 10th Meeting of the 4th Remuneration Committee	1. The proposal for 2019 bonus distribution to employee and managerial officers	All members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion.
2020.06.04 The 11th Meeting of the 4th Remuneration Committee	1. Amendments to the performance bonus for the Proprietary Trading Department	All members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion.
2020.08.13 The 12th Meeting of the 4th Remuneration Committee	1. Amendments to the Board of Directors Performance Evaluation Measures of the Company 2. Periodic review and evaluation of the policy and structure of the remuneration provided to the Company’s Directors 3. Amendments of the managers’ payment gap	Proposal 1: All members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion. Proposal 2: All members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion. Proposal 3: All members of the committee (decided at this meeting’s continual meeting in 8/17) present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion.
2020.10.29 The 13th Meeting of the 4th Remuneration Committee	1. Formulate the regulations for performance evaluations by managers and supervisors’ bonus and evaluations of brokage department 2. Proposal for adjustment of the pan- proprietary business performance bonus policy	Proposal 1: All members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion. Proposal 2: All members of the committee present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion.
2020.12.07 The 14th Meeting of the 4th Remuneration Committee	1. Amendments to the Board of Directors Performance Evaluation Measures of the Company	All members of the committee (decided at this meeting’s continual meeting in 12/14) present voted in favor of the resolution without any objection and submitted it to the Board of Directors for discussion.

President Securities Corporation

F. Corporate Social Responsibility (CSR) and Deviations from “ Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies ”

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Implementation Status Deviations from
Corporate Social
Evaluation Item Responsibility(CSR)
Yes No Abstract Explanation Best Practice Principles of TWSE/GTSM Listed
Companies” and Reasons
I. Does the company conduct ✓ The Company’s corporate social responsibility (CSR) is None
risk assessments related implemented by the Management Department, which is responsible
to environmental, social, for the formulation and implementation of corporate social
and corporate governance responsibility policies, systems, or relevant management guidelines
issues that are related to and specific implementation plans. Each year, the department
the company’s operations organizes social responsibility events and activities, including
in accordance with the social contributions, social welfare, and community participation,
materiality principle, and and formulates CSR policies, which are approved by the Board of
formulate relevant risk Directors; the results of the implementation by relevant units are
management policies or reported to the Board of Directors within four months after the end
strategies? of each year.
The Company conducts risk assessments on environmental, social,
and corporate governance issues related to its corporate operations
in accordance with the materiality principle. Relevant policies are
formulated for issues of materiality identified, as detailed in the
CSR report.
Main Topic Assessment Risk Management Policies and Strategy
The company is developing policies and strategies designed to address risk factors related to climate, such as heavy rain events, earthquakes, and high
temperatures with the goal of maintaining the safety and robustness of the Company's operations. For example, the low-carbon transformation policy on
the client side includes the full development of digital financial management. This includes the availability of online signing of a wide variety of consent
Climate documents and risk notices required by the appropriate authorities for opening accounts remotely, conducting various transactions directly on mobile
Environment change and devices, and online inquiry used to confirm whether a transaction has been conducted successfully. The goal is to make sure the Company's services will
environmental not be affected by climate change and other related events or disasters. As for the Company's operations, the Company will comprehensively review
protection business processes and convert administrative forms into electronic documents, purchase environmentally-friendly labeled products, phase out older
energy-consuming equipment year by year to reduce energy consumption, streamline energy expenditures, improve operational efficiency, and hire
an external certification agency to formally introduce and complete the IOS14064-1 standard for greenhouse gas inventory. The goal is to reduce the
generation of a carbon footprint through such interlocked low-carbon operations.
The Company pays attention to the safety of employees' work environment. In addition to minimizing the hazards present in the office environment, the
Head Office and all branches have selected and assigned appropriate employees to obtain Fire Safety Manager Certificates and the become qualified as
Occupational category B labor occupational safety and health supervisors, while formulating fire-fighting plans for the workplace, to maintain a safe office environment.
safety and The Company's Head Office and workplaces have each purchased public accident liability insurance to protect rights and interests of clients and to provide
health employer accident liability insurance to protect employees' rights and interests. A total of four automated extracorporeal defibrillators (AEDs) have been
set up on specific floors of the Company's Head Office building, and a total of 39 employees have obtained first-aid safety and health education along with
training certificates in 2020 to ensure the safety of their peers.
In addition to the independent operation of finance and business, the management rights and responsibilities of the Company and affiliated companies
are clearly divided, and their business dealings or transactions are handled in accordance with the relevant laws and regulations. In addition, an "Internal
Control System for Supervision and Management of Subsidiaries" has been established to control and manage subsidiaries. The Information System
Social issues Department of the Company has formally established an information security section assigned to upgrading the previous task-based team to a normal
organization. This section is staffed with a dedicated information security supervisor and two dedicated information security personnel to strengthen the
Customer maintenance, security, and control of the information systems and the stability of business adjustment The goal is to ensure that the organization carries out
privacy information security management operations effectively and provides clients with the most secure information trading environment.
protection and Since August 2013, the Company has applied for and obtained the British Standards Institution's ISO 27001: 2005 version of the information security
information certification for electronic trading systems. It passed the information security certification renewal and obtained the revised ISO 27001: 2013 version
security of the certification at the end of July 2014. Afterwards, the Company has applied for renewal of the certification annually and applied for review of the
certification every three years (2016 and 2019) to implement the Company's internal matters in a standard and systematic manner to reduce operational
errors. The Company has adopted TWCA as the certificate authority for authentication and verification of orders placed. When clients are conducting
online transactions, in addition to having the account number and password checked by a securities firm or a futures firm, each transaction needs to be
confirmed with a certificate issued by an impartial third party, along with the use of internationally recognized SSL technology for transmission encryption,
to increase the degree of security that is valued during online transactions.
The Company's Board of Directors has established a Risk Management Committee to supervise daily risk management affairs effectively. The risks
involved in the Company's business include risks related to the market, credit, liquidity, operations, legal issues, and model risks, which have been included
in the scope of risk management. In addition, a three-stage defense system for risk management has been implemented.
Corporate governance Risk control/audits The first-stage defense: When each business unit executes its business, it will monitor risks on its own.The second-stage defense: An independent dedicated unit has been established to formulate and execute risk policies, operating guidelines, and risk control
systems as the second-stage of defense in the monitoring of risks.
The third-stage defense: The risk management system is integrated into the internal audit system to provide for independent review.
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2020 Annual Report

III. Corporate Governance

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President Securities Corporation

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2020 Annual Report

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Implementation Status Deviations from
Corporate Social
Evaluation Item Responsibility(CSR)
Yes No Abstract Explanation Best Practice Principles of TWSE/GTSM Listed
Companies” and Reasons
IV. Social Issues
A. Does the company formulate ✓ A. The Company formulated the "Human Rights Policy of the None
appropriate management Unified General Securities Co., Ltd." on December 16, 2020,
policies and procedures which is committed to safeguarding and safeguarding basic
according to relevant regulations human rights.
and the International Bill of The company's human rights policy includes eight items,
Human Rights? including workplace inclusion, motherhood protection, child
labor, discrimination and sexual harassment, occupational
safety management, employee health management, overtime
work and labor dispute, and the management and mitigation
measures are formulated according to each item.
B. Has the company formulated ✓ B. The Company has established various salary and benefit None
and implemented reasonable measures for employees in accordance with the Labor
employee benefit measures Standards Act and relevant regulations, and provides market-
(including salary, leave, competitive benefits to motivate employees, while conducting
and other benefits), and periodic performance evaluations and linking performance with
appropriately reflected operating bonuses to share surpluses and results with its employees.
performance or results in
employee compensation?
C. Does the company provide ✓ C. 1.We focuses on the safety and health of the employees’ None
a healthy and safe working working environment. Aside from improving the dangerous
environment and organize factors within the environment, we also hire a health
training on health and safety management specialist, establish health consulting room, and
for its employees on a regular offer employee health inspections on annual basis, with hope
basis? to let employee understand and manage their own health status
in advance. President Securities provides health counseling,
followed by follow-up health assessments.
2.The Company has provided the required health and first aid
facilities (AED) and set up breastfeeding rooms. The Company
organizes health promotion seminars; it provides relevant
information and news about health care and accident prevention
that is updated on the online health education system regularly.
D. Does the company provide ✓ D. The company provides a series of employee training in respone None
its employees with career to the trends of financial market. We create Fintech courses,
development and training career planning, and career development base on indivisual
sessions? needs of staff’s positions, such as the project of cross-selling
for diversified products, human capacity building, stregthening
occupational management and so on.
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President Securities Corporation

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2020 Annual Report

III. Corporate Governance

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VI. If the Company has established the corporate social responsibility principles based on “the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies”, please describe any discrepancy between the Principles and their implementation: For the implementation of the corporate governance, the Company’s Board of Directors approved the "President Securities Corporate Social Responsibility Best practice Principles" on July 2, 2012. Implemental reports of "President Securities Corporate Responsibility Principles" were proposed in board meeting every year, and report of the year 2020 was proposed in the 18th meeting of the 11th Board of the company. VII. Other important information to facilitate better understanding of the Company’s corporate social responsibility practices: A. Environmental Protection Measures Although the Company is a securities firm that does not produce any environmental pollutants, we still care deeply about protecting the environment, about reducing our impact on the environment, and about our responsibility for sustainability. In order to properly protect the natural environment, demonstrate the organization’s improved environmental performance, achieve a balance between the environment, society, and the economy, and to achieve social expectations related to sustainable development, transparency, and responsibility, the Company will conduct ISO 14001 environmental management system certification in 2021. B. Participation in Public Service President Securities Corporation has been a long-standing supporter of important social charitable activities and, for its efforts, has been recognized with the 7th annual Wenxin Award and the 6th National Civic Service Award, and Top 50 by the Commonwealth magazine in 2013, 2015, 2016, and 2017. Besides, the Company was recognized and reward by the Taiwan Fund for Children and Families in 2013. In 2020, President Securities Corporation won the Gold Award in the Finance and Insurance Industry of the Corporate Sustainability Report Awards of the Taiwan Corporate Sustainability Awards (TCSA) for first-time participation in 2020. This represents the highest honor in Taiwan’s CSR report. The Corporation also won the Bronze Award at the 4th PwC CSR Impact Awards as the only institution in the financial industry to have won the top three awards in 2020. The Company has taken concrete actions to cooperate with the Taiwan Fund for Children and Families from 2007 to 2019 to help children from financially challenged families with their studies. The Company also mobilized all employees and customers for joint participation and invested actual funds and various equipment to social welfare activities to fulfill corporate social responsibilities. The Company donated NT$2.5 million to the Taiwan Fund for Children and Families to provide schooling subsidies in 2020 with the theme of “Love Will Not Die During Pandemic Prevention”. Since 2001, the Company has organized all employees in PSC, PFC, PAMC, PCHC, PIAC, and PSC Venture Capital as well as allowing customers to participate in the “Love Delivery Activities” that provide children from financially challenged families with scholarships. A total of approximately 8,798 elementary school, junior high school, and senior high school students were beneficiaries. The activities have provided school children from poor families with opportunities to explore different academic disciplines for their own development and growth. An employee blood donation event was held for the first time in 2006 and received an enthusiastic response. Since 2007, the Company has held an employee blood donation event twice a year and extended it to the wider community, which has received a widespread positive response from community residents. Since 2010, the Company has held a blood donation event three times a year. Due to the effects of the COVID-19 pandemic in 2020, the blood donation events were suspended. From 2006 to 2019, a total of 3,517 units of blood had been donated. As a partner of blood donation centers, the Company has been commended by the blood donation centers every year. In 2020, the Company launched a project entitled “For Every Order You Place, President Securities Corporation Will Make a Donation to the Child Welfare League Foundation.” For every order customers place to trade securities during the year, the Company would donate NT$10 to the Child Welfare League Foundation’s “Little Helmsman Education Program—Career Experience for Disadvantaged Students.” More than 110,000 active traders participated in this event, with a total donation amounting to NT$1.1 million, to help disadvantaged students seek directions in life. In the 2nd President Securities Volunteer Day—Beach Cleaning, the Chairman and 174 volunteer employees worked together to collect 453.7 kilograms of trash, protect Taiwan’s coastlines, and support environmental sustainability through their actions, enabling the Company to be an enterprise that puts ESG into practice. In addition, the Company participated in the Seniors’ and Children’s Music Carnival Event organized by the Uni-President Corporation’s foundation, to which the elderly along with school children from disadvantaged families in rural areas were invited. The Company prepared 400 gift packages for the elderly and children to allow them to experience a joyful and caring atmosphere. At the end of the year, a food box delivery event was held for the disadvantaged elderly. Around 160 volunteers, customers, and suppliers participated in sorting the material for 2,666 food boxes to be completed, delivered, and sent to the disadvantaged families and the elderly living in rural areas, such as Taitung and Hualien, while the Company could put its corporate social responsibility actions into practice.

President Securities Corporation

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C. Customer Rights We have assigned a spokesperson to be responsible for providing information to shareholders and investors, and for posting periodical and non-periodical financial and operating information on the government-operated MOPS website. We have also setup an "Investor Section" on our website where investors and shareholders can obtain information on the following: (1) President Securities’ design and sale of financial products adheres to all relevant laws and regulations. (2) Company introduction in Chinese and English. (3) Company financial statements. (4) Board of Director meeting Minutes. (5) Investor Suggestion Box, which is manned by Public Affairs personnel who are responsible for replying to all comments received. D. Employee Rights and Hiring Concerns (1) To boost work efficiency and solidarity among our employees, we place particular emphasis on benefits programs and labor relations, and thus ensure employee welfare in a comprehensive manner. (2) General accident insurance has been purchased for each of our branches and work premises so as to protect customer rights. Employer insurance has also been purchased so as to protect the interests of all employees. E. Rights of the stakeholders The Company respects rights of the stakeholders in expressing their opinions and has established a stakeholder section on the official website to build up a communication channel and to explain the Company’s corporate social responsibility (CSR) ideas and policies. For investors, employees, suppliers, customers, competent authority and community/NGO, the Company has established a communication platform, on which there are dedicated personnel to respond to any questions, to maintain good communication with the employees. F. Customer policy (1) Policy: “3 Goods and 1 Fair” ─ “Good Quality”, “Good Credibility”, “Good Service”, and “Fair Price”. This is combined with “Professional Leadership, Kind Service”, in providing all customers with comprehensive services. (2) Implementation: We have established a Customer Services Department—The Customer Service Center, which offers customers an avenue through which to register complaints, which operates a customer service hotline which is manned by customer service specialists who help to solve customer problems, and which ensures that all account correspondence sent to clients includes clear product risk warnings.

G. Ethical business operation at the Company and related implementation and Deviations from “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”

1. Ethical business operation

Our company has always applied the principle of “integrity and sustainable management”, to serve our customers sincerely. We also inherit the spirit of “3 Goods and 1 Fair”. We protect clients’ rights with flawless service. We pursue long-term, steady and balanced growth in the spirit of integrity management.

(1) The company has established “Ethical Corporate Management Best Practices Principles” and “Fair Client Treatment Principles”, and strives to adhere to these concepts.
(2) The Company makes its corporate management and financial data publically available in a transparent manner as is required by the competent authority and underwent the authority’s 3rd annual corporate governance evaluation in 2016, scoring in the top-5 percent among listed company in Taiwan.
(3) Insure company directors, supervisors, and managers’ liability insurance, also employees’ credit insurance.
(4) The Company is active in participating in community activities, and in fostering sustainable development sustainable development.

2020 Annual Report

III. Corporate Governance

2. Ethical Corporate Management:

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Implementation Status Deviations from the
Ethical Corporate
Evaluation Item Management Best
Yes No Abstract Illustration Practices Principles
for TWSE listed
companies and reasons
I. Establishment of ethical corporate
management policies and programs
None
A. Does the company declare its ethical ✓ A. (1) On August 23, 2012, the Board of Directors issued
corporate management policies and "Ethical Corporate Management Best Practice Principles"
procedures, formulate the Ethical and revealed the principle in 2013 shareholders’ meeting.
Corporate Management Policy This proves the management’s commitment to Integrity
approved by the Board of Directors management. And in March 2020, the Board of Directors
has been formulated, and, in its approved the establishment of an ethical corporate
guidelines and external documents, as management task force which served under the Board of
well as the commitment from its board Directors. In addition, the Company’s 2019 Corporate
and management level to implement Social Responsibility report delivers information regarding
the policies? the Company’s efforts in and contributions to fulfilling
its social responsibilities to stakeholders. The Company’s
senior management and board members are responsible
during supervision in line with the principle of integrity
in the execution of business, in order to create a business
environment in support of sustainable development.
(2) The Company’s Directors, Chairman, President,
heads of departments and consultants have all signed
the Statement of Compliance with Ethical Corporate
Management Policy.
✓ B. The Company has explicitly prohibited any direct or None
B. Has the company established an
indirect offering, promising, requesting, or receiving of any
assessment mechanism designed to
improper benefits.
address the risk of unethical conduct,
regularly analyzed and evaluated In addition to the Code of Ethical Business Practice, the
business activities with a high risk of "Guidelines on Ethical Business Practice and Practice" was
unethical conduct within the business
updated in August, 2020 to prevent dishonesty. In addition
scope, as well as formulated unethical to what is set out in the ethical Corporate Management
conduct prevention programs Best Practice Principles, the Company has clearly
accordingly? Such measure should at stipulated measures in the work rules that are designed
least covers activities stated in Article to facilitate the adoption of preventive measures and the
2, Paragraph 7 of the ethical corporate Company offers education sessions, to implement the
management best-practice principles ethical corporate management policy.
for TWSE listed companies.
C. Does the company establish policies ✓ C. To execute integrity management and prevent dishonesty, None
to prevent unethical conduct with the company adds related rules to corporate governess
clear statements regarding relevant (Chapter 10 article 48) in 2012, which authorized by the
procedures, guidelines of conduct, Ministry of Labor and publicly announced. Later in 2016,
punishment for violation, rules of the Company established Measures for Whistle-blowing
appeal, the commitment to implement related to Illegal and Unethical Conduct and revised
the policies, and reviewe/ revise the these documents related to the Measures for Reporting of
policies regularly? Illegal and Unethical Conduct in 2019. Also, formulated
the procedures for ethical management and guidelines
for conduct in August, 2020 in order to implement the
Company’s work rules and ethical corporate management
principles, the Company has encouraged the reporting of
any illegal and unethical conduct as well as established
internal and external reporting channels and processing
procedures of the Company to ensure integrity and ethical
conduct within the Company.
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President Securities Corporation

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Implementation Status Deviations from the
Ethical Corporate
Evaluation Item Management Best
Yes No Abstract Illustration Practices Principles
for TWSE listed
companies and reasons
II. Fufill ethical management
A. Does the company evaluate business ✓ A. Before engaging in any business relationship with any agent, None
partners’ ethical records and include supplier, customer, or any other enterprise, we conduct
ethics-related clauses in business a thorough examination of that party’s creditworthiness,
contracts? so as to avoid entering into any transactions with non-
creditworthy parties. Included in all agreements with third
parties are provisions which allow for the early termination
of such agreement in the event of any deceitful acts by that
party.
B. Does the company establish an ✓ B. The Company has established the “Ethical Corporate None
exclusively dedicated unit supervised Management Practice Team” under the Board of Directors
and appointed the supervisor of Administration Department
by the Board to be in charge of
as the convener, who is responsible for assisting the Board
corporate ethical management, and on
and the management level to establish and supervise the
a regular basis (at least once a year),
implementation of ethical corporate management policies
report the status of unethical conduct
and protective measures and to ensure the execution of
prevention programs, and the status of
Ethical Corporate Management Best Practice Principles. The
the supervision of implementation of team reports to the Board of Directors annually
related ethics policies to the Board of
 The implementation of ethical corporate management
Directors? policies in 2020:
A. Policy announcement:
The Company announce and promote the policies
to the employees. The Administration Department
announced “Developing the corporate culture under
ethical corporate management” policy to prevent
unethical behavior to 17,052 people in 2020.
B. Training:
(1) 2020 Corporate Governance courses: Following
Economic trends – the changes and challenges of
corporate operation: 42 people and 126 hours in total;
The Prospects and Challenges of Artificial Intelligence
in Taiwan in 2020: 37 people and 111 hours in total.
(2) 2020 Insider Trading Examples: 1,360 people and
798.2 hours in total.
(3) 2020 Anti-money Laundering and Counter-terrorism
Training: 1,340 people and 920.5 hours in total
C. Examination: Online exam for 2020 Anti-money
Laundering and Counter-terrorism Training: scoring 93
in average.
D. The Company has established clear reporting channels,
procedures, and confidentiality measures:
(1) Reporting line: (02) 2748-8173
(2) Reporting email: [email protected]
(3) In written form: Delivery to auditing office chief
auditor.
(4) address: 13F., No. 8, Dongxing Rd., Songshan Dist.,
Taipei City 105
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2020 Annual Report

III. Corporate Governance

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Implementation Status Deviations from the
Ethical Corporate
Evaluation Item Management Best
Yes No Abstract Illustration Practices Principles
for TWSE listed
companies and reasons
C. Does the Company establish policies ✓ C. President Securities’ board is subject to a high degree None
to prevent conflicts of interest and of self-regulation, whereby any board motion that is
provide appropriate communication suspected of having the potential to create any conflict of
channels for complaints and interest with the board or with any of its representatives or
implement it? proxies must undergo evaluation and may not be included
in the board agenda or voted upon by such party, and also
may not be voted on by any representative or proxy of
such party. Board members should exercise self-regulation
and should not conspire to support one another’s improper
actions.
In order to enable the Directors’ and managers’ conduct
to be in line with the ethical standards and stakeholders
to better understand the Company’s ethical standards, the
Company has established the “Codes of Ethical Conduct
for Directors and Managers of President Securities
Corporation” in August 2018.
D. Has the company established effective ✓ D. In order to ensure healthy and honest operations, the None
systems for both accounting and auditing office is required to submit a report on the
internal control to facilitate ethical adoption of the company’s principles for honest operation
corporate management, has the in its annual audit report, and should ensure that such
internal audit unit developed relevant principles are included in the company’s Work Rules. The
audit plans based on the assessment Committee should also publish on the company website
results of the analysis of the risk of procedures for reporting problems and the corresponding
unethical conduct, and inspect for punishments for such offenses.
compliance with the unethical conduct
prevention programs accordingly, or
has the company appointed CPAs to
perform audits.?
E. Does the company regularly hold ✓ E. The company regularly publishes “honest operation None
internal and external educational standards” and “honest operating procedure and
trainings on ethical management? regulations” , and implements training courses on these
standards for all new employees.
III. Whistle-blowing system The Company has established “Guidelines for Handling
Reports of Unlawful or Unethical Behavior”.
A. Does the company establish a clear ✓ A. We have established a clear channel for receiving None
whistleblowing and reward system complaints:
and set up a convenient channel for
(1) Complaint Hotline: (02) 2748-8173
reporting unethical activities and
(2) Complaint Email: [email protected]
reward system? Can the accused be
reached by an appropriate person for (3) Written Complaints: Complaints can be mailed or faxed
to our auditing office.
follow-up?
None
B. Has the company established standard ✓ B. Clear protocols for handling complaints have been
operating procedures for investigating established as have confidentiality measures.
any reported misconduct, follow-
up measures to be adopted after
investigations, and relevant
confidentiality mechanisms?
None
C. Does the company provide proper ✓ C. Clear measures have been put in place to protect those who
whistleblower protection? register complaints.
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President Securities Corporation

		Implementation Status	Implementation Status	Implementation Status
Evaluation Item		Yes	No	Abstract Illustration
IV. Strengthening information disclosure Does the company disclose its ethical corporate management policies and results of its implementation on the company's website and MOPS?	✓ In keeping with the company’s ethical corporate management policies, we endeavor to disclose procedures for ethical corporate management both via intranet and via our offical website (www.pscnet.com.tw). None
V. If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE/TPExListed Companies, please describe any discrepancy between the policies and their implementation: There have been no differences.
VI. Other important information to facilitate a better understanding of the company's ethical corporate management practices (e.g., review and amend its policies): None.

H. Corporate Governance Guidelines and Regulations

Except for the Corporate Governance Best Practice Principles, the Company has disclosed relevant rules and regulations that shall be established by law on the Company’s website (Investor Section/Corporate Governance) and the Market Observation Post System (MOPS).

I. Other Important Information Regarding Corporate Governance

The Company has disclosed relevant important information regarding corporate governance on the Company’s website (Investor Section/Corporate Governance) and the Market Observation Post System (MOPS).

2020 Annual Report

III. Corporate Governance

J. Internal Control Systems:

1. Internal Control Declaration:

Internal control declaration

Implementation of the internal control system of President Securities Corporation

Date: June 25, 2021.

The Company hereby declares the following based on its self -assessment result on the internal control system of 2020: I. The Company is fully aware that the Board of Directors and the management are responsible for the establishment, implementation, and maintenance of the internal control system and it is established accordingly. The purpose of establishing the internal control system is to reasonably ensure the fulfillment of operational effectiveness and efficiency (including profit, performance, and protection of assets safety), financial report reliability, timeliness, transparency and compliance with applicable rules, laws and regulations. II. The internal control system is designed with inherent limitations. No matter how perfect the internal control system is, it can only provide a reasonable assurance to the fulfillment of the three objectives referred to above. Moreover, the effectiveness of the internal control system could be affected by the changes of environment and circumstances. The Company’s internal control system is designed with a self-monitoring mechanism; therefore, the Company will take corrective actions upon identifying any nonconformity. III. The Company has assessed the design and operating effectiveness of the internal control system in accordance with the criteria provided in the “Regulations Governing the Establishment of Internal Control Systems by Service Enterprises in Securities and Futures Markets” (referred to as “the Regulations” hereinafter). The criteria defined in “the Regulations” include five elements depending on the management control process: 1. environment control, 2. risk assessment, 3. control process, 4. information and communication, and 5. supervision. Each of the five elements is then divided into a sub-category. Please refer to “the Regulations” for details. IV. The Company has implemented the criteria of the internal control system referred to above to inspect the design and operating effectiveness of internal control system. V. The following defects are included in our assessment: (1) placing orders with unregistered personal devices and 4G internet at business premises during trading hours, (2) trading futures via futures traders' accounts, (3) accepting discretionary investment engagement in futures transactions and decide the type, quantity and price on behalf of clients. (4) obtaining and keeping no audit evidences during internal auditing.( Please find attached list.)The above matters have been improved and have no impacts on achieving internal control objectives. (According to Official Letter No. Fu-10904009241 issued by the Taiwan Futures Exchange on November 19, 2020 and Official Letter No. 10903561351 and No. 10903561352 issued by the Financial Examination Bureau on November 25, 2020, Taiwan Futures Exchange and Financial Examination Bureau had demanded the company to improve and imposed a penalty of NT$ 110,000 and NT$360,000.) VI. The Company, based on the inspection approach referred to above, has concluded that the internal control system (including the supervision and management over the subsidiaries) on December 31, 2020 is reasonably effective in achieving the objectives of operational effectiveness and efficiency, financial report reliability, timeliness, transparency and compliance with applicable rules, laws and regulations. Except for the attachment all above mentioned are valid. VII. The Statement is the main contents of the Company’s annual report and prospectus and will be made public. Any illegalities such as misrepresentations or concealments in the published contents mentioned above will be considered a breach of Articles 20, 32, 171, and 174 of the Securities and Exchange Act and Article 115 of Futures and Exchange Act, and entail legal responsibilities. VIII. The Statement was resolved in the directors’ meeting with the 0 objection from the 18 attending board directors on June 25, 2021. The contents of the Statement have been accepted without any objection.

President Securities Corporation Chairman: Lin, Kuan-Chen President: Tsai, Sen-Bu CFO: An, Chi-Li Chief Auditor: Huang, Sha-Mei

President Securities Corporation

President Securities Corporation Internal Control System Findings and Remediation Action Plans

Area of Improvement	Improvement Measures	Expected improvement completion time
According to Official Letter No. Fu- 10904009241 issued by the Taiwan Futures Exchange on November 19, 2020 and Official Letter No. 10903561351 and No. 10903561352 issued by the Financial Ex- amination Bureau on November 25, 2020, Taiwan Futures Exchange and Financial Ex- amination Bureau had demanded the compa- ny to improve and imposed a penalty of NT$ 110,000 and NT$360,000 for the following defects : 1. Placed orders using personal computers connected to 4G mobile network during trading hours at business premises without prior application to the Company. 2. Conducted futures trading through futures trader accounts. 3.Accepted discretionary investmentengagement in futures transactions and decide the type, quantity and price on behalf of clients. 4. No audit evidence was obtained and kept during the internal audit.	1.Mobile telecommunication devices brought by all personnel in the futures trading business shall be centrally kept and locked in designated cabinet. The designated personnel are responsible for unlocking the cabinet when mobile communication devices are stored or taken out. They shall also record the time of accessing the cabinet and sign in the logbook. 2. and 3. The code of conduct regarding the prohibition of dealing in futures transactions had been re-notified, and if there is any re- violation, the person who violates the rule will be punished in accordance with the internal rules of the Company. 4. Audit evidence mentioned above had been obtained and attached for the internal audit. Audit trail has been recorded.	Has improved Has improved Has improved

Note: The penalties imposed by the Financial Supervisory Commission, including warnings or above or any fi ne of NT240,000 or more, shall be listed one by one as well.

2. If the company has commissioned external auditors to review the company’s internal control system, the external auditor’s report should be disclosed: Not applicable.

2020 Annual Report

III. Corporate Governance

K. Conviction of corporate or employees’ wrongdoings, Company’s punishment on employee for violation of internal control, major faults and improvements during recent fiscal period and to the publish date of the annual report. (If the result of any disciplinary action may have a significant impact on shareholders’ rights and interests or the price of securities, the content of the said action shall be specified.)

1. Punishments imposed on the Company and its internal personnel in accordance with laws

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Major faults Improvements
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Major faults	Improvements

According to Official Letter No.10803347321 issued by the Financial Examination Bureau on Febuary 11, 2020 The Financial Examination Bureau went to the Nanjing Branch from June 5, 2019 through June 13, 2019 and a deficiency in operations discovered is as follows: 1.Wang, ○-Tsung, the sales in Nanjing branch, has informed of buying individual shares by a fund customer to other clients through telephone. 2. Some of the Company’s personnel frequently traded investment targets that were the same as those of the investment targets clients were trading. The Company’s No. 98 account inspection failed to identify and explain the reasons. There is lack of systematic comparison of internal personnel stock trading, which resulted in insufficient prevention measures in relation to conflict of interests in internal personnel stock trading. 3. There is lack of control mechanism for different customers that place orders from the same IP address. There is also lack of investigation on whether customers are related parties or order agent regulation has been violated. Therefore, internal control system execution is not strictly followed. The following regulations were violated: 1. Internal control standard of Securities Firm CA-11210 Consignment Trading of Securities and Trading Confirmation (40). 2. Failure to implement control activity requested by Subparagraph 1, Paragraph 2, Article 18 of the Regulations Governing Responsible Persons and Associated Persons of Securities Firms. 3. Failed to implement the execution of internal control system. These deficiencies indicated that the Company has failed to take responsibility in monitoring and managing the implementation of internal control system, which was a violation of Paragraph 2, Article 2 of the Regulations Governing Securities Firms. The Company was requested to rectify according to Article 65 of the Securities and Exchange Act.	1. Wang, ○-Tsung, who violated the rule, was suspended from work for three months (2020/2/15~2020/5/14). 2. Two minor demerits were awarded according to Article 50 of the Work Rule. 3. To ensure the implementation of internal control and compliance of regulation and prevent employees from violating laws and regulations by accident, the Company again reminded the employees not to make inquiries not allowed by regulation, or disclose any confidential information obtained through client engagement or from work. All employees must follow related rules and regulations of business operation.
According to Official Letter No. Fu—10905000469 issued by the Taiwan Stock Exchange on February 27, 2020: The Taiwan Stock Exchange went to the Company on January 15, 2020 for inspection; the deficiencies in operations that were discovered are as follows: Huang, ○-Jen, VP of the Quantitative Trading Department, was buying or selling securities through the securities account with the Xindian Branch of Masterlink Securities on behalf of her sister.This was a violation of Paragraph 2, Article 18, Subparagraph 4, Article 75 of the Operating Rules of the Taiwan Stock Exchange Corporation and Paragraph 5, Article of the Regulations Governing Insiders of Securities Firms Opening Accounts at Their Securities Firms for Securities Brokerage Trading.	1. The violator Huang, ○-Jen , VP of the Quantitative Trading Department, received an admonition. 2. The deficiency was reviewed, addressed, and announced to raise the awareness of other personnel; relevant regulations will be implemented in the future.

President Securities Corporation

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Major faults Improvements
----- End of picture text -----

Major faults	Improvements

According to Official Letter No. 1080340897 and No. 10803408971 issued by the Financial Examination Bureau on April 22, 2020 The Financial Examination Bureau went to Songjiang on August 28, 2019 for inspection; the deficiencies in operations that were discovered are as follows: 1. Brokerage Department Project Deputy Manager Chang, ○-Hao, who was Sales Manager of Songjiang Branch Division I from June 16, 2017 to November 12, 2019: A violation of Subparagraph 17, Paragraph 2, Article 18 of Regulations Governing Responsible Persons and Associated Persons of Futures Commission Merchants. 2. E-Securities Division I Sales Manager Huang, ○-Zong: A violation of Subparagraph 20, Paragraph 2, Article 18 of Regulations Governing Responsible Person. 3. Brokerage Department Project Assistant Vice President Lin, ○-Ru, who was Manager of Songjiang Branch Division I from August 1, 2017 to November 11, 2019: A violation of the responsibilities of the management for VIP room of Branch Manager.	1. Chang, ○-Hao, who violated the rule, was suspended from work according to Chin- Kuan-Cheng Letter No.1080340897. The suspension period was two months, from May 1, 2020 to June 30, 2020. 2. According to Article 50 of the Work Rule, a minor demerit and an admonition were given to Chang, ○-Hao, who violated the rule. 3. According to Article 50 of the Work Rule, an admonition was given to Huang, ○- Zong, who violated the rule. 4. According to Article 50 of the Work Rule, an admonition was given to Lin, ○-Ru, who violated the rule. 5. To ensure the implementation of internal control and compliance of regulation and prevent employees from violating laws and regulations by accident, the Company again reminded the employees not to make inquiries not allowed by regulation, or disclose any confidential information obtained through client engagement or from work. All employees must follow related rules and regulations of business operation.
According to Official Letter No. Fu—10905001902 issued by the Taiwan Stock Exchange on June 30, 2020: The Taiwan Stock Exchange went to Shilin Branch on June 8, 2020 for inspection; the deficiencies in operations that were discovered are as follows: Sales Deputy Manager Huang, ○-Ming in Shilin Branch did not perform a thorough credit investigation when accepting an insider client to open securities borrowing and lending transaction account. It resulted in the insider of the securities issuer borrowing the securities for trading, which violated Paragraph 2, Article 18 of Operating Rules of the Taiwan Stock Exchange Corporation and Paragraph 6, Article 7 and Subparagraph 1, Paragraph 1, Article 37 of Regulations Governing Securities Borrowing and Lending by Securities Firms.	1.An admonition was given to Huang, ○- Ming, who violated the rule. 2. To ensure the implementation of internal control and compliance of regulation and prevent employees from violating laws and regulations by accident, the Company again reminded the employees not to make inquiries not allowed by regulation, or disclose any confidential information obtained through client engagement or from work. All employees must follow related rules and regulations of business operation.
According to Official Letter No. Fu—1090502679 issued by the Taiwan Stock Exchange on September 8, 2020: The Taiwan Stock Exchange went to the Chengzhong Branch on August 3, 2020 and August 4, 2020 for inspection; the deficiencies in operations that were discovered are as follows: Sales Manager Zhao, ○-in Chengzhong Branch Division III recommended specific stocks to unspecified persons through LINE group, which violated Paragraph 2, Article 18 and Paragraph 3, Article 85 of the Operating Rules of the Taiwan Stock Exchange Corporation, and Paragraph 1, Article 2 of Operational Regulations Governing Securities Firms Recommending Trades in Securities to Customers.	1. Article 50, chapter 11 of the Work Rule, an admonition was given to Zhao, ○-in Chengahong Branch Division III. 2. To ensure the implementation of internal control and compliance of regulation and prevent employees from violating laws and regulations by accident, the Company again reminded the employees not to make inquiries not allowed by regulation, or disclose any confidential information obtained through client engagement or from work. All employees must follow related rules and regulations of business operation.

2020 Annual Report

III. Corporate Governance

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Major faults Improvements
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Major faults

Improvements

According to Official Letter No. Fu-10904009241 issued by the Taiwan Future Exchange
on November 19, 2020 and Official Letter No. 1090356135, No. 10903561351 and No.
10903561352 issued by the Financial Examination Bureau on November 25, 2020:
The Taiwan Future Exchange went to the company from March 5, 2020 through March 6,
2020 for inspection; Quantitative Trading Department Head Huang, ○-Ren at headquarter was
found having violated futures-related regulations and internal control system as stated below:
1. Has opened futures accounts with futures commission merchants not designated by the
Company, which violated Paragraph 2, Article 47 of the Operating Rules of the Taiwan
Futures Exchange Corporation.
2. Has accepted others’ discretionary investment engagement in futures transactions and
traded on their behalf, which was a violation of Paragraph 11, Article 65 of Operating
Rules of the Taiwan Futures Exchange Corporation and Paragraph 2, Article 16 of
Regulations Governing Responsible Persons and Associated Persons of Futures
Commission Merchants.
3. Has used others’ account to make futures trading, which violated Paragraph 12, Article
65 of Operating Rules of the Taiwan Futures Exchange Corporation, Paragraph 2, Article
16 of Regulations Governing Responsible Persons and Associated Persons of Futures
Commission Merchants, and Paragraph 17, Article 55 of Regulations Governing Futures
Commission Merchants.
4. Has brought laptops unapproved by the Company to the office during trading hours and
connected the mobile network to make futures trading, which violated Paragraph 3, Article
21 of Operating Rules of the Taiwan Futures Exchange Corporation and Subparagraph 13,
Paragraph 2, Article 16 of Regulations Governing Responsible Persons and Associated
Persons of Futures Commission Merchants.

According to Official Letter No. Fu-
10904009241 issued by the Taiwan Future
Exchange, Official Letter No. 1090356135, No.
10903561351 and No. 10903561352 issued
by the Financial Examination Bureau and
According to Work Rule and Rule for Reward
and Punishment (200-P-114), punishments on
related personnel are as shown below:
1. Vice President Huang, ○-Ren: Work had
been suspended for four months. Two
minor demerits were given.
2. Chief Auditor and internal audit personnel
have been punished for not attaching audit
evidence for audit activities for a very long
period, which failed to follow internal
audit system.
(1) Assistant Manager Hung, x Yun: A
black mark was given.
(2) Internal audit personnel: Wu, ○-Fan,
Lin, x Ling were admonished.
3. The deficiency was reviewed, addressed,
and announced to raise the awareness of
other personnel; relevant regulations will
be implemented in the future.

President Securities Corporation

L. Major Resolutions of Shareholders Meeting and Board of Directors Meeting

1. Major resolutions of 2020 General Shareholders Meeting: Executed according to the resolution of the General Shareholders Meeting.

2020 Annual General Shareholders Meeting
(1) Matters to be ratified

Proposal 1 Proposed for approval of 2019 Business Report and Consolidated and Individual Financial Statements	Proposal 1 Proposed for approval of 2019 Business Report and Consolidated and Individual Financial Statements
Explanation	1. 2019 Consolidated and Individual Financial Statements of the Company was audited and certified by accountant Lin, Se-Kai, Hsiao, Chin-Mu from PwC. 2. Business Report as well as Consolidated and Individual Financial Statements were approved by the 12th Meeting of the 11th Board of Directors on March 26, 2020, and reviewed by the Audit Committee. 3. Business Report as well as Consolidated and Individual Financial Statements please refer to the appendix.
Resolution	The Company's shareholders present have total votes of 951,485,900, of which approval votes 926,609,674 (including electronic votes of 709,139,011), disapproval votes 156,969 (including electronic votes of 156,969), abstention votes/no votes 21,719,257 (including electronic votes of 21,719,257), and invalid votes 0; the approval votes account for 97.7%, over half of the total votes of the shareholders present. The proposal made by the Board of Directors was approved as it was.
Proposal 2 Proposed for approval of 2019 profit distribution
Explanation	1. The Company's 2019 earnings distribution was conducted in accordance with laws and the Company's Articles of Incorporation. (see the appendix) 2. For the calculation of the 2019 profit to be distributed, an decreasing adjustment of NT$26,098,951 in the remeasurement of defined benefit plan; in addition, legal reserve (10%) and special reserve (20%) shall be listed by law. In accordance with Jin-Guan-Zheng-Tou No. 1080321644, special reserve (the number as same as 2016-2018 fiscal year) shall be allocated for the transformation of employees in response to the development of financial technology and securities and future business and strenghing employee’s working abilities. Distributable earnings in 2019 amounted to NT$1,651,375,270, and the cash dividends to be paid was NT$1,372,390,028; a cash dividend of NT$1 would be paid per share. Stock dividends to be paid was NT$274,478,010; a stock dividend of NT$ 0.2 would be paid per share. Every thousand shares are allocated with a stock dividend of 20 shares. After approved at the shareholders' meeting, it is planned to invite the shareholders' meeting to authorize the Board of Directors to set the base date for ex-rights, ex-dividends and capital increasing. 3. In the future, if there is a change in the number of outstanding shares, it is planned to authorize the Board of Directors to adjust the allocation ratio according to the total number approved by the the shareholders' meeting via resolution and the number of the Company's ordinary shares actually in circulation on the record date for ex-rights, ex-dividends and capital increasing; if the dividend allocated to shareholders is less than NT$1, the amount will be transferred to the Company's Employee Welfare Committee.
Resolution	The Company's shareholders present have total votes of 951,485,900, of which approval votes 931,567,407 (including electronic votes of 711,096,744), disapproval votes 156,920 (including electronic votes of 156,920), abstention votes/no votes 19,761,573 (including electronic votes of 19,761,573), and invalid votes 0; the approval votes account for 97.90%, over half of the total votes of the shareholders present. The proposal made by the Board of Directors was approved as it was.
Execution	On July 3, 2020, the Company announced that the ex-dividend date was August 10, 2020, and the payout of cash dividends and stock dividends was completed on September 8, 2020.

(2) Matters to be discussed

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Proposal 1 Amendments to the Articles of Incorporation are proposed for discussion.
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Proposal 1 Amendments to the Articles of Incorporation are proposed for discussion.	Proposal 1 Amendments to the Articles of Incorporation are proposed for discussion.

Explanation	1. Amendment was made in accordance with point 4 in the letter of the Ministry of Economic Affairs dated July 2, 2019, and Article 162 of the Company Act. 2. Please see appendicx for related information.
Resolution	The Company’s shareholders present have total votes of 951,485,900, of which approval votes 931,513,508 (including electronic votes of 711,042,845), disapproval votes 166,959 (including electronic votes of 166,959), abstention votes/no votes19,805,433(including electronic votes of 19,805,433, and invalid votes 0; the approval votes account for 97.9%, over half of the total votes of the shareholders present. The proposal made by the Board of Directors was approved as it was.

2020 Annual Report

III. Corporate Governance

Proposal 2 Dividends for Shareholders and Issuing New Shares are proposed for discussion.	Proposal 2 Dividends for Shareholders and Issuing New Shares are proposed for discussion.
Explanation	1. In order to replenish its working capital, the Company proposed appropriating NT$274,478,010 from the 2019 dividends for shareholders and issuing 27,447,801 new shares by means of the capitalization of earnings. Every thousand shares are allocated with a stock dividend of 20 shares at a par value of NT$10 per share. 2. Shareholders may register the number of fractional shares within five days of the capital increase record date at the Company’s Shareholder Services Department. If shareholders fail to register these fractional shares within the specified period, the shares shall be converted into cash based on their face value and rounded to the nearest NTD (decimals are rounded off). The fractional shares shall be incorporated into the Company’s Employee Welfare Committee free of charge. 3. In the event that the total number of the Company’s outstanding shares are affected by the Company’s repurchase of its shares or transfer or cancellation of treasury shares, which causes the shareholder dividend ratio to be changed, the Company proposes to authorize the Board of Directors to adjust the dividend rate based on the total amount to be distributed as resolved in the shareholders’ meeting and the actual quantity of the Company’s outstanding ordinary shares on the record date of ex-rights and capital increase. 4. After the capital increase proposal has been passed in a resolution of the shareholders’ meeting and reported to the competent authority for approval, the shareholders’ meeting the Company plans to request that the shareholders authorize the Board of Directors to set the date of ex-rights and capital increase as well as to distribute stock dividends in accordance with the shareholding ratio of the shareholder register on the record date. In the event that the proposal shall be revised due to changes in regulations or as instructed by the competent authority, at the shareholders’ meeting the Company proposes to request the shareholders authorize the Board of Directors to handle it at its sole discretion. The rights and obligations associated with the new shares issued at this time are identical to those associated with the existing shares.
Resolution	The Company’s shareholders present have total votes of 951,485,900, of which approval votes 931,511,564 (including electronic votes of 711,040,901), disapproval votes 176,907 (including electronic votes of 176,907), abstention votes/no votes 19,797,429 (including electronic votes of 19,797,429), and invalid votes 0; the approval votes account for 97.9%, over half of the total votes of the shareholders present. The proposal made by the Board of Directors was approved as it was.
Proposal 3 Please discuss the proposal related to the abolition of the Procedure for Derivatives Trading.
Explanation	1. In accordance with the amendment to Article 2 of the Regulations Governing the Acquisition and Disposal of Assets by Public Companies as in the Letter Jin-Guan-Zheng-Fa No. 1070341072, the acquisition or disposal of assets by public companies shall be handled in accordance with the provisions of the regulations. However, if financial laws and regulations state otherwise, said laws and regulations shall prevail. When banks, insurance companies, bill finance companies, securities firms, futures commission merchants, leverage transaction merchants, or other financial enterprises whose operations require special approval, conduct derivatives trading business, or engage in derivatives trading, they shall do so in accordance with the provisions of any other laws and regulations that govern their sectors, and are exempt from the provisions of Chapter II, Section IV herein. 2. Pursuant to Article 4 of the Taipei Exchange Regulations Governing Over-the-Counter Trading of Financial Derivatives by Securities Firms, the content of the operating standards that a securities firm shall formulate when conducting business related to derivative financial products has been formulated and approved by the Board of Directors. The Company has formulated its Operational Guidelines for Conducting Over-the-Counter Trading of Derivative Financial Products. 3. Because laws and regulations exist in the financial industry that governs the business of trading derivative products or the engaging of derivative product trading, it is proposed that the Company’s Procedure for Derivatives Trading should be abolished.
Resolution	The Company’s shareholders present have total votes of 951,485,900, of which approval votes 931,502,232 (including electronic votes of 711,031,569), disapproval votes 183,237 (including electronic votes of 183,237), abstention votes/no votes 19,800,431 (including electronic votes of 19,800,431), and invalid votes 0; the approval votes account for 97.89%, over half of the total votes of the shareholders present. The proposal made by the Board of Directors was approved as it was.

President Securities Corporation

Proposal 4 Revised the procedures for acquiring or disposing of assets are proposed for discussion.	Proposal 4 Revised the procedures for acquiring or disposing of assets are proposed for discussion.
Explanation	1. Amendment to the relevant provisions of the Company’s Procedure for Derivatives Trading was made in accordance with Letter Jin-Guan-Zheng-Fa No. 1070341072 and in response to the Company’s abolition of the Procedure for Derivatives Trading. 2. Please see appendicx for related information.
Resolution	The Company’s shareholders present have total votes of 951,485,900, of which approval votes 931,513,261 (including electronic votes of 711,042,598), disapproval votes 173,862 (including electronic votes of 173,862), abstention votes/no votes 19,798,777 (including electronic votes of 19,798,777), and invalid votes 0; the approval votes account for 97.90%, over half of the total votes of the shareholders present. The proposal made by the Board of Directors was approved as it was.
Proposal 5 Please discuss the proposal for removal of the non-compete clause for the Company’s directors
Explanation	1. In order to meet the needs of overseas development, the Company appoints Chairman Lin Kuan-Chen to serve concurrently as the director of the joint venture Jin Yuan President Limited. 2. It is proposed to request that the shareholders’ meeting approve the lifting of the non-compete clause for directors in accordance with Article 209 of the Company Act.
Resolution	The Company’s shareholders present have total votes of 951,485,900, of which approval votes 927,043,692 (including electronic votes of 706,573,029), disapproval votes 4,641,622 (including electronic votes of 4,641,622), abstention votes/no votes 19,800,586(including electronic votes of 19,800,586), and invalid votes 0; the approval votes account for 97.43%, over half of the total votes of the shareholders present. The proposal made by the Board of Directors was approved as it was.

Note: Please refer to the Market Observatory Post System—Annual Reports and Shareholders Meetings (including depositary receipt information) for relevant appendices of the meeting.

2020 Annual Report

III. Corporate Governance

2. Major Resolutions during the Board of Directors Meetings in 2020 and to the Publish Date of the Annual Report: Executed according to the resolution of the Board of Directors Meeting.

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Meeting Item Resolution
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Meeting	Item	Resolution

2020.03.26 The 12th Board meeting of the 11th Board of Directors	1. Review of 2019 Business Report and Consolidated and Individual Financial Reports. 2. Proposal for acquisition of overseas equity held by PSBVI and liquidation of PSBVI. 3. Proposal for reversal of the special capital reserve balance. 4. Proposal regarding 2019 Employees and Directors Bonus Distribution Ratio. 5. Proposal regarding 2019 Employees and Directors Bonus Allocation. 6. Profit distribution of year 2019. 7. Convert retained earnings to capital. 8. Proposal regarding holding the General Shareholders Meeting of 2020. 9. Submitted the Statement of the 2019 Internal Control System. 10. Amendments to the policies and strategies of the principle of fair hospitality. 11. Application for the issuance of an ETN linked to the “TIP FactSet Taiwan 5G Total Return Index”. 12. Revised the Internal Control System of Information System Department. 13. Submitted the Overall Information Security Implementation Statement. 14. Revised the Risk Management Measures. 15. Disclosed qualitative information about risk management. 16. Amendments to the Management Crisis Response Policy. 17. Abolition of the Company’s procedures for derivative transactions. 18. Applied for credit risk limit for carrying out derivative financial product transactions with financial institutions. 19. Amendments to matters to be followed by OSU in advertising and solicitation activities. 20. Amendments to the OSU customer acceptance standards and the Know-Your Customer (KYC) review procedures. 21. Amended the operating procedures for the wealth management business. 22. Increased the number of upstream securities firms in placing order on foreign securities on behalf of clients. 23. Proposal for the loan amount in the application for securities lending to Cathay Securities Corporation. 24. Changes in managers. 25. Establish a Ethical Corporate Management promotion team. 26. Proposal for people in authority (managerial officers) to serve as the directors and supervisors concurrently at subsidiaries in which the Company has invested. 27. Proposal for people in authority (managerial officers) to serve as the directors and supervisors concurrently at joint ventures as well as for authorizing the appointment of independent directors. 28. Amended the Articles of Incorporation. 29. Proposal for amendments to the rules governing Board Meetings. 30. Proposal for amendments to the Audit Committee Charter. 31. Proposal for amendments to the procedures for handling the Company’s internal material information. 32. Revision of the Directions of the Company’s money laundering and terrorist financing. 33. Proposal for updating of the report on the Company’s anti-money laundering and anti-terrorist-financing risk assessment. 34. Proposal for formulation of the Company’s compliance risk evaluation report. 35. Submitted the statement of the Internal Control of anti-money laundering and counter-terrorist financing. 36. Accountant independence and competency evaluation. 37. Applied for credit line for short-term loans from financial institutions. 38. Applied for credit line for short-term loans in foreign currencies from financial institutions for OSU. 39. Applied for foreign currencies interbank call loan limits from financial institutions. 40. Applied for credit line for short-term loans from financial institutions for overseas subsidiaries. 41. Status of the implementation of the principle of fair hospitality in 2019.	All Directors present voted in favor of the resolution without any objection.

President Securities Corporation

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Meeting Item Resolution
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Meeting	Item	Resolution

2020.05.07 The 13th Board meeting of the 11th Board of Directors	1. Revised the Internal Control System. 2. Revised the procedures for acquiring or disposing of assets. 3. Revised the Internal Control System for electronic account opening. 4. Changes in managers. 5. Search of backup office site for futures proprietary merchants. 6. Proposal regarding 2019 Manager and Employees Bonus Allocation. 7. Proposal regarding the discharge of the Company’s representatives (managers) serving as Directors of investee enterprises. 8. The nomination of the independent directors of Jin Yuan President Securities Corporation Ltd. 9. Relieve the non-compete limitation for the directors. 10. Reviced the minute of 2020 shareholder meeting. 11. Dismiss of Xiamen office. 12. Applied for foreign currencies interbank call loan limits from financial i nstitutions. 13. Applied for credit line for short-term loans in foreign currencies from financial institutions for OSU. 14. Applied for credit line for short-term loans from financial institutions for overseas subsidiaries.	For proposal 1 to 8 and 10 to 14, all Directors present voted in favor of the resolution without any objection. For proposal 9, all Directors present (Chairman excluded) voted in favor of the resolution without any objection.
2020.06.19 The 14th Board meeting of the 11th Board of Directors	1. Proposal for aquisition of the price of overseas equity held by PSBVI 2. Proposal for capitalization of earnings and the Board of Directors’ authorization of the Chairman to establish the record dates of ex-rights, ex-dividends, and capital increase 3. Applied for providing structured products with foreign currency principal linked to foreign currency equity options (non-principal-protected) 4. Applied for credit risk limit for carrying out derivative financial product transactions with financial institutions 5. Status of the implementation of the principle of fair hospitality from January to May 2020. 6. Amended the audition policies of products 7. Amended the Offshore Structured Products Review and Management Regulations 8. Changes in managers 9. Changes in department supervisors 10. Amendments to the performance bonus for the Proprietary Trading Department Extempore motion: 1. Increased the issue and hedging limits of an exchange-traded note (ETN)	For proposal 2 to 10, all Directors present voted in favor of the resolution without any objection. For proposal 1, all Directors present (Chairman excluded) voted in favor of the resolution without any objection.

2020 Annual Report

III. Corporate Governance

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Meeting Item Resolution
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Meeting	Item	Resolution

2020.08.27 The 15th Board meeting of the 11th Board of Directors	1. Review of 2020Q2 Business Report and Consolidated and Individual Financial Reports 2. Revised the internal control system 3. Applied for the issuance of exchange-traded notes (ETNs) linked to the Hang Seng TECH Index (including its net return index) 4. Authorized the Chairman to flexibly adjust the Company’s overall annual risk value limit 5. Adjusted the Company’s overall risk value calculation products 6. Amended the procedures for handling consumer disputes 7. Amended the operating procedures for the wealth management business 8. Amended the audition policies of products 9. Proposal for an increase of the number of upstream securities firms for brokerage trading of foreign securities 10. Proposal for application for securities lending lines for JP Morgan Securities and Yuanta Securities 11. Changes in managers 12. Proposal for amendments to the rules governing shareholders meetings. 13. Proposal for amendments to the rules governing Board Meetings 14. Proposal for amendments to the Audit Committee Charter 15. Proposal for amendment to the Rules Governing the Scope of Powers of Independent Directors 16. Renewal of liability insurance for Directors and key personnel 17. Amended the Directors Performance Evaluation Measures 18. Status of the implementation of the principle of fair hospitality from June to July 2020. 19. Applied for credit line for short-term loans from financial institutions 20. Applied for credit line for short-term loans in foreign currencies from financial institutions for OSU 21. Applied for credit line for short-term loans from financial institutions for overseas subsidiaries 22. Periodic review and evaluation of the policy and structure for the remuneration of the Directors 23. Amended the principles of best practices for ethical corporate management 24. Formulated the Procedures for Ethical Management and Guidelines for Conduct 25. Proposal for consultant appointment and remuneration 26. Revised managers’ salary and remuneration bracket table Extempore motion: 1. Increased the issue and hedging limits of an exchange-traded note (ETN)	All Directors present voted in favor of the resolution without any objection.
2020.11.10 The 16th Board meeting of the 11th Board of Directors	1. Applied for the issuance of exchange-traded notes (ETNs) linked to the Fubon 7-10 Years US Treasury Bond ETF 2. Applied for a credit risk limit to carry out derivative financial product transactions with financial institutions 3. Amended the audition policies of products 4. Amended the operating procedures for the wealth management business 5. Changes in managers 6. Proposal for adjustment of the pan-proprietary business performance bonus policy 7. Proposal for the formulation of the bonus and performance evaluation regulations for the head, supervisor, and managers of the Brokerage Department 8. Changes in department supervisors 9. Proposal for the write-off of bad debt for 2020 10. Changed the authorized signatures of the financial institution 11. Applied for credit line for short-term loans from financial institutions 12. Applied for credit line for short-term loans in foreign currencies from financial institutions for OSU 13. Applied for credit line for short-term loans from financial institutions for Hongkong Subsidiaries	All Directors present voted in favor of the resolution without any objection.

President Securities Corporation

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Meeting Item Resolution
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Meeting	Item	Resolution

2020.12.24 The 17th Board meeting of the 11th Board of Directors	1. Submitted the Audit plan of 2021 2. Revised the type and scope of businesses that the subsidiary, President Securities Venture Capital, could operate 3. Established warrant stress test procedures 4. Revised the Risk Management Measures 5. Set the 2021 risk limit for the Company as a whole and each department 6. Amended the review operations of internal personnel’s bokerage trading 7. Amended the professional investor statement and the KYC review and management operation standards 8. The proposal has been withdrawn as approved by all the directors present 9. Proposal for application for an increase in the securities lending lines for financial institutions 10. Changes in managers 11. Budget and operating plan of 2021 12. Periodic review and evaluation of the policy and structure for the remuneration of the senior executives and managers 13. The proposal regarding the promotion of department supervisors 14. Status of the implementation of the principle of fair hospitality from August to November 2020 15. The proposal has been withdrawn as approved by all the directors present	For proposal 8 and 15 have been withdrawn as approved by Chairman, other proposals didn’t change and have been voted in favor of the resolution without any objection by all the directors present. For proposal 1 to 7 and 9 to 14, all Directors present voted in favor of the resolution without any objection.
2021.03.23 The 18th Board meeting of the 11th Board of Directors	1. Review of 2020 Business Report and Consolidated and Individual Financial Reports 2. Proposal regarding 2020 Employees and Directors Bonus Distribution Ratio. 3. Proposal regarding 2020 Employees and Directors Bonus Allocation. 4. Profit distribution of year 2020 5. Convert retained earnings to capital 6. Applied for the issuance of exchange-trade notes (ETNs) linked to the ICE FactSet Asia Semiconductor Index. 7. Submitted the Statement of the 2020 Internal Control System 8. Amended the operating procedures for the wealth management business 9. Revised the Internal Control System of Information System Department 10. Submitted the Overall Information Security Implementation Statement 11. Disclosed qualitative information ablout risk management 12. Applied for an increase in the limit of non-restricted purpose loans for Hsinchu Branch customers 13. Applied for an increase in the securities lending lines for JP Morgan Securities 14. Changes in managers 15. Changes in department supervisors 16. The proposal regarding the Company’s representatives (managers) serving as Directors of investee enterprises 17. Status of the implementation of the principle of fair hospitality in 2020 18. Amendments to the policies and strategies of the principle of fair hospitality 19. Amended the Articles of Incorporation 20. Proposal for amendments to the rules governing shareholders meetings 21. Amended the Corporate Governance Best Practice Principles Report on the Company’s anti-money laundering and anti-terrorist-financing risk assessment in 2020 22. Company’s 2020 money laundering and terrorist financing risk assessment report 23. Company’s 2020 legal compliance risk evaluation report 24. Internal Control Certification on AML/CFT and Insider Trading 25. Amended the Regulations Governing the Loaning of Funds and Creation of Endorsements/Guarantees 26. Accountant independence and competency evaluation 27. Applied for credit line for short-term loans from financial institutions 28. Applied for credit line for short-term loans in foreign currencies from financial institutions for OSU 29. Applied for credit line for short-term loans from financial institutions for Hongkong Subsidiaries 30. Proposal regarding holding the General Shareholders Meeting of 2021 31. Proposal regarding the election of the 12th Board of Directors 32. Nominations for the 12th Board of Directors 33. List of candidates nominated by the Board of Directors	All Directors present voted in favor of the resolution without any objection.

2020 Annual Report

III. Corporate Governance

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Meeting Item Resolution
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Meeting	Item	Resolution

2021.05.06 The 19th Board meeting of the 11th Board of Directors	1. The proposal has been withdrawn as approved by all the directors present 2. Revised the Internal Control System of Information System Department 3. Apply to ofer consignment trading of foreign securities to high-asset customers, including international securities business. 4. Apply to ofer wealth-management service to high-asset customers. 5. Apply to ofer proprietary trading of overseas bonds at the business premises to high-asset customers, including international securities business. 6. Apply the upper limit of total position of transactions between NTD and foreign currencies to be USD 3 million. 7. Increase the number of upstream securities frms for commissioned transactions in foreign securities business. 8. Amended the audition policies of products 9. Apply to incrementally issue President Hang Seng TECH Index ETN. 10. Apply to increase the annual department risk value upper limit for proprietary trading department. 11. Status of the implementation of the principle of fair hospitality from January to March 2021. 12. Amended the Directors Performance Evaluation Measures 13. Proposal regarding 2020 Manager and Employees Bonus Allocation. 14. Proposal for consultant re-appointment and remuneration. 15. The proposal regarding the promotion of department supervisors 16. Waive the non-compete clause of the Company's Directors. 17. Reviced the minute of 2021 shareholder meeting. 18. Proposal to increase the capital of Jin Yuan President Securities Corporation Ltd. 19. Applied for foreign currencies interbank call loan limits from financial i nstitutions. 20. Applied for credit line for short-term loans in foreign currencies from financial institutions for OSU. 21. Applied for credit line for short-term loans from financial institutions for Hongkong subsidiaries. 22. Apply to increase the amount of exemption from insurance on issuance of the Company's bills. 23. Review the list of nominees for the 12th Directors and Independent Directors.	For proposal 1 having been withdrawn as approved by Chairman, other proposals didn’t change and have been voted in favor of the resolution without any objection by all the directors present. For proposal 2 to 15 and 17 to 22, The chairman has the assent of all the Directors present voted in favor of the resolution without any objection. After the Deputy Chairman put forward the 16rd proposal for approval, it was passed unanimously by the Directors present at the meeting without any objections (excluding Chair- man who recused themselves from voting). After the Chairman put forward the 23rd proposal for approval, it was passed unanimously by the Directors present at the meeting without any objections (excluding Directors who recused themselves from voting).

M. Document or written statement that states different opinions by board members or supervisors against the approved major resolutions by the board meeting in recent fiscal period and to the publish date of the annual report: None.

N. Resignation or Dismissal of the Company’s Key Individuals, Including the Chairman, CEO, and Heads of Accounting, Finance, Internal Audit, Corporate Governance Officer and R&D: None.

President Securities Corporation

IV. Information Regarding the Company’s Audit Fee and Independent Auditor

A. Range of Auditing Fee

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Period Covered by
Accounting Firm Name of CPA Remarks
CPA’s Audit
Lin, Se-Kai
Attestation of Financial Statements
Lo, Chiao-Sen
PwC Taiwan 2020.01.01- 2020.12.31
Chen, Li-Yuan Attestation of Tax Returns
Unit: NT$ thousands
Fee Items Non-audit
Audit Fee Total
Fee Range Fee
Under NT$ 2,000 0 0 0
NT$2,000 ~ NT$4,000 0 2,523 2,523
NT$4,000 ~ NT$6,000 0 0 0
NT$6,000 ~ NT$8,000 6,420 0 6,420
NT$8,000 ~ NT$10,000 0 0 0
Over NT$10,000 0 0 0
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B. Disclosure of Auditing Fee

Unit: NT$ thousands

Accounting Firm	Name of CPA	Audit Fee	Non-audit Fee	Non-audit Fee	Non-audit Fee	Non-audit Fee	Non-audit Fee	Period Covered by CPA’s Audit	Remarks
			System of Design	Company Registration	Human Resource	Other	Subtotal
PwC Taiwan	Lin, Se-Kai Lo, Chiao-Sen	5,420	0	170	0	2,353 (Note1)	2,523	2020	Attestation of Financial Statements
	Chen, Li-Yuan	1,000							Attestation of Tax Returns

Note1: Non-audit expenses include Information security evaluation service, and BVI Economic Substance Law consultation and organizational restructuring as well as liquidation services , CSR report verification and counselling, certification service for salary information checklist for non-executive full-time employees, financial indicator description, and transfer pricing profit indicator analysis.

C. The amount of non-auditing relevant fees charged by the appointed independent auditors and the related parties reach 25 % of the Company’s annual auditing expenses: Yes, the details of the non-audit fees have been described in (B) Disclosure of auditing fee in Note1.
D. If there is any change in the appointed in dependent auditors and the Company’s annual auditing expenses decreased simultaneously, information regarding the amount, percentage and reasons for the decrease in auditing expenses shall be disclosed: Not Applicable.
E. Auditing expenses decreased by 15% in comparison to the previous year, information regarding the amount, percentage and reason for the decrease in auditing expenses shall be disclosed: Not Applicable.

2020 Annual Report

III. Corporate Governance

V. Replacement of CPA:

According to the Statements on Auditing Standards No.46, the CPA shall be replaced on a regular basis. Starting from the beginning of 2020, the financial report CPA Hsiao, Chin-Mu was replaced with Lo, Chiao-Sen.

A. Regarding the Former CPA

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Replacement Year 2020
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Replacement Year	2020	2020	2020	2020

Replacement reasons and explanations	PricewaterhouseCoopers (PwC) Taiwan job rotation.
Describe whether the Company terminated or the CPA did not accept the appointment	Parties		CPA	The Company
	PricewaterhouseCoopers (PwC) Taiwan job rotation		Attestation of Financial Statements: Lin, Se-Kai Hsiao, Chin-Mu	PSC
Other issues (except for unqualified issues) in the audit reports within the last two years		None
Differences with the company	Yes	-	Accounting principles or practices
		-	Disclosure of Financial Statements
		-	Audit scope or steps
		-	Others
	None	V
		Remarks/specify details: None
Other Revealed Matters (The provisions of Item 1-4 of Subsection 6 of Article 10 of the Guidelines shall be disclosed.)		None

B. Regarding the Successor CPA

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Name of accounting firm PricewaterhouseCoopers (PwC) Taiwan
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Name of accounting firm	PricewaterhouseCoopers (PwC) Taiwan
Name of CPA	Attestation of Financial Statements: Lin, Se-Kai and Lo, Chiao-Sen.
Year of appointment	2020
Consultation results and opinions on accounting treatments or principles with respect to specified transactions and the company's financial reports that the CPA might issue prior to the engagement.	None
Succeeding CPA’s written opinion of disagreement toward the former CPA	None

C. The official letter from former CPA in response to the provisions of Item 1 and 2-3 of Subsection 5 of Article 10 of the Guidelines: None.

VI. If the Company’s Chairman, President, or managers responsible for financial and accounting affairs have held any position in the accounting firm or its affiliates during the past year, all relevant information should be disclosed: None.

President Securities Corporation

VII. Net Change in shareholdings and in shares pledged by directors, supervisors, manages, and shareholders holding more than a 10% share in the Company.

Unit: Share

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2020 As of Mar. 31, 2021
Title Name Holding Pledged Holding Holding Pledged Holding
Increase Increase Increase Increase
(Decrease) (Decrease) (Decrease) (Decrease)
Director Kai Nan Investment Co., Ltd. 796,629 0 0 0
Director Canking Investment Co., Ltd. 338,377 0 0 0
Director Leg Horn Investment Co., Ltd. 248,160 0 0 0
Director Hui Tung Investment Co., Ltd. 203,990 0 0 0
Director Ta Le Investment Holding Co., Ltd. 143,452 0 0 0
Director Lee, Shy-Lou 0 0 0 0
Director Duh, Bor-Tsang 83,798 0 0 0
Director Juang, Jing-Yau 60 0 0 0
Director China F.R.P. Corp. 4,807,585 0 0 0
Independent Director Pai, Chun-Nan 0 0 0 0
Independent Director Song, Yung-Fong 0 0 0 0
Independent Director Horng, Yuan-Chuan 0 0 0 0
Independent Director Liang, Yann-Ping 0 0 0 0
President Tsai, Sen-Bu 6,265 0 0 0
Proprietary Trading
Department Executive Vice Yang, Kai-Chih 2,728 0 0 0
President
Finance Department Vice
An, Chi-Li 3,124 0 0 0
President
Quantitative Trading
Huang, Jung-Jen 2,147 0 0 0
Department Vice President
Financial Product
Pu, Chien-Heng 0 0 0 0
Department Vice President
Capital Market Department
Wei, Chih-Hsu 0 0 0 0
Vice President
Fixed Income Department
Yeh, Ming-Chieh 0 0 0 0
Vice President
Shareholder Services
Department Sales Vice Chueh, Chih-Chung 0 0 95,182 0
President
President Office Project
Lin, Chung-Heng 13,510 0 0 0
Vice President
Auditing Office Chief
Huang, Sha-Mei 0 0 0 0
Auditor
Administration Department
Senior Assistant Vice Yu, Hung-Chieh 114 0 -5,000 0
President
Information System
Department Senior Lin, Jung-Hui 1 0 0 0
Assistant Vice President
Compliance Division
Hung, Ying-Che 1,092 0 0 0
Assistant Vice President
President Office Corporate
Governance Assistant Vice Chen, Nai-Chen 7 0 0 0
President
Capital Market Department
Chang, Chin-Yung 0 0 0 0
Assistant Vice President
Finance Department
Su, Wei-Lun 0 0 0 0
Assistant Vice President
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2020 Annual Report

III. Corporate Governance

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2020 As of Mar. 31, 2021
Title Name Holding Pledged Holding Holding Pledged Holding
Increase Increase Increase Increase
(Decrease) (Decrease) (Decrease) (Decrease)
Financial Product
Department Assistant Vice Chang, Chung-Lin 0 0 0 0
President
Shareholder Services
Department Assistant Vice Chang, Shao-Ping 376 0 -19,000 0
President
Settlement & Clearing
Department Assistant Vice Wu, Sheng-Yu 322 0 0 0
President
Quantitative Trading
Department Assistant Vice Lee, Chien-Hsin 0 0 0 0
President
Quantitative Trading
Department Assistant Vice Chien, Pang-Yen 0 0 0 0
President
Capital Market Department
Chen, Chia-Chang 0 0 0 0
Assistant Vice President
Corporate Client Dept.
Chen, Min-Ping 0 0 0 0
Assistant Vice President
Capital Market Department
Chiang, Chang-Kuen 0 0 0 0
Assistant Vice President
Information System
Department Assistant Vice Hu, I-Der 2 0 0 0
President
Capital Market Department
Lin, Wei-Hung 0 0 0 0
Assistant Vice President
Risk Control Office
Chang, Ping-Chuan 301 0 0 0
Senior Manager
Brokerage Department
Senior Assistant Vice Chang, Hung-Shuo 28 0 0 0
President
Brokerage Department
Lin, Li-Lin 122 0 0 0
District Supervisor
Brokerage Department
Chien, Chia-Nan 0 0 0 0
District Supervisor
Brokerage Department
Liao, Chen-Yin 0 0 0 0
Vice District Supervisor
Brokerage Department
Lee, Chin-Yi 0 0 0 0
Vice District Supervisor
Brokerage Department
Chiu, Shyh-Tyng 0 0 0 0
Assistant Vice President
Brokerage Department
Jung, Yi-Chiang 0 0 0 0
Assistant Vice President
Brokerage Department
Liao, Ling-Yun 0 0 0 0
Assistant Vice President
Global Institutional
Service Department Senior Lee, Ming-Yuh 0 0 0 0
Assistant Vice President
Brokerage Department
Debit Center Assistant Vice Chu, Chen-Pu 0 0 0 0
President
Digital Business Dept. Tsai, Chen-Yuan 0 0 0 0
Senior Manager
Wealth Management and
Trust Department Senior Wang, Fong-Ju 0 0 0 0
Deputy Manager
Tunghsing Equity
Chen, Chih-Lung 0 0 0 0
Department Manager
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President Securities Corporation

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2020 As of Mar. 31, 2021
Title Name Holding Pledged Holding Holding Pledged Holding
Increase Increase Increase Increase
(Decrease) (Decrease) (Decrease) (Decrease)
Tunghsing Equity
Tsai, Shu-Mei 936 0 -41,000 0
Department Manager
Kaohsiung Branch
Wu, Huan-Chung 0 0 0 0
Manager
Dunnan Branch Manager Chiang, Chia-Jung 0 0 0 0
Zhongli Branch Manager Chiang, Tsong-Shyan 0 0 0 0
Chengzhong Branch
Chu, Po-Lin 0 0 0 0
Manager
Chengzhong Branch
Chao, Cheng 0 0 0 0
Manager
Tainan Branch Manager Hsieh, Chia-Hsi 0 0 0 0
Taichung Branch Manager Liao, Chen-Yin 0 0 0 0
Taichung Branch Manager Fang, Wu-Hsin 5 0 0 0
Hsinchu Branch Manager Lee, Chin-Yi 0 0 0 0
Chiayi Branch Manager Tai, Kuo-Chun 0 0 0 0
Pingtung Branch Manager Wang, Chien-Min 0 0 0 0
Keelung Branch Manager Yu, Ping-Tse 0 0 0 0
Yonghe Branch Manager Wu, Han-Chang 0 0 0 0
Xin Taichung Branch
Yang, Kuo-Chen 0 0 0 0
Manager
Hsinying Branch Manager Hsiao, Po-Ming 0 0 0 0
Changhua Branch Manager Yu, Fu-Tsun 0 0 0 0
Taoyuan Branch Manager Hsiao, Ju-un 0 0 0 0
Yuanlin Branch Manager Chen, Hung-Tsai 0 0 0 0
Sanchung Branch Manager Chang, Shih-Min 0 0 0 0
Shilin Branch Manager Hsu, Fu-Chiang 0 0 0 0
Panchiao Branch Manager Lo, Shih-Hong 0 0 0 0
Sanduo Branch Manager Tsai, Yi-Chen 0 0 0 0
Szichih Branch Manager Huang, Ming-Fa -91 0 0 0
Ilan Branch Manager Chiang, Jen-Chu 0 0 0 0
Nanjing Branch Manager Chou, Da-Kuang 0 0 0 0
Kinmen Branch Manager Chung, Hui-Ju 0 0 0 0
Tucheng Branch Manager Kao, Ming-Chou 0 0 0 0
Songjiang Branch Manager Lin, Yu-Ju 0 0 0 0
Songjiang Branch Manager Chang, Chih-Hsiang 0 0 0 0
Neihu Branch Manager Tseng, Chien-Ming 0 0 0 0
Renai Branch Manager Liu, Yi-Chun 0 0 0 0
Pingzhen Branch Manager Li, Shu-Jung 0 0 0 0
Zhunan Branch Manager Su,Yung-Sheng 0 0 0 0
Offshore Securities Unit
Chang, Hung-Shuo 28 0 0 0
Branch Manager
10% Shareholder Uni-President Enterprises Corp 7,871,731 0 0 0
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2020 Annual Report

III. Corporate Governance

VIII. Information Disclosing the Relationship between any of the Company’s Top Ten Shareholders

As of April 19, 2021

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Shareholding
The relationship between any of the
Shareholding Spouse & Minor by Nominee
Name Arrangement Company’s Top Ten Share holders Remarks
Shares % Shares % Shares % Name Relation
1. President Chain
Store Corp. Investees for whom
Uni-President valuation is conducted
Enterprises Corp. 401,458,290 28.68 0 0 0 0 2. Kai Nan under the equity NA
Investment Co., method
Ltd.
Lo, Chih-Hsien
Kao, Shiow- Ling
Delegate of
0 0 3,864,403 0 0 0 Delegate of Kao Spouse NA
Uni-President
Chyuan Inv. Co., Ltd.
Enterprises Corp.
President Securities
Corporation - Trust 46,904,664 3.35 0 0 0 0 NA NA NA
Account
Kai Nan Investment Uni-President
40,628,089 2.90 0 0 0 0 Note 2 NA
Co., Ltd. Enterprises Corp.
Lo, Chih-Hsien
Kao, Shiow- Ling
Delegate of Kai
0 0 3,864,403 0 0 0 Delegate of Kao Spouse NA
Nan Investment
Chyuan Inv. Co., Ltd.
Co., Ltd.
President Chain Uni-President
38,985,684 2.79 0 0 0 0 Note 2 NA
Store Corp. Enterprises Corp
Lo, Chih-Hsien
Kao, Shiow- Ling
Delegate of
0 0 3,864,403 0 0 0 Delegate of Kao Spouse NA
President Chain
Chyuan Inv. Co., Ltd.
Store Corp.
Eternal Materials
34,937,430 2.50 0 0 0 0 NA NA NA
Co., Ltd.
Tainan Spinning Hsin Yung Hsing
32,784,714 2.34 0 0 0 0 Note 3 NA
Co., Ltd. Investment Co., Ltd.
Kao Chyuan Inv.
31,720,027 2.27 0 0 0 0 NA NA NA
Co., Ltd.
Kao, Shiow- Ling Lo, Chih-Hsien
Delegate of Kao Delegate of Uni-
3,864,403 0.28 0 0 0 0 Spouse NA
Chyuan Inv. Co., President Enterprises
Ltd. Corp.
Dr. C. Y. Kao’s
Non-Profit
Foundation
of Culture & 18,245,540 1.30 0 0 0 0 NA NA NA
Education (In
Memory of His
Mother)
Canking
Investment Co., 17,257,228 1.23 0 0 0 0 NA NA NA
Ltd.
Hsin Yung Hsing
Tainan Spinning Co.,
Investment Co., 15,107,544 1.08 0 0 0 0 Note 3 NA
Ltd.
Ltd.
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Note 1: The shareholding ratio was calculated based on the 1,399,837,829 shares of the share capital of President Securities Corporation.

Note 2: Affiliates of Uni-President Enterprises Corp.

Note 3: Hsin Yung Hsing Investment Co., Ltd. is director of Tainan Spinning Co., Ltd.

President Securities Corporation

IX. Ownership of Shares in Affiliated Enterprises

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As of March 31, 2021
Ownership by the Direct or Indirect Ownership by
Total Ownership
Affiliated Enterprises Company Directors, Supervisors, Managers
Shares % Shares % Shares %
President Futures Co., LTD 63,817,303 96.69 0 0 63,817,303 96.69
President Capital Management Corp. 30,000,000 100.00 0 0 30,000,000 100.00
President Securities (Hong Kong) Limited 192,600,000 100.00 0 0 192,600,000 100.00
President Securities (BVI) Limited (Note1) 67,746,000 100.00 0 0 67,746,000 100.00
President Securities (Nominee) Limited 1,000,000 100.00 0 0 1,000,000 100.00
President Wealth Management (HK) Ltd. 23,400,000 100.00 0 0 23,400,000 100.00
Jin Yuan President Securities Limited (Note2) 588,000,000 49.00 0 0 588,000,000 49.00
Uni-President Asset Management Corporation 14,904,630 42.46 12,000 0.03 14,916,630 42.49
President Insurance Agency Co., Ltd. 1,000,000 100.00 0 0 1,000,000 100.00
PSC Venture Capital Investment Company Limited 30,000,000 100.00 0 0 30,000,000 100.00
----- End of picture text -----

Note 1: President Securities (BVI) Limited has been decided to be liquidated by the Directors and the liquidation is in progress

Note 2: Jin Yuan President Securities Limited has no shares issuin. The Company investment amount is 588,000,000 RMB dollars.

X. Name and position of the employees with the top ten amounts of bonuses as well as the total amounts of the top ten bonuses

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Unit: NT$ thousands
Name Title Bonuses (Note)
Tsai, Sen-Bu President
An, Chi-Li Vice President
Lin, Chung-Heng Project Vice President
Lin, Li-Lin District Assistant Vice President
Chen, Min-Ping Assistant Vice President
Yeh, Ming-Chieh Vice President 2,700
Huang, Jun-Jen Vice President
Yang, Kai-Chih Executive Vice President
Pu, Chien-Heng Vice President
Liao, Chen-Yin Vice District Assistant Vice President
Chueh, Chih-Chung Sales Vice President
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Note 1: Receive employee bonuses for 2019 in 2020.

Note 2: The sequence above is arranged based on the number of strokes of the last name in Chinese.

2020 Annual Report

III. Corporate Governance

XI. Training of Directors and Supervisors

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Date of
Title Name Date Organization Course Credit
Inauguration
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Lin, Kuan-Chen Taiwan in 2020
Delegate of Kai
Chairman 2018.06.21
Nan Investment Discussion on Laws and
Co., Ltd Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Liu, Tsung-Yi Taiwan in 2020
Delegate of Kai
Director 2018.06.21
Nan Investment Discussion on Laws and
Co., Ltd. Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Taiwan in 2020
With the Advent of the Digital
Economy, address How
Taiwan Institute of
2020.10.23 Companies can Embrace 3
Chen, Kuo-Hui Directors
Talent Transformation in the
Delegate of Kai
Director 2018.06.21 Next Decade
Nan Investment
Co., Ltd.
Discussion on Laws and
Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
Taiwan Institute of Group Governance and
2020.07.24 3
Directors Performance Management
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Taiwan in 2020
With the Advent of the Digital
Economy, address How
Taiwan Institute of
Hsieh Hong, Hui- 2020.10.23 Companies can Embrace 3
Directors
Tzu Talent Transformation in the
Director Delegate of Kai 2018.06.21 Next Decade
Nan Investment
Co., Ltd. Discussion on Laws and
Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
Taiwan Institute of Group Governance and
2020.07.24 3
Directors Performance Management
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President Securities Corporation

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Date of
Title Name Date Organization Course Credit
Inauguration
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Taiwan in 2020
With the Advent of the Digital
Economy, address How
Taiwan Institute of
2020.10.23 Companies can Embrace 3
Lu, Li-An Directors
Talent Transformation in the
Delegate of Kai
Director 2018.06.21 Next Decade
Nan Investment
Co., Ltd.
Discussion on Laws and
Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
Taiwan Institute of Group Governance and
2020.07.24 3
Directors Performance Management
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Taiwan in 2020
With the Advent of the Digital
Economy, address How
Taiwan Institute of
2020.10.23 Companies can Embrace 3
Chen, Ching-Yi Directors
Talent Transformation in the
Delegate of Kai
Director 2019.06.18 Next Decade
Nan Investment
Co., Ltd.
Discussion on Laws and
Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
Taiwan Institute of Group Governance and
2020.07.24 3
Directors Performance Management
With the Advent of the Digital
Economy, address How
Taiwan Institute of
2020.10.23 Companies can Embrace 3
Directors
Talent Transformation in the
Next Decade
Chen, Yi-Ling
Business Group Tax
Delegate of Kai Taiwan Institute of
Director 2019.06.18 2020.08.28 Management Trends in the 3
Nan Investment Directors
Post-pandemic Era
Co., Ltd.
Taiwan Institute of The Battle for Management
2020.08.28 3
Directors Rights and Case Study
Taiwan Institute of Group Governance and
2020.07.24 3
Directors Performance Management
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Teng, Wen-Hwi Taiwan in 2020
Delegate of Kai
Director 2018.06.21
Nan Investment Discussion on Laws and
Co., Ltd. Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
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2020 Annual Report

III. Corporate Governance

==> picture [542 x 647] intentionally omitted <==

----- Start of picture text -----

Date of
Title Name Date Organization Course Credit
Inauguration
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Lee, Chi-Ming Taiwan in 2020
Delegate of Hui
Director 2018.06.21
Tung Investment Discussion on Laws and
Co., Ltd. Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Chang, Ming-Chen Taiwan in 2020
Delegate of Leg
Director 2018.06.21
Horn Investment Discussion on Laws and
Co., Ltd. Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Tu, Li-Yang Taiwan in 2020
Delegate of Ta
Director 2018.06.21
Le Investment Discussion on Laws and
Holding Co., Ltd. Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Taiwan in 2020
Lee, Shu-Fen
Director Delegate of China 2018.06.21
Discussion on Laws and
F.R.P. Corp.
Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Taiwan in 2020
Director Duh, Bor-Tsang 2018.06.21
Discussion on Laws and
Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
Discussion on Laws and
Taiwan Institute of Regulations designed
Director Lee, Shy-Lou 2018.06.21 2020.08.27 3
Directors to Improve Corporate
Governance
Corporate Governance and
Taiwan Corporate Securities Regulations—From
2020.11.10 Governance the Perspective of Corporate 3
Association Governance Evaluation
System
Director Juang, Jing-Yau 2018.06.21
Discussion on Laws and
Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
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President Securities Corporation

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----- Start of picture text -----

Date of
Title Name Date Organization Course Credit
Inauguration
Discussion on Window
Taiwan Securities Dressing and Fraud in
2020.10.08 3
Association Financial Statements of
Problematic Companies
Independent
Liang, Yann-Ping 2018.06.21
Director
Discussion on Laws and
Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
Responsibilities of Directors
Taiwan Corporate
and Supervisors during
2020.09.04 Governance 3
Business Mergers and
Association
Acquisitions
Independent
Pai, Chun-Nan 2018.06.21
Director
Discussion on Laws and
Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Taiwan in 2020
Independent
Song, Yung-Fong 2018.06.21
Director Discussion on Laws and
Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
The Prospects and Challenges
Taiwan Institute of
2020.11.10 of Artificial Intelligence in 3
Directors
Taiwan in 2020
Independent Horng, Yuan-
2018.06.21
Director Chuan Discussion on Laws and
Taiwan Institute of Regulations designed
2020.08.27 3
Directors to Improve Corporate
Governance
----- End of picture text -----

2020 Annual Report

III. Corporate Governance

XII. Manager Learning

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----- Start of picture text -----

Title Name Date Organization Credit Course
Taiwan Institute of The Prospects and Challenges of Artificial
2020.11.10 3
Directors Intelligence in Taiwan in 2020
Chairman Lin, Kuan-Chen
Taiwan Institute of Discussion on Laws and Regulations designed
2020.08.27 3
Directors to Improve Corporate Governance
Taiwan Institute of The Prospects and Challenges of Artificial
2020.11.10 3
Directors Intelligence in Taiwan in 2020
President Tsai, Sen-Bu
Taiwan Institute of Discussion on Laws and Regulations designed
2020.08.27 3
Directors to Improve Corporate Governance
Taiwan Institute of The Prospects and Challenges of Artificial
2020.11.10 3
Executive Directors Intelligence in Taiwan in 2020
Vice Yang, Kai-Chih
President Taiwan Institute of Discussion on Laws and Regulations designed
2020.08.27 3
Directors to Improve Corporate Governance
Vice Taiwan Institute of The Prospects and Challenges of Artificial
Huang, Jun-Jen 2020.11.10 3
President Directors Intelligence in Taiwan in 2020
Taiwan Institute of The Prospects and Challenges of Artificial
2020.11.10 3
Directors Intelligence in Taiwan in 2020
Vice
Pu, Chien-Heng
President
Taiwan Institute of Discussion on Laws and Regulations designed
2020.08.27 3
Directors to Improve Corporate Governance
Vice Taiwan Institute of The Prospects and Challenges of Artificial
Wei, Chih-Hsu 2020.11.10 3
President Directors Intelligence in Taiwan in 2020
Taiwan Institute of The Prospects and Challenges of Artificial
2020.11.10 3
Directors Intelligence in Taiwan in 2020
Vice
An, Chi-Li
President
Taiwan Institute of Discussion on Laws and Regulations designed
2020.08.27 3
Directors to Improve Corporate Governance
Taiwan Institute of The Prospects and Challenges of Artificial
2020.11.10 3
Directors Intelligence in Taiwan in 2020
Chief
Huang, Sha-Mei
Auditor
Taiwan Institute of Discussion on Laws and Regulations designed
2020.08.27 3
Directors to Improve Corporate Governance
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President Securities Corporation

IV. Capital Structure

I. Shareholders’ equity

A. Source of Capital

Types of shares issued in the most recent year prior to the publication date of this annual report

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Authorized Share Capital Capital Stock Remark
Month/ Issue Price
Capital Increase
Year (Per Share) 1,000 Amount (NT$ 1,000 Amount (NT$ Sources of
by Assets Other Other
shares thousands) shares thousands) Capital
than Cash
Apr- Treasury Stock
10 1,500,000 15,000,000 1,185,706 11,857,062 None Note 1
2009 Retired
Aug- Capital Increase
10 1,500,000 15,000,000 1,231,933 12,319,334 None Note 2
2010 by Earning
Aug- Capital Increase
10 1,500,000 15,000,000 1,304,646 13,046,456 None Note 3
2011 by Earning
Dec- Treasury Stock
10 1,500,000 15,000,000 1,284,582 12,845,816 None Note 4
2011 Retired
Aug- Capital Increase
10 1,500,000 15,000,000 1,323,119 13,231,191 None Note 5
2012 by Earning
Mar- Treasury Stock
10 1,500,000 15,000,000 1,303,796 13,037,961 None Note 6
2016 Retired
May- Treasury Stock
10 1,500,000 15,000,000 1,295,248 12,952,481 None Note 7
2016 Retired
July- Capital Increase
10 1,500,000 15,000,000 1,335,666 13,356,657 None Note 8
2016 by Earning
Aug- Capital Increase
10 1,500,000 15,000,000 1,390,428 13,904,280 None Note 9
2017 by Earning
May- Treasury Stock
10 1,500,000 15,000,000 1,372,390 13,723,900 None Note 10
2019 Retired
Aug- Capital Increase
10 1,500,000 15,000,000 1,399,838 13,998,378 None Note 11
2020 by Earning
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Note 1: Approved by the Financial Supervisory Commission Jin Kuan Cheng3 Tzu No.0980003793 on January 23, 2009.
Note 2: Approved by the Financial Supervisory Commission Jin Kuan Cheng1 Tzu No.0990037293 on July 19, 2010.
Note 3: Approved by the Financial Supervisory Commission Jin Kuan Cheng1 Tzu No.1000033006 on July 15, 2011.
Note 4: Approved by the Financial Supervisory Commission Jin Kuan Cheng1 Tzu No.0970064519 on November 24, 2008 and approved by the Financial Supervisory Commission Jin Kuan Cheng1 Tzu No.1010002095 on January 18, 2012 for the capital change.
Note 5: Approved by the Financial Supervisory Commission Jin Kuan Cheng1 Tzu No.1010030875 on July 12, 2012.
Note 6: Approved by the Financial Supervisory Commission Jin Kuan Cheng Jiao Tzu No.1040048944 on November 23, 2015.
Note 7: Approved by the Financial Supervisory Commission Jin Kuan Cheng Jiao Tzu No.1050010487 on March 31, 2016.
Note 8: Effective after reporting to the Financial Supervisory Commission on July 5, 2016 and approved by Ministry of Economic Affairs Jin So Sun Tzu No.10501197070 on August 10, 2016.
Note 9: Effective after reporting to the Financial Supervisory Commission on July 3, 2017 and approved by Ministry of Economic Affairs Jin So Sun Tzu No.10601121960 on August 28, 2017.
Note 10: Approved by the Financial Supervisory Commission Jin Kuan Cheng Jiao Tzu No.1080305980 on March 5, 2019.
Note 11: Effective after reporting to the Financial Supervisory Commission on June 29, 2020 and approved by Ministry of Economic Affairs Jin So Sun Tzu No.10901155560 on August 24, 2020.
Note 12: As of May 31, 2021, there are no cases where the shares are issued below the par value, and nothing other than cash is used as payments and private placement.

2020Annual Report

IV. Capital Structure

1. Type of Stock

Unit: Share

Type of Stock		Authorized Share Capital	Authorized Share Capital	Authorized Share Capital	Remark
		Issued Shares (Note)	Unissued Shares	Total
Common Stock	1,399,837,829 100,162,171 1,500,000,000 Listed on TWSE

Shelf Registration: None.

B. Structure of Shareholders

As of April 19, 2021

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Structure of Foreign
Shareholders Government Financial Other Personal Institutions
Institutional Total
Agencies Institutions Shareholders and Personal
Quantity Shareholders Shareholders
Number of Holders 0 0 225 46,811 177 47,213
Number of Shares 0 0 777,114,302 467,919,800 154,803,727 1,399,837,829
Ownership (%) 0 0 55.515 33.426 11.059 100
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C. Distribution Profile of Share Ownership

1. Common Shares

As of April 19, 2021

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Shareholders Ownership Number of
Ownership Ownership (%)
(Unit:Share) Shareholders
1 ~ 999 23,897 2,286,509 0.163
1,000 ~ 5,000 13,804 30,038,682 2.146
5,001 ~ 10,000 3,556 26,938,080 1.924
10,001 ~ 15,000 1,660 20,037,123 1.431
15,001 ~ 20,000 870 15,595,135 1.114
20,001 ~ 30,000 954 23,513,672 1.680
30,001 ~ 40,000 489 17,097,153 1.221
40,001 ~ 50,000 348 15,988,757 1.142
50,001 ~ 100,000 750 53,411,889 3.816
100,001 ~ 200,000 407 55,489,793 3.964
200,001 ~ 400,000 244 67,762,047 4.841
400,001 ~ 600,000 68 32,449,401 2.318
600,001 ~ 800,000 37 24,970,801 1.784
800,001 ~ 1,000,000 29 25,785,848 1.842
Over 1,000,001 100 988,472,939 70.613
Total 47,213 1,399,837,829 100
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2. Preferred Shares: None.

D. Major Shareholders

As of April 19, 2021

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----- Start of picture text -----

Shareholding Shareholders Number of Shares Ownership (%)
Uni-President Enterprises Corp. 401,458,290 28.678
President Securities Corporation - Trust Account 46,904,664 3.350
Kai Nan Investment Co., Ltd. 40,628,089 2.902
President Chain Store Corp. 38,985,684 2.785
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President Securities Corporation

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Shareholding Shareholders Number of Shares Ownership (%)
Eternal Chemical Co., Ltd. 34,937,430 2.495
Tainan Spinning Co., Ltd. 32,784,714 2.342
Kao Chyuan Investment Co., Ltd. 31,720,027 2.265
Dr. C. Y. Kao’s Non-Profit Foundation of Culture &
18,245,540 1.303
Education (In Memory of His Mother)
Canking Investment Co., Ltd. 17,257,228 1.232
Hsin Yung Hsing Investment Co., Ltd. 15,107,544 1.079
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Note: The shareholding ratio was calculated based on the 1,399,837,829 shares of the share capital of President Securities Corporation.

E. Market Price Per Share, Net Value, Earnings & Dividends for Latest Two Years

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Years
2019 2020 2021Q1
Item
Highest 14.6 18.8 23.5
Market Price
Per Share Lowest 11.11 9.46 18.3
(Note 1)
Average 12.68 13.95 20.99
Before Distribution 19.455 21.008 21.752
Net Worth
Per Share
After Distribution (Note 2) 18.455 - -
Weighted Average Shares
1,373,457 1,399,838 1,399,838
(thousand shares)
Earnings Per
Share Before Adjustment 1.72 2.58 0.68
Earnings
Per Share
After Adjustment 1.69 - -
Cash Dividends (NT$) 1.0 1.5 -
Retained Earnings 0.2 0.4 -
Stock
Dividends
Dividends Additional Paid-in
Per Share - - -
Capital
Accumulated Undistributed
Dividend - - -
Price/Earnings Ratio (Note 3) 7.37 5.41 -
Return on
Price/Dividend Ratio (Note 4) 12.68 9.30 -
Investment
Cash Dividend Yield (Note 5) 7.89% 10.75% -
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Note 1: The market price per share is adjusted retrospectively based on earnings distribution.

Note 2: The net worth per share after distribution is filled in based on the distribution determined via resolution at the shareholders’ meeting in the next year.

Note 3: Price / Earning Ratio = Average Market Price / Earnings per Share

Note 4: Price / Dividend Ratio = Average Market Price / Cash Dividends per Share

Note 5: Cash Dividend Yield Rate = Cash Dividends per Share / Average Market Price

F. Dividend Policy and Implementation Status

1. Dividend Policy

We take 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:

(1) With regard to the surplus for the year (net of taxes payable and losses from previous years), after

2020Annual Report

IV. Capital Structure

portions have been set aside in surplus reserves in accordance with the law and set aside or transferred to the special reserve in accordance with regulations, the balance and undistributed earnings (beginning of the year) may not be distributed if they do not make up at least five percent of paid-in capital.

(2) The total amount of dividend shall not be below 70% of the allocable profit as per the preceding paragraph.
(3) Out of the dividend which can be allocated according to the preceding paragraph, stock dividend shall not be below 50% and cash dividend shall not exceed 50%.
(4) Taking the operation situation of the year and the fiscal plan of next year into consideration, the company may decide the best stock and cash dividend on its discretion.

2. Proposed Distribution of Dividend

The Board adopted a proposal for 2020 profit distribution at its Meeting on March 23, 2021, and the proposal to distribute 2020 profits is a cash dividend of NT$1.5 per share and stock dividend of NT$0.4 per share.

G. Impacts of Stock Dividends on Operation Results and EPS: Not Applicable.

H. Compensation of Employees, Directors and Supervisors

1. Information Relating to Compensation of Employees, Directors and Supervisors in the Articles of Incorporation

The Board of Directors passed a motion on January 27, 2016 amending the Company’s Articles of Incorporation, which stated the company will distribute compensation to employees and the Directors from pre-tax profits. Where the company has pre-tax profits, the total value of funds to be distributed among employees shall not be less than 1.6% of pre-tax profits; while the total value of funds to be distributed among the Directors shall not be more than 2% of pre-tax profits. If the company has losses carried forward, compensation should only be paid to employees and Directors after funds have been set aside as reserve for such losses. This amendment was approved in the 2016 shareholders’ meeting.

2. Estimate Foundation of Employee Compensation and Directors’ Remuneration

The Company’s profit in 2020 was based on the income before taxes after deducting the bonuses to the employees and Directors; it was estimated that the bonuses for the employees and Directors accounted for 2% of the income before taxes, respectively. If there were differences between the actual amount and the estimated figures, the profit and loss of 2021 would be adjusted accordingly.

3. Profit Distribution of Year 2020 Approved in Board of Directors Meeting for Compensation of Employees and Directors

(1) The amount of bonuses to the employees, Directors, and Supervisors in the forms of cash or shares. If differences are found in the estimated expenses of the year, the differences, cause, and handling of the differences shall be disclosed.

On March 23, 2021, our Board of Directors passed the proposed allocation of 2% employees’ compensation and 2% remuneration for directors and supervisor in 2020 as follows:

Total employees’ compensation of NT$81,804,081 and total directors’ remuneration of NT$81,804,081.

There was no difference between the estimates and the actual distributions approved at the Board Meeting for Employee bonus and Director/Supervisor compensation.

(2) Ratio of employee bonuses in shares on net profit and total employee bonuses for the period:

There were no employee bonuses in shares for the current period.

4. Information of 2019 Distribution of Compensation of Employees, Directors and Supervisors

On March 26, 2020, the Board of Directors passed the proposed allocation of employees’ compensation

President Securities Corporation

and remuneration for directors and supervisor in 2019 as follows: Employees and directors bonus appropriation ratio was 2%, respectively, and distributed in cash.

Employees’ compensation amounted to NT$52,103,124 while remuneration for directors and supervisors amounted to NT$52,103,124. There was no difference between the estimates and the actual distributions approved at the Board Meeting.

I. Buyback of Treasury Stock: None.

II. Long-Term Borrowings: None.

A. Unpaid corporate bonds: None.

B. Corporate bonds due within one year: None.

III. Issuance of Preferred Stocks: None.

IV. Issuance of Global Depositary Receipts: None.

V. Issuance of Employee’s Stock Options: None.

VI. Merge and Acquisition: None.

VII. Working Capital Plans:

Any incomplete share issuance or private placement or any completed share issuance or private placement over the past three years from which benefits have not yet been reported as of March 31, 2021: None.

2020Annual Report

V. Business Environment

I. Description of Business Activities

A. Business Scope

1. Main areas of Business Operations

Underwriting business
Proprietary trading of listed securities
Brokerage for listed securities
Proprietary trading of listed securities through retail locations
Brokerage for listed securities through retail locations
Consignment trading of foreign securities
Securities margin purchase and short sale
Money borrowing or lending in connection with securities business
Securities borrowing and lending
Non-restricted purpose loan business
Shareholder services coordination
Support for futures trading through equity-related business
Concurrent operation of futures proprietary trading
Wealth Management business
Trust business
Financial derivatives products approved by the SFC
Offshore Securities business
Other relevant operations approved by the competent authority

2. Breakdown of Revenues for Latest Three Years

Unit: NT$ thousands

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2018 2019 2020
Item Operating Operating Operating
% % %
Revenue Revenue Revenue
Brokerage 2,483,267 52.97 2,221,924 35.67 3,218,058 37.98
Proprietary
2,006,020 42.79 3,726,001 59.81 5,013,874 59.17
Trading
Underwriting 198,603 4.24 281,992 4.52 241,052 2.85
Total 4,687,890 100.00 6,229,917 100.00 8,472,984 100.00
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3. Products and Services

We offer a comprehensive range of financial services-brokerage, underwriting, proprietary trading, fixed income dealing, financial product development, wealth management, and shareholder services. The following is a brief description of our primary business units.

President Securities Corporation

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Business Area Products and Services Description
1. Accept orders from clients to buy/sell 1. The market share of brokerage business was 3.23% in 2020,
listed securities and forward to TWSE ranked 9th among the top ten Taiwanese securities firms.
for execution.
2. The Company has 31 branches in total. The market share in
2. Accept orders from clients to buy/sell a single location is 0.1% and ranked 3rd among the top ten
listed securities and forward to TPEx Taiwanese securities firms, indicating that the Company’s
for execution. operational efficiency was better than other firms.
3. Manage custodial services for clients. 3. The Company has been active in promoting electronic
trading, where proportion of transactions through electronic
4. Provide margin financing for securities
trading in the entire Company was 43.43% in 2014, 45.05%
trading.
in 2015, 49.71% in 2016, 54.44% in 2017, 64.79% in
5. Securities Borrowing and Lending average in 2018, 68.29% in 2019 and 69.15% in 2020. The
Brokerage Business. proportion of transactions through electronic trading has
demonstrated significant growth every year.
6. Non-restricted purpose loan business
4. The trading system has integrated the trading functions of all
7. Accepting orders to trade Foreign
products, and customers can use the same electronic trading
Securities.
platform for trading securities, futures, options, OTC stocks,
8. Futures Introducing Broker Business. sub-brokerage, fund, and overseas futures products.
5. By offering a more all-inclusive market monitoring and order
entry environment, we can provide services to a larger client
base.
6. We integrate our sales of all types of products available in the
market and thereby offer more value to our existing clients.
1. Trading of publicly listed securities on 1. Market Position
the TWSE and TPEx, using President Over the past 10 years, our proprietary trading department
Securities’ own funds. has been among the top every year. Regardless of the market
2. Hedge positions via futures and options trend, our proprietary trading department is able to accurately
markets. read the market and adjust its strategy accordingly and pick
out the key trends and sectors. And, they are able to match
Proprietary 3. Legally-permitted foreign marketable this with effective futures hedging, risk management, and a
securities trading; international diverse range of product trading strategies, resulting in big
Trading investment expanding, such as gains, and small losses. This has allowed us to retain a core
American stocks, Hong Kong stocks, proprietary trading team with considerable experience, which
A-shares in Shanghai-Hong Kong Stock has become the envy of the industry.
Connect and Shenzhen-Hong Kong
Stock Connect, Japan stocks, global 2. Specialty Product
ETFs. System application is supported by quantitative analysis and
technical indicator modules.
1. Use own capital to trade domestic and The Fixed Income Department mainly focuses on fixed
foreign corporate and government income proprietary trading business, sales, and DCM business,
bonds in the OTC market. supplemented with the issuance of structured products. The
proprietary trading business is mainly based on foreign
2. Offer tendering services of Taiwan
currency-denominated notes, supplemented by New Taiwan
government bonds.
dollar-denominated notes. The main products are US dollar-
3. Repo and Reverse-Repo transactions. denominated and euro-denominated notes. The fixed income
sales, underwriting, issuance of structured products and Bond
4. Trade overseas and domestic convertible
Fixed Income Exchange-Traded Notes are being developed continuously. To
bonds.
Business expand fee businesses via proprietary trading business support.
5. Provide debt capital market services for
overseas and domestic issuers.
6. To trade government and corporate
bonds with customers.
7. Interest rate structured products trading,
design and sales.
8. Designed Bond Exchange-Traded Notes
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2020 Annual Report

V. Business Environment

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Business Area Products and Services Description
1. Futures Proprietary Trading Division: 1. Operating Performance
Market making and trading of legally- In 2020, profitability of our futures proprietary trading
permitted foreign futures and options division was among the top in the industry.
Quantitative contracts.
2. New Products/Services in Development
Trading 2. Strategic Trading Division: As regulators continue to liberalize the industry and allow
ETF arbitrage, market making, new financial products, we stand ready to add these new
structured products issuing and trading. products to our trading and, in turn, to add to our revenue
streams.
1. Equity Warrants (including OTC In 2020, our Financial Products Division was primarily
contract-based warrants) and issuance engaged in issuing new warrants, structured note products, and
of callable bull/bear contracts. other derivative products authorized by the Taiwan’s regulators.
2. Structured products trading. 1. Market Position
3. Convertible bond asset swap business. (1) Equity Warrants: A total of 2,850 warrants were issued in
2020, for a total dollar value of NT$25,811,590 thousand,
4. Trading of equity derivatives. ranked 7th in the market.The market share of the firm
5. Exchange Traded Note, ETN was approximately 6.95%. The net buy and sell of
premium ranked 4th in the entire market, accounting for
6. Other derivatives financial products
approved by the competent authority. approximately 8.79% of the market. It was clear that the
efficiency of the net sell was high (while the issue amount
only accounted for 6.95% of market share, the proportion
of net sell was 8.79%).
(2) Structured note products: For the year of 2020, the
Company undertook contracts amounting to a principal
of NT$20,354,829 thousand and was ranked 5th in the
market. A total of NT$5,998,942 thousand in structure
note products were outstanding at the end of 2020, ranked
4th in the market.
Financial
(3) In 2020, the total brokerage transaction volume reached
Products
NT$6,496,497 thousand, ranking second in the market.
At the end of the year, the outstanding amount was
NT$437,040 thousand, ranking first in the market.
(4) Exchange-Traded Notes (ETNs): ETNs are new products
that were launched with permission of the competent
authority in 2019. As of December 2020, a total of 29
ETNs were issued in the entire market. The Company also
launched eight diverse ETNs and ranked first in the market
in terms of the number of ETNs launched.
2. New Products/Services in Development
In addition to actively promoting the existing call/put warrant
business, structured product business, and equity options
products, and so on, the Company is currently actively
launching ETNs.The Company will maintain an excellent
quality in market making, provide better warrant services
to investors, and look forward to building consumer trust in
the brand so as to elevate the status of President Securities’
warrants in the market.
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President Securities Corporation

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Business Area Products and Services Description
By carefully selecting stock targets, a basket of targets were
combined into an ETN to provide investors with a good
choice of asset allocation. President Securities plans to
develop detailed media-based self-teaching lessons, to make
it easier for novice investors to understand the ETN business,
so as to continue to differentiate itself from competitors in
the sector and to expand its market share of new products.
1. Assist corporations in application for 1. Market Position
public listing on TWSE or TPEx. In 2020, PSC had 51 lead and co-lead underwriting deals, for
a total dollar value of NT$3.81 billion.
2. Assess and advise clients with respect to
capital increase plans. 2. New Products/Services in Development
3. Underwrite domestic and foreign bonds Our goal is to provide professional corporate financial
and issue global or Taiwan depositary services, to simultaneously act as both an effective market
receipts. maker and also as a top-notch service provider, all with the
Underwriting
aim of increasing the company’s overall added value. Going
4. Assist in M&A activities.
(Capital Market) forward we will continue to focus our energy on landing
5. Assess and advise clients with respect mid- and large-sized deals, and will continue to bolster our
to applications to convert private equity presence within the Greater China Region, so as to become a
into publicly traded stocks, treasury more competitive securities firm.
stocks, capital increase plans and
employee’s stock options.
6. Other businesses relate to underwriting
and consulting.
1. Coordinate shareholder services on 1. The scale of the Company’s agency
behalf of publicly listed companies. (1) The number of serviced companies in 2020 was 160,
2. Assist in the coordination of where 89 were listed companies, amounted to 55.62%.
shareholders’ meetings. (2) The scale of the Company’s agency is larger. The average
number of shareholders we serviced in 2020 was 1.96
3. Coordinate the distribution of cash and/
million.
or stock dividends to shareholders.
2. Operating Performance
4. Manage the issuance and delivery of tax
forms to shareholders. (1) The number of serviced companies in 2020 had a 1.25%
Shareholder growth compared to the number of service companies in
5. Respond to shareholder enquiries and 2019.
Services
legal issues.
(2) The number of shareholders’ agents in 2020 was
comparable to that in 2019, thus allowing us to
continuously achieve a high economy of scale and
efficient operations.
3. Long-term Objectives
Actively expand the number of serviced companies to
increase revenues.
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2020 Annual Report

V. Business Environment

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Business Area Products and Services Description
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Business Area	Products and Services	Description

Wealth Management & Trust	1. Provide customers with the most complete asset arrangement and finance service planning service. 2. Conduct asset allocation for customers through trust. 3. Coordinate the funds of domestic and foreign commodities, marketable securities, and structured products on the Trust Platform. 4. An employee welfare trust business was launched.	1. Market Position At the end of 2020, the number of customers in the wealth management trust account reached 17,539; the client trust assets reached NT$5.635 billion, including NT$5.618 billion for non-discretionary money trust assets and NT$17 million for marketable securities trust assets. The asset size ranked 9th among securities firms. 2. Long-term Objectives Establish "wealth management platform" for Taiwan customers through wealth management and trust.

4. New Products/Services in Development

The Company will continue to promote digitalization and adopt information technology to transform internal processes, strengthen digital management capabilities, as well as increase business momentum and decision-making efficiency. In addition, in the financial product business, the Company will continue to issue ETNs, strive to take advantage as a pioneer in the ETN market, and create product differentiation to establish a brand image.

In order to shorten the account opening time for customers, an integrated account-opening platform has been created, integrating all existing types of businesses (securities, sub-brokerage, credit, futures IB, financial instruments, bonds, OSU, and wealth-management trust). All information required for account opening are analyzed and simplified, so that customers can open an account for all businesses by filling out information only once, which greatly enhanced the customer experience. The paperless accountmanagement operating system and e-signature system were also implemented so that both online and offline accounts became fully paperless. The RPA credit investigation process will continue to be implemented to shorten the customer credit-investigation time for the Company.

B. Industry Overview

1. Overall Economic Environment

In the past year, the global economy has been impacted by the COVID-19 pandemic, while the global economy has generally declined. In the U. S., the Federal Reserve System (Fed) quickly cut interest rates, expanded the scale of quantitative easing, and also purchased mortgage backed securities and corporate bonds, while increasing its support for market liquidity and credit. The U.S. Congress also introduced fiscal stimulus policies, such as expanding unemployment benefits and providing loans to small- and medium-sized enterprises. However, U.S. President Trump underestimated the severity of the pandemic, which when coupled with the riots caused by ethnic protests, caused the pandemic to continue to escalate and led to an economic recession. In Europe, in response to the effects of the pandemic major regions of Europe implemented lockdown measures for the second time, which had serious effects on the food and beverage, tourism, and entertainment industries. Although the European Central Bank urgently adopted new monetary policies, such as the debt purchase plan, the fiscal policies had not been finalized, causing a sharp recession in the economy. Although China is the place where the Covid-19 virus causing the pandemic was first identified, the government of mainland China took decisive and drastic measures to control the pandemic. They adopted fiscal and monetary policies designed to stabilize the Chinese economy and help small- and medium-sized enterprises, while expanding the manufacturing and sales of medical equipment, to drive the economy and create a V-shaped recovery.

In Taiwan, the domestic economic growth rate increased from 2.96% in 2019 to 3.11% in 2020. The main reason is that the pandemic in Taiwan was properly controlled, so it has had little impact on the daily lives of people domestically. In terms of exports, rising demand for remote business opportunities, semiconductors, information and communication devices, and 5G applications has driven economic

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growth. In the Taiwanese stock market, with the implementation of quantitative easing policies by the central banks of Europe, the U.S., and other countries, as well as the proper pandemic control efforts in Taiwan, the market has had abundant liquidity . The annual TAIEX rose from 11,997 to 14,732 points, an increase of 22.8%. The average daily volume of the stock exchange market increased to NT$200.7 billion from NT$120.0 billion.

Looking forward to 2021, With continuous vaccination efforts worldwide, the pandemic will be controlled and economic activity will return to normal. The International Monetary Fund (IMF) anticipates that the global economic growth rate this year will increase from -3.5% last year to 5.5%. In Taiwan, the production capacity of high-end semiconductor manufacturing has been gradually expanded operations. Supporting the global digital transformation and remote business opportunities facilitated by the pandemic, strong external demand and industrial advantages will enhance the growth of exports in Taiwan. Although the pandemic control measures affected the growth momentum of private consumption, the domestic job market remained stable, while domestic and overseas stock markets were active, which helped maintain the growth in consumption. In private investment, the scale of investment in semiconductor plants increased, telecom operators were deploying 5G networks, offshore wind power, solar energy, and other green energy facilities were constructed. Dangerous old buildings were stabilized and reconstructed while urban renewal was implemented; thus, private investment was expected to continue to grow. Consequently, the Directorate-General of Budget, Accounting and Statistics estimated that economic growth this year would reach 4.64% in Taiwan.

2. Current Status and Future Development

(1) Primary Market

Unit: NT$ 100 Million

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Corporate Bond
Over-The-Counter
Listed Company Government Bond
Year (OTC) Company Ordinary Corporate Convertible Bond
Bond
Total
Number Capital Number Capital Number Net total Number Net total Number Net total
1993 669 47,252.8 423 6,394.7 80 25,870.7 2,666 7,998.5 235 1,218.1 9,216.6
1994 697 50,580.8 466 6,261.0 86 28,506.7 2,882 8,993.8 349 1,522.1 10,515.9
1995 691 54,159.6 503 6,431.8 88 31,417.2 2,784 9,355.2 322 1,549.0 10,904.2
1996 688 55,226.7 531 7,262.0 90 33,823.2 2,397 9,710.2 292 1,830.1 11,540.3
1997 698 56,016.2 547 7,148.1 88 35,184.7 1,744 8,773.4 276 2,108.0 10,881.4
1998 718 57,354.4 539 7,030.7 91 37,351.7 1,142 9,476.1 269 1,857.7 11,333.8
1999 741 58,695.9 546 7,727.3 93 39,708.5 783 9,413.9 208 1,405.2 10,819.1
2000 758 59,279.5 564 7,059.9 94 43,341.5 512 10,002.1 246 1,373.7 11,375.8
2011 790 61,523.8 607 7,319.2 97 46,441.5 425 11,242.6 299 1,660.3 12,902.9
2012 809 63,849.5 638 6,674.5 100 49,343.0 433 13,641.2 314 1,594.5 15,235.7
2013 838 66,100.3 658 6,618.5 103 52,209.5 468 15,776.1 294 1,542.4 17,318.5
2014 854 67,834.0 685 6,795.6 108 54,401.7 519 17,197.8 277 1,507.7 18,705.5
2015 874 69,509.0 712 7,061.9 113 55,693.7 500 17,081.5 297 1,554.1 18,635.6
2016 892 70,217.0 732 7,152.6 116 56,053.3 500 16,776.4 270 1,483.1 18,259.5
2017 907 71,361.9 744 7,223.6 119 56,363.3 512 17,436.6 193 1,172.6 18,609.1
2018 928 71,588.9 766 7,385.0 124 56,024.7 535 18,120.0 157 1,173.5 19,293.4
2019 942 71,556.4 775 7,466.6 129 55,509.6 569 19,012.0 166 1,186.1 20,198.1
2020 948 72,383.6 782 7422.4 137 56,244.6 681 23,505.6 193 1,338.2 24,843.8
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Reference: Securities and Futures Bureau, FSC

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2020 Annual Report

V. Business Environment

(2) Overview of total market value of the securities market in the past three years

Unit: NT$ billions

Item	2018	2019	2020
Taiwan Stock Exchange
Stocks	29,608.9	26,464.6	45,654.3
ETF	1,834.1	2,080.5	2,838.6
ETN	0.0	2.0	5.6
Beneficiary Securities	4.2	10.0	11.6
Equity Warrants	712.6	497.1	509.2
TDR	2.7	2.4	163.3
Subtotal	32,162.4	29,056.6	49,182.5
Taipei Exchange
Stocks	8,145.5	7,607.5	12,087.1
Equity Warrants	211.7	145.4	154.6
ETF	316.8	854.0	415.4
ETN	0.0	0.7	1.9
Bonds	48,217.5	44,677.1	40,604.2
Subtotal	56,891.4	53,284.7	53,263.1
Total	89,053.8	82,341.3	102,445.7
TAIEX	9,727.41	11,997.14	14,732.53

Reference: Securities and Futures Bureau, FSC

3. Relationship with Up-, Middle- and Downstream Companies

The securities market is a part of the financial market as a direct transaction channel between fund seekers and fund providers; industrial and commercial enterprises usually raise funds through the issuance of marketable securities, and investing in marketable securities has become an important way for people to manage their savings and personal wealth. The mission of the securities market is to pool savings and turn them into investment, and thus facilitate economic growth.

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Upstream Midstream Downstream
Funds Suppliers Funds Mediator Funds Funds Demanders
Listed Companies
Individual Investors Financial
Securities Firms
Institutional Investors Institutions
Securities Securities Government
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4. Product Trends and Relevant Competition

 Proprietary Trading

(1) Equities Markets

In the first quarter of 2020, the Covid-19 pandemic affected the global stock market. From China to Europe and the U.S. cities were locked down with a slowing of economic activity. Coupled with the breakdown of negotiations among the oil-producing countries on March 9, 2020, oil price plummeted by 30%. This resulted in a surge in liquidity risk in the global financial market causing circuit breakers to kick in for the European and U.S. stock markets; global stock markets plunged by more than 30%. Among them, the Russian and European stock markets fell by as much as 40%. The U.S. and Asian stock markets also fell by 25% to 30%. The Taiwanese stock market fell from 11,997 points at the beginning of the year to 8,523 points on March 19, 2020, a decrease of 28.9%. The global central banks made a

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President Securities Corporation

quick decision in response. For example, the Fed took the lead in cutting interest rates by 0.5% on March 5, 2020, and then by 1% on March 15, and offered a quantitative easing policy of US$700 billion and another US$2 trillion stimulus plan subsequently, which could be called an epic stimulus plan in U.S. history. Under the double-pronged approach of monetary and fiscal policies, global stock markets began to recover in the second quarter while fluctuating in the third quarter and rebounding strongly again in the fourth quarter as the economic recovery was better than expected. With the success in the efforts by the Taiwanese government to control the pandemic locally, economic activity in Taiwan was barely impacted. With the continuous trend of a de-Americanization strategy and a significant rebound in orders received by the international component and original technological equipment manufacturers (OEM), Taiwan’s economic growth rates in the four quarters of 2020 were 2.51%, 0.35%, 4.26%, 5.09%, respectively, far better than in the U.S. as well as in some countries in Europe and Asia. Thus, Taiwan's stock market rose by 2,735 points in 2020, or 22.8%, ranking among the top three in Asian stock markets. In the international stock market, the NASDAQ Composite Index (NASDAQ) and Philadelphia Semiconductor Index (SOX) of US stock markets performed relatively strong, with increases as high as 44% and 51%, respectively. With the return of orders under the policy of "manufacturing in the U.S.," the rebound in demand driven by the work-from-home (WFH) model, the construction of data centers that exceeded expectations, and the rebound in demand for automotive chips, the performance of semiconductor market was relatively strong, and the SOX even surged by 51%, ranking first in the world. The South Korean stock market also performed better than others in Asia and increased by 27.5% throughout the year, which was mainly attributed to the transfer of supply chains caused by the China-US trade war and the obvious recovery of the semiconductor industry. Under the low base period of the stock market in 2019, although its GDP was only -1%, its growth rate was better than the Taiwanese stock market. Because the economy had not rebounded significantly and because China had failed to implement a major quantitative easing policy, the annual economic growth rate stood at only 2.3% in China, so the annual growth rate of China's stock market ranged only from 12% to 32%. Taiwan's stock market performed better than expected as it rose by 23.3% compared to -5% to 15% in emerging markets. The main reason for this was the appreciation of the New Taiwan dollar and the inflow of funds. Also, Taiwan's stock yield of 3% to 3.5% was far better than the 1.8% to 2.2% in developed countries, coupled with the effects of the transfer of supply chains caused by the trade war and the rebounding of the business activity in the 5G, mobile phone, and semiconductor sectors of the market. Thus, the Taiwanese stock market rebounded strongly by 26.8% in the second half of the year, extending from the rebound in the second quarter to the performance-driven rise in the fourth quarter.The TAIEX rose 2,735 points and the OTC index grew 23.2% in 2020. In 2020, the performance of dealer business remained in the forefront of the industry while risk trend was still effectively controlled .

In the first half of 2020, the Proprietary Trading Department strictly controlled risks and kept abreast of the status of 5G, AI, and IoT in the second half of the year. The Department also confirmed the mid-term trend of WFH and the financial estimates of the Taiwan factories that benefited from the trend, while keeping abreast of the rebound of the semiconductor industry and the acceleration of the transition of enterprise activity to the cloud. And took long-term investment and quick short-term investment positions to make flexible adjustments to the stock inventory positions in accordance with changes in the stock market to minimize systemic risks in 2018. It also remained vigilant of the changes in the fundamentals of listed companies to conduct real-time adjustments of positions to exchange weak positions for strong positions. Coupled with hedging positions in futures to lower risks and losses, its performance in the TWSE led the industry. Overseas stock market operations also performed well overall with the Department’s investment of vast numbers of personnel for research to fully grasp emerging international trends. Overall performance was better than index fluctuations. In the future, the Department will continue to intensify global macroeconomic research and flexibly adjust domestic and foreign positions

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2020 Annual Report

V. Business Environment

and strategies as the foundation of its operations. It will grasp opportunities for profits in bull markets and diversify investments to expand sources for Department revenue. The Department plans to be among the leaders of profitability in the industry while maintaining its past competitive advantages.

(2) Risk Management

In addition to using VaR figures provided by the proprietary trading department’s risk control office, stop losses and limit alerts are set for the stocks that each trader trades. Each trader is given trading limits and trading performances are updated in real time and, when necessary, trading authorizations can be immediately revoked. The effect of all of these measures is to ensure maximum protections for our shareholders.

(3) Hedging Operations

Futures and options are our primary hedging tools. Going forward, we will continue to use these financial products to adequately hedge our proprietary trading department’s exposure.

 Fixed Income Dealing

(1) Outright Purchases and Sales of Government Bonds

Although the Fed is expected to keep the base rate at a low level this year, with the optimistic development of vaccines, the gradual recovery of the economy, and the increasing expectations of a low inflation rate, coupled with the large supply of public debt, the development of U.S. debt is weak, so the operation in this regard will be conservative and prudent. As far as the domestic government bond market is concerned, the Central Bank will still maintain a moderately loose monetary policy; this will also be beneficial to long positions in bonds in terms of strategy. However, the low interest rate of the government bond leads to a high risk of a rebound in interest rate. Therefore, the trading of domestic government bonds this year will be conducted discreetly, and attention will be paid to liquidity risks.

(2) Convertible Bonds, Futures and Options

For convertible bonds, two strategies will be carried out. The first is to invest in bonds with large issuance size and limited downside risk, because better liquidity, capital structure, and limited risk are good for long term strategy to capture the trend. The second is to invest in notes with rally potential for short term trading. Because of high volatility, traders will control total positions for risk managing. The proportion is generally low so as to keep the level of risk under control. In recent years, due to an increase in market activity, the degree of activity in the convertible bond market has gradually increased. With an increase in the number of bonds issued by various industries, conditions are also more conducive to dispersing the allocation of positions to reduce the risk of concentration of individual targeted industries.

(3) Foreign Bonds

Under the impact of the pandemic last year, governments of various countries adopted monetary and fiscal easing policies to support the real economy. Both the interest rates on government bonds and the credit spread have declined significantly, resulting in an unprecedented boom in foreign bonds last year. In 2021, the introduction of vaccines in various countries is expected to support the growth of the real economy. Under the pressure of rising prices for raw materials which is expected to drive an increase in inflation, the probability of an increase in bond interest rates is expected this year, and the spread of longand short-term bonds is also expected to rise. Therefore, this year the Fixed Income Department will adopt a more conservative approach, focus on shorter-term targets, and take action based on the yield of U.S. Treasury bonds.

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President Securities Corporation

 Financial Products Business

(1) Equity Warrants

In 2020, there was a strong expansion in Taiwan’s equity warrant market, with all securities firms aggressively issuing warrant products. A total of 40,988 equity warrants were issued in 2020, for a total dollar value of NT$382.0 billion.

The total dollar value of all equity warrants issued by the company in 2020 was NT$25.8 billion and the market share was 6.76%, ranked 7th in the market. In addition, due to the increased volatility of the overall securities market in the first quarter in 2020, the pace of issuance in the warrant business has been slowed. Issue focuses mainly on the selection of stock performance with good Return on Equity (ROE) to create a win-win situation with investors and stable profits through different derivatives, futures, and options, etc., with hope to effectively lower hedging costs.

(2) Structured Note Products

The amount of contracts oustanding by the end of 2020 was NT$49.039 billion, the Company’s amount of contracts outstanding by the end of 2020 was NT$5.999 billion and the market share was 12.23%. For a trading volumn of NT$245.897 billion. The Company undertook contracts amounting to a principal of NT$21.63 billion, the market share was 8.79% and was ranked 5th in the market.

(3) Equity options

This business was launched by the Company in April 2020 for customers. The business is mainly for issuance of over-the-counter (OTC) equity options in the form of long-term options. Call or put options can be issued according to customers’ needs. At the end of 2020, the total contract balance outstanding in the market was NT$872 million. The Company’s outstanding balance was NT$437 million, with a market share of about 50.11%, ranking first in the market. The cumulative total market turnover in 2020 was NT$26.07 billion, and the Company’s contract principal reached NT$6.496 billion, with a market share of about 24.92%, ranking second in the market.

(4) Exchange Traded Note (ETNs)

ETNs provide a new product released by the responsible authorities in 2019. As of December 2020, a total of 29 ETNs had been issued on the market, and the Company has also launched 8 main ENT. In addition to the cash dividends, low volatility, and dividend yield indicators as the basis for initial selection, the Company subsequently issued 5G, MSCI technology, Hang Seng tech, U.S. government bonds, and other domestic and foreign index products with great potential to provide investors with diverse investment options. Through the domestic and foreign indexes in diverse fields linked to the products, the Company's ability to build a system is evident.

Among them, the eight ETNs issued by the Company are as follows:

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Stock Code Stock Name Listing Date
020003 President Dividend Appreciate TR 150 ETN 2019/4/30
020011 President Low Volatility High Dividend TR ETN 2019/12/3
020015 President MSCI USA Minimum Volatility NTR ETN 2020/3/27
020016 President MSCI USA IMI Information Technology NTR ETN 2020/3/27
020018 President TIP Customized Value Growth Total Return Index ETN 2020/7/30
020019 President Taiwan 5G TR ETN 2020/7/30
020021 President Hang Seng TECH Index ETN 2020/12/2
02001B President US Treasury 7-10 Years Index ETN 2020/12/29
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2020 Annual Report

V. Business Environment

 Underwriting Business (Capital Markets)

(1) Domestic Bond and Equity Underwriting

As of the end of 2020, there were a total of 948 companies listed on the TWSE and a total of 782 companies listed on the Taipei Exchange Market, representing a growth of 0.7% and 0.9% in comparison to 941 and 775 companies in 2019. The Department has actively fought for cases while maintaining risk management. The President Securities’ underwriting cases, which were listed in 2020, included Dyaco International Inc. with NT $600 million of secured convertible bonds, High-tek harness enterprise Co.,Ltd with NT $300 million of secured convertible bonds, U.D.Electronic Co. with NT $300 million of secured convertible bonds, Gudeng Precision Industrial Co., Ltd., which raised NT $385 million in cash capital, Right Way Industrial Co.,Ltd., which raised NT $400 million in cash capital, OK Biotech Co., Ltd., which raised NT $403 million in cash capital, Ta Chen Stainless Pipe Co., Ltd., which raised NT $7.2 billion in cash capital. The Company shall continue to attentively screen cases, carefully select industries, and focus on company credit risks to provide public listing/OTC listing and fundraising services for companies with healthy finances or those in industries with an excellent outlook.

(2) Financial Advisory

We take great pride in providing professional corporate finance services. In recent years, our financial advisory business has also made great progress and expanded into advisory services dealing with employee stock option exercise prices, offering price for preferred stocks and stock repurchase by listed companies. We will no doubt continue to develop our financial advisory services business with a particular emphasis securities related consulting (i.e., IPOs, mergers, private placements, and other consulting services) around the Greater China Region.

(3) Offshore Underwriting

The Company is actively pursuing public listing and OTC listing operations of Taiwanese companies returning from China, Hong Kong, and Southeast Asia in accordance with market conditions.

(4) Emerging Market Exchange

There were 253 companies listed on the Emerging Stock Board in 2020, a 2.02% increase from 2019 with 248 companies listed. To capture more IPOs, the department has also been actively positioning itself with respect to emerging board targets. However, the IFRS’s launch in 2013 has changed the way emerging board stocks will be assessed, and to take risk control into account, the number of officially recommended emerging board companies is 23 at the end of 2020. This year, the division will continue to compete for quality clients while maintaining risk control, and issue recommendations for emerging stocks based on the progress of its client counseling.

 Wealth Management & Trust

The total assets under overall securities firms’ non-discretionary individual management in 2020 was NT$142.74 billion(YoY +15.7%). The total assets in securities trust management was NT$27.9 billion(YoY +3.1%). The total assets under management was NT$170.64 billion, which was a 13.5% increase of NT$20.3 billion from the NT$150.34 billion at the end of 2019. Among them, the money trust business continued to grow, while the negotiable securities trust lending business was replaced by the “new two-way securities lending of Taiwanese stocks for natural persons” which only slight growth.

The assets under the Company’s non-discretionary money trusts by the end of 2020 amounted to NT$5.618 billion. The total assets in securities trust management were NT$17 million. The total assets under management were NT$5.635 billion. This ranked the Company 9th among securities firms.The tradable products in wealth management included domestic and overseas funds, domestic and overseas structured products, bonds with repurchasing agreements, and foreign bonds.

In 2020, the Wealth Management and Trust Department continued to expand its product lines; the newly released domestic and overseas funds included JPMorgan, Morgan Stanley, Allianz, Fidelity, BNP

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Paribas, Union Securities Investment Trust, and Huan Nan China Investment Trust, to make the coverage of fund product lines more complete as funds are available with excellent performance in all major investment sections for customers to choose from. In addition, the overseas structured products issued by BNP Paribas, NATIXIS, SG, Morgan Stanley and Credit Suisse were introduced and the “Employee Stock Ownership Trust” business has been launched to diversify the revenue sources.

C. Research and Development Overview

In line with the competent authority’s requirements for the professionalism of underwriting personnel, this year, based on the courses offered by the Taiwan Securities Association, on-the-job training and further training are arranged; personnel are sent to participate in the professional courses offered by the Taiwan Stock Exchange Corporation (TWSE) and Taipei Exchange on a quarterly basis for intermediaries to be equipped with the knowledge of relevant laws and professionalism as the country is increasingly open to overseas business.

 R&D for Derivative Product

Various Technical Expertise and R&D

We have a complete financial engineering team that brings together talented individuals from finance and statistics with access to top-notch trading and valuation software, so that they can develop innovative product and trading strategies. With cutting-edge financial engineering at the forefront, we bring together comprehensive product development and advanced trading experience in designing new products, and in providing sophisticated derivatives products and consulting services for our customers. Plus, every year, we invest heavily in modernizing our warrant software so as to make our systems faster and more stable, and so as to offer a broader range of services to our customers.

Our Research Analysts, Their Training, and Our R&D Costs for the Most Recent 5 years

The company has been aggressively developing new products and working diligently to secure regulatory approvals for new products. Over the past 5-year period, we have spent an average of NT$4.5 million per year on R&D efforts.

Unit: Person

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Year 2018 2019 2020 Mar. 31, 2021
Number Number Number Number
Education level % % % %
of people of people of people of people
Master&PhD 39 81.25 38 79.17 42 79.25 42 79.25
Bachelor 6 12.50 7 14.58 8 15.09 8 15.09
Others 3 6.25 3 6.25 3 5.66 3 5.66
Total 48 100.00 48 100.00 53 100.00 53 100.00
Average
years of 4.53 4.61 5.20 5.42
service
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New products or Techniques Successfully Developed Within the Last 5 years
(1) The company has been successful in the design and pricing of many structured note products, equity swaps, credit derivative products, as well as equity-linked derivative products, bonds and interest rates, and we stand ready to issue these products whenever appropriate market timing emerges.
(2) We have successfully developed several market operating strategies, as well as option market making models and strategies.

 Strengthened the electronic trading and relevant information systems

The electronic trading market continues to grow and the company is able to raise customer service quality through an e-trading platform that is stable, convenient and diversified.

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V. Business Environment

(1) President Securities 2020 Electronic Trading and Information System Relevant R&D Plan

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System R&D Capabilities
1. Optimize the “message push” function. Provide “hot securities lending of the day”, “hot
securities lending target of the day”, “President Securities selection of shares” and “instant
message during trading hours”.
2. Add internal dormant account notification
3. Fund management account function
4. Competitive auction function
5. Information disclosure on individual stock risk-control value.
Enhanced electronic
customer services 6. Increase the number of online digital services to reduce the load of over-the-counter
service.
7. Smart mobile order placement
8. Online mobile signature
9. Online password section
10.Online application of stock depository E book
11.President Securities service menu section
1. Overall adjustment on the trading system in line with the launch of odd-lot trading during
Odd-lot trading during
trading hours.
trading hours
2. Upgrade trading hosts and optimize the trading system platforms
1. The brand-new version of the official website is available.
The new version of the 2. Provides more extensive information and better browsing flow to provide investors with
official website better user experience.
3. User-friendly service interface in Chinese and English
Core system (AS/400)
CRMS system has been optimized.
transformation
1. Digitization of account opening at the counter.
Digitalization of process 2. Digitalization of relevant application forms
flow 3. Statistics documenting accounts with a high risk of money laundering
4. Annual review of the money laundering prevention system
1. The official new wealth management website was revised and launched.
Optimization of the wealth
management trading 2. Digitization of account opening at the counter.
functions
3. Estimated redemption and account debit date. Disclosure of redemption date net worth.
1. Continuous trading.
System reforms of the 2. The securities trading price field is enlarged.
Taiwan Stock Exchange
3. New bidding system for odd lot trading
CRS tax declaration Domestic tax “Joint reporting standards”
1. Modify NTD and foreign currency payment transaction in fund transfer system
2. Transfer in management process for swap/spot, etc
E-payment project
3. The bond account will be paperless, the process will be simplified, the account time will
be shortened and the service quality will be improved.
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Financial Product Department-related development projects	1. Stock option account affairs optimization activity 2. Foreign Index ETN 3. Consolidation of financial products account opening 4. Batch order placement of domestic ETN 5. Self-developed option/warrant-market-making system
Related development projects requested by Finance Department	1. Online journal entry approval 2. Digitalization of petty cash reimbursement 3. System integration of internal funding costs 4. Foreign currency assets and liabilities reporting activity 5. Credit lines application form for financial institutes 6. Petty cash E-payment project
Related development projects for President Futures	1. Risk-control data documented for the Futures Association 2. Overseas futures transfer to Sino-Philippines 3. FTP file conversion for booking of overseas dealer business 4. Accounting entries for new overseas futures product transactions were added 5. New process for overseas futures trading system 6. Optimization of clients’ futures securities deposit
Information security	1. 2020 information security health check 2. Mobile device security solution 3. Inspection and testing of source codes 4. APP lab inspection 5. Establish in-house information security monitoring center 6. Control the administrator account in every personal computer 7. Set up recordings of all VPN connections
Digital transaction and Fintech-related projects	1. Branch accounts and EACH connections 2. Introduction of VA Fast verification structure 3. Second-generation online account opening 4. TDCC ePASSBOOK 5. Smart text customer service 6. Precision push of securities lending during trading hours 7. Task bulletin on website and app 8. Marketing event platform optimization
President Capital Management development projects	1. Optimization of President Capital Management LINE@ account 2. Change of VIP investment advisory member website 3. Paid-up member online signature - Mobile Edition 4. New official website of President Capital Management 5. Optimization of the investment advisory member platform

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V. Business Environment

(2) 2020 R&D investment plan and progress

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Expected Critical
Current Expected
Project Name Details of Plan and Benefits Project Plan Cost Success
Progress Completion
Outlay Factors
1. Adjustment to settlement and
clearance procedures and
optimization of the accounting
verification mechanism through the
electronic payment platform
2. Accounting automatic linking for
adjustment and processing for fee
applications
Respond to the
3. The management and control roll out of new
Completed
process for settlement payments business areas
Expected to design
and improve
E-payment was integrated for bonds, non- provide services process;
service quality 20 million Ongoing
project trading fund transfers, and structured in second- business
while optimizing
products processes and quarter, 2021. process
planning
4. Administrative review authorization intergrading
systems
modules
5. Security control modules for the
coordination and authorization of
electronic payments
6. Message and key encryption packet
modules
7. Communication modules for financial
institutions
1. The host connection is changed to
FIX to speed up the efficiency of
commissioned securities trading
services. Respond to the
2. Systematic investment plan for stock roll out of new Completed
Brokerage business areas
purchases. Expected to design
Department’s and improve
relevant 3. Optimization of the securities service quality 20 million Ongoing provide services process;
borrowing accounting system in fourth- business
development while optimizing
4. Optimization of the customer quarter, 2021 process
projects processes and
relationship management system intergrading planning
5. Optimization of the decision-making systems
support system
6. Bankee app project
7. Customized trading system
1. Sub-brokerage and trust online Respond to the
account opening roll out of new Completed
Digital Business 2. Smart text customer service business areas design
Department’s and improve Expected to
relevant 3. Securities Line @ interface revision service quality 10 million Ongoing provide services process;
4. Order placing via Line business
development while optimizing during 2021
5. Task bulletin on website and app process
projects processes and
6. Single Click—One click notification intergrading planning
for placing orders. systems
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Expected Critical
Current Expected
Project Name Details of Plan and Benefits Project Plan Cost Success
Progress Completion
Outlay Factors
1. U.S. Treasury bond ETN
2. ETN market making system
3. Warrant FIX host connection,
quotation, and trading API
4. Equity trading system development
5. Optimization of ex-rights operations Respond to the
Financial for equity options roll out of new Completed
business areas
Product 6. Optimization of convertible design
and improve Expected to
Department’s bond asset swap (CBAS) product service quality 15 million Ongoing provide services process;
relevant accounting operation. business
while optimizing during 2021
development 7. New Total return swap (TRS) process
processes and
projects hedging contract accounting for intergrading planning
structured products. systems
8. Integration and processing of the
New Financial Product Department’s
Know-Your-Customer (KYC) and
Know-Your-Product (KYP) master
files.
1. A backup trading server room in a
center with a different location has
been established as a backup for the Respond to
main IDC server room in Banqiao. the authorities’ Completed
Establishment Expected to design
2. A complete off-site backup requirement
of an off-site mechanism has been established to ,and the risk 66 million Ongoing provide services process;
backup server in fourth- business
room 3. An offsite backup structure for ensure uninterrupted trading. and security issues regarding quarter, 2021 process planning
electronic transactions has been e-trading
established to increase transaction
security.
1. Enhance the trading function of the Respond to the
OSU bond system roll out of new Completed
business areas
2. Diversification of OSU bond design
and improve Expected to
IMS system settlement report process;
service quality 10 million Ongoing provide services
optimization 3. Add OSU interest payout and business
while optimizing during 2021
declaration of overseas income processes and process
procedure intergrading planning
4. Increase OSU equity trading business systems
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V. Business Environment

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Expected Critical
Current Expected
Project Name Details of Plan and Benefits Project Plan Cost Success
Progress Completion
Outlay Factors
1. Management activity of ledger
accounts for settlement payments
(T+2)
2. Optimization of securities brokerage
account modification process
3. Accounts payable to customers for
securities lending
4. Optimization of credit release penalty
5. Optimization of lending without
restricted purpose Respond to the
Settlement 6. Transaction settlement system for roll out of new Completed
business areas
& Clearing foreign-currency ETFs design
and improve Expected to
Department- 7. Direct data exchange with the Taiwan service quality 30 million Ongoing provide services process;
related Depository and Clearing Corporation business
while optimizing during 2021
development 8. Securities brokerage account-opening process
processes and
projects outside of the company intergrading planning
9. E-integration of client account systems
opening
10. Automated incorrect transaction
summary report correction and
approval process
11. Optimization of multi-product
classification of securities for dealer
business accounting system
12. Chinese text code conversion of
depository account
1. Increase multi-currency conversion
in futures dealer-business-accounting
entries
2. Accounting entries for forward
contracts hedging transaction by
Respond to the
Quantitative Trading Department roll out of new
Finance 3. Optimization of stock inventory business areas Completed
design
Department- check activity for securities dealer and improve Expected to
related business service quality 10 million Ongoing provide services process;
business
development 4. Payment application form, online while optimizing during 2021
projects application and approval of domestic processes and process planning
and overseas travel expenses and intergrading
systems
entertainment expenses
5. Automated transfer-in of transfer
prices in management report
6. Automated transfer-in of Account
application
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D. Future Business Development

In an effort to establish our core competiveness, it is essential that we have a clear understanding of future trends in the securities industry and then establish a corresponding business development plan. We must also develop strategies that will allow us to accommodate business areas newly approved by regulators so that we are in a position to move quickly in these new markets. Accordingly, we see our business developing in the following ways:

Continue to recruit exceptional talent, and thereby improve our competiveness and, in doing so, increase our market share.
Implement risk management practices and technologies, thereby improving profitability and stabilizing overall business operations.
Improve IT and enhance e-business infrastructure.
Offer professional asset management and provide personalized financial planning services.
Develop foreign market to maximize proprietary trading profit.
Be ready to move on market liberalizations and, in particular, business opportunities across the Hong Kong-PRCTaiwan market.

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 Cultivate talented researchers and thus raise our abilities in designing new products.  Synergize our business units and enhance our wealth management services.  Build and maintain alliances with financial institutions and corporations outside of the finance industry, relationships that allow for mutual cooperation and mutual benefit.

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Business Short-term Development Long-term Development
1. Promote marketing activities to increase customer transaction 1. Provide professional research and service quality
frequency and increase revenue. to acquire institutional and foreign investor
2. Enhance the construction of various transaction platforms to provide customers.
customers with a more convenient and real-time transaction system. 2. Promote cross (and regional) marketing.
3. Enhance risk management to lower rates of errors. 3. Integrate electronic transaction platforms for
4. Optimize the customer relationship management system. diversified products.
5. Construct a self-help service framework. 4. Increase smart self-help services.
6. Communicate with customers and revitalize static accounts. 5. Conduct periodic personnel training and replace
Brokerage
7. Implement operators' education and training to cultivate versatile ineffective employees.
operators. 6. Promotion and integration of wealth management
8. Promote the wealth management business and provide customers services.
with professional and diversified financial wealth management
services.
9. Promotion of two-way natural person bond loan businesses.
10. Promotion of non-restricted purpose loan business
1. Intensify operations in international stock markets: in addition to 1. Enhance internal division of labor and use the
authorization of transactions in the existing US and Hong Kong risk management system to increase performance
stock markets, A shares, and overseas funds, transaction targets in of operations and aid supervisors in adjusting
A shares of Shenzhen-Hong Kong Stock Connect were added in strategies and positions at appropriate times.
December 2016. 2. Conduct more extensive company visits and
2. Implementation of various instruments: Use foreign options to maintain information exchanges with other
Proprietary
conduct hedging and non-hedging transactions. companies in the industry to increase the
Trading
3. Usage of bear-side channels: Use the sales of borrowed bonds to Company's knowledge of individual listed
increase resistance to bear markets. companies and thereby increase profits.
3. Expand international investment businesses in
foreign spot transactions as well as research and
investment in futures market that are permitted by
laws.
1. Diversify the scope of transactions by developing different types of 1. Construct a complete global financial product
foreign currencies note trading. database and a comprehensive foreign bond
2. Increase foreign trade counterparties to acquire better opportunities. transaction platform.
3. Increase Ropo counterparties to enhance foreign currencies funding. 2. Strengthen the judgment of global trends and risk
4. Enhance control over the supply end in international bonds to awareness and strengthen sovereign debt trading to
increase opportunities for profits. diversify the risks of trading corporate bonds.
5. Increase the proportion of foreign currencies bond trading to achieve 3. Expand customers for bonds denominated
Fixed Income better performance than trading in domestic market. in foreign currencies and provide them with
Business 6. Increase the proportion of secured convertible bonds with strictly diversified bond products.
risk management to keep high profits. 4. Develop a product line for structured products and
7. Enhance the sales and underwriting capabilities in fixed income strengthen the ability to develop products to satisfy
products to expand fee profits other than proprietary trading. risk preferences and requirements of different
8. Expand corporate-related business and strengthen the connection. customers.
5. Increase relevant commission revenue to balance
the risk-related revenue from proprietary trading.
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2020 Annual Report

V. Business Environment

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Business Short-term Development Long-term Development
1. Warrants business 1. Provide diversified customized financial products
(1) Increase the efficiency in the issuance and sales of warrants and based on customer requirements.
carefully formulate issuance strategies based on main investment 2. Strictly execute risk-monitoring system for
targets in stocks with good historical performance in shareholders' derivatives.
return on equity. Provide diversified product lines with different 3. Diversify hedging products and flexibly implement
strike prices and different maturity dates. options in stocks with the same targets, convertible
(2) Enhance hedging transaction skills and increase the performance bonds, equity options etc. to effectively lower
of transaction systems to increase profits in warrant hedging. various Greeks risks of derivatives.
(3) Diversify hedging products and flexibly implement options in 4. Comply with the openness of the competent
stocks with the same targets, convertible bonds, equity options authority in the future and continue to issue or
etc. in addition to warrant subjects in current stocks to effectively sell domestic and foreign derivative financial
lower various Greeks risks. products as an agent. Continue to demonstrate
2. Structured products the performance of the Company's financial
(1) Design products that are suited for various market situations, engineering team and integrate expertise in
Financial demand-oriented, and profitable, with the aim of allowing financial, information, mathematical disciplines to
Products customers to achieve stable profitability through carrying out enrich the product line of financial products and
transactions of quality target products. disperse revenue sources.
(2) Provide customized products for individuals and institutions.
(3) Establish stable transaction strategies for hedging.
3. ETNs
(1) ETNs are guaranteed by the issuer’s credit to provide
compensation for the indices tracked. Compared with ETFs, there
is no tracking error, which can be a good choice for investors in
asset allocation.
(2) In the future, various types of constituent stocks will be issued.
In addition to the existing filtering indicators, including cash
dividends, low volatility, and dividend yields, future-oriented
technology indices, such as 5G, will also be planned to be
included to aim to issue domestic and foreign target indices with
great potential.
1. Continue to develop transaction strategies and modules to create 1. Enhance strategic real-time measurement and
profits for the department. analysis capabilities and build a comprehensive
2. Strengthen the automated risk control ability for each strategic foreign remuneration risk decision-making and
module. analytical system module.
Quantitative 3. Expand cross-market arbitrage and price difference transactions for 2. Completely systemize and automate the order-
Trading foreign products. placing module and the risk control mechanism.
4. Actively seek market maker qualifications for domestic and foreign
futures and options.
5. Increase the ratio of automated ordering in the department program.
6. Design and issue structured products to increase the source of profit.
1. Respond to changes in the underwriting market, actively seek lead 1. Seek private equity businesses and actively operate
underwriting cases for IPOs, enhance fixed profits; carefully select related investment banking businesses in the
SPO (including CB and ECB) industries and focus on lowering the Greater China Region.
Company's credit risks while targeting medium to large projects. 2. Collaborate across industries for the group to
Underwriting
2. Seek public listing (OTC listing) operations of returning Taiwanese expand customer base in the Greater China Region.
(Capital
companies.
Market)
3. Coordinate with OSU operations in expansion of related investment
banking operations. Cooperate with the Fixed Income Department
to invite foreign financial institutions to issue international bonds in
Taiwan.
1. Assisting companies with handling stock-related affairs as an agent. 1. Actively expand the number of serviced companies.
Shareholder 2. Update operating models in accordance with laws at any time.
Services
1. Continue to increase the product lines for the non-discretionary 1. Develop a wealth management platform for the
money trust and marketable securities trust. development of the whole asset allocation through
Wealth 2. Actively promote FinTech to provide more real-time and convenient financial management trusts.
Management cross-device service models and diversified electronic transaction 2. Expand the international financial business and
& Trust platforms. increase the competitiveness through offshore
3. Actively explore corporate business and strive for stable sources of securities units.
profit in response to the launch of employee welfare trusts.
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II. Market Conditions

A. Analysis of the Securities Industry

1. Sales and Services Area

Unit: NT$ thousands

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2018 2019 2020
Area
Amount % Amount % Amount %
North 2,413,724 73.48% 2,124,885 73.13 3,415,940 73.50
Central 498,522 15.18% 317,315 10.92 413,373 8.89
South 372,741 11.34% 463,492 15.95 818,580 17.61
Total 3,284,987 100% 2,905,692 100 4,647,893 100
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Note 1: The amounts in the table above are brokerage fee revenue.
Note 2: The distribution area of the headquarters and branches is as follows: Northern area: Taipei Headquarters and branches in Hsinchu and north of Hsinchu. Central area: Branches extending from south of Miaoli to north of Chiayi. Southern area: Branches south of Tainan and in Kinmen.

2. Breakdown of Market Share According to Business Area

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Business Area Component Market Share Rank
Equity Brokerage Trading
3.23% 9
Volume
Brokerage
Individual Branch 0.10% 3
Warrants Issued (Volume) 6.95% 7
Financial Products
Structure Commodity Business
8.27% 5
Volume
Domestic Bonds 0.65% 14
Fixed Income Business
(Conditional and Outright)
International Bond 4.36% 5
Lead Underwriting Deals (No./ 8 (3.83%)/
12/14
Volume) 2.153 billion (2.85%)
Underwriting
(Note)
Lead and Co-Lead Underwriting 51 (4.98%)/
5/10
Deals (No./ Volume) 3.810 billion (4.00%)
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Note: Due to the difference of calculation base date, the number or volumn of deals may be different from the content of other chapters.

3. A Look at Future Growth as well as Supply and Demand in the Market

The Financial Supervisory Commission (FSC) continues to expand the business scope and the types of business activity securities firms are allowed to engage in. In September of 2020, a new wealth management plan was released for amendments to the Regulations Governing Securities Firms Accepting Orders to Trade Foreign Securities and the Directions for the Conduct of Wealth Management Business by Securities Firms. For eligible securities firms, when providing services, such as brokerage trading of foreign securities and brokerage investing in offshore structured products and foreign bonds by trust for high-asset clients, the regulations will be loosened. The Company will evaluate business opportunities and file an application to the competent authority in accordance with the regulations.

In the brokerage business, the Financial Supervisory Commission has been studying diversified financial products, such as “permitting securities dealers to launch ETNs” and “Promotion of the return of overseas funds to Taiwan”, so as to continue to expand the size of the capital market, build a welldeveloped securities market, and enhance the competitiveness of the securities and futures industry every year. The opening of new business means new opportunities that could stimulate increased market

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V. Business Environment

transactions. The Company has also remained active in planning related business in hopes of providing customers with more comprehensive product services.

Furthermore, the competent authority cut the stock transaction tax for day trading by half and implemented the policy for one year; extension of the implementation period to the end of 2021 was passed through the third reading in the Legislative Yuan Sittings on April 13, 2018. The overall trading volume has increased significantly since the implementation of the reduction of the stock transaction tax for day trading, helping to improve market liquidity. Therefore, the daily average turnover of Taiwan stocks in 2020 has increased to NT$249.95 billion. This measure breathed life into the securities brokerage business. The authority also enabled Odd-lot trading during the intraday session on October 26, 2020. Such a measure would make people with mediocre incomes easier to invest with a small amount. Thus would attract young people to join the market, slow down the aging trend of Taiwanese stock market, and bring new/young customers for the Company.

In response to Finance 3.0 trends, the Company shall continue to enhance electronic ordering businesses and integrate functions on the transaction platform. The ratio of electronic transaction operations has reached 69.15% in 2020 and 68.14% in 2019. The Company will provide customers with safer information transactions to ensure the promptness and accuracy of orders and create advantages for the Company’s electronic orders. In addition, the Company shall continue to develop a global transaction platform and provide customers with more international and diversified options once business development matures. It shall also provide quality services to increase customer satisfaction and build company reputation to achieve better performance.

As for our underwriting business, with competition for corporate funds raising deals increasingly intense, many corporations are learning that they have many options available to meet their financing needs, and that equity issues are not always their best opinion. As a result, companies that are properly screened and that demonstrate sufficient creditworthiness, as well as the preferred stock that issued by financial holdings companies and commercial banks, can often be better off turning to convertible bonds. Plus, with the number of large companies that have not already publicly listed shrinking and the demand for integration due to competition within industries increasing, financial advisory business and corporate funding such as private equity, mergers and acquisitions, capital reductions are growing.

The Taiwan government has also recently been actively encouraging foreign companies to consider Taiwan for primary and secondary listings, forcing most domestic underwriting departments to think more broadly and internationally. Add to this the regulators opening up of Offshore Securities Units (OSU), which allow domestic brokerage houses to become more international in scope. Going forward, the Company intends to pursue more international integrated investment banking business in the Greater China Region, and to pursue more foreign companies to list in Taiwan, thereby breathing new energy into Taiwan’s equity markets.

In terms of the President Securities’ proprietary trading business, the greatest changes in 2021 are in the subsequent development of the global economy and monetary policy, the progress of resumption of operations in industries, and the slowdown in demand, the progress of US-China trade negotiations, and knowing whether inflation affects the Fed's restriction policy after the pandemic is stabilized because this will affect the future development of the global stock market. At this stage, global economic growth is in a stage of gradual recovery from recession, and the growth space in the first half of the year will be greater than in the second half because of the low base period last year. However, due to the recent rapid rebound of the 10-year government bond yield to the pre-pandemic level of last year and the doubt about the overestimation of the value of technology stocks, the stock market is in a short-term consolidation period. However, because economic growth in the first half of this year was significantly better than expected, the Directorate-General of Budget, Accounting and Statistics also revised the projected GDP of this year from 3.83% up to 4.64%. Therefore, in the first half of the year, as the effects of the pandemic slow down while the capital market and fundamentals rebound, the stock market still

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has great room for operation. The point of time that is not conducive to investment will fall in the second half of the year when there are more variables and when the rate of growth in the fundamentals is uncertain. Looking at various variables and risks, the Proprietary Trading Department will still adopt a steady approach to investing and defend carefully to maintain the department’s maximum profit.

As for our financial products business, we will continue to pursue increasingly tailored products to meet the needs of our clients as the regulators open up new areas of business. This will require enhancing our hedging activities a risk management models, so as to lower risk and ensure stable returns. Going forward, as the regulators allow greater access to Offshore Securities Units business, we will pursue global equity business and develop foreign derivatives services so as to better diversify our revenue streams.

In the wealth management business, the Compnay actively motivates salespeople to provide wealth management services to customers and expand the breadth of business penetration. Meanwhile, the Company has expanded product lines, including domestic and overseas funds and new structured products on the wealth management platform to provide customers with more choices in asset allocation. The employee benefit trust business has been launched to increase new revenue sources.

4. Market Supply forecast, growth opportunity, and business competitiveness

(1) Our Competitive Strengths
Our corporate image is solid.
We respect professional management and leadership.
Our horizontal organization and human resource costs are well-controlled.
Our brokerage business market share is steady.
Our position management performance is outstanding in winning percentage.
Our operating costs and risk management are both well-controlled.
(2) Positive Factors
The global economy is in recovery; consumption and investment are picking up, which will drive domestic economic growth.
Capital is readily available and the cost of capital is quite low.
Intraday odd lot trading has been launched to attract young people to participate in the stock market, and alleviate the problem of an aging population in the Taiwanese stock market.
With competent authorities gradually widening the business scope of securities firms, the breadth of the company’s operations will also be increased as well.
Flexibility in proprietary trading business with industry-leading performance.
Free from the shackles of a financial holding company and from restructuring and consolidation activities that would result from such M&A activities, employees can focus more on tasks at hand and the organization can enjoy smooth and unfe+ttered development.
Growth in online trading shows no signs of slowing down. The company’s fast and reliable online trading technology is well-positioned to attract a new, young client base.
The level of computerization and automation of information and processes is one of the highest in the industry leading to management practices with high efficiency.
Through President Group, the firm and our employees have access to superb sales channels and myriad resources.
With structured note products now available, products can be custom designed for either retail clients or institutional clients, thereby retaining clients who would have otherwise been drawn to banks and financial holding companies.
The government is planning to establish tax policies on financial products in line with international standards and this will encourage financial product innovation and drive new business.
The company encourages a corporate culture that emphasizes innovation and rising to challenges.

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V. Business Environment

As financial markets continue to mature and the numbers of participants continue to increase, market liquidity and efficiency keep rising.
(3) Weakness
Financial holding companies have the advantage of capital employment and crisscross integration.
It is hard to mark up brokerage handling charge due to fierce competition.
Foreign investors are an increasing proportion of the market; domestic firms are at a disadvantage in terms of developing overseas clients.
The aging of domestic population lowers demand for investments.
The salary growth rate of the youth population grows slowly and the low amount of savings makes it difficult to begin investments.

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(4) Strategies for Dealing with the Weakness Identified

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Business Unit Strategy
1. Encourage various departments and subsidiaries to work together to develop new business.
2. Transformation into a multi-functional branch to expand the market share and profit.
3. Develop our institutional client business, using asset management business to pursue corporate clients and
combine that with our OSU business, and provide added-value services beyond our conventional securities
services.
4. Expand our spread trading business, increase mid-level customer trading volumes and position turnovers
rates.
5. Enhance internal auditing procedures, reduce client complaints.
6. Customized online brokerage system for institutional and mid-level investors.
7. Increase revenues from securities lending service to investors.
8. Identify under-performing brokers and refocus them towards “Marketing” efforts as a means of making a
breakthrough, or refocusing their efforts on cross-selling of non-traditional products.
9. Cultivate all employees’ abilities to cross-sell a range of financial products, particularly personal financial
planning products and wealth management services.
10. Focus on tiered, wealth management sales efforts that take into consideration client preferences, trading
Brokerage habits, and that provide appropriate product information and that increase trading frequency.
11. Push forward with online brokerage business; implement comprehensive platform that integrates both
information and trading systems. Upgrade online trading system stability and order entry quality.
12. Improve our employee training, assistance in preparation for related licenses, performance management,
and information system knowledge, to upgrade our brokers’ professionalism and productivity.
13. Continue to recruit new employees, cultivate strong management trainees and financial planning
professionals who are familiar with a wide range of products. Train back-office staff to take on sales roles
thereby streamlining HR costs.
14. Evaluate the feasibility of digitizing all back-office operations so as to increase efficiency and to control
costs at individual branches.
15. Implement succession mechanisms for each level of the organization, strengthen our incubation center
functions, retain good talent, solid management training programs, set incentive programs, encourage
successors, smooth generational gaps.
16. Set break-even point for each branch, consider the linkage between target customers and brokers’
performance and branches’ operation outcome, evaluate potential for future profitability, and adjust business
direction.
1. Recognize and adjust to different market conditions, switching between “Range Trading” and “Trend
Trading” strategies, thereby maintaining an optimal market position.
Proprietary 2. Strictly implement risk control regulations to effectively reduce the impact of systemic risk.
Trading 3. Improve our research and trading of Emerging Market Exchange equities, foreign-listed equities, and futures
markets, to create more diverse sources of revenue.
4. Add quantitative analysis and technical indicator model analysis to our operating systems.
1. Make good use of macroeconomic databases and develop systematic tools to enhance profitability.
2. Appropriately adjust traders’ mandate and increase traders’ mandates gradually.
3. Enhance traders’ decision making and trading ability.
Fixed Income
4. Strengthen foreign bond research and trading team to meet the growing needs of expanding businesses.
Business
5. Recruit experts for sales and debt capital market to expand the business scope in fixed income market.
6. Develop structured products in different themes with the advantages in the proprietary trading business.
7. Strengthen corporate-related business and diversify the risk of proprietary trading business.
1. Be more consumer-oriented and develop new products to meet these demands.
Financial
2. Strengthen market research and investment analysis of foreign market objectives and issue a variety of
Products
derivative products to provide customers with diverse options for asset allocation.
1. Diversify our trading strategies to better react to market changes.
2. Aggressively pursue market-maker roles in foreign futures and options markets.
Quantitative
3. Expand our range of foreign products traded and increase profitability in foreign products.
Trading
4. Increase the proportion of order placements via automatic trading programs.
5. Increased the integration of resources across multiple departments, thereby creating better synergies.
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Business Unit Strategy
1. Prior to taking initial steps on a given underwriting deal, consultations should be conducted with colleagues
throughout the company’s various departments and divisions so as to accurately access to the realistic profit
opportunities and risks of the deal. Once a deal is ongoing, regular reassessments and revisions should be
made in order to ensure the quality of the overall project.
2. When acting as exclusive sales agent for an issue, a risk assessment report must be generated to determine
Underwriting
if risks fall within the firm’s accepted parameters. Afterwards, daily risk values should be generated and
(Capital
market simulations should be conducted to as so have a clear and timely picture of risk exposure and thus
Markets)
determine when to initiate stop losses or when to take profits. The net effect of all of these efforts will be to
lower overall risk while pursuing the largest possible profit.
3. As for the domestic business, customers of several departments, including Brokerage, Corporate Client,
Wealth Management, Financial Product, and Shareholder Services have been integrated; platforms for
corporate and personal financial services have been established and activated.
1. Improve quality of service:
(1) Respond quickly to legal changes which affect procedures and materials. Improve efficiency of training
cycles. Develop employee knowledge on various regulations and procedures. Enhance mutual support and
Shareholder flexibility among employees. Increase efficiency of human resource utilization.
Services (2) Enhance inter-department cooperation and verifications, thereby ensuring accuracy and security of
Coordination
processes.
2. Enhance efficiency of operations:
Follow the internal objective of “Customer satisfaction, unceasing improvement and innovation”, we will
keep increasing the satisfaction rate of agency business.
1. Help business personnel to obtain the relevant professional licenses and raise their wealth management
Wealth competence.
Management & 2. Aside from providing multiple products, we focus more on the depth of product service.
Trust 3. Construct cross-device platforms that allow orders to be placed for all types of products, thereby offering
clients added convenience and achieving Bank 3.0 objectives.
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B. Productions Procedures of Main Products

The Company is a securities service provider. The business and services provided by the Company do not involve the production processes for physical products, so it is not applicable.

C. Supply Status of Main Materials

The securities business and services conducted by the Company are in accordance with the laws and regulations of the competent authority. There is no supply of physical materials, so it is not applicable.

D. Major Suppliers and Clients

The Company’s main customers include individuals, legal entities, approved foreign professional investment institutions and natural persons. In the past two years, each customer’s purchase (sales) of products failed to reach 10% of the purchase (sales) of products of the Company per year.

E. Production in the Last Two Years

The value of the securities business and services conducted by the Company cannot be provided as in the general manufacturing industry.

F. Shipments and Sales in the Last Two Years

The value of the securities business and services conducted by the Company cannot be provided as in the general manufacturing industry. The revenue and its ratio of the Company’s main businesses in the past two years are as follow:

Unit: NT$ thousands

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Item 2019 % 2020 %
Brokerage 2,221,924 35.67% 3,218,058 37.98%
Proprietary Trading 3,726,001 59.81% 5,013,874 59.17%
Underwriting 281,992 4.52% 241,052 2.85%
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III. Employee Data

Analysis of Average Tenure, Age and Education, for Sales Force in 2019, 2020, and the first quarter of 2021

Unit: Person

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Year 2019 2020 2021Q1
Management 111 109 112
Number of
Regular Staff 1,313 1,299 1,297
Employees
Total 1,424 1,408 1,409
Average Age 45.49 45.05 46.03
Average Tenure 13.49 13.09 13.74
Doctorate Degree 0.21 0.21 0.21
Master’s Degree 14.4 16.76 16.61
Bachelor Degree / Junior
Education (%) 71.98 70.88 71.11
College Graduate
Senior High School 13.41 12.15 12.07
-- -- --
High School or Less
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Note: Directors and part-time employees are excluded.

Revenue Per Employee

Note: Directors and part-time employees are excluded. Revenue Per Employee	Note: Directors and part-time employees are excluded. Revenue Per Employee	Note: Directors and part-time employees are excluded. Revenue Per Employee
Unit: NT$ thousands
Item	2019	2020
Revenue Per Employee	4,375	6,018

Note: Revenue per employee = total revenue /number of employees

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IV. Environmental Protection and Corporate Citizenship

A. Environmental Protection

Based on governmental order #0950007006, each company is required to disclose in its annual report its compliance with the European Union’s Restriction of hazardous Substances Directive (RoHS). The Company is in the securities service industry, so there is no signification environmental pollution nor losses incurred because of environmental pollution (including no compensation and environmental protection audit results documenting any violation of environmental regulations).

B. Corporate Citizenship

President Securities Corporation has been a long-standing supporter of important social charitable activities and, for its efforts, has been recognized with the 7th annual Wenxin Award and the 6th National Civic Service Award, and Top 50 by the Commonwealth magazine in 2013, 2015, 2016 and 2017.

In 2020, President Securities Corporation won the Gold Award in the Financial and Insurance Industry of the Corporate Sustainability Report Awards of the Taiwan Corporate Sustainability Awards (TCSA) for the first time, the highest honor in Taiwan's CSR report, and won the Bronze Award at the 4th PwC CSR Impact Awards as the only institution in the financial industry to have won the top three awards in 2020. The Company has taken concrete actions to cooperate with the Taiwan Fund for Children and Families from 2007 to 2020 to help children from financially challenged families with their studies, and has received a certificate of Appreciation in 2013. The Company also mobilized all employees and customers for joint participation and invested actual funds and various equipment to social welfare activities to fulfill corporate social responsibilities . The Company made a donation of NT$2.5 million to the Taiwan Fund for Children and Families providing schooling subsidies in 2020 in the theme of “Love Will Not Die During Pandemic Prevention”.

Since 2001, the Company has organized all employees in PSC, PFC, PAMC, PCMC, PIAC, and President Securities Venture Capital as well as allowing customers to participate in the “Love Delivery Activities” that provide children from financially challenged families with scholarships. A total of approximately 9,086 elementary school, junior high school, and senior high school students were beneficiaries. The activities have provided school children from poor families with opportunities to explore different academic disciplines for their own development and growth.

The Company organized the first employee blood donation event in 2006 and received a passionate response. Starting in 2007, the Company has organized two employee blood donation events every year and expanded the event to include community residents who have provided strong support. Starting in 2010. Due to the impact of the Covid-19 pandemic in 2020, blood donation events were suspended. A total of 3,517 bags of blood have been donated from 2006 to 2019 and the Company has become a permanent partner of the Blood Center. The Company receives a letter of gratitude and commendation from the Blood Center every year.

In 2020, the Company launched a project entitled “For Every Order You Place, President Securities Corporation Will Make a Donation to the Child Welfare League Foundation,” in which for every order customers place to trade securities during the year, the Company would donate NT$10 to the Child Welfare League Foundation’s “Little Helmsman Education Program—Career Experience for Disadvantaged Students.” More than 110,000 active traders participated in this event, with a total donation amounting to NT$1.1 million, to help disadvantaged students seek directions in life.

In the 2nd President Securities Volunteer Day—Beach Cleanup, the Chairman and 174 volunteer employees worked together to clean up 453.7 kilograms of trash, protect Taiwan’s coastlines, and support environmental sustainability through actions, as an enterprise that puts ESG into practice. In addition, the Company participated in the Seniors’ and Children’s Music Carnival Event organized by the Uni-President Corporation’s foundation, at which the elderly in rural areas and school children from disadvantaged families in rural areas were invited to participate. The Company prepared 400 gift packages to give to the elderly and children to allow them to experience a joyful and caring atmosphere. At the end of the year, a food box

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delivery event was held for the disadvantaged elderly. Around 160 volunteers, customers, and suppliers participated in the material sorting activity for the food boxes to be delivered and completed; 2,666 food boxes were sent to disadvantaged families and the elderly living alone in rural areas, such as in Taitung and Hualien.

President Securities Corporation upholds the spirit of “giving back to the community what we take”, and we continue to dedicate ourselves to helping disadvantaged groups and to promote social welfare activities.

C. Work Environment Safety and Precautions

1.In order to maintain the safety and health of employees, an Occupational Safety and Health Project Section has been set up under the Company’s Department of General Affairs. To promote occupational safety and health services, a Type A occupational safety and health business officer and occupational safety and health administrators have been engaged, which have been registered with the Labor Inspection Office, Taipei City Government.
2.The Company pays attention to safety and health in the employees’ work environment. It minimizes hazards in the office environment and also hires full-time health managers and on-site occupational medical specialists while having established a health consultation room to provide health consultation services to employees. Every year, regular employee health examinations are held to let employees understand their health status, take necessary disease and accident prevention and control measures as soon as possible, while a health consultation service is provided to help employees track, analyze, and follow up on each one’s health situation.
3.The Company’s office environment considers the safety of employees to be the top priority. Each entrance and exit is equipped with access control card swiping devices. The entrances and exits of each building are controlled by security personnel during the day, night, and on holidays to ensure the personal safety of employees.
4.In accordance with the requirements of the Building Public Safety Inspection Certification and Filing Regulations, the Company regularly entrusts a professional company to conduct building public safety inspections every two years and has obtained a qualified independent management certificate related to building public safety.
5.The Company’s various mechanical and electrical or fire safety equipment (fire alarms or fire extinguishers, and so on) are in compliance with the provisions of the Fire Services Act; the Company outsources regular fire safety equipment maintenance, repairs, and inspections to a third-party institution every year while filing a report to the competent authority.
6.Smoking is completely banned in the Company’s business premises in accordance with regulations, and janitors are hired to clean the office environment. Office floors and carpets are cleaned and waxed regularly to ensure a clean and hygienic work environment.
7.The Company provides employees with a safe and healthy workplace. The office is a comfortable space suited for working as it is equipped with a central air-conditioning system and has adequate lighting.
8.The Company has provided necessary health and first aid facilities, including automated external defibrillators, and has established breastfeeding rooms. The Company organizes health promotion seminars, and provides employees with relevant information and news related to health care as well as disease and accident prevention; this information is updated on the online health education system regularly.

V. Labor Relations & Employee Benefit

A. Employee Benefits, Education and Training

1. Employee Benefits

The company has always maintained a harmonious relationship with its employees. We have spared no expense in providing attractive employee benefits, in providing opportunities for personal growth, in providing a pleasant work environment, and in providing clear and accessible communication channels

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to all levels of management.

In addition, we go beyond simply offering benefits prescribed by Labor Standard Act, such as annual leave time and number of working hours. Employees also enjoy additional benefits such as group insurance for worker’s compensation, accident medical care, and department dining subsidy. As well, we offer employees funds for weddings and in time of bereavement, and organizes and subsidized employee outings aimed at strengthening relationships between the firm and our employees, and among employees themselves.

The company is committed to creating a reasonable, friendly, and efficient work environment for its employees, an environment that includes strong lines of communication for employees to express opinions and suggestions about the firm. With this in mind, the firm has established an “Employee Suggestion Center” and also organizes regular employee workshops to actively solicit, discuss, and then respond to employee concerns and suggestions. The Company has also dedicated itself to building a safe and equal work place with a proper complaint channel.

In January of 2004, the company expanded its employee benefits to include an “Employee Stock Ownership Trust, (ESOT)”.Each participating employee may decide his/her own monthly contribution to the trust account, and the Company will also set aside a corresponding amount (subject to an award cap according to his/her job rank) as bonus. The aim of this program is to promote long-term commitments from employees as well as encourage healthy savings habits and encourage responsible retirement planning.

To encourage employees to live healthier lives, the Company provides all employees with a smoke-free work environment and arranges annual health checks for employees to improve their physical health. The arrangements are superior to legal requirements. In addition, the Company also conducts periodic blood donation activities and physical and spiritual health seminars from time to time to improve employees’ overall health. The activities include sanitation education, policy, and the environment.

The Company also provides a spacious 200-ping sports center which is equipped with comprehensive sports facilities. It also actively promotes various club activities to promote healthier lifestyles for employees. Essentially, all such benefits and programs are designed to foster a harmonious relationship between employees and the company. In addition, the Company was awarded two stars as Best Companies to work for by Department of Labor, Taipei City Government in 2012. The Company was also selected as an Enterprise of Happiness by 1111 Job Bank in 2019. Going forward, we are optimistic to continue to improve upon these relationships, always with the ultimate aim of allowing both the company and our employees to enjoy mutual benefit and growth.

2. Education and training courses, expenditures, and number of hours

The Company values education, training, and talent development. The effects of training in 2020 are described as follows:

 Talent training

(1) Talent development for future channel personnel: To meet the needs of the organization’s business development, assist the brokerage department and the settlement department in nurturing new generation of talents to prepare for organizational development.
(2) Nurturing of top talent: To meet the needs of future development and operating challenge of the organization, the Company launched a talent pool project to recruit excellent young talents, systematically select and nurture them, effectively pass on experience and skills, actively nurture future entry-level managers and build new-generation leaders.
Assist the brokerage system with wealth-management project execution
(1) Wealth management expert consulting program

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(5) Industry trends:

The monthly President Class focuses on analyses of trending industries to provide colleagues with a greater understanding of industry trends to provide better service to our customers.

 Finance 3.0 Digital Transformation Training Program

(1) IT Seminars:

In response to the needs of digital transformation, in order to improve IT transformation, enhance performance response capability, concept and skills in cross department cooperation and talent nurturing, share previous experience of existing issues and challenges and external cases through IT seminars. From the above, capability can be enhanced and ideas for improvement discovered.

(2) RPA process automation robot:

Assist the back office in improving the highly repetitive, routine and labor-consuming operating procedures, and streamline and automate the process to save costs and improve operational efficiency.

(3) FinTech lectures:

In response to the advent of the era of financial technology, the Company strives to inspire employees through the dangers, customer type, behavior patterns, and service methods in the future development in the securities industry and will continue to promote personnel transformation and grasp the future development trends of FinTech.

Program for improving management by supervisors
(1) In response to rapid environmental changes and the needs of business development, the supervisor takes the role of guiding and leading the team to achieve their goals. To assist supervisors to effectively undertake tasks, grasp environmental changes, quickly analyze and sort out issues, to suggest solutions, problem analysis and solving, courses are conducted to assist supervisors in familiarizing themselves with systematic thinking, problem analysis and solution skills to enable the team complete the tasks.
(2) In order to reach a consensus on management methods among senior supervisors, a supervisor consensus camp is held. This camp is based on organizational transformation and business development, to help supervisors think about new concepts and practices collectively so as to meet future business challenges.

 E-training

(1) The training system has been upgraded to version LMS6.4 and its functions are upgraded to improve the Company’s management and implementation of training programs.
(2) The Company purchases and produces training materials based on job requirements, integrates free

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resources, and selects various online materials suitable for various roles to encourage employees to learn on their own at any time. This allows learning to be more diverse and spontaneous.

(3) Marketing activities are used to encourage employees to make use of online resources and cultivate habits for continuous learning. The goal is to strengthen motivation for learning and improve their ambitions for improving digital transition.

 Cross-department communication

(1) The Company organized wealth management project discussion meetings in 2020 to learn about business departments’ strategies and key business goals of the current year to plan suitable courses and options to ensure the efficacy of studies and performance output. It also allowed employees to learn about the departments’ ideas on training and establishes good communication channels.
(2) Through information-sharing camps to meet the Company’s long-term operation and transformational needs, overcome the shortage of information-service capabilities, and ensure that the business unit heads have a transformational mindset, their planning capability in relation to information needs can be strengthened, and they can further understand how to reach a consensus in tasks while interacting with the Information Department.
The Company received the Taiwan Training Quality Assessment Bronze Award from the Labor Development Department, Ministry of Labor from 2016 to 2020, and won silver award for six consecutive years from 2010 to 2016, and was the only enterprise in the securities industry to receive the Silver Award for six consecutive years. The Company won the bronze award from 2018 to 2020. It developed human-resource development quality management system according to TTQS in consecutive 10 years for consistency and stability.

B. Retirement System and Implementation Status

To encourage employees’ long-term services and professional development, protect employee rights, and improve work efficiency, the Company has established the Employee Retirement Regulations in accordance with the approval granted in the National Taxation Bureau’s (1989) Cai-Bei-Guo-ShiuShen-1 No.112955 . Letter dated November 12, 1989.
The Company established the Employee Pension Fund Management Committee on October 11, 1994 with the approval of the Department of Labor of the Taipei City Government. After the implementation of the Labor Standards Act in March 1998, the Company established the Supervisory Committee of Labor Retirement Reserve in accordance with the laws. Related organization charters and retirement regulations have been approved by the Department of Labor of the Taipei City Government. The Company appropriates funds at least 2% to the Trust Department of the Bank of Taiwan according to the appropriation ratio calculated by the actuary.
The government implemented the new retirement system in the “Labor Pension Act” in July 2005 to handle employees’ retirement. As of today, the Company has close to 1,400 employees enrolled in the new labor pension system. The Company complies with government policies and appropriates 6% of employees’ salaries to the pension account in the Bureau of Labor Insurance each month.The appropriation amount for 2020 is 62,258 thousand .
Retirement qualifications and principles for payment:
4.1 Voluntary retirement: Employees who met any of the following criteria may apply for voluntary retirement:
- A. Those who have served for more than 15 years and are over 55 years old.
- B. Completed 25 years of service, regardless of age.
4.2 Forced retirement: The Company may request an employee to retire in any of the following situations:
- A. Where the employee attains the age of 65.

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B. Employees who are in dangerous or high labor density work and have reached the age of 55.
C. Where the employee is unable to perform his/her duty due to a mental or physical disability.
4.3 The calculation of pension:
A. For employee who joined the Company after July 1, 2005, the pension eligibility follows the Labor Pension Act. During the employment period, the Company shall make monthly contributions based on monthly salary scale set by the Ministry of Labor. A monthly pension of not less than 6% of the salary shall be contributed to the individual pension account established by the Bureau of Labor Insurance.
B. Employees who joined the Company before July 1, 2005 may choose the following two pension rules for their applicable years of service:
- (a). Follow the rule of Labor Standards Act: Two bases are given for each full year of service rendered. But for the rest of the period over 15 years, one base is given for each full year of service rendered. The total number of bases shall be no more than 45. The length of service is calculated as half year when it is less than six months and as one year above six months. The basis of salary is based on the average salary of the last six months prior to the employees applying for retirement. Those who choose to apply for this method may opt for the years of service which is after July 1, 2010 according to Labor Pension Act by July 1, 2010.
- (b). According to the provisions of the Labor Pension Act, the Company pays monthly salary based on the monthly salary scale as set by the Ministry of Labor from the date the employees opts for it. A monthly pension of not less than 6% shall be contributed by the individual as set by the Bureau of Labor Insurance.
4.4 An additional 20% on top of the amount calculated according to the preceding subparagraph shall be given to employees who are forced to retire due to mental or physical disability caused while executing their duties.

C. Employee Disputes and Protection of Employee Rights

In accordance with the Labor Standards Act, the company has instituted its own set of work rules and has submitted a copy of these work rules to the Taipei City Government Department of Labor for approval. In addition to notifying all employees via internet of the content of these work rules, we also have posted a copy of these work rules on rules, we also have posted a copy of these work rules on the company’s internal corporate website where employees may view a copy of these rules at any time.
To date, the company has made every effort to maintain a harmonious and fulfilling work environment for all of its employees and, as such, has not suffered any loss or damage resulting from any employee disputes, in the firm’s entire history. And, the company has every reason to believe that this harmonious dynamic will continue.

D. Loss caused by labor dispute in the most recent three years: None.

E. An estimate of losses incurred to date or likely to be incurred in the future, and mitigation measures being or to be taken: None.

F. Certification Details of Employees Whose Jobs are Related to the Release of the Company’s Financial Information

Certification details of employees whose jobs are related to the release of the Company’s financial information are disclosed in the table below. In response to the competent authorities’ requirements for risk management implemented by the risk management unit and the qualifications for operators and internal auditors, the Company’s relevant personnel have also completed the training and obtained relevant qualifications in accordance with the regulations. Currently, three employees in charge of risk verification have obtained the Financial Risk Manager (FRM) Certificate and two employees in charge of auditing have also obtained Certified Financial Service Auditor (CFSA) Certificate.

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Risk Controls Office/4 employees
Certifications and Qualifications Received by Employees
Qualified Ratio (%)
Qualification Exam for Senior Securities Specialist 4 100.0
Qualification Exam for Futures 4 100.0
Certificate of Margin Trading and Short Selling 1 25.0
Qualification Exam for Securities Investment Trust and
3 75.0
Consulting Professional
Qualification Exam for Personal Insurance Representative 1 25.0
Qualification Exam for Non-Life Insurance Representative 1 25.0
Bill Finance Specialist exam 2 50.0
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Finance Department/40 employees
Certifications and Qualifications Received by Employees
Qualified Ratio (%)
Qualification Exam for Senior Securities Specialist 31 77.5
Qualification Exam for Securities Specialist 1 2.7
Qualification Exam for Futures 11 27.5
Certified Public Accountants 1 2.5
Certificate of Margin Trading and Short Selling 5 12.5
Qualification Exam for Securities Investment Trust and
10 25.0
Consulting Professional
Proficiency Test for Trust Operations Personnel 7 17.5
Qualification Exam for Personal Insurance Representative 8 20.0
Basic Proficiency Test for Bank Lending Personnel 1 2.5
Proficiency Test for Financial Planning Personnel 2 5.0
Basic Proficiency Test for Bank Internal Controls 6 15.0
Qualification Exam for Non-Life Insurance Representative 5 12.5
Professional Capacity of Bonds Specialist 1 2.5
Bill Finance Specialist exam 3 7.5
Proficiency test for corporate basic internal control 3 7.5
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Auditing Office/43 employees
Certifications and Qualifications Received by Employees
Qualified Ratio(%)
Qualification Exam for Senior Securities Specialist 37 86.0
Qualification Exam for Securities Specialist 6 14.0
Qualification Exam for Futures 43 100.0
Certified Public Accountants 1 2.3
Certificate of Margin Trading and Short Selling 32 74.4
Qualification Exam for Securities Investment Trust and
28 65.1
Consulting Professional
Proficiency Test for Trust Operations Personnel 40 93.0
Qualification Exam for Personal Insurance Representative 32 74.4
Qualification Test for Sales Personnel of Structured Products 1 2.3
Basic Proficiency Test for Bank Lending Personnel 4 9.3
Proficiency Test for Financial Planning Personnel 12 27.9
Basic Proficiency Test for Bank Internal Controls 24 55.8
Qualification Exam for Non-Life Insurance Representative 33 76.7
Qualification Exam for Stock Affair Specialist 4 9.3
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Auditing Office/43 employees
Certifications and Qualifications Received by Employees
Qualified Ratio(%)
Professional Capacity of Bonds Specialist 2 4.7
Bill Finance Specialist exam 2 4.7
Qualification Exam for Investment-orientated Insurance
16 37.2
Product Representative
Proficiency test for corporate basic internal control 8 18.6
Wealth management salespersons 37 86.0
Qualification Exam for Securities Investment Trust and
6 14.0
Consulting Regulations
Trust laws exam 2 4.7
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G. Conduct and Ethics of Employees

The Company has formulated the “Work Rules” and “The Regulations and Declaration” signed with employees for their conduct and ethics. The content is summarized below:

All the Company’s employees shall comply with the following standards and rules in the daily life for the Company’s development and all employees’ welfare:
(1) Environmental sanitation: Maintain sanitation in the surrounding environment and keep documents and supplies tidy.
(2) Clothing and appearance: Dress in a simple and tidy manner; have a haircut and shave from time to time; barefoot, slippers, flip-flops, and jeans are prohibited; wear in uniform from Monday through Thursday.
(3) Interaction with people: Focus on manners, punctuality, and promise-keeping, respect others, cherish public property, work hard, and be efficient.
(4) Commitment: Be active and responsible at work; do not shirk responsibilities; do not be perfunctory; never put off till tomorrow what may be done today.
(5) Customer first: Receive customers in a cordial and attentive manner; put services first; place emphasis on customers’ rights and interests.
(6) Public property: Ensure proper safekeeping and strengthened management of supplies and equipment.
(7) Profit boosting and cost cutting: Assist in the expansion of business, actively strive for the Company’s interests, reduce and save expenses, as well as eliminate waste.
(8) The Company strictly prohibits gambling, noise, and physical fights.
All of the Company’s employees shall comply with the following service standards and rules for maintaining the Company’s interest.
(1) During employment, employees shall not take on part-time (concurrent) duties other than the work designated by the Company. If it is not in conflict with the Company’s operating interests and will not interfere with the full-time work, employees shall report to their supervisors beforehand. Except for the purpose of business, employees shall not use the Company’s name without permission.
(2) Employees shall not look through documents, correspondence, and books of accounts that are not part of their business and present their business documents to irrelevant parties.
(3) Never leak, transfer, or otherwise the Company’s business or technological secretes, including but not limited to all documents, information, products, or objects or rights with property value, to people.
(4) Employees guarantee that when leaving the Company, all the Company’s information kept related to the work shall be handed over to the unit supervisor, and that Company’s property and relevant documents shall not be taken away.
(5) Employees shall not bring prohibited items and flammable materials into the company; they shall not bring people who do not work at the Company to the Company without permission.
(6) Employees are not allowed to absent the Company’s major meetings without any reason.

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(7) The Company’s employees shall report their duties and business to supervisors from the first level all the way up and shall not bypass supervisors in the middle and report to those at higher levels directly, unless it is an emergency or special circumstance.
(8) The Company’s employees shall not take the Company’s property or documents out of the Company without permission, unless with the responsible supervisor’s approval.
(9) The Company’s employees shall not have a loan relationship or guarantee relationship with the Company’s customers.
(10) The Company has prohibited inappropriate lending or loan brokerage among employees.
(11) During employment, employees shall comply with the Company’s assignment of work as well as management and supervision; the Company may adjust the employees’ job duties and workplace location based on business needs in accordance with labor laws.
(12) To protect the Company’s reputation, the Company strictly prohibits employees’ comments that are not verified or may damage the Company’s reputation on any social websites.
To maintain the Company’s corporate culture, the Company’s employees shall comply with the following ethical standards and rules.
(1) When conducting business, employees shall not directly or indirectly offer, promise to offer, request, or accept any improper benefits, including kickbacks, commissions, facilitation fees, or otherwise offer or accept improper benefits to or from customers, agents, contractors, suppliers, public servants, or other stakeholders.
(2) When directly or indirectly offering a donation to political parties or organizations or individuals participating in political activities, employees shall comply with the Political Donations Act and its own relevant internal operational procedures, and shall not make such donations in exchange for commercial gains or business advantages.
(3) For charitable donations or sponsorships, employees shall comply with relevant laws and regulations and shall commit bribery in disguise.
(4) Employees shall not directly or indirectly offer or accept any unreasonable presents, hospitality or other improper benefits to establish business relationship or influence commercial transactions.
(5) Managers shall not take advantage of their positions in the Company to obtain improper benefits for themselves, their spouses, parents, children or any other person.
I will comply with relevant securities laws; in the case of any violations, I am willing to accept the Company’s punishment.
If personal behavior is detrimental to the social public order, good social customs, or personal misconduct has constituted sexual harassment of other colleagues, with specific evidence proving that it has damaged a business unit’s or colleague’s image or reputation, the Company may terminate the employment relationship without notice.
I will strictly abide by the Company’s regulations on copyright protection, do not use computer programs that are not legally authorized on the Company’s personal computers, and will never reproduce or infringe any programs that are legally authorized on the Company’s personal computers. If violating the above-mentioned regulations, I am willing to accept the Company’s severe punishment and accept all the criminal and civil liability.
Corporate information confidentiality
(1) The ownership, patent rights, and other rights of the business information, research results, or inventions and technologies, which are obtained because of or through my duties, belong to the Company, and I agree to assist the Company in conducting the necessary procedures for obtaining or protecting the rights, whether I am employed.
(2) I agree that the author of the work, which I plan with the fund from the Company or I accomplish through the equipment or information provided by the Company, is the Company, and that the Company owns the

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(3) Never help the Company’s competitors or provide them with relevant materials or information without approval.
(4) Never use Company’s confidential information to threaten the Company as a means of promotion or getting a pay raise.
(5) Never investigate (snoop about) the Company’s confidential information that is not related to the work; never discuss the Company’s confidential information with colleagues.
(6) The salary and bonuses of the Company’s employees are regarded as confidential; I shall not tell other people about my own salary and bonuses and must not inquire about other colleagues’ salaries and bonuses.
(7) If violating the above-mentioned regulations, I am willing to accept the Company’s punishment and take the responsibility for compensation for the resulting damage or losses to the Company.
Regulations on e-mail

Comply with the Company’s relevant regulations on intranet connected to the Internet and e-mail accounts; any violator is willing to accept the Company’s punishment.

H. Internal Legal Compliance and Material Information Management

We have set an “internal material information handling procedures” and assigned the Compliance Office to be in charge of internal major information in order to do coordination and prevent internal trading. In addition, our HR promotes education advocacy toward board members, managerial officers, and employees each year. In accordance with the “Taiwan Stock Exchange Corporation Procedures for Verification and Disclosure of Material Information of Listed Companies” and with the “Taiwan Stock Exchange Corporation Procedures for Press Conferences Concerning Material Information of Listed Companies”, we have posted all such information on the company’s internal corporate website where employees and managers may view it.
Within the Office of the CEO, we have established a Legal Compliance Department, which is tasked with ensuring that all of the company’s processes and administrative procedures are in compliance with the most recent laws and regulations, that all activities are conducted in accordance with relevant laws and regulations. And in accordance with “Standard Directions for the Content and Procedures of Assessment of Legal Compliance of Securities Firms”, this department is also tasked with conducting regular legal compliance evaluations of each department and each branch office and then conducting legal compliance training specific to their needs.
We have created a legal compliance section on our internal corporate website where we routinely post information on any recent amendments made to relevant laws and regulations. We have also set up a hotline where employees can call to learn more about insider trading, its key principles, definitions, and the potential civil and criminal exposures involved. All of these measures, taken together, provide our employees with appropriate and adequate legal guidance.To strengthen the awareness of brokerage employee of the need for compliance, the Company held a “Month of Compliance” event in the first quarter of 2020. In addition to daily sharing of cases of violations in the industry through “sharing reports,” the Company offered online classes and gave tests based on four major themes to brokerage employees.
To comply with Personal Information Protection Act, we established personal data protection system in 2013. Since 2013, the Company has introduced an information management system with the assistance of an external professional consulting team and obtained the BS 10012 information management system certification mark issued by the British Standards Institution. The Company has established a personal data protection committee and an emergency response team for personal data protection. Every year, each department is required to inspect and review all personal data collected, processed, and used, as well as reviewing the operating standards.

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V. Business Environment

VI. Material Contracts and Agreements

A. Operating lease contract: For each leased asset with more than NT$5 million of rent per annum as of April 30, 2021

Unit: NT$

Type	Asset	Area (Ping)	Lease Term	Rental	Lessee	Payment Method	Restrictive Covenant
Assets leased by the Company	Nanjing Branch Office	218	2017.01-2021.12	458,000/month	Chen, Ting- Yuan	Half a year	NA

B. Non-operating lease contract: For each leased asset with more than NT$5 million of rent per annum as of April 30, 2020

Unit: NT$

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Area Payment Restrictive
Type Asset Lease Term Rental Lessee
(Ping) Method Covenant
Assets Uni-President
President
leased Asset
Securities 307.06 2019.04-2024.03 522,000/month Monthly NA
to other Management
Building
entities Corporation
Assets
President
leased President Tokyo
Securities 417.14 2019.04-2024.03 709,000/month Monthly NA
to other Corp.
Building
entities
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President Securities Corporation

VI. Financial Information

I. Five-Year Financial Summary

A. Condensed Balance Sheet

1. Consolidated Condensed Balance Sheet – Based on IFRS

Unit: NT$ thousands

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Year Financial Summary for the last five years (Note1)
2021Q1
(Note1)
Item 2016 2017 2018 2019 2020
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Current Assets		81,275,723	81,561,564	64,915,856	90,081,974	105,321,883	119,909,551
Property and Equipment (Note2)		2,467,163	2,434,389	2,442,370	2,443,964	2,453,712	2,444,505
Intangible Assets		129,771	112,096	124,210	129,160	151,765	152,043
Other Assets		2,183,539	2,203,645	2,898,837	3,099,302	5,784,405	5,881,257
Total Assets		86,056,196	86,311,694	70,381,273	95,754,400	113,711,765	128,387,356
Current	Before distribution	62,877,634	60,800,920	44,636,888	68,821,260	84,087,688	97,713,146
Liabilities	After distribution	62,877,634	62,469,434	45,596,283	70,193,650	Note3	Note3
Non-Current Liabilities		48,933	75,812	31,938	167,368	144,595	148,974
Total	Before distribution	62,926,567	60,876,732	44,668,826	68,988,628	84,232,283	97,862,120
Liabilities	After distribution	62,926,567	62,545,246	45,628,221	70,361,018	Note3	Note3
Equity Attributable to Shareholders of the Parent		23,080,930	25,385,654	25,645,985	26,699,680	29,407,315	30,449,442
Capital Common	Stock	13,356,658	13,904,281	13,904,281	13,723,900	13,998,378	13,998,378
Capital Reserve		142,702	142,702	142,702	91,261	91,261	91,261
Retained	Before distribution	9,432,286	11,397,045	10,979,662	12,362,704	14,483,188	15,431,988
Earnings	After distribution	8,884,663	9,728,531	10,020,267	10,715,836	Note3	Note3
Other Equity Interest		149,284	-58,374	619,340	521,815	834,488	927,815
Treasury Stocks		-	-	-	-	-	-
Non-controlling Interests		48,699	49,308	66,462	66,092	72,167	75,794
	Before distribution	23,129,629	25,434,962	25,712,447	26,765,772	29,479,482	30,525,236
Total Equity
	After distribution	23,129,629	23,766,448	24,753,052	25,393,382	Note3	Note3

Note 1: Financial information for the years of above-mentioned was audited and certified by CPAs. The financial information for the first quarter of 2021 has been reviewed by CPAs.

Note 2: No asset revaluation has been conducted. Note 3: Distributed earnings from 2020 have yet to be approved by shareholders.

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VI. Financial Information

2. Individual Balance Sheet

Unit: NT$ thousands

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Year Financial Summary for the last five years (Note1)
2021Q1
(Note1)
Item 2016 2017 2018 2019 2020
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Current Assets		63,516,085	66,854,475	48,293,715	71,080,620	79,397,996	87,722,937
Property and Equipment (Note2)		2,295,097	2,260,981	2,269,210	2,270,391	2,270,322	2,262,821
Intangible Assets		85,761	62,317	67,004	70,726	94,479	97,151
Other Assets		6,094,357	6,082,755	6,965,559	7,263,678	9,087,091	9,219,816
Total Assets		71,991,300	75,260,528	57,595,488	80,685,415	90,849,888	99,302,725
Current	Before distribution	48,852,745	49,788,572	31,913,301	53,837,030	61,303,138	68,705,698
Liabilities	After distribution	48,852,745	51,457,086	32,872,696	55,209,420	Note3	Note3
Non-Current Liabilities		57,625	86,302	36,202	148,705	139,435	147,585
Total	Before distribution	48,910,370	49,874,874	31,949,503	53,985,735	61,442,573	68,853,283
Liabilities	After distribution	48,910,370	51,543,388	32,908,898	55,358,125	Note3	Note3
Capital Common	Stock	13,356,658	13,904,281	13,904,281	13,723,900	13,998,378	13,998,378
Capital Reserve		142,702	142,702	142,702	91,261	91,261	91,261
Retained	Before distribution	9,432,286	11,397,045	10,979,662	12,362,704	14,483,188	15,431,988
Earnings	After distribution	8,884,663	9,728,531	10,020,267	10,715,836	Note3	Note3
Other Equity Interest		149,284	-58,374	619,340	521,815	834,488	927,815
Treasury Stocks		-	-	-	-	-	-
Non-controlling Interests		-	-	-	-	-	-
	Before distribution	23,080,930	25,385,654	25,645,985	26,699,680	29,407,315	30,449,442
Total Equity
	After distribution	23,080,930	23,717,140	24,686,590	25,327,290	Note3	Note3

Note 1: Financial information for the years of above-mentioned was audited and certified by CPAs. The financial information for the first quarter of 2021 has been reviewed by CPAs.

Note 2: No asset revaluation has been conducted.

Note 3: Distributed earnings from 2020 have yet to be approved by shareholders.

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B. Condensed Income Statements

1. Consolidated Condensed Income Statements

Unit: NT$ thousands

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Year Financial Summary for the last five years (Note1)
2021Q1
(Note1)
Item
2016 2017 2018 2019 2020
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Operating Revenue	4,497,543	7,270,066	5,774,276	7,142,397	9,581,272	2,723,812
Gross Profit	3,730,502	6,284,995	4,644,268	5,896,915	8,526,443	2,461,440
Operating Income	518,530	2,393,918	1,021,143	2,061,802	3,607,110	1,016,831
Non-Operating Income	418,981	450,055	415,744	496,006	375,712	104,932
Income Before Tax	937,511	2,843,973	1,436,887	2,557,808	3,982,822	1,121,763
Net Income (Loss) from
Operations of Continued	833,042	2,624,657	1,217,633	2,373,835	3,614,596	950,114
Segments
Net Income (Loss) from	-	-	-	-	-	-
Discontinued Operations
Net Income (Loss)	833,042	2,624,657	1,217,633	2,373,835	3,614,596	950,114
Other Comprehensive Income (Income after Tax)	-88,465	-314,958	145,968	-124,296	475,346	95,640
Total Comprehensive Income	744,577	2,309,699	1,363,601	2,249,539	4,089,942	1,045,754
Net Income Attributable to Shareholders of the Parent	826,690	2,618,769	1,210,323	2,368,536	3,607,518	948,800
Net Income Attributable to non-controlling Interests	6,352	5,888	7,310	5,299	7,078	1,314
Comprehensive Income
Attributable to Shareholders of	737,775	2,304,724	1,355,594	2,244,912	4,080,025	1,042,127
the Parent
Comprehensive income
attributable to non-controlling	6,802	4,975	8,007	4,627	9,917	3,627
interests
Earnings Per Share (Note2)	0.58	1.85	0.85	1.69	2.58	0.68

Note 1: Financial information for the years of above-mentioned was audited and certified by CPAs. The financial information for the first quarter of 2021 has been reviewed by CPAs.

Note 2: Earnings per share is calculated based on the number of shares that were adjusted retrospectively. The unit is NTD.

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VI. Financial Information

2. Individual Condensed Income Statements

Unit: NT$ thousands

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Year Financial Summary for the last five years (Note1)
2021Q1
(Note1)
Item
2016 2017 2018 2019 2020
----- End of picture text -----

Operating Revenue	3,493,434	6,359,985	4,687,890	6,229,917	8,472,984	2,436,415
Gross Profit	3,086,106	5,715,963	3,931,716	5,313,631	7,832,892	2,281,834
Operating Income	384,592	2,333,898	880,341	2,024,947	3,522,255	1,009,751
Non-Operating Income	511,418	474,303	505,305	489,434	404,341	95,789
Income Before Tax	896,010	2,808,201	1,385,646	2,514,381	3,926,596	1,105,540
Net Income (Loss) from
Operations of Continued	826,690	2,618,769	1,210,323	2,368,536	3,607,518	948,800
Segments
Net Income (Loss) from	-	-	-	-	-	-
Discontinued Operations
Net Income (Loss)	826,690	2,618,769	1,210,323	2,368,536	3,607,518	948,800
Other Comprehensive Income (Income after Tax)	-88,915	-314,045	145,271	-123,624	472,507	93,327
Total Comprehensive Income	737,775	2,304,724	1,355,594	2,244,912	4,080,025	1,042,127
Earnings Per Share (Note2)	0.58	1.85	0.85	1.69	2.58	0.68

Note 1: Financial information for the years of above-mentioned was audited and certified by CPAs. The financial information for the first quarter of 2021 has been reviewed by CPAs.

Note 2: Earnings per share is calculated based on the number of shares that were adjusted retrospectively. The unit is NTD.

C. Auditors’ Opinions from 2016 to 2020

Year	CPA	Audit Opinion
2016	Hsiao, Chin-Mu / Chang, Ming-Hui	Unqualified Opinion
2017	Hsiao, Chin-Mu / Chang, Ming-Hui
2018	Lin, Se-Kai / Hsiao, Chin-Mu
2019	Lin, Se-Kai / Hsiao, Chin-Mu
2020	Lin, Se-Kai / Lo, Sen-Jiao

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II. Financial Analysis for the Past Five Years

1. Consolidated Financial Analysis for the Past Five Years

Year		Financial Summary for the last five years (Note1)	Financial Summary for the last five years (Note1)	Financial Summary for the last five years (Note1)	Financial Summary for the last five years (Note1)	Financial Summary for the last five years (Note1)
Item		2016	2017	2018	2019	2020
Financial Structure (%) Debt Ratio Ratio of Long-term Capital to property and equipment	73.12 70.53 63.42 72.05 74.08 76.22 937.5 1044.82 1052.77 1095.18 1201.42 1248.73
Solvency (%) Current Ratio Quick Ratio	129.26 134.15 145.43 130.89 125.25 122.72 129.19 134.09 145.39 130.86 125.22 122.68
Profitability Analysis Return on Total Assets (%) Return on Stockholders’ Equity (%) Pre-tax Income to Paid-in Capital (%) Profit Ratio (%) Earnings Per Share (NT$) (Note2)	1.31 3.43 1.98 3.37 3.66 0.81 3.63 10.81 4.76 9.05 12.85 3.17 7.02 20.45 10.33 18.64 28.45 8.01 18.52 36.10 21.09 33.24 37.73 34.88 0.58 1.85 0.85 1.69 2.58 0.68
Cash Flow (%) Cash Flow Ratio Cash Flow Adequacy Ratio Cash Reinvestment Ratio	- 5.92 24.26 - 8.87 - 123.28 214.36 404.72 409.63 459.61 489.46 - 13.84 35.71 - 20.81 -
Other Ratio (%) Debit to Equity Ratio Ratio of Property and Equipment to Total Asset Total Underwriting to Quick Assets Ratio Total Margin Loan Balance to Equity Ratio Total Short Sales Amount to Equity Ratio	272.06 239.34 173.72 257.75 285.73 320.59 3.55 3.48 4.3 3.18 2.72 2.41 0.75 0.61 1.32 0.88 0.73 0.14 37.58 44.88 31.19 37.45 41.55 49.19 6.56 8.64 7.81 7.06 6.14 2.91
Analysis of financial ratio differences for the last two years (for variations above 20%) (1) Profitability: Despite the impact of the pandemic outbreak in 2020, under the stimulus of Fed QE monetary policy and the massive US economic relief bill, the momentum was provided to the economic recovery, coupled with smooth progress of the vaccination, the stock price and trading volume of TAIEX had reached a new record high again, and the overall market uncertainty had been reduced.The Company’s overall net after tax profit for 2020 increased when compared with the previous period, leading to an increase in the return on equity and increases in the ratio of pre-tax net profit to paid-in capital along with the net profit margin compared with 2019. (2) Cash flow ratio: Net cash flow from operating activities turned from net cash outflow in 2019 to net cash inflow in 2020, causing the cash flow ratio to increase compared with 2019. (3) Cash flow reinvestment ratio: Net cash flow from operating activities turned from net cash outflow in 2019 to net cash inflow in 2020, causing the cash flow reinvestment ratio to increase compared with 2019.

Note 1: Financial information for the years of above-mentioned was audited and certified by CPAs. The financial information for the first quarter of 2021 has been reviewed by CPAs.

Note 2: Earnings per share is calculated based on the number of shares that were adjusted retrospectively. The unit is NTD. Note 3: Equations for analysis items:

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2020 Annual Report

VI. Financial Information

(1) Financial structure
i. Liability to total assets ratio = Total liabilities/total assets
ii. Ratio of long-term capital to property, plant and equipment = (total equity + non-current liabilities) /net worth of property, plant and equipment
(2) Solvency
i. Current ratio = Current assets / Current liabilities
ii. Quick ratio = (Current assets - inventory - prepaid expenses) / Current liabilities
(3) Profitability
i. Return on assets = [after-tax income (loss) + interest expense × (1- tax rate)]/average total assets
ii. Return on equity = net income / average total equity
iii. Profit margin before tax = net income / net sales
iv. Earnings per share = (profit and loss attributable to owners of the parent – dividends on preferred shares) / weighted average number of issued shares
(4) Cash flow
i. Cash flow ratio = Net cash flow from operating activities / current liabilities
ii. Net cash flow adequacy ratio = Net cash flow from operating activities for the most recent five years / (capital expenditures + inventory increase + cash dividend) for the most recent five years
iii. Cash flow reinvestment ratio = (Net cash flow from operating activities – cash dividend) / (gross property, plant and equipment value + long-term investment + other non-current assets + working capital)
(5) Other ratio
i. Debt to equity ratio = total liabilities/ shareholders’ equity
ii. Property and equipment to total assets ratio = net fixed assets / total assets
iii. Total underwriting to quick asset ratio = total underwriting / (current assets - prepayments)
iv. Total margin loan balance to equity ratio = total margin loan balance / shareholders’ equity
v. Total short sales amount to equity ratio = total short sales amount / shareholders’ equity

2. Individual Financial Analysis for the Past Five Years

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Year Financial Summary for the last five years (Note1)
2021Q1
(Note 1)
Item 2016 2017 2018 2019 2020
Debt Ratio 67.94 66.27 55.47 66.91 67.63 69.34
Financial
Structure
Ratio of Long-term Capital to
(%) 1005.66 1122.77 1130.17 1175.99 1295.29 1345.64
property and equipment
Current Ratio 130.02 134.28 151.33 132.03 129.52 127.68
Solvency (%)
Quick Ratio 129.93 134.23 151.28 131.99 129.48 127.65
Return on Total Assets (%) 1.51 3.99 2.3 4.01 4.44 1.02
Return on Stockholders’ Equity
3.61 10.81 4.74 9.05 12.86 3.17
(%)
Profitability
Pre-tax Income to Paid-in Capital
Analysis 6.71 20.20 9.97 18.32 28.05 7.90
(%)
Profit Ratio (%) 23.66 41.18 25.82 38.02 42.58 38.94
Earnings Per Share (NT$) (Note2) 0.58 1.85 0.85 1.69 2.58 0.68
Cash Flow Ratio - 6.27 33.44 - 12.60 -
Cash Flow
Cash Flow Adequacy Ratio 118.15 183.46 398.65 398.27 465.96 494.51
(%)
Cash Reinvestment Ratio - 12.08 34.72 - 21.46 -
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President Securities Corporation

	Debit to Equity Ratio 211.91 196.47 124.58 202.2 208.94 226.12
	Ratio of Property and Equipment to Total Asset 3.86 3.61 4.74 3.40 3.07 2.80
	Other Ratio (%) Total Underwriting to Quick Assets Ratio 0.95 0.74 1.77 1.12 0.97 0.19
	Total Margin Loan Balance to Equity Ratio 37.66 44.97 31.27 37.54 41.65 49.31
	Total Short Sales Amount to Equity Ratio 6.57 8.66 7.83 7.07 6.15 2.92
	Analysis of financial ratio differences for the last two years (for variations above 20%)
	(1) Profitability: Despite the impact of the pandemic outbreak in 2020, under the stimulus of Fed QE monetary policy
	and the massive US economic relief bill, the momentum was provided to the economic recovery, coupled with
	smooth progress of the vaccination, the stock price and trading volume of TAIEX had reached a new record high
	again, and the overall market uncertainty had been reduced.The Company’s overall net after tax profit for 2020
	increased when compared with the previous period, leading to an increase in the return on equity and increases in
	the ratio of pre-tax net profit to paid-in capital along with the net profit margin compared with 2019.
	(2) Cash flow ratio: Net cash flow from operating activities turned from net cash outflow in 2019 to net cash inflow in
	2020, causing the cash flow ratio to increase compared with 2019.
	(3) Cash flow reinvestment ratio: Net cash flow from operating activities turned from net cash outflow in 2019 to net
	cash inflow in 2020, causing the cash flow reinvestment ratio to increase compared with 2019.

Note 1: Financial information for the years of above-mentioned was audited and certified by CPAs. The financial information for the first quarter of 2021 has been reviewed by CPAs.
Note 2: Earnings per share is calculated based on the number of shares that were adjusted retrospectively. The unit is NTD.

Note 3: Equations for analysis items:

(1) Financial structure
i. Liability to total assets ratio = Total liabilities/total assets
ii. Ratio of long-term capital to property, plant and equipment = (total equity + non-current liabilities) /net worth of property, plant and equipment
(2) Solvency
i. Current ratio = Current assets / Current liabilities
ii. Quick ratio = (Current assets - inventory - prepaid expenses) / Current liabilities
(3) Profitability
i. Return on assets = [after-tax income (loss) + interest expense × (1- tax rate)]/average total assets
ii. Return on equity = net income / average total equity
iii. Profit margin before tax = net income / net sales
iv. Earnings per share = (profit and loss attributable to owners of the parent – dividends on preferred shares) / weighted average number of issued shares
(4) Cash flow
i. Cash flow ratio = Net cash flow from operating activities / current liabilities
ii. Net cash flow adequacy ratio = Net cash flow from operating activities for the most recent five years / (capital expenditures + inventory increase + cash dividend) for the most recent five years
iii. Cash flow reinvestment ratio = (Net cash flow from operating activities – cash dividend) / (gross property, plant and equipment value + long-term investment + other non-current assets + working capital)
(5) Other ratio
i. Debt to equity ratio = total liabilities/ shareholders’ equity
ii. Property and equipment to total assets ratio = net fixed assets / total assets
iii. Total underwriting to quick asset ratio = total underwriting / (current assets - prepayments)
iv. Total margin loan balance to equity ratio = total margin loan balance / shareholders’ equity
v. Total short sales amount to equity ratio = total short sales amount / shareholders’ equity

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2020 Annual Report

VI. Financial Information

III. Audit Committee’s Review Report on the Company’s 2020 Financial Statement

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141

President Securities Corporation

IV. Financial Difficulties Experienced by the Company or Its Affiliates in the Most Recent Year or up to the Date of Publication of the Report that will Affect the Company’s Financial Situation: None.

V. Status of the Achievement in Financial Forecasts for the Latest Two Years: Not Applicable.

VI. Methods and Assumptions used for Evaluating Fair Value of Financial Instruments

A. The fair value of short-term financial instruments is evaluated at their book value since the effect of discounting is not significant. This method is applied to cash and cash equivalents, bonds purchased under resale agreements, margin loans receivable, refinancing guaranty deposits, receivable from refinance guaranty, receivables from security lending, security lending deposits, restricted assets, operation deposits, clearing and settlement fund, short-term loans, commercial paper payable, bonds sold under repurchase agreements, deposits on short sales, guarantee deposit received on borrowed securities, short sale proceeds payable, notes and accounts payable, collection for others, other payables (excluding income tax payable) and deposits received.
B. Financial instruments at fair value through profit and loss, when they are traded in active markets, their fair value are based on their quoted prices. If there are no quoted market prices which can be used as benchmarks, evaluating methods will be adopted to measure the fair value. Estimates and assumptions used in evaluating methods adopted by the Group are consistent with those adopted by market participants for financial instrument pricing.

Methods of evaluating fair value of financial instruments are as follows:

Equity Securities: Fair value refers to the closing prices as at the balance sheet. For open-ended funds, fair value refers to the net asset value of the fund as at the balance sheet.
Bonds: Government bonds and corporate bonds are based on the market prices derived from average bond yields published by the Taipei Exchange; foreign bonds are based on the transaction prices from Bloomberg.
Interest rate instruments: For IRS, interest rate quotations of CP with same durations in the same markets in the representative quotation system (e.g. Reuters) are used as reference interest rates. In addition, average bid/offer interest rates at certain point of time daily are used as interest rate parameters. Along with other parameters, they are then used in the valuation models to calculate fair value.
Futures: Closing prices of respective futures exchanges on that day.
Options: Closing prices of the exchanges of the options on that day.
Warrants: Closing prices of the instruments in the listed market.
Convertible Bond Asset Swap: Closing prices of the CB and of underlying shares in the listed exchanges are used as parameters along with others in the valuation model to calculate the fair value.
Structured instruments: Closing prices of underlying instruments or bond yields published by the Taipei Exchange are used as parameters along with others in the valuation models to calculate the fair value.
Other derivatives: For listed derivatives, fair value is based on the quoted prices. For unlisted ones, fair value is based on average bid or offer prices from quotation platforms or other quoted prices.
C. For financial assets at fair value through other comprehensive income, if there are quoted prices in active markets, they are used as their fair value. If there are no quoted prices, a valuation methods are adopted to measure the fair value.

VII. Hedge Accounting Applied to Financial Instruments: Not applicable.

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VII. Financial Status, Operating Results and Risk Management

I. Financial Status

Unit: NT$ thousands

Year Item	Fluctuation	Fluctuation
	Amount	Variance (%)
Current Assets 105,321,883 90,081,974 15,239,909 16.92% Non-Current Assets 8,389,882 5,672,426 2,717,456 47.91%
Total Assets 113,711,765 95,754,400 17,957,365 18.75%
Current Liabilities 84,087,688 68,821,260 15,266,428 22.18% Non-Current Liabilities 144,595 167,368 (22,773) (13.61%)
Total Liabilities 84,232,283 68,988,628 15,243,655 22.10%
Capital Stock 13,998,378 13,723,900 274,478 2.00% Capital Surplus 91,261 91,261 0 0% Retained Earnings 14,483,188 12,362,704 2,120,484 17.15% Other Equity 834,488 521,815 312,673 59.92% Attributable to Parent’s Ownership Interest 29,407,315 26,699,680 2,707,635 10.14% Non-Controlling Interests 72,167 66,092 6,075 9.19%
Total Equity 29,479,482 26,765,772 2,713,710 10.14%
Note: Financial information for the years of above-mentioned (based on IFRS) was audited and certifed by CPAs. (1) Main reasons for material changes in assets, liabilities and shareholders' equity items within the last two years (changes over 20% between the frst and second periods, and the change amount reaches NT$ 10 million), its efects, and future response plans: Non-Current assets increased mainly due to the increase of investments accounted for under the equity method in 2020. Current liabilities increased mainly due to the increase of futures trades’equity in 2020. Other equity items increased mainly due to the increase of unrealized gain from investments in equity instruments at fair value through other comprehensive income in 2020. (2) Main reasons for the changes in the Company's current liabilities over the last two years and in long-term liabilities that mature within a year, its efects, and future response plans: The increase in current liabilities is mainly caused by a increase in the demand for capital that caused accounts payable and other fnancial liabilities-current to increase from the levels in 2019.

II. Analysis of Operating Results

Unit: NT$ thousands

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Year 2020 2019
Item (Note) (Note) Amount Variance (%)
Operating Revenue 9,581,272 7,142,397 2,438,875 34.15%
Operating Expenses 5,974,162 5,080,595 893,567 17.59%
Operating Income 3,607,110 2,061,802 1,545,308 74.95%
Non-Operating Income 375,712 496,006 (120,294) (24.25%)
Income before Tax 3,982,822 2,557,808 1,425,014 55.71%
Income Tax Expense 368,226 183,973 184,253 100.15%
Net Income 3,614,596 2,373,835 1,240,761 52.27%
Other Comprehensive Income
475,346 -124,296 599,642 482.43%
(after Tax)
Total Comprehensive Income 4,089,942 2,249,539 1,840,403 81.81%
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Year 2020 2019
Item (Note) (Note) Amount Variance (%)
Net Income Attributable to
Shareholders of the Parent 3,607,518 2,368,536 1,238,982 52.31%
Non-controlling Interests 7,078 5,299 1,779 33.57%
Comprehensive Income
Attributable to
Shareholders of the Parent 4,080,025 2,244,912 1,835,113 81.75%
Non-controlling Interests 9,917 4,627 5,290 114.33%
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Note: Financial information for the years of above-mentioned (based on IFRS) was audited and certified by CPAs.

Explanation to major variations in the last two years (changes over 20%):

 Operating revenue: Due to the increase in net profit from operating securities and brokerage handling fee revenue in 2020.

 Operating income: Due to the increase in net profit from operating securities and brokerage handling fee revenue in 2020.

Non-operating income: Due to the decrease in other gains and losses in 2020.

 Income before tax: Due to the increase in net profit from operating securities and brokerage handling fee revenue in 2020.

 Income tax expense: Due to the increase in income tax expense in 2020.

Net income: Due to the increase in net profit from operating securities and brokerage handling fee revenue in 2020.

 Other comprehensive income(after Tax): Due to the increase in unrealized gain from investments in equity instruments at fair value through other comprehensive income in 2020.

 Total comprehensive income: Due to the increase in net profit from operating securities and brokerage handling fee revenue in 2020.

 Shareholders of the Parent: Due to the increase in shareholders of the parent in 2020.

 Non-controlling Interests: Due to the increase in non-controlling interests in 2020.

III. Analysis of Cash Flow

A. Cash Flow Analysis for the Current Year

(1) Operating activities: Net cash inflow from operating activities was NT$7,462,460 thousand, which was mainly because of a decrease in FVPL financial assets-current in the same period last year.
(2) Investing activities: Net cash outflow from investing activities was NT$2,714,034 thousand, which was mainly because of an increase in the investments under equity method to acquire the equity of subsidiaries and affiliated companies in the same period last year, leading to the net cash outflow in investing activities increased.
(3) Financing activities: Net cash outlow from financing activities was NT$6,079,607 thousand, which was mainly because of a decrease in commercial papers payable and short-term loans in the current period.

B. Remedy for Cash Deficit and Liquidity Analysis

The Company has maintained a good credit relationship with banks for a long time and maintained mid-and short-term credit lines sufficient to meet the Company’s funding needs.

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Year Item	2019	2020	Variance (%)
Cash Flow Ratio (%)	-	8.87	-
Cash Flow Adequacy Ratio (%)	409.63	459.61	12.2%
Cash Reinvestment Ratio (%)	-	20.81	-
Explanation to major variations: Cash Flow Ratio: The cash fow from main operating activities in 2020 changed from net cash outfow in 2019 to net cash infow, resulting in an increase in the cash fow ratio compared with that in 2019. Cash Reinvestment Ratio: The cash fow from main operating activities in 2020 changed from net cash outfow in 2019 to net cash infow, resulting in an increase in the cash reinvestment ratio compared with that in 2019.

C. Cash Flow Analysis for the Coming Year

Unit: NT$ thousands

Estimated Cash and Cash Equivalents, Beginning of Year (1)	Estimated Net Cash Flow from Operating Activities (2)	Estimated Cash Outfow (Infow) (3)	Cash Surplus (Defcit) (1)+(2)-(3)	Cash Surplus (Defcit) (1)+(2)-(3)	Leverage of Cash Surplus (Defcit)	Leverage of Cash Surplus (Defcit)
					Investment Plans	Financing Plans
5,124,862	1,682,024	2,867,485	3,939,401		-	-

IV. Effects of Major Capital Expenditures in the Most Recent Fiscal Year on Financial Operations: Not Applicable.

V. Long-term Investment Policy

In 2020, the company’s domestic reinvestment operations generated healthy profits. Each subsidiary’s operations will still be subject to strict risk control with timely stop-loss and stop-gain orders, so as to reduce risk and maintain steady development.

As for our present direct investment policy, we consider all areas of business currently permitted by Taiwan’s regulators and look for effective cross-selling strategies and other possible synergies, with the overall aim of best leveraging all of the company’s resources. Looking to the coming year, we expect regulators to again open up many new areas of business. We will expand into these new business areas, develop and promote new financial products. In particular, we are looking to Hong Kong and the PRC as key areas of expansion to bolster our presence in international financial services and our cross-strait business, including the joint venture securities company that was approved by the China Securities Regulatory Commission (CSRC) on February 17, 2020. The capital injection has been completed for the second quarter of 2020 and the business was officially up and running by the third quarter 2020. The initial business scope includes securities brokerage, dealer business, securities underwriting, and sponsorship business. After these businesses have completed their launch and can operate at scale, they are expected to generate considerable profits from the large PRC securities market.

The profitability of each investment in 2020 is detailed in VIII. Other Disclosures-Operational Highlights of Affiliated Companies.

VI. Analysis of Risk Management

A. The Company’s risk management policies, organizational structure, measurement standards, as well as the impact of various risks and response measures

1. Risk Management Policies

(1) In order to ensure that we have a solid an effective risk management system in place, our system has been developed so as to encompass all of our business areas. Then, with appropriate risk tolerance levels in place, create value for the company, and achieve our return on asset targets.
(2) By constructing risk controls for each individual business area, we are able to achieve a measured approach to risk management. Accordingly, each department is assigned risk parameters based on its respective responsibilities, thereby achieving layered yet comprehensive risk management.

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(3) The company’s risk management measures take into account the following forms of risk, market risk, credit risk, liquidity risk, operational risk, legal risk, and model risk.

2. Related Risk Management System Architecture

(1) Board of Directors: Audits the company’s risk management policy, supervises sales business strategies, approves all business proposals and trading permissions, and is ultimately responsible for risk management.
(2) Risk Management Committee: Established by the Board of Directors tasked with integrating all risk management operations, with supervising and assisting all the various risk management and related operations. The committee is also tasked with setting the various risk authorities, limits, and targets, for a centralized supervision of the status of all of the company’s risk management efforts.
(3) President Office: Supervises the daily implementation of all of the company’s risk management operations and authorizes any exceptions to the risk management protocols.
(4) Assets & Liabilities Management Committee: Controls the company’s overall asset structure, sets limits for different businesses, collects and analyzes domestic and international interest rates, exchange rates, and economic changes.
(5) Risk Control Office: Is responsible for the drafting of risk policies and regulations, for monitoring market and credit risks, for monitoring liquidity risks, for compiling data on operational risk control and management, for constructing and maintaining the risk management system, for implementation of risk management systems and for ensuring company-wide regulatory compliance.
(6) Auditing Office: Audits operations risk controls, audits the standards for risk controls systems, puts in place internal auditing controls, and implements daily check routines.
(7) Compliance Division: Implements legal risk controls and ensures that all businesses and risk management operations are in compliance with relevant laws and regulations. Compliance Division concurrently is responsible for anti-money laundering and counter-terrorist financing, developing relevant regulations and systems, monitoring internal control and transactions, supervising the implementation by business units, holding training sessions, and reporting cases suspicious of money laundering.
(8) Finance Department: Monitors capital adequacy rates and liquidity risk, and analyzes the company’s asset/liability structure and other key financial ratios.
(9) Business units: Based on the company’s risk management policies and regulations sets risk management guidelines for various businesses, and produces a report on abnormal risk items for the Risk Control Office.
(10) Settlement & Clearing Department: Implementation of risk control and management for settlement, clearing, and short-sale business operations. Implementation of risk management and business department risk management for transactions.

3. Risk Evaluation Standards

The company has set risk management principles. In order to ensure that all of our organizations businesses adhere to our operating policies, operating goals, and capital levels, we must set suitability evaluation policies that can react to changes in our business and in the market:

Market Risk Evaluation
(1) We use RiskMetrics market risk management system to manage our company’s exposure to market risk. In addition to producing daily risk value tables, we perform simulation analysis and historical analysis to supplement missing risk values.
(2) We evaluate the completeness of the evaluation models on different business areas, and evaluate the assumptions, parameters, and data for various product models, and then test if the models for the various products are reasonable.

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(3) We evaluate the effectiveness of risk control models, and regularly perform Back Testing to ensure the reasonableness of the models used.
Credit Risk Evaluation
(1) Our company undergoes credit rating evaluations from Moody’s, Standard & Poor’s, Fitch, Taiwan Ratings Corp., and Taiwan Corporate Credit Risk Index, TCRI)
(2) Trading counter-partner credit risk: We assess our company’s maximum exposure in the event that the counterparty defaults, and use maximum exposure limits set by the board of directors in determining the credit risk of a trading counterparty.
(3) Issuer’s Credit Risk: We use KMV models to perform an internal evaluation, and combine that with financial data and stock price data, to calculate a probability of default. Based on these measurements, we then develop an internal evaluation, Z-Score model, to control the external credit risk gaps from issuers and augment.
Operational Risk Evaluation
(1) Operational risks refer to risks of damage caused by internal operations, inappropriate actions or errors of personnel or systems, or external incidents. The definition includes legal risks but does not include risks in strategies and reputation.
(2) We create operations risk policies handbooks that encompass each level of operations.
(3) Ensure the appropriate measurement, disclosure, and control of the operating quality based on risk assessment reports and auditing reports.

4. Risk Factors and Corresponding Responses

(1) Management Crisis Risk refers to significant market changes, a lack of access to capital, or significant losses from direct investments, which affect a company’s operations and cause losses.

Response: We have implemented a “Management Crisis Response Policy” that clearly lays out what steps should be followed in the event of a serious crisis so as to ensure normal operation of the company.

(2) Market risk refers to dramatic changes in pricing or volatility in interest rates, equities, or foreign exchange rate that can result in serious losses to open positions.

Response: We will attempt to lessen the impact of such market risks through prudent business analysis, product analysis, and process analysis, so as to clearly identify sources of market risk. Based on this, we then set effective management controls; we monitor investment position risk levels, risk structure, and risk changes to ensure that they are all in line with our forecasts.

(3) Credit risk refers to the exposure for underwriters for the terms and conditions of the securities that underwrite and for losses that may result from a counterparty being unable to fulfill its obligations to the security.

Response: In an effort to shield ourselves from potential credit risk, we conduct extensive credit risk evaluations prior to a deal being executed and then conduct repeated evaluations after the deal has been executed. Based on these evaluations and a maximum credit exposure scenario for the counterparty in question, we set credit risk limits for that counterparty. In evaluating the risk to the underwriter for debtrelated securities, we look not only at the TCRI rating, but also at default rates based on KMV models.

(4) Operational risk refers to the risk created when internal processes, employees, or systems are inappropriate or cause errors, or the risks caused by external factors. This type of risk is related to legal risks but not strategic risk or credit risk.

Response: In order to reduce the probability of such operation risk occurring, we have created an operating manual that addresses every level of our operations, we perform regular audits of every business segment, as well as every work flow, every legal risk point, and every risk control point. Finally, we compile an audited risk report that helps us to ensure that our operating quality is properly balanced, controlled, and disclosed.

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(5) Legal/Regulatory risk refers risk related to non-compliance with laws and regulations governing our investment strategies and our business operations, and any resulting corrective orders or penalties from relevant authorities, or any civil or criminal actions taken against us. It also refers to risk related to our inability to perform our obligations under agreements that we have entered into with other parties.

Response: In order to reduce our exposure to legal/regulatory risks, we have created a Compliance Division and Legal Matters Department.

Compliance Division ensures that all businesses and risk management operations are in compliance with relevant laws and regulations.
Legal Matters Department implements legal risk controls.
(6) Liquidity risk refers to position liquidity risks and capital liquidity risks. Sometimes losses can be suffered as a result of illiquid markets that make it difficult to open or close a position at normal market prices requiring that a position be either bought at a premium or sold at a discount. Capital liquidity risks result when positions are increased beyond planned levels, leaving the company with insufficient funds to meet settlement requirements for a position.

Response: In an effort to better manage liquidity risks, we have created centralized risk management standards that take into consideration all departments and that set position limits for each department. We also have a team that performs daily forecasts of capital requirements based on the needs of all company guarantees and service loans, and then monitors daily capital adjustments accordingly. We also produce a monthly “Capital Liquidity Risk Simulation Analysis Table” that analyzes multiple scenarios, forecasts the potential liquidity risks for those scenarios, and estimates the capital levels that each such scenario would require.

(7) Model risk refers to potential situations where market values and other variables are beyond normal and predictable conditions and therefore exceed the ability of the model to handle.

Response: We effectively maintain and manage our models with particular emphasis on financial product risk management. We have created a set of “Model Us Management Procedures” that clearly spell out procedures for developing models, for validating models, for managing variables, and for discontinuing the use of problem models.

B. An Evaluation of Key Risks

1. Effects of recent interest rates, foreign exchange rate fluctuations, and inflation concerns on our company and our strategies for dealing with these concerns.

(1) Interest rate: Changes in interest rates have a direct impact on the income we derive from our fixed income-related businesses. In addition to conducting our own thorough research on domestic and foreign interest rate trends, we utilize various interest rate derivative tools as well a risk control system that manages our interest rate-related risks, that creates an effective interest rate hedging system for our fixed income-related businesses. Changes in interest rates also affect our company’s financing costs. Going forward, we intend to utilize interest rate hedging and other capital raising avenues as ways to control our company’s financing costs.
i. Bond and Interest Derivative Product Business: The amount of our company’s major interest products At March 31, 2021, and the likely loss of NT$237,160 thousand due to the 1% interest rate change (as show in the following table).

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Unit: NT$ thousands

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----- Start of picture text -----

Profit/loss based on
Item Amount 1% Interest rate
change
Government bond 762,504 -980
Corporate bond 958,690 -185
Bank debentures 201,142 -591
International bond 2,048,329 -11,782
Foreign bond 9,303,884 -223,622
Total 13,274,549 -237,160
----- End of picture text -----

Countermeasures: Our Company has risk management rules and operational procedures on government bond, corporate bond, bank debentures, foreign/international bond. Our company has put the interest risk under good control by pre-purchase assessment and risk control afterward.

ii. Borrowing: The main risk of borrowing is the fluctuation of interest rate. Our company can adjust methods, conditions and terms of borrowing according to the likely interest changing trend. We can also avert risks through the product of interest exchange etc. Our total debt amount of short-term borrowing and payable short-term bill totals NT$15.047 billion on the end of 2021 Q1. They are both borrowing with interest rate risks. With every 1bp change in market interest rate, our company has to pay NT$150.47 thousand more interest every year.
Countermeasures: Looking at a potential rise in interest rates, we will keep a close watch on the markets and on business demands and will make adjustments to our positions accordingly.In December 2020, the Central Bank’s joint meeting of directors and supervisors resolved to maintain the current interest rate policy as the major economies of the world still maintained their loose monetary policies and continued to implement large-scale relief and economic stimulus programs. The global economy continued to recover slowly, while uncertain risks still existed in the domestic and international economic and financial situations. The domestic economy of Taiwan is expected to continue to grow moderately next year; current prices were rebounding and the inflation outlook for the next year was moderate.Three rates, the Central Bank’s rediscount rate, the rate on facilities with collateral, and rate on facilities without collateral, were 1.375%, 1.75%, and 3.625% per annum, respectively. It is expected that interest rates will remain stable over the coming year and that our Company’s risks related to the changes of the rates will remain low.
(2) Exchange rate: The Company’s principal business targets and place of business are domestic; hence the impact of currency fluctuations is minimal. Potential foreign exchange risks include not just that arising from the par of exchange for foreign currency assets, but also that from foreign currency investment with respect to foreign reinvested or reinvested companies (when future earnings are repatriated or disposed). Whenever the company invests in foreign currency assets, FX swaps will always be in place to avoid foreign exchange risk. Since its overseas subsidiaries are running perpetual operations, the impact of exchange rate movements on long-term equity investments is limited to the changes to book value and does not affect profits and losses.

At March 31, 2021, the company’s main exchange rate product positions, and 1% exchange rates fluctuation may result in a loss of NT$273,533 thousand (as show in the following table).

Unit: NT$ thousands

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----- Start of picture text -----

Loss resulted by 1% exchange
Item Position rates fluctuation
Foreign Stock 1,448,546 -38,129
International Bond 2,048,329 -11,782
Foreign Bond 9,303,884 -223,622
Total 12,800,759 -273,533
----- End of picture text -----

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Countermeasures: Our Company’s transactions of foreign stock, international bond, and foreign bond have risk management and standard operating process. The business above was lower the risk of exchange rate by trading foreign exchange swap.

(3) Inflation: The CPI growth rate in the first quarter of 2021 was 0.82%, which had no meaningful effect on operations or on profits.

2. Recent High-Risk or High-Leverage Investments, Loans to Third Parties, Pledges Given for Third Parties, Derivative Products Trading Policy and Profitability and Losses, Reasons for Losses and Strategies for Correcting Such Losses Going Forward.

(1) In 2021Q1, we did not engage in any high-risk or highly-leveraged investments, did not provide any loans to third parties, and did not provide any pledge for any third parties.
(2) We only trade those derivative products which have been approved by the relevant authorities and which are permitted by our company’s Articles of Incorporation. We have also created and followed a “Code of Over-the-Counter Trading of Derivative Financial Products” in an effort to further reduce our exposure to related risk.

3. Future Development Plans and Expected R&D Investments.

To assist with our development of ever-better products and trading strategies, we have assembled a professional financial engineering team, which brings together experts from finance, statistics, mathematics, and information technology, to create trading and valuation software and hardware resources. Our annual spending on human resources and R&D in this area is in the millions of dollars every year. Please see Chapter 5 for more information on the status of our operations and on our R&D efforts.

4. Effects of Significant Policy and Legal Changes both in Taiwan and Abroad and Measure for Dealing with These Issues.

We are constantly on watch for significant policy and legal changes both inside Taiwan and abroad and, to that end, routinely enlists the help of professional legal and accounting firms to assist in evaluating these changes, to help create effective responses to these changes, and to ensure compliance with these changes, thereby working to reduce the effects of policy and legal changes on our business. In recent years, we have been quite effective in adjusting to policy and legal changes both within and beyond Taiwan and, thus, our overall solid financial health has seen little impact from such changes.

On September 8, 2020, the Financial Supervisory Commission issued Order Jin-Guan-Zeng-Quan No. 1090364100 regarding amendments to the Regulations Governing Securities Firms Accepting Orders to Trade Foreign Securities; as such, qualified securities firms are permitted to provide high-asset customers with brokerage trading service for foreign securities with loosened regulations to meet the needs of high-asset customers for investment and wealth management. The Company will evaluate the current business opportunities and apply to the competent authority for permits as needed.
On September 10, 2020, the Financial Supervisory Commission issued Order Jin-Guan-Zeng-Quan No. 10903641007 regarding amendments to the Directions for the Conduct of Wealth Management Business by Securities Firms; as such, qualified securities firms are permitted to provide high-asset customers with wealth management services in a trust model. The application of high-asset customers' trust property to products, such as offshore structured products and foreign bonds, will be deregulated. The Company will evaluate the current business opportunities and apply to the competent authority for permits as needed.
On September 10, 2020, the Financial Supervisory Commission issued Order Jin-Guan-Zeng-Quan No. 10903641201 to permit qualified securities firms to engage in proprietary trading with high-asset

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customers and to trade offshore structured products that meet certain regulations. The Company will evaluate the current business opportunities and apply to the competent authority for permits as needed.

On September 10, 2020, the Financial Supervisory Commission issued Order Jin-Guan-Zeng-Quan No. 10903641202 for the deregulation to permit securities firms to provide endorsements/guarantees to overseas subsidiaries, in which they hold at least 50% of the outstanding shares. The Company has amended internal regulations in accordance with the regulations.
On October 15, 2020, the Financial Supervisory Commission issued Order Jin-Guan-Zeng-Quan No. 1090143575 to permit securities firms to launch securities lending businesses, in which they can accept six foreign currencies, including U.S. dollars, as collateral from overseas ethnic-Chinese and foreigners to increase business flexibility. The Company has conducted this type of business in accordance with the regulations.
On October 22, 2020, the Financial Supervisory Commission issued Order Jin-Guan-Zeng-Quan No. 1090363892 to permit securities firms to purchase shares that the publicly listed companies on Taiwan Stock Exchange/Taipei Exchange issue before an IPO and before they are sold by means of auctions. The Company will participate in auctions of IPO stocks in accordance with the regulations.
On October 29, 2020, the Financial Supervisory Commission issued Order Jin-Guan-Zeng-Quan No. 1090364783 regarding amendments to Article 21 of the Regulations Governing Securities Firms, which clearly stipulates that the financial statements of securities firms are to be submitted to the board of directors and shall be signed or stamped by the chairperson of the board, the manager, and the accounting manager. The distribution of earnings or compensation for losses shall be handled in accordance with the financial statements audited and certified by independent accountants. The company handles relevant matters in accordance with the regulations.

5. Effects of Industry Changes and Technological Changes and Measures for Dealing with These Changes.

In response to the changing financial and technological environment, the Company shall create a diversified, fast, stable, and secure electronic ordering platform as a top development priority. In the pursuit of this goal, the Company shall continue to promote system upgrades and development to steadily increase the ratio of the Company’s electronic orders in the coming years.

In view of the phenomenal growth in the use of mobile devices in the Internet generation, the role of securities dealers is bound to be transformed from a purely “broker and platform” to a “digital business” supported by FinTech and AI. Therefore, the Company has set up the “Digital Financial Division” and transformed the physical branches on a trial basis to integrate the virtual and physical channels, so as to promote the digitalization and paperless operations of business procedures. It is planned to gradually complete the online digital services starting from electronic trading in the directions of diverting customer flows, differentiation, and customized services. In addition, the internal operations will be improved to expand the introduction of electronic procedures to enhance efficiency and provide customers with safe and efficient trading platforms.

In response to the increasing trend of placing orders via mobile devices and customized trading in the overall market, customers are provided with the all-round app of the digital integrated financial investment service platform with the app interface adjusted according to customer feedback. In addition, in response to the FSC’s requirements for strengthening information security in the financial market, the Company will continue to use existing information security management regulations (ISO-27001),

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internal auditing and periodic reviews by third-party certification institutions to enhance the management system. The Company shall also invest specific amounts in the annual budget on the enhancement of the protection of the information security framework.

The Company has arranged third parties to conduct tests on the information security operations center (SOC), dual ISP backup architecture, and periodic joint prevention tests. Disaster Recovery server room evaluation, support code inspection, VPN overall recording, WAF system implementation, and APP lab inspection have been completed.The goal is to increase the stability of the information system and prevent risks in external information security attacks in order to achieve the goal of fair transactions with investors and create wealth with customers.

6. Significant Impairment of Corporate Image and Measures for Dealing with that Damage.

Our company has a core philosophy of “Good Quality, Good Credibility, Good Service and Fair Prices”. This is combined with the concept of “Professional Leadership, Kind Service”. the Company has been a long-standing supporter of important social charitable activities and devoted to fulfill corporate social responsibility. Since the date of the establishment, the Company has no negative corporate image issues to report.

7. Expected effect of acquisition and the possible risk: None.

8. Expected effect and possible risk of expanding business locations and the countermeasures: None.

9. Expected effect and possible risk of excessive concentration of purchasing sources and excessive customer concentration: Not Applicable.

10. Effects of, Risks Relating to and Response to Large Share Transfers or Changes in Shareholdings by Directors, Supervisors, or Shareholders with Shareholdings of over 10%: None.

11. Effects of, Risks Relating to and Response to the Changes in Management Rights: None.

12. Litigation or Non-litigation Matters

(1) Major lawsuits, non-contentious matters or administrative procedures with a determined court ruling or that are still pending, that may significantly affect the shareholders’ equity or the stock price of the Company (over the previous two years and up to the time that this annual report was published):

==> picture [492 x 244] intentionally omitted <==

----- Start of picture text -----

Parties involved in Amount
The major claims Date The current progress Remark
major lawsuits (Unit:NT$)
The plaintiff Wang, ○-Cheng (did not Plaintiff: Wang, ○-Cheng 2010.7 The court ruled in the 9,007,179 After the
open an account at a branch and traded stocks) claimed that he borrowed a Defendant: Chu, ○-Jung, trial of 2nd instance of the case that the evaluation
PSC of this case,
customer account from 2004 through Company was not
2008 and entrusted business clerk Chu, liable for paying any the case has
○-Jung at the Tucheng Branch to buy compensation, and no material
and sell stocks. However, Chu, ○-Jung the plaintiff refused to
impact on the
sold the stocks in the account secretly accept the ruling and
and expropriated the proceeds from the filed an appeal; the high shareholders'
stocks. In addition, due to Chu, ○-Jung's court remanded the case equity of the
fraud, Wang, ○-Cheng was required to
to the supreme court Company or
pay a guarantee deposit and suffered
loss; thus, he claimed that the Company for examination.The the price of
shall be jointly liable for the indemnity Company has appointed securities.
and filed this lawsuit. an attorney to file an
answer in accordance
with the law.
----- End of picture text -----

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----- Start of picture text -----

Parties involved in Amount
The major claims Date The current progress Remark
major lawsuits (Unit:NT$)
The Trade-Van Information Services Plaintiff:The Trade-Van 2020.7 This case is first heard 10,000,000 After the
Co. claimed that there was damage Information Services at the Taiwan Taipei evaluation
to the delivery of ballots for its 2020 Co. District Court, and of this case,
shareholders' meeting, and filed a civil Defendant: the Company has the case has
lawsuit against the Company and its chou, ○-hung 、 appointed an attorney no material
employees to demand joint liability and Gong, ○-Da、 to file an answer in impact on the
compensation. Chen, ○-Hua、 accordance with the shareholders'
Lin, ○-Siou、 law. equity of the
PSC Company or
the price of
securities.
The plaintiffs Huang Hsiang-○ Plaintiffs: 2020.11 This case was 328,133 After the
and Huang Ching-○ applied for Huang Hsiang-○、 concluded by the evaluation
the transfer of ○○ stocks under the Huang Ching-○ Taiwan Taipei District of this case,
name of the successor, but failed to Defendant: PSC Court on February 26, the case has
submit the national identity cards of 2021, and the ruling no material
"all inheritors" or the seal certificate of the first instance impact on the
issued by the household registration was that the Company shareholders'
office in accordance with Article 24 shall transfer the ○ ○ equity of the
of the Regulations Governing the stocks under the name Company or
Administration of Shareholder Services of the successor to the the price of
of Public Companies; as a result, plaintiffs. securities.
the transfer could not be completed.
Therefore, they filed a civil lawsuit
against the Company to request the
Company to complete the transfer of
inheritance.
----- End of picture text -----

(2) Any Company director, supervisor, manager, responsible person, or company shareholder holding more than 10% of the company’s shares that is involved in any judgments already handed down or any ongoing litigation, non-litigation, or administrative action over the previous two years up to the time that this annual report was published, the potential effects on shareholder rights and on the company’s share price, the key facts of the dispute, dollar values involved, the date that the litigation was initiated, the key parties involved, and the current status of said litigation(s): None.
(3) Any company director, supervisor, manager, responsible person, or company shareholder holding more than 10% of the company’s shares that has been found in violation of Article 157 of the Securities and Exchange Act over the previous two-year period and up to the time that this annual report was published, and the current status of any related action taken or being taken against that person:

The Company claimed for the disgorgement (NT$ 420 for price spread and 11 for interest, NT$ 431 in total) from a manager whose last name is Lee in accordance to article 157 of the Securities and Exchange Act on December 11, 2019. And informed Securities and Futures Investors Protection Center on December 12, 2019.

13. Other Important Risks:

(1) In response to the Personal Information Protection Act, our company will continue to enforce the consciousness of the importance and the legal risk of personal information processing, money laundry preventing, and financial consumer protection.
(2) Impact of information system damage on the Company’s financial operations and response measures:

The increasingly frequent security attacks may cause disruption to business operations and in turn affect business revenue and damage the corporate image. President Securities Corporation has begun to import

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President Securities Corporation

the Information Security Management System (ISMS) since 2013, and obtained ISO 27001 certification on August 23, 2013 and continued to maintain the validity of the certification. The information security governance has been gradually developed and implemented, with the strict requirements of various information security standards.

In view of the increasing threat of cyberattacks recently, in order to ensure that computer systems have certain security protection capabilities, it is necessary to upgrade the protection capabilities in each aspect from computer facilities, servers and hosts, user equipment, the internet all the way to e-mail, so as to implement control measures in the technical and management aspects and improve and enhance the security protection capabilities of the internet and information systems. In addition to completing the revision and formulation of relevant information security management regulations, the security updates and version upgrades of relevant equipment will be completed gradually. Furthermore, external units are invited to conduct independent inspection, tests, and assessment to identify potential information security risks early.

This year, the information security response speed of relevant units was also strengthened through exercises. The information security response strengthening exercises are as follows:

Social Engineering Exercises for Prevention of Malicious Email
The application system disaster recovery has switched to practice activities.
Distributed Denial-of-Service (DDoS) Attack and Defense Exercises
2020 Financial Supervisory Commission and Its Affiliated Institutions (Organizations) Annual Financial Security Notification Exercises
Information Security and Checkup Assessment
The ultimate goal of hierarchical security protection in the securities and futures industry is to strengthen information security awareness and arrange information security education and training, which includes:
-Information on security incidents and sharing of security concepts
-Personal computer use and daily security operations
-Information security skills training and information security concepts
-Mail security and prevention of social engineering

It aims to improve the security, reliability, availability of information systems and reduce the risks that relevant information security incidents may pose to the Company’s finance.

VII. Other significant events: None.

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2020 Annual Report

VIII. Other Disclosures

VIII. Other Disclosures

I. Consolidated Business Report of Affiliated Companies, Consolidated Financial Statements of Affiliated Companies, and Reports of Affiliation

A. Summary of Affiliated Companies

1. Affiliated Companies Chart

==> picture [461 x 112] intentionally omitted <==

----- Start of picture text -----

PRESIDENT SECURITIES CORPORATION
Shareholding Shareholding Shareholding Shareholding Shareholding Shareholding Shareholding Shareholding
100% 100% 96.69% 100% 100% 100% 100% 100%
Insurance President PSC Venture President President Capital President Securities President Securities PresidentWealth President
Agency Capital Investment Company Limited Futures Co., Ltd Management (Hong Kong) Limited Nominee Limited Management Securities (BVI)Limited
Co., Ltd. Corp. (Hong Kong) Limited
----- End of picture text -----

2. Basic Information of Affiliates

As of April 30, 2021

Company	Established Date	Address	Currency	Paid-in Capital (in thousands)	Main Business
President Futures Co., Ltd 1994.03.01 B1.,No.8, Dongxing Rd., Taipei City NTD 660,000 Futures and brokerage
President Capital Management Corp. 1997.04.15 3F.,No.8, Dongxing Rd., Taipei City NTD 300,000 Securities investment and consulting
President Securities (Hong Kong) Limited 1994.07.26 Unit 2603-6,26/F., Infnitus Plaza ,199 Des Voeux Road, Central , Hong Kong HKD 192,600 Securities proprietary, brokerage, underwriting ,and consulting
President Securities (BVI) Limited (Note) 1998.02.26 Unit 2603-6,26/F., Infnitus Plaza ,199 Des Voeux Road, Central , Hong Kong USD 67,746 Securities investment and holding company (Note)
President Securities Nominee Limited 1999.08.06 Unit 2603-6,26/F., Infnitus Plaza ,199 Des Voeux Road, Central , Hong Kong HKD 1,000 Nominee service
President Wealth Management (Hong Kong) Limited 2002.03.31 Unit 2603-6,26/F., Infnitus Plaza ,199 Des Voeux Road, Central , Hong Kong HKD 23,400 Wealth management
President Insurance Agency Co., Ltd. 2008.04.29 7F.,No.8, Dongxing Rd., Taipei City NTD 10,000 Insurance agent
PSC Venture Capital Investment Company Limited 2013.10.29 2F.,No.8, Dongxing Rd., Taipei City NTD 300,000 Consultation of investment management and venture capital; other unprohibited or unrestricted businesses beyond the permit

Note : President Securities (BVI) Limited was approved by the board of directors to deal with the dissolution and liquidation matters. The liquidation process is currently in progress.

155

President Securities Corporation

3. Rosters of Directors, Supervisors, and Presidents of PSC’s Subsidiaries

As of April 30, 2021

==> picture [465 x 685] intentionally omitted <==

----- Start of picture text -----

Holding Shares
Company Title Representative
Shares Shareholding Ratio
Chairman Han, Li-Chun
Director & President Huang, Yi-Ming
PSC holds
Director Lin, Kuan-Chen 96.69%
63,817,303 shares
Director Lin, Jung-Hui
President Futures Co., Ltd
Director Tsai, Sen-Bu
Supervisor Yang, Ya-Ting 0 0%
PIDC holds
Supervisor Lin, Chiun-Ya 1.00%
660,000 shares
Chairman & President Li, Fang-Kuo
President Capital Management Director Huang, Tseng-Hui PSC holds
100%
Corp. Director Wu, Fang-Ling 30,000,000 shares
Supervisor Pan, Lung-Ching
Director Lin, Kuan-Chen
Director & President Ma, Chun-Wah
President Securities (Hong PSC holds
Director An, Chi-Li 100%
Kong) Limited 192,600,000 shares
Director Tsai, Sen-Bu
Director Lu, Fang-Jun
Director Lin, Kuan-Chen
President Securities (BVI) Director & President Ma, Chun-Wah PSC holds
100%
Limited Director An, Chi-Li 67,746,000 shares
Director Tsai, Sen-Bu
Director Lin, Kuan-Chen
President Securities Nominee Director & President Ma, Chun-Wah PSC holds
100%
Limited Director An, Chi-Li 1,000,000 shares
Director Tsai, Sen-Bu
Director Lin, Kuan-Chen
President Wealth Management Director & President Ma, Chun-Wah PSC holds
100%
(Hong Kong) Limited Director An, Chi-Li 23,400,000 shares
Director Tsai, Sen-Bu
Chairman Lee, Wen-Sheng
President Insurance Agency Co., Director Yu, Hung-Chieh PSC holds
100%
Ltd. Director & President Lu, Hsiang-Chung 1,000,000 shares
Supervisor An, Chi-Li
Chairman Kuo, Li-Yun
PSC Venture Capital Investment Director & President Lu, Mu-Sheng PSC holds
100%
Company Limited Director Hou, James 30,000,000 shares
Supervisor Huang, Ya-Ping
----- End of picture text -----

156

2020 Annual Report

VIII. Other Disclosures

4. Operational Highlights of Affiliated Companies

==> picture [485 x 441] intentionally omitted <==

----- Start of picture text -----

As of December 31, 2020 Unit: thousands
Net
Total Total Total Operating Operating EPS
Company Currency Capital Income
Assets Liabilities Equity Revenue Income ($)
(Loss)
President
Futures Co., NTD 660,000 26,291,593 24,117,689 2,173,904 944,414 89,600 214,024 3.24
Ltd
President
Capital
NTD 300,000 360,987 40,895 320,092 70,759 (3,769) (2,095) (0.07)
Management
Corp.
President
Insurance
NTD 10,000 43,671 13,981 29,690 45,243 7,193 9,489 9.49
Agency Co.,
Ltd.
PSC Venture
Capital
Investment NTD 300,000 246,707 4,572 242,135 2,331 (6,716) (6,411) (0.21)
Company
Limited
President
Securities
HKD 192,600 781,075 410,092 370,983 39,352 6,123 5,529 0.03
(Hong Kong)
Limited
President
Securities
HKD 1,000 472 17 455 0 (24) (19) (0.019)
Nominee
Limited
President
Wealth
Management HKD 23,400 15,267 20 15,247 0 (41) 95 0.004
(Hong Kong)
Limited
President
Securities
USD 67,746 0 0 0 0 (25) (25) 0.00
(BVI)
Limited
----- End of picture text -----

Note: Foreign exchange rates:

USD/NTD (end of 2020) =28.4800 USD/NTD (2020 average) =29.5325 HKD/NTD (end of 2020) =3.6730 HKD/NTD (2020 average) =3.8074

B. Consolidated Financial Statements of Affiliated Companies

In 2020, in accordance with Article 33 of 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, the companies that shall be included in the preparation of the consolidated financial statements of affiliated companies were the same as the companies that shall be included in the consolidated financial statements of the parent company and subsidiaries in accordance with the International Financial Reporting Standards No. 10. Please refer to the Financial Statement of Chapter Six Financial Overview V. The Consolidated Financial Statements of the Parent Company and Subsidiaries Certified by the CPAs for the Year of 2020.

C. Reports of Affiliation

Since the Company is a controlling company, it does not need to prepare such reports.

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President Securities Corporation

II. In the most recent year up to the publication date of this annual report, as for the private placement of marketable securities, the quantity approved by the shareholders’ meeting or the Board of Directors and the approval date, the basis for price determination and the reasonableness, the specific person selection method, and necessary reasons for the private placement shall be disclosed: None.

III. Holding or disposal of the company’s shares by the subsidiaries in the most recent year up to the publication date of this annual report: None.

IV. Other Necessary Supplement

A. KPI Performance Indicator

1. Capital Adequacy Ratio

Within the securities industry, a company’s capital adequacy rate is viewed as a key performance indicator. Many BIS regulations require that a securities firm has a minimum capital adequacy rate of 200% in order to be permitted to operate in many key business areas. As such, this level can be seen as an important benchmark in evaluating a securities firm’s business performance and risk management measures. As of March 2021, our capital adequacy rate stood at 341%, well above this key 200% level.

2. Market Share Rate

Market share of various business could be used for performance indicators. It could represent company’s weighted market share and perceptive of future trend, which help to analyze management performance. Our company’s Brokerage market share was 3.23% in 2020, ranked the 9th among top 10 competitors. Average single branch market share was 0.10%, ranked the 3rd among top 10 competitors. Compared with other securities firms, our performance was more efficient and competitive. Currently our company continues to build comprehensive and personalized information platform to improve stability of electronic transactions and orders, train sales with multiple financial ability, hoping to create more profit for customers and company.

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2020 Annual Report

IX. Occurrences of items that may give rises to substantial impact on shareholders’ interests and/or stock price as defined in NO.3-2 Article 36 of Securities and Exchange Law in the latest fiscal year including the days counting to the publication of the annual reports: None.

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President Securities Corporation

X. Financial Statements

PRESIDENT SECURITIES CORPORATION

PARENT COMPANY ONLY FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’

REPORT

DECEMBER 31, 2020 AND 2019

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

160

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR20003739

To the Board of Directors and Shareholders of President Securities Corporation

Opinion

We have audited the accompanying parent company only balance sheets of President Securities Corporation as at December 31, 2020 and 2019, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of President Securities Corporation as at December 31, 2020 and 2019, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Firms and Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants.

Basis for opinion

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. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the parent company only financial statements section of our report. We are independent of President Securities Corporation in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the parent company’s 2020 only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

161

The key audit matters of the parent company’s 2020 only financial statements are stated as follows: Fair value measurement of unlisted stocks without active market

Description

Please refer to Note 4(7) for the accounting policies on unlisted stocks without active market (shown as “financial assets at fair value through other comprehensive income”) and Note 5(2) for details of significant judgements, estimates and assumption uncertainty. As at December 31, 2020, the unlisted stocks without active market held by the President Securities Corporation totaled 186,334 thousand New Taiwan Dollars and were shown as “financial assets at fair value through other comprehensive income” (Level 3 fair value).

Due to the lack of an active market, the fair value of the unlisted stocks held by the President Securities Corporation was determined using valuation method. Management measured its fair value by using comparable listed companies in market approach. The main assumption of market approach is calculating based on the latest published price-book ratio of comparable listed companies in similar industries and considering discounts on market liquidity or risk particularity.

Above-mentioned estimation of fair value involves various assumptions and material unobservable inputs, which has high uncertainty and relies on the subjective judgment of management. Any changes in judgements and estimates may affect the ultimate result of accounting estimates and have an impact on the financial statements of the President Securities Corporation. Thus, we have included the fair value measurement of unlisted stocks without active market as a key audit matter in our audit. How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

Obtained an understanding and assessed policy documents, internal control system, fair value measurement models and approval processes that are related to fair value measurement of unlisted stock;
Ascertained whether the measurement methods used by the management is commonly used by the industry;
Assessed the reasonableness of parameter of similar companies used by management;
Examined inputs and calculation formulas used in valuation methods and agreed such data to supporting documents.

162

Impairment assessment of investments accounted for under equity method

Description

Please refer to Note 4(13) for accounting policies on investments accounted for under equity method and its impairment, Note 5(2) for the uncertainty of accounting estimates and assumptions applied on asset impairment, and Note 6(10) for details of investments accounted for under equity method.

President Securities Corporation held 42.46% of equity of Uni-President Asset Management Corp. which was accounted for under equity method, and the excess of the carrying amount over the share of the investee company’s net assets is mainly goodwill. As of December 31, 2020, the amount was 602,375 thousand New Taiwan Dollars. Impairment assessment is based on the expected future cash flow of the investee, discounted at an appropriate discount rate, to measure the recoverable amount of the cash generating unit.

The recoverable amount of the investee is based on its expected future cash flows which involve multiple estimates and assumptions on discount rate and financial forecast. These are subjective judgements, have a high degree of uncertainties, and are material to the recoverable amount. Thus we consider the impairment assessment of investments accounted for under the equity method as one of the matters of most significance to our audit.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

1.Obtained the impairment assessment report prepared by an external valuation expert who was commissioned by the management;
2.Assessed the reasonableness of expected future cash flows, discount rate and other significant assumptions applied in the cash flow model; and
3.Inspected valuation model parameters, formula setting and the accuracy of calculation.

163

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statement that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing President Securities Corporation’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate President Securities Corporation or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee, are responsible for overseeing President Securities Corporation’s financial reporting process.

Auditors’ responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the generally accepted auditing standards in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with the generally accepted auditing standards in the Republic of China, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one

resulting from error, as fraud may involve collusion, forgery, intentional omissions,

164

misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of President Securities Corporation’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on President Securities Corporation’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause President Securities Corporation to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within President Securities Corporation to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

165

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Lin, Se-Kai

Independent Auditors

Lo, Chiao-Sen

For and on behalf of PricewaterhouseCoopers, Taiwan March 23, 2021

The accompanying parent company only financial statements are not intended to present the financial position and financial performance 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 parent company only financial statements and Independent Auditors’ report 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 any liability for[the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the ] translation.

166

PRESIDENT SECURITIES CORPORATION PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Assets	December 31, 2020 AMOUNT % `$` `3,507,116` `4` `40,831,878` `45` `353,510` `-` `12,248,272` `14` `51,532` `-` `42,889` `-` `1,288,127` `2` `240,796` `-` `1,007,090` `1` `737` `-` `17,635,068` `19` `4,413` `-` `20,463` `-` `9,518` `-` `2,156,587` `2` `79,397,996` `87` `67,484` `-` `186,334` `-` `7,247,316` `8` `2,270,322` `3` `171,581` `-` `270,503` `1` `94,479` `-` `99,384` `-` `1,044,489` `1` `11,451,892` `13` `$` `90,849,888` `100`	December 31, 2019	December 31, 2019
	AMOUNT `$` `3,507,116` `40,831,878` `353,510` `12,248,272` `51,532` `42,889` `1,288,127` `240,796` `1,007,090` `737` `17,635,068` `4,413` `20,463` `9,518` `2,156,587` `79,397,996` `67,484` `186,334` `7,247,316` `2,270,322` `171,581` `270,503` `94,479` `99,384` `1,044,489` `11,451,892` `$` `90,849,888`	AMOUNT `$` `3,829,651` `43,510,101` `-` `10,024,189` `102,545` `88,759` `517,809` `101,043` `543,171` `697` `11,786,358` `2,615` `18,464` `10,294` `544,924` `71,080,620` `71,296` `157,656` `5,476,748` `2,270,391` `167,514` `272,603` `70,726` `132,198` `985,663` `9,604,795` `$` `80,685,415`	%
110000 Current assets 111100 Cash and cash equivalents 112000 Financial assets at fair value through profit or loss - current 113200 Financial assets at fair value through other comprehensive income - current 114030 Margin loans receivable 114040 Refinancing security deposits 114050 Receivables from refinance guaranty 114060 Receivable of securities business money lending 114090 Receivables from security lending 114100 Security lending deposits 114110 Notes receivable 114130 Accounts receivable 114140 Accounts receivable - related parties 114150 Prepayments 114170 Other receivables 119000 Other current assets 110000 Total current assets 120000 Non-current assets 122000 Financial assets at fair value through profit or loss - non-current 123200 Financial assets at fair value through other comprehensive income - non- current 124100 Investments accounted for under the equity method 125000 Property and equipment, net 125800 Right-of-use assets 126000 Investment property 127000 Intangible assets 128000 Deferred tax assets 129000 Other assets-non-current 120000 Total non-current assets 906001 Total Assets			`5` `54` `-` `12` `-` `-` `1` `-` `1` `-` `14` `-` `-` `-` `1`
			`88`
			`-` `-` `7` `3` `-` `1` `-` `-` `1`
			`12`
			`100`

(Continued)

167

PRESIDENT SECURITIES CORPORATION PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	December 31, 2020 AMOUNT % `$` `578,976` `1` `7,298,896` `8` `2,622,141` `3` `19,096,165` `21` `1,381,470` `2` `1,809,955` `2` `903,852` `1` `28,105` `-` `18,038,119` `20` `332` `-` `1,098,674` `1` `1,975,239` `2` `6,008,310` `7` `324,555` `-` `61,875` `-` `76,474` `-` `61,303,138` `68` `8,627` `-` `103,607` `-` `2,813` `-` `24,388` `-` `139,435` `-` `61,442,573` `68` `13,998,378` `15` `91,261` `-` `3,111,013` `4` `7,600,316` `8` `3,771,859` `4` `834,488` `1` `29,407,315` `32` `$` `90,849,888` `100`	December 31, 2019	December 31, 2019
	AMOUNT `$` `578,976` `7,298,896` `2,622,141` `19,096,165` `1,381,470` `1,809,955` `903,852` `28,105` `18,038,119` `332` `1,098,674` `1,975,239` `6,008,310` `324,555` `61,875` `76,474` `61,303,138` `8,627` `103,607` `2,813` `24,388` `139,435` `61,442,573` `13,998,378` `91,261` `3,111,013` `7,600,316` `3,771,859` `834,488` `29,407,315` `$` `90,849,888`	AMOUNT `$` `2,845,502` `9,596,704` `848,265` `20,956,256` `1,558,717` `1,888,832` `56,004` `633` `11,467,219` `310` `375,582` `1,235,306` `2,743,866` `194,272` `56,963` `12,599` `53,837,030` `4,180` `105,452` `12,148` `26,925` `148,705` `53,985,735` `13,723,900` `91,261` `2,876,769` `7,130,830` `2,355,105` `521,815` `26,699,680` `$` `80,685,415`	%
210000 Current liabilities 211100 Short-term loans 211200 Commercial papers payable 212000 Financial liabilities at fair value through profit or loss - current 214010 Bonds sold under repurchase agreements 214040 Deposits on short sales 214050 Short sale proceeds payable 214070 Guarantee deposit received on borrowed securities 214090 Equity for each customer in the account 214130 Accounts payable 214150 Advance receipts 214160 Collections on behalf of third parties 214170 Other payables 214200 Other financial liabilities - current 214600 Current tax liability 216000 Current lease liabilities 219000 Other current liabilities 210000 Total current liabilities 220000 Non-current liabilities 225100 Non-current provisions 226000 Non-current lease liabilities 228000 Deferred tax liability 229000 Other liabilities-non-current 220000 Total non-current liabilities 906003 Total Liabilities 301000 Capital 301010 Common stock 302000 Capital reserve 304000 Retained earnings 304010 Legal reserve 304020 Special reserve 304040 Unappropriated earnings 305000 Other equity interest 906004 Total equity 906002 Total liabilities and equity			`4` `12` `1` `26` `2` `2` `-` `-` `14` `-` `1` `2` `3` `-` `-` `-`
			`67`
			`-` `-` `-` `-`
			`-`
			`67`
			`17` `-` `3` `9` `3` `1`
			`33`
			`100`

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

168

PRESIDENT SECURITIES CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except earnings per share)

Items Year ended December 31
2020
2019
Notes
AMOUNT
%
AMOUNT
%
6(28)
$
2,465,522
29
$
1,528,416
25
6(29)
76,506
1
62,811
1
22,312
-
22,192
-
6(30)
3,351,750
40
2,833,461
45
77,732
1
75,832
1
6(31)
1,052,595
12
1,163,195
19
382,536
4
305,758
5
6(32)
995,619
12
711,103
11
6(33)
268,439
3
37,413
1
6(34)
(
117,021) (
1) (
21,418)
-
6(35)
100,358
1
15,309
-
(
83,151) (
1) (
2,377)
-
2,870
-
-
-
6(36)
95,405
1
93,864
1
40,206
-
35,784
1
6(37)
(
120,517) (
1) (
987,583) (
16)
6(38)
(
15,308)
- (
6,498)
-
6(39)
(
122,869) (
1)
362,655
6
8,472,984
100
6,229,917
100
6(40)
(
373,105) (
5) (
399,172) (
6)
(
5,658)
-
-
-
6(41)
(
249,390) (
3) (
506,284) (
8)
(
182)
- (
133)
-
(
11,731)
- (
10,658)
-
(
26)
- (
39)
-
6(42)
(
2,796,016) (
33) (
2,044,099) (
33)
6(43)
(
157,405) (
2) (
154,827) (
3)
6(44)
(
1,357,216) (
16) (
1,089,758) (
18)
(
4,950,729) (
59) (
4,204,970) (
68)
3,522,255
41
2,024,947
32
6(10)
303,699
4
329,744
5
6(45)
100,642
1
159,690
3
3,926,596
46
2,514,381
40
6(46)
(
319,078) (
4) (
145,845) (
2)
$
3,607,518
42
$
2,368,536
38

400000 Revenues
401000
Brokerage handling fee revenue
404000
Revenues from underwriting
business
406000
Net gain on wealth management
410000
Net gain on sale of trading securities
421100
Revenue from providing agency
service for stock affairs
421200
Interest revenue
421300
Dividend revenue
421500
Net valuation gain on operating
securities at fair value through profit
or loss
421600
Net gain on covering of borrowed
securities and bonds with resale
agreements-short sales
421610
Net valuation loss on borrowed
securities and bonds with resale
agreements-short sales at fair value
through profit or loss
421750
Net realised gain on financial assets
measured at fair value through other
comprehensive income-bonds
422000
Net loss on issuance of ETNs
422100
Administrative and handling fee
revenues from issuance of ETNs
422200
Net gain from issuance of call (put)
warrants
424100
Future commission revenue
424400
Net loss from derivatives
425300
Impairment loss and reversal of
impairment loss
428000
Other operating income
Total revenues
500000 Expenditure and expense
501000/
502000/
503000
Handling charges
507000
ETNs administrative expenses
521200
Interest expenses
524200
Securities commission expense
524300
Expense of clearing and settlement
528000
Other operating expenditure
531000
Employee benefits expense
532000
Depreciation and amortization
533000
Other operating expense
Total expenditure and expense
Operating profit
601100
Share of profit of subsidiaries,
associates and joint ventures
accounted for under the using equity
method
602000
Other gains and losses
902001Profit before tax
701000
Income tax expense
902005Net income

(Continued)

169

PRESIDENT SECURITIES CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except earnings per share)

Items Year ended December 31
2020
2019
Notes
AMOUNT
%
AMOUNT
%
($
20,158)
- ($
34,860) (
1)
6(3)
369,407
5
11,111
-
91,900
1 (
23,857)
-
6(46)
4,032
-
6,972
-
27,298
- (
77,467) (
1)
28
- (
5,523)
-
$
472,507
6 ($
123,624) (
2)
$
4,080,025
48
$
2,244,912
36
6(47)
$
2.58
$
1.69
$
2.57
$
1.69

Other comprehensive income
Components of other comprehensive
income that will not be reclassified to
profit or loss
805510
Remeasurements of defined benefit
plan
805540
Net unrealised gain from
investments in equity instruments at
fair value through other
comprehensive income
805560
Other comprehensive gain of
subsidiaries, associates, and joint
ventures accounted for under equity
method
805599
Income tax benefit relating to
components of other comprehensive
income
Items may be reclassified to profit or
loss subsequently
805610
Translation gain (loss) on the
financial statements of foreign
operating entities
805615
Net unrealised gain from
investments in debt instruments at
fair value through other
comprehensive income
805000
Current other comprehensive
income (loss) (post-tax)
902006Total current comprehensive income
Earnings per share
975000
Basic earnings per share (in dollars)
985000
Diluted earnings per share (in
dollars)

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

170

PRESIDENT SECURITIES CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

For the year ended December 31, 2019 Balance at January 1, 2019 Net income for the year ended December 31, 2019 Other comprehensive income for the year ended December 31, 2019 Total comprehensive income (loss) Appropriations of 2018 earnings: Legal reserve Special reserve Cash dividends Purchase of treasury shares Retirement of treasury share Balance at December 31, 2019 For the year ended December 31, 2020 Balance at January 1, 2020 Net income for the year ended December 31, 2020 Other comprehensive income(loss) for the year ended December 31, 2020 Total comprehensive income Appropriations of 2019 earnings: Legal reserve Special reserve Cash dividends Stock dividends Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2020	Notes		Common stock		Capital reserve				Retained earnings			Other equity interest	Other equity interest	Other equity interest		Treasuryshares		Total equity
							Legal reserve		Special reserve		Unappropriated earnings	Translation gain and loss on the financial statements of foreign operating entities		Unrealised gains or losses on financial assets measured at fair value through other comprehensive income
	6(27) 6(27)	`$ 13,904,281` `-` `-` `-` `-` `-` `-` `-` `(` `180,381` `)` `$ 13,723,900` `$ 13,723,900` `-` `-` `-` `-` `-` `-` `274,478` `-` `$ 13,998,378`		`$` `142,702` `-` `-` `-` `-` `-` `-` `-` `(` `51,441 )` `$` `91,261` `$` `91,261` `-` `-` `-` `-` `-` `-` `-` `-` `$` `91,261`			`$ 2,755,737` `-` `-` `-` `121,032` `-` `-` `-` `-` `$ 2,876,769` `$ 2,876,769` `-` `-` `-` `234,244` `-` `-` `-` `-` `$ 3,111,013`		`$ 6,945,453` `-` `-` `-` `-` `185,377` `-` `-` `-` `$ 7,130,830` `$ 7,130,830` `-` `-` `-` `-` `469,486` `-` `-` `-` `$ 7,600,316`	`$ 1,278,472` `2,368,536` `(` `26,099 )` `2,342,437` `(` `121,032 )` `(` `185,377 )` `(` `959,395 )` `-` `-` `$ 2,355,105` `$ 2,355,105` `3,607,518` `(` `17,197 )` `3,590,321` `(` `234,244 )` `(` `469,486 )` `(` `1,372,390 )` `(` `274,478 )` `177,031` `$ 3,771,859`		`$` `19,251` `-` `(` `77,467` `)` `(` `77,467` `)` `-` `-` `-` `-` `-` `($` `58,216` `)` `($` `58,216` `)` `-` `27,298` `27,298` `-` `-` `-` `-` `-` `($` `30,918` `)`	`$` `600,089` `-` `(` `20,058 )` `(` `20,058 )` `-` `-` `-` `-` `-` `$` `580,031` `$` `580,031` `-` `462,406` `462,406` `-` `-` `-` `-` `(` `177,031 )` `$` `865,406`		`$` `-` `-` `-` `-` `-` `-` `-` `(` `231,822 )` `231,822` `$` `-` `$` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-`		`$ 25,645,985` `2,368,536` `(` `123,624` `)` `2,244,912` `-` `-` `(` `959,395` `)` `(` `231,822` `)` `-` `$ 26,699,680` `$ 26,699,680` `3,607,518` `472,507` `4,080,025` `-` `-` `(` `1,372,390` `)` `-` `-` `$ 29,407,315`

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

171

PRESIDENT SECURITIES CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation

Amortization

Impairment gain and reversal of impairment loss

Net valuation gain on operating securities at fair value
through profit or loss
Net valuation loss on borrowed securities and bonds with
resale agreements-short sales at fair value through profit or
loss
Interest expenses

Interest income (including financial income)

Dividend income
Share of profit of subsidiaries, associates and joint ventures
accounted for under the equity method
(Gain) loss on disposal of property and equipment
Loss on disposal of investments
(Gain) loss on valuation of non-operating financial
instrument
Net loss from lease modification

Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss
Financial assets at fair value through other comprehensive
income - current
Bonds purchased under resale agreements
Margin loans receivable
Refinancing security deposits
Receivables from refinance guaranty
Receivable of securities business money lending
Receivables from security lending
Security lending deposits
Notes receivable
Accounts receivable
Accounts receivable - related parties
Prepayments
Other receivables
Other current assets
Changes in operating liabilities
Bonds sold under repurchase agreements
Financial liabilities at fair value through profit or loss -
current
Deposits on short sales
Short sale proceeds payable
Guarantee deposit received on borrowed securities
Equity for each customer in the account
Accounts payable
Advance receipts
Collections on behalf of third parties
Other payable
Other financial liabilities - current
Other current liabilities Year ended December 31
Notes
2020
2019
$
3,926,596
$
2,514,381
6(43)
142,494
143,330
6(43)
14,911
11,497
6(38)
17,510
7,170
6(2)(32)
(
995,619 ) (
711,103 )
6(34)
117,021
21,418
6(41)
249,390
506,284
6(31)(44)
(
1,064,310 ) (
1,182,276 )
(
390,222 ) (
312,397 )
6(10)
(
303,699 ) (
329,744 )
(
1 )
928
25,676
-
6(45)
7,352
(
7,576 )
6(45)
-
15
3,655,513
(
16,009,810 )
(
13,884 )
290,558
-
93,193
(
2,239,117 ) (
2,023,768 )
51,013
(
98,143 )
45,870
(
80,372 )
(
770,318 ) (
517,809 )
(
139,753 ) (
22,727 )
(
463,919 )
242,260
(
40 )
38
(
6,291,689 ) (
3,126,130 )
(
1,798 )
1,280
(
1,999 ) (
4,808 )
(
578 ) (
2,794 )
(
1,611,663 ) (
97,426 )
(
1,860,091 )
5,889,657
1,656,855
(
38,683 )
(
177,247 ) (
208,552 )
(
78,877 ) (
118,370 )
847,848
55,383
27,472
633
6,964,657
3,728,377
22
255
723,092
14,549
740,631
449,094
3,264,444
56,857
63,875
4,003

(Continued)

172

PRESIDENT SECURITIES CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

Cash inflow (outflow) generated from operations
Interest received
Dividends received
Income tax paid
Net cash flows from (used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment
Loss on disposal of property and equipment
Acquisition of intangible assets
Investments accounted for under equity method
(Increase) decrease in other non-current liabilities
Proceeds from disposal, liquidation and capital reduction of
investments accounted for using equity method
Increase in prepayment for equipment
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in short-term loans
(Decrease) increase in commercial papers payable
Payments of lease liabilities
(Decrease) increase in other non-current liabilities
Distribution of cash dividends
Payments to acquire treasury shares
Interest paid
Net cash flows (used in) from financing activities
Effect of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year Year ended December 31
Notes
2020
2019
$
6,137,418
( $
10,861,328 )
1,138,004
1,237,357
609,128
551,092
(
161,284 ) (
84,456 )
7,723,266
(
9,157,335 )
6(11)
(
23,990 ) (
41,146 )
13
10
6(15)
(
10,032 ) (
7,557 )
(
3,844,497 ) (
126,000 )
(
84,496 )
11,966
2,263,273
-
(
69,632 ) (
51,785 )
(
1,769,361 ) (
214,512 )
(
2,266,526 )
1,905,623
(
2,300,000 )
9,600,000
(
66,454 ) (
77,342 )
(
2,537 )
3,410
6(26)
(
1,372,390 ) (
959,395 )
-
(
231,822 )
(
261,268 ) (
502,822 )
(
6,269,175 )
9,737,652
(
7,265 ) (
29,292 )
(
322,535 )
336,513
3,829,651
3,493,138
$
3,507,116
$
3,829,651

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

173

PRESIDENT SECURITIES CORPORATION

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANIZATION

1) President Securities Corporation (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Law of the Republic of China (R.O.C.) on December 17, 1988, and was renamed as President Securities Corporation on March 4, 1989. The Company started commercial operations on April 3, 1989. As of December 31, 2020, the Company had 31 operating branches (including the Head Office), and established Offshore Securities Unit in July 2014.
2) The Company is primarily engaged in underwriting of securities, dealing or brokerage business of securities at the securities exchange markets and business premises, registration and transfer agency service for securities, margin loans and short sales business of securities, securities lending and borrowing business, futures introducing brokerage services, futures dealing, issuance of call (put) warrants, new financial instrument transactions, wealth management business, and trust business.
3) The Company’s shares are listed on the Taiwan Stock Exchange.
4) The number of employees of the Company were 1,434 and 1,447, as of December 31, 2020 and 2019, respectively.
THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE FINANCIAL
STATEMENTS AND PROCEDURES FOR AUTHORIZATION
These parent company only financial statements were authorised for issuance by the Board of Directors on March 23, 2021.
APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS
1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by FSC effective from 2020 are as follows:

as follows:
New Standards,Interpretations andAmendments	Effective Date by International Accounting Standards Board
Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interest rate benchmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

174

Note ： Earlier application from January 1, 2020 is allowed by FSC.

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company

New standards, interpretations and amendments endorsed by FSC effective from 2021 are as follows:

s follows:
	Effective Date by
	International Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’	January 1, 2021
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘Interest Rate Benchmark Reform— Phase 2’	January 1, 2021

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs endorsed by the FSC effective are as follows:

IFRSs endorsed by the FSC effective are as follows:
	Effective Date by
	International Accounting
New Standards,Interpretations andAmendments	Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’	To be determined by International Accounting Standards Board
Amendments to IFRS 3, ‘Reference to the conceptual framework’	January 1, 2022
Amendments to IAS 16, ‘Property, plant and equipment: proceeds before intended use’	January 1, 2022
Amendments to IAS 37, ‘Onerous contracts— cost of fulfilling a contract’	January 1, 2022
Annual improvements to IFRS Standards 2018–2020	January 1, 2022
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, 'Insurance contracts'	January 1, 2023
Amendments to IAS 1, ‘Classification of liabilities as current or non-current’	January 1, 2023
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023
The above standards and interpretations have no significant	impact to the Company’s
financial condition and financial performance based on the Company’s assessment.

175

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are described below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

1) Compliance statement
The financial statements of the Company have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Firms” and “Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants”.
2) Basis of preparation
A. Except for the following items, these financial statements have been prepared under the historical cost convention:
- (A) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
- (B) Financial assets at fair value through other comprehensive income measured.
- (C) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligations.
B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretation as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 5.
3) Classification of current and non-current items
A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
- (A) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
- (B) Assets held mainly for trading purposes;
- (C) Assets that are expected to be realized within twelve months from the balance sheet date;
- (D) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
- (A) Liabilities that are expected to be paid off within the normal operating cycle;

176

  - (B) Liabilities arising mainly from trading activities;

  - (C) Liabilities that are to be paid off within twelve months from the balance sheet date;

  - (D) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

4) Translation of foreign currency transactions
A. Foreign currency translation and presentation
- Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (the “functional currency”). Functional currency and bookkeeping currency of the Company is New Taiwan Dollars.
B. Foreign currency transactions and balances
- Foreign currency transactions denominated in a foreign currency or required to settle in a foreign currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
- Monetary assets and liabilities denominated in foreign currency are translated by the closing exchange rate at balance sheet date. The closing exchange rate is determined by the market exchange rate. Non-monetary assets and liabilities denominated in foreign currencies which are carried at historical cost are re-translated at the exchange rates prevailing at the original transaction date. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are retranslated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income.
C. Translation of foreign operations
- The operating results and financial position of all the company entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- (A) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
- (B) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
- (C) All resulting exchange differences are recognized in other comprehensive income.

177

5) Cash and cash equivalents
A. In the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with banks, and other short-term highly liquid investments.
B. Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.
6) Financial assets and financial liabilities at fair value through profit or loss
A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.
C. At initial recognition, the Company measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.
D. The Company recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.
7) Financial assets at fair value through other comprehensive income
A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:
- (a)The objective of the Company’s business model is achieved both by collecting contractual cash flows and selling financial assets; and
- (b)The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.
C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value:
(a)The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.
- (b)Except for the recognition of impairment loss, interest income and gain or loss on

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foreign exchange which are recognized in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.

8) Notes and accounts receivable, other receivables and margin loans receivable
A. Accounts and notes receivable and margin loans receivables entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.
9) Bonds sold under repurchase agreements and bonds purchased under resale agreements Bond transactions under repurchase or resale agreements are stated at the amount of actual payment or receipt. When transactions of bonds with a condition of resale agreements occur, the actual payment or receipt shall be recognized in ‘bonds purchased under resale agreements’ under current assets. When transactions of bonds with a condition of repurchase agreements occur, the actual payment or receipt shall be recognized in ‘bonds sold under repurchase agreements’ under current liabilities. Any difference between the actual payment/receipt and predetermined redemption (repurchase) price is recognized in interest income or interest expense.
10) Impairment of financial assets
For debt instruments measured at fair value through other comprehensive income, at each reporting date, the Company recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Company recognizes the impairment provision for lifetime ECLs.
11) Derecognition of financial instruments
A. Derecognition of financial assets

The Company derecognizes a financial asset when one of the following conditions is met:

(A) The contractual rights to receive cash flows from the financial asset expire.
(B) The contractual rights to receive cash flows from the financial asset have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial asset.
(C) The contractual rights to receive cash flows of the financial asset have been

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transferred; however, the Company has not retained control of the financial asset.

B. Derecognition of financial liabilities
- A financial liability is derecognized when the obligation under the liability specified in the contract is discharged or cancelled or expires.
12) Offsetting financial instruments
Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.
13) Investments accounted for under the equity method/Subsidiaries and associates
A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Investments in subsidiaries are accounted for using the equity method and are initially recognized at cost.
B. Unrealized gains on transactions between the Company and its subsidiaries are eliminated to the extent of the Company’s interest in the subsidiaries. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, including any other unsecured receivables, the Company does not recognize further losses.
D. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.
E. The Company’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred statutory/constructive obligations or made payments on behalf of the associate.
F. When changes in an associate’s equity that are not recognized in profit or loss or other comprehensive income of the associate and such changes not affecting the Company’s ownership percentage of the associate, the Company recognizes its share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

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G. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
H. According to "Regulations Governing the Preparation of Financial Reports by Securities Firms", the profit or loss for the period and other comprehensive income presented in parent company only financial reports shall be the same as the allocations of profit or loss for the period and of other comprehensive income attributable to owners of the parent presented in the financial reports prepared on a consolidated basis, and the owners' equity presented in the parent company only financial reports shall be the same as the equity attributable to owners of the parent presented in the financial reports prepared on a consolidated basis.
I. When there are objective evidences of impairment, at balance sheet date, the Company considers the whole investment carrying amount as single asset, and compares its recoverable amount (value in use or fair value less costs of disposal) with the carrying amount, to test its impairment. Value in use is determined by the present value of the Company’s share of the expected future cash flow from the associates. If the recoverable amount is less than its carrying amount, an impairment loss should be recognized. The loss will not be allocated to any of the components (including goodwill), which comprise the carrying amount of the investment. An impairment loss recognized in prior periods shall be reversed if circumstances of impairment no longer exist or have decreased.

14) Property and equipment

A. Property and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property and equipment are subsequently measured using the cost model and depreciated using the straight-line method to allocate their cost over their estimated useful lives.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of

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consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property and equipment are as follows:

Useful lives

Buildings 5~50 years Furniture and fixtures 4~10 years Computer equipment 3~5 years Electrical equipment 3~10 years Leasehold improvements 5 years

E. When an asset is sold or retired, the cost and accumulated depreciation are removed from the respective accounts and the resulting gain or loss is included in current operations.

15) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities

A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of low value assets, lease payments are recognized as an expense on a straightline basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are mainly comprised of fixed payments.
- The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.
C. At the commencement date, the right-of-use asset is stated at cost comprising mainly the amount of the initial measurement of lease liability.
- The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.
16) Investment property
A. Investment property of the Company is the property held either to earn long-term rental income or for capital appreciation or for both.
B. Part of the property may be held by the Company for self-use purpose and the remaining are used to generate rental income or capital appreciation. If the property held by the Company can be sold individually, then the accounting treatment should be

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made respectively. If each part of the property cannot be sold individually and the selfuse proportion is not material, then the property is deemed as investment property in its entirety.

C. When the future economic benefit related to the investment property is highly likely to flow into the Company and the costs can be reliably measured, the investment property shall be recognized as assets. When the future economic benefit generated from subsequent costs is highly likely to flow into the entity and the costs can be reliably measured, the subsequent expenses of the assets shall be capitalized. All maintenance cost are recognized in profit or loss as incurred.
D. Investment property is subsequently measured using the cost model. Depreciated cost is used to calculate amortization expense after initial measurement. The depreciation method, remaining useful life and residual value should apply the same rules as applicable for property and equipment.
17) Intangible assets
A. The cost of computer software is amortized using the straight-line method over the useful lives based on acquisition cost, with an amortization period of 4 years.
B. In accordance with IFRS 3 ‘Business combinations’ as endorsed by FSC, goodwill arises when the acquisition cost exceeds the fair value of identifiable assets and liabilities of the consolidated subsidiary on the consolidation date. The goodwill arising from the consolidated subsidiary is included in the intangible asset. Goodwill is tested annually for impairment and any impairment loss will be recognized when impairment occurs. Impairment losses on goodwill are not reversed.
18) Impairment of non-financial assets
A. The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.
B. The recoverable amounts of goodwill, intangible assets with an indefinite useful life and intangible assets that have not yet been available for use are evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss shall not be reversed in the following years.

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C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.
19) Financial liabilities at fair value through profit or loss
A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorized as financial liabilities held for trading unless they are designated as hedges.
B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognized in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognized in profit or loss.
20) Contingent liabilities

Contingent liability is a possible obligation that arises from past event, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Or it could be a present obligation as a result of past event but the payment is not probable or the amount cannot be measured reliably. The Company did not recognize any contingent liabilities but made appropriate disclosure in compliance with relevant regulations.

21) Employee benefits
A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service.

B. Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Company’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employee. The Company recognized expense as it can no longer withdraw an offer of termination benefit or it recognizes relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

C. Pensions
(A) Defined contribution plans

Effective July 1, 2005, the Company established the defined contribution plan for

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employees of R.O.C. nationality. The employees have the option to participate in the New Plan. Under the New Plan, the Company contributes monthly an amount equivalent to 6% of employees’ salaries to the employees’ personal pension accounts with the “Bureau of Labor Insurance”. Benefits accrued under the New Plan are portable upon termination of employment. Net defined benefit asset can only be recognized when there is a cash refund or elimination in the future accrued pension liabilities.

(B) Defined benefit plans
- a. In a defined benefit plan, the pension paid is determined based on the amount that an employee shall receive upon retirement, which could vary with age, work seniority and salary compensations. The Company recognizes the accrued pension obligations in the balance sheet based on the net amount of actuarial present value of defined benefit obligation less the fair value of fund, which is adjusted with the net of past service cost recognized as liabilities. Defined benefit obligation is assessed annually using projected unit credit method by the actuary. The present value of the defined benefit obligation is determined using the market yield of government bonds of a currency and term consistent with the currency and term of the employment benefit obligations.
- b. Remeasurement arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.
D. Employees’ remuneration and directors’ remuneration
Employees’ and directors’ remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

22) Revenues and expenses

The Company’s revenues and expenses mainly include:

A. Gains (losses) on sale of securities, securities brokerage fees, and commissions on brokerage and trading are recognized on the transaction date.
B. Underwriting fees and related service charges: application fees are recognized upon collection; underwriting fees and service charges are recognized when the contract is completed.
C. Gains (losses) on futures contracts: The margin of futures transaction is recognized as cost. Costs and expenses are recognized as incurred.
D. Operating expenses: operating expenses refer to required expenses invested in the Company’s operations, which primarily include employee benefit expense, depreciation and amortization, and other business and administrative expenses.

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23) Income tax

A. Current income tax

Income tax payable (refundable) is calculated on the basis of the tax laws enacted in the countries where a company operates and generates taxable income. Except for the transactions or other matters directly recognized in other comprehensive income or equity, in which cases the related income taxes in the period are recognized in other comprehensive income or directly derecognized from equity, all the others should be recognized as income or expense for the period.
B. Deferred income tax
Deferred income tax assets and liabilities are measured based on the tax rate of the anticipated period that the future assets realization or the liabilities settlement requires, which is based on the effective or existing tax rate at the balance sheet date. The carrying amounts and temporary differences of assets and liabilities included in the balance sheet are calculated using the liability method and recognized as deferred income tax. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit (loss). Deferred income tax assets are recognized only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized. If the future taxable income is probable to provide unused loss carryforwards or deferred income tax credit which can be realized in the future, the proportion of realization is deemed as deferred income tax asset.
C. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions for income tax liabilities where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
D. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

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24) Share capital

A. Incremental costs directly attributable to the issuance of new shares are shown as a deduction, net of tax, from equity. Dividends from common stocks are recognized as equity in the financial period in which they are approved by the Company’s shareholders. If the date of dividends declared is later than the balance sheet date, common stocks are disclosed in the subsequent events.
B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

25) Earnings per share

A. Earnings per share is calculated by dividing net income by the weighted average number of shares outstanding during the year after taking into consideration the retroactive effect of stock dividends and capital reserve capitalized.
B. When the Company calculates earnings per share, basic earnings per share and diluted earnings per share for all potential ordinary shares shall all be disclosed in accordance with IAS 33 “Earnings per share”.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

1) As the financial statements of the Company may be affected by the adoption of accounting policy, accounting estimate and assumption, the Company’s management shall properly exercise its professional judgement, estimates, and assumptions on the information of the key risks that is obtained from other resources and could affect the carrying amounts of financial assets and liabilities in the next fiscal year while adopting critical accounting policies as stated in Note 4. Estimates and assumptions of the Company are the best estimates made in compliance with IFRSs as endorsed by the FSC. Estimates and assumptions are made based on past experience and other factors (including the influence of COVID 19) deemed relevant; however, the actual results may differ from the estimates. The Company evaluates the estimates and assumptions on an ongoing basis and recognizes the adjustment of the estimates only in the period which is affected by the adjustment. If the adjustment simultaneously affects both the current and future periods, it should be recognized in both periods.
2) Relevant information on key assumptions to be made in the future, key sources of assumption uncertainty made at balance sheet date, and assumptions and estimates that may cause key risks that could affect the carrying amounts of financial assets and liabilities

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are as follows:

A. Fair value of financial instruments
Financial instruments with no active market or quoted price use valuation technique to determine the fair value. Under such condition, fair value is assessed through the observable information or models of similar financial instruments. If there is no observable input available in a market, the fair value of financial instrument is assessed through appropriate assumptions. When valuation models are adopted to determine the fair value, all the models should be calibrated to ensure that the output can actually reflect actual information and market price. Models should try to take only observable information as much as possible.
B. Expected credit losses

For financial assets, the measurement of expected credit losses uses complex models and multiple assumptions. These models and assumptions take into account future macro-economic conditions and credit behaviors of borrowers (e.g. probability of customer default and loss). Please refer to Note 12(2) for detailed information on parameters, assumptions, and estimation methods used in measuring expected credit losses and disclosure of the sensitivity of credit loss to the aforementioned factors.

The measurement of expected credit losses according to applicable accounting rules involves significant judgement in several areas, for example:

(A)The criteria used to judge whether there is significant increase in credit risk.
(B)The selection of appropriate models and assumptions for measuring expected credit losses.

For judgements and estimations of the above expected credit losses, please refer to Note 12(2).

C. Impairment assessment on investment accounted for under the equity method When there are impairment indicators that show the investments accounted for under equity method are impaired and the carrying amount can no longer be recovered, the Company will assess the impairment of the investment. The Company assess its share of the recoverable amount which is based on the discounted value of expected cash flow, and assess the reasonableness of relevant assumptions, including revenue growth rate, operating profit margin, net profit margin, financial forecast, and discount rate.
D. Impairment assessment of goodwill
The periodic impairment assessment of goodwill includes allocation of assets, liabilities, and goodwill to brokerage segment, and determines the recoverable amount based on brokerage segment’s present value of expected future cash flow. The periodic assessment also analyzes reasonableness of relevant assumptions, including expected future trading volumes, market share, segment’s operating profit margin, and discount rates.

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6. DETAILS OF SIGNIFICANT ACCOUNTS

1) Cash and cash equivalents

	December31,2020	December31,2020	December31,2019	December31,2019
Checking deposits	$	430,291	$	486,626
Current deposits:
Deposits denominated in NTD		262,276		92,681
Deposits denominated in foreign currencies		1,057,849		987,144
Time deposits		1,756,700		2,263,200
Total	$	3,507,116	$	3,829,651

As of December 31, 2020 and 2019, the annual interest rates of time deposits, including foreign time deposits were 0.020%~0.520% and 0.040%~1.065%, respectively.

2) Financial assets at fair value through profit or loss

Current items: Financial assets mandatorily measured at fair value through profit or loss: Open-ended funds, money market instruments and securities investment by brokers Open-ended mutual funds beneficiary certificates Adjustment of open-ended funds, money market instruments and securities investment by brokers Total Trading securities-dealer Listed (TSE and OTC) stocks Government bonds Corporate bonds Convertible corporate bonds Emerging stocks Overseas stocks Exchange-traded funds Unlisted stocks Subtotal Adjustment of trading securities - dealer Total Trading securities-underwriter Listed (TSE and OTC) stocks Convertible corporate bonds Subtotal Adjustment of trading securities - underwriter Total	December31,2020 25,000 $ 459 25,459 5,546,156 2,699,935 3,317,423 417,025 98,366 17,628,935 2,099,505 14,714 31,822,059 1,190,808 33,012,867 469,460 170,407 639,867 49,913 689,780	December31,2019
		201,298 $ 1,267
		202,565
		6,192,641 3,364,452 6,992,481 146,703 54,554 15,502,816 3,091,765 1,514
		35,346,926 503,131
		35,850,057
		807,209 238,046
		1,045,255 101,417
		1,146,672

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Trading securities-hedging Listed (TSE and OTC) stocks Convertible corporate bonds Warrants Overseas stocks Exchange traded funds Subtotal Adjustment of trading securities - hedging Total Options bought-futures Futures guarantee deposits receivable Derivative financial instrument assets-OTC Total Non-current items: Financial assets mandatorily measured at fair value through profit or loss: Trading securities - dealer - government bonds Unlisted stocks Subtotal Adjustment of trading securities Total	December31,2020 3,535,818 $ 20,561 52,681 - 12,084 3,621,144 117,091 3,738,235 36,249 3,319,915 9,373 40,831,878 $ 49,947 $ 2,609 52,556 14,928 67,484 $	December31,2019
		3,142,111 $ 7,647 47,966 64,648 165,249 3,427,621 83,999 3,511,620 15,533 2,782,685
		969 43,510,101 $
		49,921 $ 2,609
		52,530 18,766
		71,296 $

a. For the years ended December 31, 2020 and 2019, net realized and unrealized gains on financial assets and liabilities at fair value through profit or loss amounted to $4,393,394 and $2,664,463, respectively.
b. Details of the Company’s financial assets at fair value through profit or loss pledged to others as collateral are provided in Note 8.
c. Information relating to credit risk is provided in Note 12(2).

3) Financial assets at fair value through other comprehensive income

Equity instruments Trading securities-dealer Listed (TSE and OTC) stocks Adjustment of trading securities - dealer Total Non-current items: Equity instruments Unlisted stocks Adjustment of trading securities Total	December31,2020 189,812 $ 163,698 353,510 $ 6,449 $ 179,885 186,334 $	December31,2019
		- $ -
		- $
		6,449 $ 151,207
		157,656 $

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a. The Company has elected to classify unlisted stocks that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounts to $539,844 and $157,656 as at December 31, 2020 and 2019.
b. For year ended December 31, 2020, the Group sold its stock investments listed on TSE and OTC with fair value of $1,525,695, and an accumulated gain on disposal of $177,031, in order to adjust the investment position.

b.	fair value of such investments amounts to $539,844 and $157,656 as at December 31, 2020 and 2019. For year ended December 31, 2020, the Group sold its stock investments listed on TSE and OTC with fair value of $1,525,695, and an accumulated gain on disposal of $177,031, in order to adjust the investment position.	fair value of such investments amounts to $539,844 and $157,656 as at December 31, 2020 and 2019. For year ended December 31, 2020, the Group sold its stock investments listed on TSE and OTC with fair value of $1,525,695, and an accumulated gain on disposal of $177,031, in order to adjust the investment position.
c.	Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below: Equity instruments at fair value through other comprehensive income Year ended December 31,2020 Year ended December 31,2019 Fair value change recognised in other comprehensive income 369,407 $ 11,111 $ Cumulative gains (losses) reclassified toretained earnings due to derecognition 177,031) ($ - $ Dividend income recognised in profit or loss Held at end of period 11,444 $ 5,595 $ Derecognised during the period 66,894 - 78,338 $ 5,595 $ Debt instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income 100,330) ($ 20,832) ($ Cumulative other comprehensive income reclassified to profit or loss Due to derecognition 100,358 $ 15,309 $ Interest income recognised in profit or loss 28,276 $ 784 $
		11,111 $ - $ 5,595 $ - 5,595 $ 20,832) ($ 15,309 $ 784 $

d. Details of the Company’s financial assets at fair value through other comprehensive income pledged to others as collateral are provided in Note 8.
e. Information relating to credit risk is provided in Note 12(2).

4) Margin loans receivable

Margin loans receivable were secured by the securities purchased by customers under margin loans. The annual interest rate was 6.4%.

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5) Accounts receivable

Accounts receivable
	December31,2020		December31,2019
Accounts receivable - related parties	$	4,413	$	2,615
Accounts receivable - non related parties
Settlement price receivable-brokers	$	14,845,933	$	8,775,893
Settlement price receivable-dealer		132,304		857,731
Accounts receivable-international bonds		4,454		601,111
Accounts receivable-foreign bonds		55,001		435,180
Interest receivable		244,723		301,206
Settlement price		2,250,253		745,383
Others		103,025		70,510
Subtotal		17,635,693		11,787,014
Less: Allowance for uncollectible accounts	(	625)	(	656)
Total	$	17,635,068	$	11,786,358

A. The ageing analysis of accounts receivable that were past due but not impaired is as follows:

follows:
Accounts receivable Accounts receivable - related parties Accounts receivable - non related parties Accounts receivable Accounts receivable - related parties Accounts receivable - non related parties			December 31, 2020					Total
	Up to 30 days	31 to 90 days	91 to 180 days		181 days to 12 months		More than 12 months
	4,413 $ 17,409,892 17,414,305 $	- $ 44,721 44,721 $		- $ - $ 86,814 62,624 86,814 $ 62,624 $ December 31, 2019		- $ 62,624	- $ 31,642 31,642 $	4,413 $ 17,635,693 17,640,106 $ Total
						62,624 $
	Upto 30 days	31 to 90 days	91 to 180 days 181 days to 12 months				More than 12 months
	2,615 $ 11,493,440 11,496,055 $	- $ 69,155 69,155 $		- $ 102,517 102,517 $		- $ 75,020	- $ 46,882 46,882 $	2,615 $ 11,787,014 11,789,629 $
						75,020 $

Note: The above ageing analysis was based on invoice date.

B. Information related to credit risk is provided in Note 12(2).

6) Other receivables

Other receivables
	December	31,2020	December	31,2019
Interest receivable	$	2,392	$	3,746
Others		7,180		6,602
Less: Impairment loss	(	54)	(	54)
Total	$	9,518	$	10,294

Information relating to credit risk is provided in Note 12(2).

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7) Other current assets

Other current assets
December31,2020 Pending settlements 427,009 $ Pledged time deposits 400,000 Deposits-in for foreign currency securities 647,622 Underwriting share proceeds collected on behalf of customers 651,290 Temporary payments 1,841 Others 28,825 Total 2,156,587 $	December31,2019 34,990 $ 400,000 - 18 108,566 1,350
	544,924 $

8) Transfer of financial assets

A. During the Company’s activities, the transferred financial assets that do not meet derecognition conditions are mainly debt instruments with purchase agreements or debt instruments lent out in accordance with securities borrowing and lending agreement. The cash flow of the contract has been transferred and related liabilities of transferred financial assets that will be repurchased at a fixed price in the future have been reflected. The Company may not use, sell or pledge the transferred financial assets during the valid period of the transaction. The financial assets were not derecognized as the Company is still exposed to interest rate risk and credit risk.
B. Financial assets that do not meet the derecognition conditions and related financial liabilities are analysed below:

December31,2020	December31,2020	Carrying amount of related financial liabilities
Financial assets category Carrying amount of transferred financial assets Financial assets measured at fair value through profit or loss Repurchase agreement 20,375,875 $ December31,2019	Carrying amount of transferred financial assets
		19,096,165 $ Carrying amount of related financial liabilities
Financial assets category Financial assets measured at fair value through profit or loss Repurchase agreement	Carrying amount of transferred financial assets
	21,964,175 $	20,956,256 $

9) Offsetting financial assets and financial liabilities

A. The Company has transactions that are or are similar to net settled master netting arrangements but do not meet the offsetting criteria, i.e. derivative financial instruments, resale and repurchase agreements. If one party breaches the contract, the counterparty can choose to use net settlement for the above transactions.

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B. The offsetting of financial assets and financial liabilities are set as follows:
(1)Financial assets

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December 31, 2020
Financial assets that are offset, or can be settled under agreements of net settled master netting arrangements or similar arrangements
Gross amounts Gross amounts of recognised Net amounts of financial Not set off in the balance sheet
of recognised financial liabilities set off in assets presented in the Financial Cash collateral
Description financial assets the balance sheet balance sheet instruments received Net amount
Derivative financial instruments $ 9,303 $ - $ 9,303 $ 9,303 $ - $ -
December 31, 2019
Financial assets that are offset, or can be settled under agreements of net settled master netting arrangements or similar arrangements
Gross amounts Gross amounts of recognised Net amounts of financial Not set off in the balance sheet
of recognised financial liabilities set off in assets presented in the Financial Cash collateral
Description financial assets the balance sheet balance sheet instruments received Net amount
Derivative financial instruments $ 938 $ - $ 938 $ 938 $ - $ -
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(2) Financial liabilities

December 31, 2020

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Financial liabilities that are offset, or can be settled under agreements of net settled master netting arrangements or similar arrangements
Gross amounts of Gross amounts of recognised Net amounts of financial Not set off in the balance sheet
recognised financial financial assets set off in the liabilities presented in the Financial Cash collateral
Description liabilities balance sheet balance sheet instruments received Net amount
Derivative financial instruments $ 26,252 $ - $ 26,252 $ 9,303 $ - $ 16,949
Bonds sold under repurchase
agreements 14,051,616 - 14,051,616 14,051,616 - -
Total $ 14,077,868 $ - $ 14,077,868 $ 14,060,919 $ - $ 16,949
December 31, 2019
Financial liabilities that are offset, or can be settled under agreements of net settled master netting arrangements or similar arrangements
Gross amounts of Gross amounts of recognised Net amounts of financial Not set off in the balance sheet
recognised financial financial assets set off in the liabilities presented in the Financial Cash collateral
Description liabilities balance sheet balance sheet instruments received Net amount
Derivative financial instruments $ 8,371 $ - $ 8,371 $ 938 $ - $ 7,433
Bonds sold under repurchase
agreements 11,622,022 - 11,622,022 11,622,022 - -
Total $ 11,630,393 $ - $ 11,630,393 $ 11,622,960 $ - $ 7,433
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10) Investments accounted for under the equity method

Investments accounted for under the equity method
Subsidiaries President Futures Corp. President Securities (HK) Ltd. President Wealth Management (HK) Ltd. President Securities (Nominee) Ltd. President Capital Management Corp. President Securities (BVI) Ltd President Insurance Agency Corp. PSC Venture Capital Investment Limited Company Associates Uni-President Asset Management Corp. Jin Yuan President Securities Co.,Ltd.	December31,2020 2,102,027 $ 1,361,333 56,002 1,672 320,169 - 29,698 242,139 4,113,040 602,375 2,531,901 7,247,316 $	December31,2019 1,924,380 $ 72,935 - - 322,208 2,301,733 28,561 248,549
		4,898,366 578,382 -
		5,476,748 $

A. The Company’s share of its associates’ profits or losses recognized in long-term equity investment accounted for under the equity method for the years ended December 31, 2020 and 2019 were $303,699 and $329,744, respectively. The dissolution and liquidation of President Securities (BVI) was approved by the Board of Directors in March 2020.
B. The Company holds 42.46% of the equity of Uni-President Asset Management Corp., making it the single largest shareholder of the associates, while the other equity is mainly held by the other 15 shareholders. Half of the voting rights of the shareholders attending the shareholders meeting exceeds the voting rights of the Company, and the Company does not take an active role in the management of the associates. This shows that the Company has no actual ability to direct relevant activities. The Company has no control over Uni-President Asset Management Corp., but has significant influence over it.
C. Details of information of subsidiaries are provided in Note 4(3) of consolidated financial statements.
D. The financial information of the Company’s principal associates is summarized as follows: (a)The basic information of the associate that are material to the Company is as follows:

Princial place Companyname of businesss Uni-President Asset Management Corp. Taipei city Jin Yuan President Securities Co.,Ltd. Xiamen	December 31, 2020 December 31, 2019 42.46% 42.46% 49.00% - Shareholdingratio	Nature of relationship Associate Associate	Methods of measurement
			Equity method Equity method
	42.46% 49.00%

Note: The Company participated in the establishment of Jin Yuan President Securities Co., Ltd. since May 2020.

(b)The summarized financial information of the associate that are material to the Company is as follows:

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Balance sheet

Balance sheet
			Uni-PresidentAsset	Management Corp.
			December31,2020			December31,2019
Current assets		$	656,152		$	543,681
Non-current assets			687,024			627,350
Current liabilities	(		292,750)	(		176,271)
Non-current liabilities	(		54,266)	(		55,102)
Total net assets		$	996,160		$	939,658
Share in associte's net assets		$	423,003		$	399,010
Goodwill and others			179,372			179,372
Carrying amount of the associate		$	602,375		$	578,382
Balance sheet

Balance sheet
Current assets Non-current assets Current liabilities Non-current liabilities Total net assets Share in associte's net assets Carrying amount of the associate Statement of comprehensive income Revenue Profit for the period from continuing operations Other comprehensive income (loss)- net of tax Total comprehensive income Dividends received from associates Statement of comprehensive income Revenue Loss for the period from continuing operations Total comprehensive loss Dividends received from associates	( ( Year ended December 31,2020 941,595 $ 258,096 $ 20,871 278,967 $ 94,466 $ Uni-PresidentAsset	Jin Yuan President Securities Co.,Ltd. December 31, 2020 5,083,846 $ 174,020 85,687) 5,034) 5,167,145 $ 2,531,901 $ 2,531,901 $ Year ended December 31,2019 Management Corp.
		831,987 $ 251,386 $ 9,768) ( 241,618 $ 93,631 $ Jin Yuan President Securities Co.,Ltd.
		Eight months ended December 31,2020
		74,454 $ 83,388) ($ 83,388) ($ - $

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11) Property and equipment

) Property and equipment
January1				2020
	Land	Buildings		Equipment		Leasehold improvements		Total
Cost Accumulated depreciation and impairment Total January 1 Additions Disposal Reclassifications Depreciation December 31 December31	1,573,570 $ - 1,573,570 $ 1,573,570 $ - - - - 1,573,570 $ Land	980,799 $ 397,833) ( 582,966 $ 582,966 $ 1,340 - 32,076 27,036) ( 589,346 $ Buildings		158,227 $ 60,690) ( 97,537 $ 97,537 $ 22,397 13) ( 14,436 37,497) ( 96,860 $ Equipment		31,424 $ 15,106) ( 16,318 $ 16,318 $ 253 - - 6,025) ( 10,546 $ Leasehold improvements		2,744,020 $ 473,629) ( 2,270,391 $ 2,270,391 $ 23,990 13) ( 46,512 70,558) ( 2,270,322 $ Total
Cost Accumulated depreciation and impairment Total January1	1,573,570 $ - 1,573,570 $	1,010,840 $ 421,494) ( 589,346 $		180,060 $ 83,200) ( 96,860 $ 2019		22,293 $ 11,747) ( 10,546 $		2,786,763 $ 516,441) ( 2,270,322 $
	Land		Buildings		Equipment		Leasehold improvements		Total
Cost Accumulated depreciation and impairment Total January 1 Additions Disposal Reclassification Depreciation December 31 December31	1,573,570 $ - 1,573,570 $ 1,573,570 $ - - - - 1,573,570 $ Land	978,012 $ 381,262) ( 596,750 $ 596,750 $ 2,475 - 6,430 22,689) ( 582,966 $ Buildings		138,552 $ 56,264) ( 82,288 $ 82,288 $ 36,393 156) ( 10,740 31,728) ( 97,537 $ Equipment		41,252 $ 24,650) ( 16,602 $ 16,602 $ 2,278 782) ( 6,030 7,810) ( 16,318 $ Leasehold improvements		2,731,386 $ 462,176) ( 2,269,210 $ 2,269,210 $ 41,146 938) ( 23,200 62,227) ( 2,270,391 $ Total
Cost Accumulated depreciation and impairment Total	1,573,570 $ - 1,573,570 $	980,799 $ 397,833) ( 582,966 $		158,227 $ 60,690) ( 97,537 $		31,424 $ 15,106) ( 16,318 $		2,744,020 $ 473,629) ( 2,270,391 $

A. No interest was capitalized for property and equipment for the years ended December 31, 2020 and 2019.

B. The information on property and equipment pledged or restricted as of December 31, 2020 and 2019 is described in Note 8.

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`－` 12) Leasing arrangements lessee

A. The Company leases various assets including buildings, machinery and equipment, business vehicles and multifunction printers. Rental contracts are typically made for periods of 1 to 10 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Buildings Transportation equipment (Business vehicles) Office equipment (Photocopiers) Total Buildings Transportation equipment (Business vehicles) Office equipment (Photocopiers) Total		December 31,2020	December 31,2019 CarryingAmount 151,128 $ 15,727 659 167,514 $ Year ended December 31,2019
		CarryingAmount
		147,180 $ 15,283 9,118 171,581 $ Year ended December 31,2020
		Depreciation charge	Depreciation charge
		63,380 $ 5,258 1,198 69,836 $	71,405 $ 6,331 1,267 79,003 $

C. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets amounted to $73,910 and $76,212, respectively.
D. The information on income and expense accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on variable lease payment	Year ended December 31,2020 1,301 $ 3,264 224	Year ended December 31,2019
		1,265 $ 3,831 317

E. For the years ended December 31, 2020 and 2019, the Company’s total cash outflow for leases amounted to $71,243 and $82,755, respectively.
F. The Company has applied the practical expedient to “Covid-19-related rent concessions”, and recognized the other gains or losses from changes in lease payments arising from the rent concessions amounting to $116 by decreasing rent expense for the year ended December 31, 2020.
13) Leasing arrangements – lessor
A. The Company leases various assets including office and parking space. Rental contracts are typically made for periods of 1 and 5 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.

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B. For the years ended December 31, 2020 and 2019, the Company recognized rent income in the amount of $ 25,228 and $25,788, respectively, based on the operating lease agreement, which does not include variable lease payments.
C. The maturity analysis of the lease payments under the operating leases is as follows:

2020 2021 2022 2023 2024 Total		December 31,2020		December 31,2019
		- $ 23,557 23,187 23,133 5,960 75,837 $		25,159 $ 22,480 21,883 21,883 5,345 96,750 $

14) Investment property

) Investment property
January1		2020
	Land Buildings Total 198,099 $ 107,076 $ 305,175 $ - 32,572) ( 32,572) ( 198,099 $ 74,504 $ 272,603 $ 198,099 $ 74,504 $ 272,603 $ - 2,100) ( 2,100) ( 198,099 $ 72,404 $ 270,503 $ Land Buildings Total 198,099 $ 107,076 $ 305,175 $ - 34,672) ( 34,672) ( 198,099 $ 72,404 $ 270,503 $ 2019
Cost Accumulated depreciation and impairment Total January 1 Depreciation December 31 December31
Cost Accumulated depreciation and impairment Total January1
	Land Buildings Total 198,099 $ 107,076 $ 305,175 $ - 30,472) ( 30,472) ( 198,099 $ 76,604 $ 274,703 $ 198,099 $ 76,604 $ 274,703 $ - 2,100) ( 2,100) ( 198,099 $ 74,504 $ 272,603 $ Land Buildings Total 198,099 $ 107,076 $ 305,175 $ - 32,572) ( 32,572) ( 198,099 $ 74,504 $ 272,603 $
Cost Accumulated depreciation and impairment Total January 1 Depreciation December 31 December31
Cost Accumulated depreciation and impairment Total

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A. For the years ended December 31, 2020 and 2019, rental income from the lease of the investment property were $16,570 and $17,652, respectively, and direct operating expenses arising from the investment property were $3,864 and $3,609, respectively.
B. Details of fair value of investment property are provided in Note 12(5).
15) Intangible assets

) Intangible assets
January1			2020
	Computer software		Goodwill
Cost Accumulated depreciation and impairment Total January 1 Additions Reclassifications Depreciation December 31 December31	44,326 $ 15,701) ( 28,625 $ 28,625 $ 10,032 28,632 14,893) ( 52,396 $ Computer software		42,004 $ - 42,004 $ 42,004 $ - - - 42,004 $ Goodwill
Cost Accumulated depreciation and impairment Total January1	75,854 $ 23,458) ( 52,396 $
		Computer sofware	Goodwill	Customer relationships and others Total 54,160 $ 139,331 $ 54,160) ( 72,327) ( - $ 67,004 $ - $ 67,004 $ 100 7,557 - 7,662 3) ( 11,497) ( 97 $ 70,726 $ Customer relationships and others Total 54,260 $ 140,590 $ 54,163) ( 69,864) ( 97 $ 70,726 $
Cost Accumulated depreciation and impairment Total January 1 Additions Reclassifications Depreciation December 31 December31	43,167 $ 18,167) ( 25,000 $ 25,000 $ 7,457 7,662 11,494) ( 28,625 $ Computer software		42,004 $ - 42,004 $ 42,004 $ - - - 42,004 $ Goodwill
Cost Accumulated depreciation and impairment Total	44,326 $ 15,701) ( 28,625 $		42,004 $ - 42,004 $

A. No interest was capitalized for intangible assets for the years ended December 31, 2020 and 2019.

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B. Goodwill and customer relationships were acquired through acceptance of transfer of the securities brokerage business of Standard Chartered (Taiwan) Bank's retail banking business, and were all allocated to the Company’s brokerage segment.
C. The recoverable amount of goodwill was periodically determined based on its value in use. Calculations of value in use after-tax cash flow projections are based on financial budgets approved by the management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below.

The recoverable amount calculated based on the value in use exceeded the carrying amount, thus the goodwill was not impaired. The key assumptions used for calculation of value in use are as follows:

2020 Growth rate 0.00% Discount rate 9.79% Brokerage	2019 0.00% 11.16% Segment

Management determined the growth rate based on past performance and its expectations of market development. The discount rates were based on the weighted average financing cost rates determined by the Company’s capital asset pricing model. The discount rates also reflect specific risks related to relevant operating segments.

16) Other non-current assets

risks related to relevant operating segments. 16) Other non-current assets
		December31,2020			December31,2019
Operation guaranteed deposits		$	505,000		$	520,000
Clearing and settlement fund			243,407			244,803
Refundable deposits			257,611			193,565
Net defined benefit assets			16,688			-
Prepayment for equipment			21,063			26,575
Overdue receivables			39,388			240,073
Others			720			720
Subtotal			1,083,877			1,225,736
Less: Allowance for uncollectible
accounts-overdue receivables	(		39,388)	(		240,073)
Total		$	1,044,489		$	985,663
17) Short-term loans
		December31,2020			December31,2019
Unsecured loans	$		578,976	$		2,845,502
Interest rates			0.590%~0.700%			0.880%~2.495%
18) Commercial papers payable
		December31,2020			December31,2019
Face value		$	7,300,000		$	9,600,000
Less: discount on commercial papers payable	(		1,104)	(		3,296)
Total		$	7,298,896		$	9,596,704
Interest rates			0.200%~0.340%			0.530%~0.695%

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19) Financial liabilities at fair value through profit or loss - current

		December31,2020	December31,2020		December31,2019	December31,2019
Liabilities on sale of borrowed securities
- hedged		$	243,446		$	192,174
Valuation adjustment on liabilities on sale of
borrowed securities - hedged			28,741			8,617
Liabilities on sale of borrowed securities
- non-hedged			688,401			208,143
Valuation adjustment on liabilities on sale of
borrowed securities - non-hedged			79,206	(		17,707)
Subtotal			1,039,794			391,227
Issuance of call ( put ) warrants			10,937,977			6,639,919
Gain on price fluctuation	(		912,291)	(		945,819)
Market value (A)			10,025,686			5,694,100
Warrants redeemed	(		9,807,568)	(		5,473,503)
Loss on price fluctuation			461,682			163,564
Market value (B)	(		9,345,886)	(		5,309,939)
Warrants - net (A+B)			679,800			384,161
Options sold - TAIFEX			15,405			17,390
Outstanding Liability for Issuance of ETNs			683,685			19,222
Valuation adjustment on outstanding Liability for
Issuance of ETNs			52,029			549
Subtotal			735,714			19,771
Derivative financial liabilities - OTC			151,428			35,716
Total		$	2,622,141		$	848,265

Among the warrants issued by the Company, except for contract-based warrants which are Europeanstyle warrants, all other warrants are American-style warrants. Warrants are stated as liabilities for issuance of warrants at issuance price prior to expiration. Upon repurchase of warrants after issuance, the repurchased amounts are recognized as warrants repurchase and charged as a deduction to liabilities for issuance of warrants. The warrants have six to twelve months exercise period from the date of issuance. The issuer has the option to settle either by cash or stock delivery.

20) Bonds sold under repurchase agreements

Bonds sold under repurchase agreements
Government bonds Corporate bonds Bank debentures International bonds Foreign bonds Total	December31,2020 2,856,072 $ 951,350 200,000 1,037,127 14,051,616 19,096,165 $	December31,2019
		3,445,144 $ 1,601,547 400,889 3,886,654 11,622,022
		20,956,256 $

The above bonds sold under repurchase agreements as of December 31, 2020 and 2019 were due within one year and were contracted to be repurchased at the agreed-upon price plus interest charge

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on the specific date after the transaction. The total repurchase amounts were $19,112,268 and $21,035,116, respectively, and the annual interest rates in every currency were shown as follows:

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Currency December 31, 2020 December 31, 2019
NTD 0.17%~0.26% 0.47%~0.62%
Foreign currencies (Note) -0.40%~3.10% -0.50%~3.40%
Note ： Foreign currencies include AUD, EUR, USD, GBP, RMB and SGD.
21) Accounts payable
December 31, 2020 December 31, 2019
Settlement accounts payable - brokered trading $ 16,849,132 $ 8,410,426
Settlement proceeds 471,589 1,223,127
Settlement accounts payable - operating 513,165 616,917
Accounts payable - international bonds 27,575 223
Accounts payable - foreign bonds 14,454 709,611
Spot exchange payable, foreign currencies 54,719 434,980
Others 107,485 71,935
Total $ 18,038,119 $ 11,467,219
22) Other payables
December 31, 2020 December 31, 2019
Salary and bonus payable $ 1,228,688 $ 718,595
Employees’ and directors’ remuneration payable 163,608 104,206
Others 582,943 412,505
Total $ 1,975,239 $ 1,235,306
23) Other financial liabilities - current
December 31, 2020 December 31, 2019
Equity-linked notes (ELN) - Options $ 17,000 $ 4,000
Principal guaranteed notes (PGN) - fixed income 5,991,310 2,739,866
Total $ 6,008,310 $ 2,743,866
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The Company deals in equity-linked products and combines fixed income instruments with call or put options. These products are categorized into ELN (Equity-Linked Notes) and PGN (Principal Guaranteed Notes). On trade date, the contracted amounts are collected in full from the counterparties. The payout amount on maturity will depend on the price fluctuation of the instruments linked to these contracts and be calculated as trading price less option strike price on maturity. All the linked products are financial instruments under the supervision of the SFB (Securities and Futures Bureau). 24) Other liabilities-non-current

Other liabilities-non-current
Guarantee deposits received Net defined benefit liabilities - non-current Total	December31,2020 24,388 $ - 24,388 $	December31,2019
		25,338 $ 1,587
		26,925 $

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25) Pension plan

A. Defined benefit plans
(A) The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. The Company contributes monthly an amount which ranges between 2.0% and 7.2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the supervisory committee of workers' retirement reserve fund, and with Cathay United Bank, under the name of the management committee of employees’ retirement fund. Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method, to the employees expected to be qualified for retirement next year, the Company will make contributions to cover the deficit by next March.
(B) The amounts recognized in the balance sheet are determined as follows:

	December	31,2020	December	31,2019
Present value of defined benefit obligations	$	795,455	$	819,706
Fair value of plan assets	(	812,143)	(	818,119)
Net defined benefit (assets) liabilities	($	16,688)	$	1,587

Year ended December 31,2020		Present value of defined benefit obligations	Fair value ofplan assets	Net defined benefit liabilities (assets)
	819,706 $ 4,678 5,738 830,122 - 26,308 3,356 29,664 - 64,331) ( 64,331) ( 795,455 $		818,119) ($ - 5,727) ( 823,846) ( 9,506) ( - - 9,506) ( 43,122) ( 64,331 21,209 812,143) ($	1,587 $ 4,678 11 6,276 9,506) ( 26,308 3,356 20,158 43,122) ( - 43,122) ( 16,688) ($
Balance at January 1 Current service cost Interest expense (income) Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in financial assumptions Experience adjustments Pension fund contribution Paid pension Balance at December 31

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		Present value of	Present value of					Net defined
		defined benefit			Fair value	benefit liabilities
			obligations	ofplan assets				(assets)
Year ended December 31,2019
Balance at January 1		$	785,853	($	785,897)	($		44)
Current service cost			5,006		-			5,006
Interest expense (income)			8,644	(	8,644)			-
			799,503	(	794,541)			4,962
Remeasurements:
Return on plan assets (excluding
amounts included in interest
income or expense)			-	(	7,249)	(		7,249)
Change in financial assumptions			28,807		-			28,807
Experience adjustments			13,302		-			13,302
			42,109	(	7,249)			34,860
Pension fund contribution			-	(	38,235)	(		38,235)
Paid pension	(		21,906)		21,906			-
	(		21,906)	(	16,329)	(		38,235)
Balance at December 31		$	819,706	($	818,119)		$	1,587

(D) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan asset fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilization Report published by the government. In addition, for retirement fund deposits with Cathay United Bank, under the name of the management committee of employees’ retirement fund, the fund invests in time deposit accounts under Cathay United Bank.

(E) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases		Year ended December 31,2020 Year ended December 31, 2019 0.30% 0.70% 2.50% 2.50%

Assumptions regarding future mortality rate are set based on the Taiwan Standard Ordinary Experience Mortality Table (2011).

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Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

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Discount rate Future salary increases
Increase 0.25% Decrease 0.25% Increase 0.25% Decrease 0.25%
December 31, 2020
Effect on present value
of defined benefit
obligation ($ 16,592) $ 17,108 $ 14,741 ($ 14,399)
December 31, 2019
Effect on present value
of defined benefit
obligation ($ 18,175) $ 18,762 $ 16,344 ($ 15,945)
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(F) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2021 amounts to $46,641.
B. Defined contribution plans:

Effective from July 1, 2005, the Company established a defined contribution plan pursuant to the “Labor Pension Act”, which covers employees with R.O.C. nationality and those who chose or are required to apply the “Labor Pension Act”. The contributions are made monthly based on not less than 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The payment of pension benefits is based on the employees’ individual pension fund accounts and the cumulative profit in such accounts. The employees can choose to receive such pension benefits monthly or in lump sum. The pension costs under defined contribution pension plans of the Company for the years ended December 31, 2020 and 2019 were $62,258 and $56,453, respectively.

26) Equity

A. Common stock
(A) As of December 31, 2020, the Company’s authorized capital was $15,000,000 with a par value of $10 (in dollars) per share. As of December 31, 2020 and 2019, the common stocks issued and the outstanding common stocks were 1,399,838 and 1,372,390 thousand shares, respectively.

Movements in the number of the Company’s ordinary shares outstanding are as follows:

January 1 Purchase and retirement of treasury shares Stock dividends December 31		(Expressed in thousands) Year ended December 31,2020 Year ended December 31,2019 1,372,390 1,390,428 - 18,038) ( 27,448 - 1,399,838 1,372,390	(Expressed in thousands) Year ended December 31,2020 Year ended December 31,2019 1,372,390 1,390,428 - 18,038) ( 27,448 - 1,399,838 1,372,390
		1,372,390 - 27,448 1,399,838	1,390,428 18,038) ( - 1,372,390

The Company was approved by the board of directors on March 26, 2020 and the shareholders' meeting resolved on June 19, 2020 to increase capital with an undistributed surplus of $274,478, and issue 27,448 thousand ordinary shares with a par value of $10 (in dollars) per share. The capital increase base date is at August 10, 2020, the total issued share capital after the capital

207

increase was $13,998,378, divided into 1,399,838 thousand shares, each with a denomination of $10 (in dollars) per share.

(B) Treasury shares

In order to maintain the Company’s credit and stockholders’ rights and interests, the Company bought back outstanding shares. The movement of the number of treasury shares is as follows:

(Expressed in thousands)

==> picture [462 x 123] intentionally omitted <==

----- Start of picture text -----

Year ended December 31, 2019
Shares at the Shares at the
beginning of Period Period end of the Period-end
Reason for buyback the period increase decrease period amount
To maintain the
Company's credit and
stockholders' rights and
interests - 18,038 ( 18,038) - -
----- End of picture text -----

In accordance with Article 28-2 of the Securities and Exchange Act, whenever the buyback is required to maintain the company's credit and shareholders' rights and interests, the shares so purchased shall be cancelled and the amendment registration shall be effected within six months from the date of buyback. In May, 2019, the Board of Directors resolved to retire the treasury shares and completed the registration of change in capital.

B. Capital reserve

Capital reserve
December 31, 2020 December 31, 2019		Sharepremium		Treasury share transactions		Expired stock options		Difference between consideration and carrying amount of subsidiaries acquired or disposed 440 $ 440 $	Total
		24,663 $ 24,663 $		65,675 $ 65,675 $		483 $ 483 $			91,261 $ 91,261 $

Pursuant to the R.O.C. Company Law, capital reserve arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided it should not exceed 10% of the paid-in capital each year. Capital reserve should not be used to cover accumulated deficit unless the legal reserve is insufficient.

C. Legal reserve

Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the balance of the reserve exceeds 25% of the Company’s paid-in capital.

D. Special reserve

208

in capital. The special reserve shall be used exclusively to cover accumulated deficit or to increase capital and shall not be used for any other purpose. Such capitalization shall not be permitted unless the Company had already accumulated a special reserve of at least 25% of its paid-in capital stock and only quarter of such special reserve may be capitalized.

In accordance with the regulations, the Company shall set aside an equivalent amount of special reserve from accumulated unappropriated retained earnings of the current year based on the decreased amount of equity. If there is any subsequent reversal of the decrease in equity, the earnings may be distributed based on the reversal proportion.

In accordance with Jing-Guan-Zheng-Quan Letter No. 10500278285 dated August 5, 2016, securities firms should set aside 0.5% to 1% of net income after tax as special reserve, upon the distribution of earnings from 2016 to 2018. From fiscal year 2017, special reserve as mentioned above may be reversed based on an amount equal to employees’ transformation training expenditure, employee transfer and settlement expenditure arising from the development of Fintech. Further, according to Jing-Guan-Zheng-Quan Letter No. 1080321644 dated July 10, 2019, securities firms are no longer required to set aside special reserve starting from 2019. And the special reserve, within the balance of special reserve set aside in the previous years, could be reversed at the same amount for the aforementioned expenditures.

27) Unappropriated earnings and dividends policy

A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall be used to pay all taxes and offset prior years’ operating losses first, and then set aside as legal reserve, accounted for as 10% of the remaining amount, and special reserve, accounted for as 20% of the remaining amount. Upon provision or reversal of special reserve in accordance with the law, any remaining amount together with unappropriated earnings at beginning of the period shall be distributed according to the following resolution adopted at the stockholders’ meeting: Distribution shall not be made if the balance of distributable earnings is less than 5% of paid-in capital.
B. In addition, the total amount of dividends declared every year shall be at least 70% of distributable earnings, of which stock dividends shall be at least 50% and cash dividends shall be lower than 50%.
C. The Company may determine a better proportion of cash and stock dividends distribution based on its actual operating conditions and capital utilization plan for the following year.

209

D. The earnings distribution for 2019 as resolved by the Board of Directors on June 19, 2020; the appropriation of 2018 earnings was resolved by the shareholders on June 18, 2019. Details are as follows:

Legal reserve Special reserve Special reserve (Note 1) Reversal of special reserve (Notes 1&3) Special reserve (Note 2) Cash dividends Stock dividends Total	Amount Dividends per share (in dollars) 234,244 $ 473,707 - 4,221) ( - 1,372,390 1.00 $ 274,478 0.20 2,350,598 $ Year ended December 31, 2019	Amount Dividends per share (in dollars) 121,032 $ 242,064 6,052 4,365) ( 58,374) ( 959,395 0.69 $ - - 1,265,804 $ Year ended December 31, 2018

Note 1: Special reserve was provided for employees’ transition for financial technology development according to Jing-Guan-Zheng-Chuang Letter No. 10500278285 and can be reversed for employees’ transition.
Note 2: Special reserve shall be set aside in the same amount of net debit amount of other equity interest recorded in current year from the profit or loss of current year and the accumulated unappropriated earnings pursuant to paragraph 1 of Article 41 of Securities and Exchange Act and Jing-Guan-Zheng-Chuang Letter No. 1010028514.
Note 3: Special reserve was reversed according to Jing-Guan-Zheng-Chuang Letter No. 10800321644.
E. The earnings distribution for 2020 as resolved by the Board of directors on March 23, 2021 is set forth below:

orth below:
Legal reserve Special reserve Reversal of special reserve (Note 4) Cash dividends Stock dividends Total	Year ended December 31,2020
	Amount	Dividends per share (in dollars)
	376,735 $ 721,504 7,620) ( 2,099,756 559,935 3,750,310 $	1.50 $ 0.40 $

Note 4: Special reserve was provided for employees’ transition for financial technology development based on Jing-Guan-Zheng-Chuang Letter No. 1080321644 and can be reversed for employees’ transition.

210

28) Brokerage handling fee revenue

Revenues from brokered trading - TWSE Revenues from brokered trading - OTC Others Total

	Year ended		Year ended
December 31, 2020		December 31, 2019
$	1,787,358	$	1,069,518
	617,121		426,700
	61,043		32,198
$	2,465,522	$	1,528,416

29) Revenues from underwriting business

Revenues from underwriting securities on a firm commitment basis Others Total

	Year ended		Year ended
December 31, 2020		December 31, 2019
$	25,222	$	25,139
	51,284		37,672
$	76,506	$	62,811

30) Net gain (loss) on sale of trading securities

Net gain (loss) on sale of trading securities
Dealers: -TAIEX -OTC -Overseas trading Subtotal Underwriters: -TAIEX -OTC Subtotal Hedging: -TAIEX -OTC -Overseas trading Subtotal Total	Year ended December 31,2020		Year ended December 31,2019
	1,745,296 $ 32,375 1,233,469 3,011,140 Year ended December 31,2020		1,686,209 $ 139,489 504,755 2,330,453 Year ended December 31,2019
	59,566 65,373 124,939 159,062 53,329 3,280 215,671 3,351,750 $	47,543 73,592 121,135 340,461 52,232 10,820) ( 381,873 2,833,461 $

211

31) Interest revenue

31) Interest revenue	31) Interest revenue	31) Interest revenue
32) Net valuation gain (loss) on trading securities at fair value through profit or loss 33) Net gain on covering of borrowed securities and bonds with resale agreements-short sales Year ended December 31, 2020 Year ended December 31, 2019 Interest income from margin loans 502,286 $ 484,574 $ Interest income from bonds 535,601 674,047 Others 14,708 4,574 Total 1,052,595 $ 1,163,195 $ Year ended December 31,2020 Year ended December 31, 2019 Gain on sale of securities - dealer 1,014,047 $ 655,672 $ Loss on sale of securities - underwriting 51,505) ( 22,420) ( Gain on sale of securities - hedging 33,077 77,851 Total 995,619 $ 711,103 $ Year ended December 31,2020 Year ended December 31,2019 Loss from the bond investments under resale agreements ($ 5,861) ($ 6,528) Gain (loss) from covering - warrants 8,731 ( 3,919) Gain from covering - structured notes 1,504 2,861 Loss from securities borrowing transactions - structured notes ( 147) ( 1,295) Gain from securities borrowing transactions - dealer 262,471 46,294 Gain from covering - equity options 1,540 - Gain from securities borrowing transactions - equity options 201 - Total 268,439 $ 37,413 $
	Year ended December 31,2020
	($ 5,861) 8,731 1,504 ( 147) 262,471 1,540 201 268,439 $	($ 6,528) ( 3,919) 2,861 ( 1,295) 46,294 - -
		37,413 $

212

34) Net valuation loss on borrowed securities and bonds with resale agreements-short sales at fair value

through profit or loss

through profit or loss	through profit or loss
Net Realized gain on financial assets measured at fair value through other comprehensive income Year ended December 31,2020 Year ended December 31,2019 Valuation loss from the bond investments under resale agreements - $ 5,265) ($ Valuation (loss) gain from securities borrowing transactions - dealer 92,095) ( 5,546) ( Valuation loss from covering - warrants 5,292 10,607) ( Valuation gain from securities borrowing transactions - equity options 2 - Valuation loss from covering - equity options 30,220) ( - Total 117,021) ($ 21,418) ($
Year ended December 31, 2020 Foreign bonds 100,358 $	Year ended December 31,2019
	15,309 $

35) Net Realized gain on financial assets measured at fair value through other comprehensive income

36) Net gain from issuance of call (put) warrants

37) Net loss from derivatives 38) Impairment loss and reversal of impairment loss Net gain on changes in fair value of call warrant liabilities and redemption Loss on exercise of put warrants before maturity Expenses arising out of issuance of put warrants Total Futures contract gain (loss) Option trading (loss) gain (Loss) gain on foreign exchange derivatives Others Total Provision of provision for impairment Collection of bad debt Total	Year ended December 31,2020	Year ended December 31,2019
	367,407 $ 114,508) ( 157,494) ( 95,405 $ Year ended December 31,2020	203,893 $ 31,156) ( 78,873) ( 93,864 $ Year ended December 31,2019
	265,861 $ 159,758) ( 43,196) ( 183,424) ( 120,517) ($ Year ended December 31,2020	908,766) ($ 18,375) ( 18,870 79,312) ( 987,583) ($ Year ended December 31,2019
	17,510) ($ 2,202 15,308) ($	7,170) ($ 672 6,498) ($

213

39) Other operating income

Other operating income
			Year ended		Year ended
		December 31,2020		December 31,2019
Income from securities lending		$	151,265	$	113,544
Net currency exchange gain	(		326,402)		196,750
Handling fee revenues from funds			46,855		45,349
Others			5,413		7,012
Total	($		122,869)	$	362,655

40) Handling charges

Handling charges
Financial costs Employee benefits expense Brokerage handling fee expense Dealer handling fee expense Refinancing processing fee expense Total Interest expense from repurchase agreements Loans interest expense Other interest expense Total Salaries Labor and health insurance Pension Other employee benefits Total	Year ended December 31, 2020	Year ended December 31, 2019
	218,425 $ 149,976 4,704 373,105 $ Year ended December 31,2020	131,978 $ 264,894 2,300 399,172 $ Year ended December 31, 2019
	180,657 $ 60,866 7,867 249,390 $ Year ended December 31,2020	382,546 $ 116,568 7,170 506,284 $ Year ended December 31,2019
	2,508,670 $ 120,577 66,947 99,822 2,796,016 $	1,787,058 $ 108,575 61,459 87,007 2,044,099 $

41) Financial costs

42) Employee benefits expense

A. In accordance to the Company’s Article of Incorporation, the remainder of the year-end income before taxes less income before appropriating employees’ compensation and directors’ remuneration, if any, shall appropriate an employees’ compensation no less than 1.6% and directors’ remuneration no more than 2%. However, when the Company has an accumulated deficit, earnings to cover the deficit shall first be retained before appropriating employees’ compensation and directors’ remuneration.

B. For the years ended December 31, 2020 and 2019, employees’ compensation was accrued at $81,804 and $52,103, respectively; directors’ remuneration was accrued at $81,804 and $52,103, respectively. The aforementioned amounts were recognized in salary expenses.

214

C. For years ended December 31, 2020, employees’ compensation was estimated at 2% and directors’ remuneration at 2%, based on the period-end income before taxes less income before appropriating employees’ compensation and directors’ remuneration.
D. The actual distributed amount of employees’ and directors’ remuneration for 2019 as resolved by the Board of Directors was in agreement with the estimates in the 2019 financial statements.
E. Information on the appropriation of the Company’s earnings as resolved by the Board of Directors would be posted in the “Market Observation Post System” on the Taiwan Stock Exchange Official website.

43) Depreciation and amortization

Depreciation Amortization Total	Year ended December 31,2020 142,494 $ 14,911 157,405 $	Year ended December 31,2019
		143,330 $ 11,497 154,827 $

44) Other operating expenses

Other operating expenses
Postage Taxes Security lending expenses Computer information expenses Others Total	Year ended December 31, 2020		Year ended December 31,2019
	68,637 $ 708,890 93,702 102,723 383,264 1,357,216 $		58,880 $ 521,601 85,186 97,435 326,656 1,089,758 $

45) Other gains and losses

Other gains and losses
Financial income (Loss) gain on disposal of investments Net currency exchange gain (loss) Other net non-operating revenues Total	Year ended December 31,2020		Year ended December 31,2019
	11,715 $ 40,290) ( 7,352) ( 136,569 100,642 $		19,159 $ 9,073 7,576 123,882 159,690 $

215

46) Income tax

A. Income tax expense

(a)Components of income tax expense:

e tax ome tax expense Components of income tax expense:
			Year ended			Year ended
		December 31,2020			December 31,2019
Current tax:
Current tax on profits for the periods		$	319,537		$	163,690
Prior year income tax overestimation	(		27,970)	(		11,154)
Total current tax			291,567			152,536
Deferred taxes:
Origination and reversal of temporary
differences			27,511	(		6,691)
Total deferred taxes Income tax expense		$	27,511 319,078	(	$	6,691) 145,845

(b)The income tax expense relating to components of other comprehensive income is as follows ：

		Year ended			Year ended
		December 31, 2020		December 31,2019
Remeasurement of defined benefit
obligations		4,032) ($		($	6,972)
Reconciliation between income tax expense and accounting profit
		Year ended			Year ended
	December 31, 2020			December 31,2019
Tax calculated based on profit before tax and statutory tax rate	$	785,319		$	502,876
Expenses disallowed by tax regulation		21,336			93,470
Prior year income tax underestimation	(	27,970)	(		11,154)
Tax exempt income by tax regulation	(	755,544)	(		594,419)
Effect from Alternative Minimum Tax		295,937			155,072
Income tax expense	$	319,078		$	145,845

B. Reconciliation between income tax expense and accounting profit

216

C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows ：

	YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020	YearendedDecember31,2020
	January1	Recognised in profit or loss	Recognised in other comprehensive income		December 31
	January1	Recognised in profit or loss	Recognised in other comprehensive income		December 31
29,635 $ 9,559 76,285 5,182 120,661 $ 14,274) ($ 14,274) ($ 106,387 $		9,844 $ 5,340) ( - 61 4,565 $ 2,126 $ 2,126 $ 6,691 $	- $ - 6,972 - 6,972 $ - $ - $ 6,972 $	39,479 $ 4,219 83,257 5,243 132,198 $ 12,148) ($ 12,148) ($ 120,050 $

D. As of December 31, 2020, the Company’s income tax returns have been approved by the Tax Authority until 2018, except for 201 7.

217

E. With respect to the income tax returns of the Company for 2016, the Tax Authority assessed to increase income tax payable by $2,822. However, the Company disagreed with the assessments and had filed for administrative remedy. The Company had recognized the income tax expense based on the assessment.

47) Earnings per share

based on the assessment. ) Earnings per share
Basic earnings per share Net income attributable to common shareholders Dilutive effect of common stock equivalents Employee bonus Basic earnings per share Net income attributable to common shareholders Dilutive effect of common stock equivalents Employee bonus	Amount after tax Weighted-average outstanding common shares (In thousands) Earnings per share (In dollars) 3,607,518 $ 1,399,838 2.58 $ - 4,446 3,607,518 $ 1,404,284 2.57 $ Amount after tax Weighted-average outstanding common shares (In thousands) Earnings per share (In dollars) 2,368,536 $ 1,400,927 1.69 $ - 3,678 2,368,536 $ 1,404,605 1.69 $ YearendedDecember31,2020 YearendedDecember31,2019
	Amount after tax	Weighted-average outstanding common shares (In thousands) 1,400,927 3,678 1,404,605
	2,368,536 $ - 2,368,536 $		1.69 $ 1.69 $

The above-mentioned weighted average number of outstanding shares has been adjusted based on the proportion of capital increase on August 4, 2020, and the earnings per share for the year ended December 31, 2019 have been recalculated.

7. RELATED PARTY TRANSACTIONS

1) Names and relationships of related parties

Names of related parties

Uni-President Enterprises Corp.

President Capital Management Corp. President Futures Corp. Company President Securities (BVI) Ltd

Relationship with the Company

Entity having significant influence on the Company Subsidiary of the Company PSC Subsidiary of the Company PSC Subsidiary of the Company PSC

218

Names of related parties Company President Securities (HK) Ltd. Associates President Insurance Agency Corp. Company PSC Venture Capital Investment Limited Company President Securities (Nominee) Ltd. President Wealth Management (HK) Ltd. Uni-President Asset Management Corp. President Tokyo Co., Ltd. ScinoPharm Taiwan, Ltd. Ton Yi Industrial Corp. President Chain Store Corp. (PCSC) Kai Yu (BVI) Investment Co., Ltd Cayman President Holdings Limited President (BVI) International Investment Holdings Ltd Funds managed by Uni-President Asset Management Corp.

Relationship with the Company Subsidiary of the Company PSC Subsidiary of the Company PSC Subsidiary of the Company PSC Subsidiary of the Company PSC Subsidiary of the Company PSC Associate Other related party Other related party Other related party Other related party Other related party Other related party Other related party

Security investment trust fund raised by the Uni-President Asset Management Corp.

2) Significant related party transactions and balances A. Futures guarantee deposits receivable

Significant related party transactions and balances A. Futures guarantee deposits receivable
B. Accounts receivable Subsidiary of the Company PSC: President Futures Corp. Entity having significant influence on the company: Uni-President Enterprises Corp. Subsidiary of the Company PSC: President Futures Corp. Company President Securities (HK) Ltd. Other related party: ScinoPharm Taiwan, Ltd. President Chain Store Corp. (PCSC) Others Total	December 31,2020	December 31,2019 2,016,203 $ December 31,2019
	2,825,942 $ December 31,2020
	25 $ 3,389 149 399 378 73 4,413 $	274 $ 2,620 729 515 161 53 4,352 $

219

C. Other receivables

Other receivables
	December 31,2020		December 31,2019
Subsidiary of the Company PSC:
President Futures Corp.	$	257	$	66
Others		20		18
Other related party:
Others		18		-
Total	$	295	$	84

－
D. Lease transactions lessee
(A) The Company leases business vehicles and multifunction printers, etc., from President Tokyo Co., Ltd. Rental contracts are typically made for periods of 1 to 5 years. Rents are paid monthly.
(B) Right-of-use assets:
- a. Acquisition of right-of-use assets:

ht-of-use assets: cquisition of right-of-use assets:
isposals of right-of-use assets: ase liabilities Lease liabilities`–`current Lease liabilities`–`non-current Financial costs Other related party: President Tokyo Co., Ltd. Other related party: President Tokyo Co., Ltd. Other related party: President Tokyo Co., Ltd. Other related party: President Tokyo Co., Ltd. Other related party: President Tokyo Co., Ltd. Others Total	December 31,2020	December 31,2019 8,256 $ Year ended December 31, 2019 1,887 $ December 31,2019 4,940 $ December 31, 2019 10,782 $ Year ended December 31,2019 116 $ 1 117 $
	14,471 $ Year ended December 31, 2020
	- $ December 31,2020
	7,016 $ December31,2020 17,378 $ Year ended December 31,2020
	144 $ - 144 $

b. Disposals of right-of-use assets:
(C) Lease liabilities
a. Lease liabilities current
b. Lease liabilities non-current
c. Financial costs

220

d. Net gain on lease modification

d. Net gain on lease modification
E. Refundable deposits F. Accounts payable G. Guarantee deposit received H. Bonds sold under repurchase agreements Other related party: President Tokyo Co., Ltd. Subsidiary of the Company PSC: President Futures Corp. Subsidiary of the Company PSC: President Futures Corp. Other related party: President Tokyo Co., Ltd. Total Subsidiary of the Company PSC: President Futures Corp. Others Associate: Uni-President Assets Management Corp. Other related party: President Tokyo Co., Ltd. Total Other related party: President Life Sciences Cayman Co., Ltd Kai Yu (BVI) Investment Co., Ltd Cayman President Holdings Limited Total	Year ended December 31, 2020	Year ended December 31, 2019 26 $ December 31,2019 34,000 $ December 31, 2019
	- $ December 31, 2020
	34,000 $ December 31,2020
	104 $ - 104 $ December 31,2020	242 $ 452 694 $ December 31,2019 $ 16,137 804 1,044 1,434 19,419 $ December 31,2019
	$ 16,137 811 1,044 1,434 19,426 $ December 31,2020
	- $ 148,096 489,856 637,952 $	24,475 $ - - 24,475 $

221

I. Handling fee revenue

Handling fee revenue
		Year ended		Year ended
	December 31,2020		December 31,2019
Subsidiary of the Company PSC:
Others	$	48	$	128
Security investment trust fund raised
by the Uni-President Asset Management Corp.:
Uni-President Asset Management Corp.		47,108		32,992
Other related party:
Others		2,354		810
Total	$	49,510	$	33,930

Terms of handling fee revenue mentioned above are similar to those of transactions with third parties. J. Futures commission income

J. Futures commission income	J. Futures commission income	J. Futures commission income
K. Gins on wealth management-trust income from sales of funds The revenues were collected on a monthly basis in accordance with contract terms. L. Other operating income-handling charge revenue The revenues were collected on a monthly basis in accordance with contract terms. M. Rent income Year ended December 31, 2020 Year ended December 31,2019 Subsidiary of the Company PSC: President Futures Corp. 40,206 $ 35,784 $ Year ended December 31,2020 Year ended December 31,2019 Associates: Uni-President Assets Management Corp. 5,260 $ 9,817 $ Year ended December 31,2020 Year ended December 31,2019 Associates: Uni-President Assets Management Corp. 45,022 $ 43,792 $			Year ended December 31, 2020			Year ended December 31,2019
						35,784 $ Year ended December 31,2019
	Subsidiary of the Company PSC： President Capital Management Corp. Others Associates: Uni-President Assets Management Corp. Other related party: President Tokyo Co., Ltd. Total	Period 2017.10.01~2024.03.31 2016.01.01~2024.03.31 2018.04.01~2024.03.31		Deposit 595 $ 353 1,044 1,434	Year ended December 31, 2020		Year ended December 31, 2019
					$ 3,644 2,747 6,811 9,422 22,624 $		$ 3,644 3,070 7,045 9,422 23,181 $

ent income
					Year ended		Year ended
				December 31,		December 31,
	Period	Deposit			2020		2019
Subsidiary of the Company PSC：
President Capital Management Corp.	2017.10.01~2024.03.31	$	595	$ 3,644		$	3,644
Others			353		2,747		3,070
Associates:
Uni-President Assets
Management Corp.	2016.01.01~2024.03.31		1,044		6,811		7,045
Other related party:
President Tokyo Co., Ltd.	2018.04.01~2024.03.31		1,434		9,422		9,422
Total				$	22,624	$	23,181

222

Rental income mentioned above is derived from leasing part of the Company’s office space and business premises to various related parties and calculated as agreed by both parties. Lease payments are collected on schedule in accordance with the terms of the lease contracts.

N. Revenues from underwriting business

Revenues from underwriting business
Stock custodian income Entity having significant influence on the company: Uni-President Enterprises Corp. Entity having significant influence on the company: Uni-President Enterprises Corp. Subsidiary of the Company PSC Uni-President Enterprises Corp. Associate: Uni-President Assets Management Corp. Other related party: ScinoPharm Taiwan, Ltd. Ton Yi Industrial Corp. President Chain Store Corp. (PCSC) Others Total	Year ended December 31,2020 300 $ Year ended December 31,2020 3,697 $ 66 135 2,635 1,220 2,097 663 10,513 $	Year ended December 31, 2019
		- $ Year ended December 31,2019 3,506 $ 66 133 2,371 1,225 1,929 663 9,893 $

O. Stock custodian income

Terms of stock custodian income mentioned above are similar to third parties.

P. Net loss from derivatives

P. Net loss from derivatives
Q. Other operating expenses-equipment rental and Other related party: Cayman President Holdings Limited Kai Yu (BVI) Investment Co., Ltd Total Other related party: President Tokyo Co., Ltd.	Year ended December 31,2020		Year ended December 31,2019
	copy expense 1,189) ($ 36) ( 1,225) ($ Year ended December 31,2020		- $ 240) ( 240) ($ Year ended December 31,2019

		1,889 $	544 $

223

R. Clearing charges-futures

		Year ended December 31,2020 11,731 $ Year ended December 31,2020 50,400 $ Year ended December 31, 2020

		$	$
		$	$

Entity having significant influence on the company: Uni-President Enterprises Corp. Other related parties: President Chain Store Corp. ScinoPharm Taiwan, Ltd. Others Total Entity having significant influence on the company: Uni-President Enterprises Corp. Other related parties: President Chain Store Corp. Total
	Ending Shares (In thousands)
	5 - - -
	Ending Shares (In thousands)
	76 -

224

V. Compensation of key management personnel

The compensation of key management such as directors, general managers, vice general managers were as follows:

ere as follows:
		Year ended		Year ended
	December 31, 2020		December 31, 2019
Salary and short-term employee benefits	$	264,054	$	154,625
Retirement benefits		660		774
Other long-term employee benefits		-		-
Termination benefits		-		-
Share-based payment		-		-
Total	$	264,714	$	155,399

8. PLEDGED ASSETS

The Company’s assets pledged or restricted for use were as follows:

Assets Financial assets at fair value through profit or loss - current: Trading securities (par value) - Corporate bonds - Government bonds - Overseas bonds - International bonds - Bank debentures Restricted assets: - Demand deposits - Pledged time deposits Financial assets at fair value through profit or loss - non-current: - Government bonds (par value) Property and equipment - Land and buildings (book value) Pledged time deposits - Operating guarantee deposits	December31,2020 950,000 $ 2,634,800 15,119,396 1,034,879 200,000 652,010 400,000 50,000 1,101,768 505,000	December31,2019 1,600,000 $ 3,330,800 12,421,911 4,110,169 400,000 735 400,000 50,000 1,107,127 520,000	Purposes
			Securities for bonds sold under repurchase agreements Securities for bonds sold under repurchase agreements Securities for bonds sold under repurchase agreements Securities for bonds sold under repurchase agreements Securities for bonds sold under repurchase agreements Collections on behalf of third parties and reimbursement for wages and stocks Securities for short-term loans and guarantees for issuance of commercial papers Trust fund deposit-out Securities for short-term loans and guarantees for issuance of commercial papers Security deposits

9. SIGNIFICANT COMMITMENTS

None.

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10. SIGNIFICANT LOSS FROM NATURAL DISASTER

None.

11. SIGNIFICANT SUBSEQUENT EVENT

None.

12. OTHER

1) Management objective and policy of financial risks
A. Risk management objective

The Company continually strengthens risk culture to every employee and makes sure that the Company can actively develop various businesses under a healthy and effective risk management system. At the same time, by creating value of an entity and continually increasing profit, profit maximization may be achieved within appropriate risk tolerance.

B. Risk management system
In order to ensure the completeness of risk management system, run the balancing mechanism of risk management, and improve the division efficiency of risk management, the Company sets up “Risk Management Policy”. Such policy aims to establish internal system compliance and the guiding tools for policies communication within the Company and enable every layer of the Company engaged in different tasks to identify, evaluate, monitor, and control various risks with establishment of consistent compliance rules for risks of each business so that the risks can be controlled within the limits set in advance.
The Company’s risk management system covers risks incurred from businesses in and off the balance sheet, such as market risk, credit risk, liquidity risk, operating risk, legal risk, model risk which are all included in the risk management.
C. Risk management organization
Risk management organization: Board of Directors, Risk Management Committee, Risk Control Office, Business units and other related segments (such as Office of Auditing, Office of General Manager, Compliance segment, Legal segment, Finance segment and Settlement segment) are in charge of planning, supervising and execution.
(A) The Board of Directors should ensure the effectiveness of risk management and be responsible for the ultimate result and the following duties:
- a. To establish proper risk management system, operating process, and risk management culture in the Company with allocation of necessary resource for better execution and operation.
- b. Policy of risk management review
- c. Review and approval of business application, transaction authorization and risk limit.
(B) The Risk Management Committee reports to the Board of Directors and is responsible for the following:
- a. Review risk management policy
- b. Review the highest risk tolerance
- c.Submit regular reports to the Board of Directors in relation to the risk management status of the whole Company
(C) The General Manager supervises daily risk management of the entire Company and is responsible for the following:
- a. Supervise and monitor daily risk management of the entire Company
- b. Approval of management exceptions
(D) Assets and Liabilities Committee reports to the General Manager and is responsible for the following:
- a. Set up the ultimate guidelines for assets and liabilities management of the entire Company
- b. Analyze and control the entire Company’s assets and liabilities portfolio

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  - c. Approval of various businesses’ quotas

  - d. Gather and analyze information on domestic and offshore interest rate, exchange rate, prosperity fluctuation, political and economic environmental changes, and predict the financial trend in the future

(E) Risk Control Office implements risk management policy and related regulations and reports to the Risk Management Committee. Risk Control Office also reports daily risk management to the General Manager and is responsible for the following:
- a. Establish Risk Management Policy of the entire Company
- b. Develop effective method for measurement and risk management in an entity
- c. Review risk management system of business units
- d. Generate risk report through information gathering and consolidation
- e. Analyze various business risks and report to the General Manager
- f. Report the risk management situation to the Risk Management Committee according to a meeting’s nature and needs
- g. Carry out duties as designated by the Risk Management Committee and control risks of business units
(F) Auditing Office is responsible for the following:
- a. Execute operating risk control
- b. Include the risk management system into internal audit program and carry out the daily audit schedule.
- c. Assess the effectiveness of internal control and verify the executed result.
(G) Compliance segment and legal segment under the Office of General Manager are responsible for the following:
- a. Compliance segment should make sure that the business operation and risk management system are in compliance with relevant regulations.
- b. Legal segment is responsible for legal risk control.
- c. Compliance segment also provides services of Anti-Money Laundering and Counter Terrorism Financing, including designs specification and internal control, establishes transaction monitoring, oversees the effective implementation of business units, conducts the employee training and reports any suspicion of money laundering.
(H) Finance segment is responsible for the following:
- a. Verify the correctness of position information and reasonability of profit and loss calculation.
- b. Control and analyze self-owned capital adequacy ratio.
- c. Analyze the appropriateness of structures of the assets and liabilities.
(I) Business units are responsible for the following:
- a. Set up risk management details of various businesses according to the risk management policy and other related regulations.
- b. Provide sufficient position information and risk control information to the Risk Control Office.
(J) Settlement division is responsible for:
- a. Clearing and settlement; risk control and management of margin purchase and short sale of securities.
- b. Risk control and management of trading middle office and enforcement of rules governing risk management of business segments.
D. Risk management policy

In order to ensure the completeness of risk management system, run the balancing mechanism of risk management, and improve the division efficiency of risk management, the Company sets up “Risk Management Policy”. Such policy aims to establish internal system compliance and

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the guiding tools for policies communication within the Company and enable every layer of the Company engaged in different tasks to identify, evaluate, monitor, and control various risks with establishment of consistent compliance rules for risks of each business so that the risks can be controlled within the limits set in advance.

Risk management processes include risk identification, risk evaluation, risk supervision and various risk control. Each kind of risk evaluations and responding strategies are described as follows:

  - (A) Market risk management

     - The Company has implemented risk management information system (Risk Manager) in relation to market risk control. All trading positions of the Company have been included in the daily risk control system for the calculation of Value at Risk (VaR). Limit exceeding indicators are mainly the nominal principal, stop-loss, sensitivity (Greeks) and VaR. The risk management report is presented on a daily basis for implementation of regular control and limit exceeding handling procedures.

  - (B) Credit risk management

     - In relation to risk control, the quantitative model of default rate adopts KMV model to calculate the default rate of issuers with credit exposure of the issuing company and the trading counterparties, and credit risk of securities disclosed in the report. The credit exposure is mitigated through regular review of credit status.

  - (C) Fund liquidity risk

     - Unit in charge of fund procurement regularly predicts future fund demand and supply, and consolidates company guarantee or endorsement and capital lending businesses to monitor the condition of fund procurement on a daily basis.

E. Hedging and risk-offsetting strategy
- (A) Policies of hedging and risk mitigating are parts of the Company’s risk management policies, and the hedging position and hedged trading position are supposed to be one portfolio, of which the gain and loss and risk information are measured on a consolidated basis.
- (B) The overall position (hedging position and trading position) is included in the daily risk management system to calculate Value at Risk and other relevant information. Limit exceeding indicators mainly include nominal principal, stop-loss point, price sensitivity and VaR. With the presentation of daily risk management report, routine control and limit exceeding treatment can be executed.
- (C) The continued effectiveness of hedging and risk-offsetting strategy is measured by the gain and loss of overall position (hedging position and trading position), in order to track reasonableness of the profit or loss of hedging position and the offsetting relationship with the profit or loss of trading position, and to control them within a reasonable range.
2) Credit risk
A. Source and definition of credit risk
- The credit risk exposure of the Company as a result of engagement in financial transactions include issuer’s credit risk, credit risk of counterparty and credit risk of underlying assets:
- (A) Credit risk of the issuer refers to the issuers of financial debt instruments held by the Company failing to repay its obligation due to the fact that the issuer breaches the contract resulting in the risk of financial loss to the Company.
- (B) Credit risk of counterparty refers to risk of financial loss to the Company arising from default by the counterparty of financial instruments on the settlement or payment obligation.
- (C) Credit risk of the underlying assets happens when the credit rating of the underlying assets linked to the financial instrument is downgraded by the rating agency or when the losses occur as a result of contract default.

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The financial assets held by the Company which could result in credit risk include bank deposit, debt securities, derivatives transactions in OTC, bonds purchased/sold under resale/repurchase agreements, refundable deposit of securities lending, futures trade margins, other refundable deposits and receivables.

B. Maximum credit risk exposure and credit risk concentration

The maximum exposure to credit risk of financial assets in the parent company only balance sheet, without consideration of the collateral or other credit enhancements, is equivalent to the carrying amount. In Taiwan, the sources of credit risk of the Company are primarily resulting from cash deposited with banks or other financial institutions, debt securities issued or guaranteed by a bank, derivative instruments transaction underwritten by the Company, and all counterparties of customer margin deposits accounts being financial institutions. Credit risks of various financial assets are as follows:

(A) Cash and cash equivalents

Cash and cash equivalents include time deposit, demand deposits and checking deposits. Correspondent institutions are mainly domestic financial institutions.

(B) Financial assets at fair value through profit and loss -current
a. Fund
- The funds held by the Company are bond funds. As the positions held are not significant, credit risk is deemed low.
b. Commercial papers

The commercial papers held by the Company are repurchase agreements. As all the counterparties are financial institutions with good credit, the credit risk from counterparties is extremely low.

c. Debt securities

Debt securities are mainly positions like government bonds, convertible corporate bonds and foreign bonds and the issuers are primarily R.O.C. government, domestic and foreign legal entities. 31% of convertible corporate bond is guaranteed by banks. Details are as follows:

(a)Government Bonds

The bonds held by the Company are mostly government bonds (inclusive of central and local government). As a whole, the credit risk of the bonds held by the Company is low.

(b)Corporate bonds

The corporate bonds held by the Company are mainly underlying investment with good credit rating and those with rating above (S&P BB).

(c)Convertible corporate bond

The convertible corporate bonds held by the Company are mostly issued by the domestic legal entities. The Company mitigates highly risky credit exposure of the issuers by control through Taiwan Corporate Credit Risk Index (TCRI).

(d)Foreign bonds

The foreign bonds held by the Company are mainly underlying investment with good credit rating and those with rating above (S&P BB).

(C) Financial assets at fair value through other comprehensive income - current The foreign government bonds held by the Company are classified as debt instruments at fair value through other comprehensive income. In general, the bonds held by the Company are with lower credit risk.
(D) Derivatives- futures trade margin

When engaging in futures trades in stock exchange market, the Company needs to deposit margin into a margin deposit account of a financial institution designated by the futures

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merchants as a guarantee to fulfil contractual obligation in the future. As a result, the credit risk is low.

(E) Derivatives-OTC
The Company signs International Swaps and Derivatives Association (ISDA) agreements with each counterparty when engaging in OTC derivatives as an agreement regarding such transactions for both parties. In the agreement, it provides a fundamental contractual model for OTC derivative transactions. If any party breaches the contract or terminates the transactions early, then all the open interest covered in the agreement should be settled by net amount as bound in the contract. When the ISDA agreement is signed, the Credit Support Annex (CSA) is also signed. According to the CSA, collateral will be transferred from a party to the other during transaction process to mitigate the risk of counterparty in open interest. Please refer to Note 6(9).
Types of OTC derivative transactions in which the Company is engaged include structured notes and swap transaction. The counterparties are all from financial service industry and mainly located in Taiwan and United Kingdom.
(F) Bonds investment under a resale agreement Bonds sold under a resale agreement are the bonds that the client sold to the Company at a price, interest rate, length of period as agreed by two parties and the client shall repurchase the bonds at the specified price upon maturity. The Company needs to assume credit risk from counterparties when underwriting such business, as the payment being delivered to the other party. With consideration of good collateral obtained, the net of credit risk exposure from counterparties can be effectively reduced. As all the counterparties are financial institutions with good credit rating, the credit risks from counterparties are extremely low. Please refer to Note 6(9).
(G) Margin loans receivable
Margin loans receivable are the loans provided to the client in order to process businesses of margin trading and short sale using the securities purchased through financing as collateral. The Company monitors the clients’ margin ratio through information system on a daily basis. As the margin ratio of margin trading is set at 130% according to Regulations Governing the Conduct of Securities Trading Margin Purchase and Short Sale Operations by Securities Firms, the credit risk is extremely low.
(H) Receivables of securities business money lending Receivables of securities business money lending are the non-restricted purpose loan business and monetary financing business, pursuant to an agreement between a securities firm and a customer, using customer securities and other commodities as collateral. The Group regularly assesses its customer line of credit and implements appropriate credit control. As the margin ratio of margin trading is set at 130% according to Regulations Governing the Conduct of Securities Trading Margin Purchase and Short Sale Operations by Securities Firms, the credit risk is extremely low.
(I) Guaranteed price for securities lending Guaranteed price for securities lending is the sale price of the Company’s securities sold by other securities firms through margin trading after deduction of securities transactions tax and service fee, which is deposited in other securities firms as collateral. As all the counterparties are financial institutions with good credit rating, the credit risk from counterparties is extremely low.
(J) Refundable deposits for securities lending Refundable deposits for securities lending are the margins deposited in other securities firm as collateral when the Company’s securities are sold. As all the counterparties are financial institutions with good credit, the credit risk from counterparties is extremely low.

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(K) Receivables
Receivables are the credit rights arising from the securities business including settlement receivables of consignment trading, settlement receivables of operating securities sold, financing interest receivables of self-operating credit transaction, receivables of consignment trading for securities, and receivables from banks’ underwriting on foreign exchange transactions and foreign fund demand. As the majority of the Company’s receivables from the consignment businesses and self-operating businesses are settlement of securities from OCT or TWSE, the credit risk is extremely low. As the foreign exchange transactions are simply the receipt or payment of different currencies and the correspondent banks are of good credit rating, the credit risk is extremely low.
(L) Other current assets

Other current assets are mainly the collateral deposited in the bank for application for shortterm debt limit and guarantee for application for issuance of commercial papers. As the correspondent banks are all financial institutions with good credit rating, the credit risk is extremely low.

(M) Financial assets at fair value through profit and loss – non-current In order to underwrite trust business, the Company deposits central government bonds in the Central Bank as collateral. Regardless of the bonds themselves or the financial institutions where the bonds deposited, the credit risk is extremely low.
(N) Other non-current assets

Other non-current assets mainly comprise operating guarantee deposits, settlement funds, and refundable deposits. Operating guarantee deposits are mainly deposited in domestic banks with good credit rating. Settlement funds are deposited in securities exchange. Settlement funds are used as compensation when a party to a marketable securities transaction fails to fulfil the settlement obligation. The credit risks from the institutions where these two assets are deposited are extremely low. The refundable deposits refer to cash or other assets which are deposited externally by the Company and can be used as refundable deposits. Because deposits are placed in various financial institutions and each deposit amount is small, the credit risk is dispersed and the credit exposure of overall refundable deposit is extremely low.

C. Expected credit loss assessment

In the assessment of impairment and calculation of expected credit losses, the Company considers reasonable and supporting information about past events, current conditions and future economic conditions. The Company determines at the balance sheet date whether there has been a significant increase in credit risk since initial recognition or whether credit impairment has occurred, and recognizes expected credit loss according to which stage the asset belongs: no significant increase in credit risk or low credit risk at balance sheet date (Stage 1), significant increase in credit risk (Stage 2), and credit impaired (Stage 3). 12-month expected credit losses are recognized for assets in Stage 1, and lifetime expected credit loses are recognized for assets in Stage 2 and Stage 3.

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The definition of and expected credit losses recognized for each stage are as follows:

Item	Stage 1	Stage 2	Stage 3
Definition	No significant deterioration of credit quality of the financial asset since initial recognition, or the financial asset is considered low-risk at the balance sheet date.	Significant deterioration of credit quality of the financial asset since initial recognition, but the asset is not yet credit impaired.	The financial asset is credit impaired at the financial reporting date.
Expected credit losses recognition	12-month expected credit losses	Lifetime expected credit losses	Lifetime expected credit losses

(A) Judgements of the significant increase in credit risk since initial recognition
Judgements and assumptions used to determine whether the credit risk has a significant increase since initial recognition when the Company calculates expected credit loss under IFRS 9 are as follows:
a. If contractual payments are over 30 days past due according to the payment terms, the financial asset is considered to have significant increase in credit risk since initial recognition.
b. There is significant increase in credit risk at the reporting date if the credit rating of the issuer has been downgraded by more than 2 grades and the final external credit rating at the reporting date is non-investment grade, if the interest payments are over 30 days past due, or if there has been a default in the past.
(B) Definition of default and credit-impaired financial assets According to the definition of credit impairment set by IFRS 9, a financial asset is creditimpaired when one or more events that have occurred and have a significant impact on the expected future cash flows of the financial asset. The criteria used to judge whether a financial asset is credit-impaired since initial recognition includes but is not limited to the following:
a. Contractual payments or principal or interest payments on bonds are over 3 months (90 days) past due.
b. Bond investment is rated as “in default” by external credit rating agencies.
c. Bond issuer has filed for bankruptcy, restructure, or other debt clearance procedures.
d. Issuer or counterparty has financial difficulties.
(C) Writing-off policy

If any of the following condition applies, the Company will write off the non-recoverable portion of the overdue receivables as bad debt.

a. Debt cannot be fully or partially recovered due to dissolution of, disappearance of, settlement with, bankruptcy declaration by the debtor, or any other reason.

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b. The collateral and the assets of the primary and secondary debtors could not be auctioned off after multiple attempts and multiple price discounts, and the Company has not received any real benefits in assuming the collateral.
c. Payments are over two years past due and could not be recovered after attempts to collect.
(D) Measurement of expected credit losses

The Company considers reasonable supporting information which shows significant increase in credit risk since initial recognition when calculating expected credit losses. Main indexes include: internal/external credit rating, information of past due, credit spread, other market information in relation to the borrower, issuer or counterparty, and significant increase in credit risk of other financial instrument of the same borrower.

a. Investments in bills and bonds
(a)Probability of default was based on external credit rating, which include forwardlooking information.
(b)Loss given default was based on the average loss given default of external credit rating of investment position and counterparties.
(c)Exposure at default

Stage 1, Stage 2 and Stage 3: Total carrying amount (including interest receivable).

(E)Consideration of forward-looking information
- Historical loss rate (based on the historical experience in the past 3 to 5 years) as obtained and compared with economic environment in the past, nowadays and future (forward-looking factor) to see whether there is any significant change, and then to properly adjust future loss rate standards. If any significant default event occurs, the loss rate in the current year will be included in the calculation of future loss rate standard.
D. Table of movements in loss provision of the Company
(A) For the years ended December 31, 2020 and 2019, there were no changes in the loss allowance for investments in debt instruments measured at fair value through other comprehensive income.
(B) Except for debt investments and its interest receivable, the Company applies the modified approach to measure the loss allowance at an amount equal to lifetime expected credit losses for receivables and overdue receivables. The movements in loss provision of marginal receivables, accounts receivable, other receivables-others and other non-current assetsoverdue receivables of the Company are as follows:

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Year ended December 31, 2020

	Marginal receivable	Other non- current assets- overdue receivables	Total
	43,806 $ 15,034 - 58,840 $		284,589 $ 17,510 203,192) ( 98,907 $ Total
	Marginal receivable	Other non- current assets- overdue receivables
61,669 $ 20,067 - 37,930) ( 43,806 $		213,075 $ 13,191) ( 274) ( 40,463 240,073 $	277,693 $ 7,170 274) ( - 284,589 $

3) Liquidity risk

A. Definition and source of liquidity risk

Liquidity risk refers to possible financial losses arising from the inability to realize the asset or to obtain sufficient fund to fulfil the financial liabilities soon to be matured. Above situations may weaken the sources of cash from the Company’s trading and investment activities.

B. Liquidity risk management procedure and stimulation test

In order to prevent operational crisis as a result of liquidity risk, the Company has established responding crisis process with regular monitoring over liquidity gap of fund.

(A) Procedure

In addition to the operating capital for various business and long-term investment, the Company needs to maintain revolving funds at a certain level for daily operation. The use of remaining fund shall avoid high concentration and should be based on the principle of holding sound earning assets with high liquidity and treated in compliance with policies of the Company.

The responsive unit for fund procurement adjusts the liquidity gap to ensure proper liquidity according to the daily volume and movement in the market.

(B) Stimulation test
a. The Company reviews fund liquidity risk from a perspective of supply and demand of fund every month with simulation analysis of available fund for emergency including scenario analysis of cash, funding limit of financial institutions, margin loans and short sale, and value of disposal of position in order to compute maximum available fund and

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fund demand. Finally, safety stock of fund is reviewed to monitor liquidity risk.

  - b. Above liquidity risk is generally reviewed monthly. However, if the available limit of increment banking credit risk in financing limit of a financial institution is lower than a certain amount (that is, the amount may be timely adjusted according to the fund liquidity in the market and the actual fund demand and supply in an entity), the safety stock will be reviewed weekly. After the early warning report for fund is submitted, the head of finance segment will call for a fund control meeting.

  - c. Other than individual funding liquidity risk of an entity, stress test of minimization funding supply and maximization funding demand in the event of significant crisis is simulated, including:

     - (a)When there is a significant crisis in the market, the financing limit of the financial institutions and the value of disposal of position can be deemed the minimized ratio of fund supply which is then adjusted according to actual condition to compute the total fund supply under maximum stress.

     - (b)Except for the operating expense, the stock concept is adopted for the calculation of total fund demand under maximum stress.

     - (c)The Company should conduct a review to see whether the total minimized fund supply is more than maximized total fund demand. The Company should further review how long (by month) the difference may cover the operating expenses so that the safety stock of fund (by month) under stress test can be computed.

     - (d)The minimum safety stock of fund under stress test (by month) may be adjusted according to the crisis itself and only operating expense for at least 6 months under a normal stimulation can be deemed safe.

C. Maturity analysis for the financial assets and financial liabilities held for liquidity risk management
(A) The Company holds cash and sound earning assets with high liquidity in order to fulfil the payment obligation and potential emergency fund demand in the market. Financial assets held for liquidity risk management are mainly cash and cash equivalents, among which, all time deposits mature within a year. Financial assets at fair value through profit and loss are mainly listed stocks, convertible bonds and debt securities. As all of them have positions in active market, the liquidity risk is deemed low.

(Blank below)

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(B) Maturity analysis for the financial liabilities is as follows:

	December31,2020	December31,2020
Immediately	Less than 3 months	3-12 months	1-5years - $ - - - - - - - - 80,784 - - 103,607 184,391 $	Total
- $ - 1,039,794 1,550,679 - 1,381,470 1,809,955 - 18,023,694 1,010,210 985 - - 24,816,787 $	578,976 $ 7,300,000 - - 19,112,268 - - 803,016 14,425 7,680 222,277 2,017,803 19,214 30,075,659 $	- $ - - 31,668 - - - 100,836 - - 1,751,977 3,990,507 42,661 5,917,649 $		578,976 $ 7,300,000 1,039,794 1,582,347 19,112,268 1,381,470 1,809,955 903,852 18,038,119 1,098,674 1,975,239 6,008,310 165,482
				60,994,486 $

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	December31,2019	December31,2019
Immediately	Less than 3 months	3-12 months	1-5years - $ - - - - - - - - 85,924 - - 155,491 241,415 $	Total
600,000 $ 350,000 391,227 457,039 - 1,558,717 1,888,832 - 11,439,298 284,082 - - - 16,969,195 $	2,245,502 $ 9,250,000 - - 21,035,116 - - 56,004 27,921 5,576 176,676 1,797,292 1,067 34,595,154 $	- $ - - - - - - - - - 1,058,630 946,574 5,857 2,011,061 $		2,845,502 $ 9,600,000 391,227 457,039 21,035,116 1,558,717 1,888,832 56,004 11,467,219 375,582 1,235,306 2,743,866 162,415
				53,816,825 $

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4) Market risk

A. Definition of market risk

Market risk refers to the risk of decrease in the Company’s revenue or value of investment portfolio as a result of the changes in exchange rate, commodity price, interest rate, and stock price or other market risk factors.

The Company continually exercises risk management tools such as sensitivity analysis, Value at Risk, stress test and so on to completely and effectively measure, monitor and manage market risk.

B. Value at Risk (VaR)

Value at Risk is used to measure the possible maximum potential losses in investment portfolio as a result of movement in market risk factor in a specified period and confidence level. The Company currently uses confidence level of 95% to calculate Value at Risk of one day. A VaR model must reasonably, completely and accurately measure the maximum potential risks of financial instruments or investment portfolio before being adopted as a risk management model by the Company. The VaR model used in risk management is continually certified and retrospectively tested to demonstrate that the model can reasonably and effectively measure the maximum potential risks of financial instruments or investment portfolios.

Statistical table	Statistical table	Statistical table	Statistical table	Statistical table
for one-day VaR	of transactions	for one-dayVaR	of transactions
December31,2020	Amount	December 31, 2019		Amount
	172,331 $		$	99,926
VaR Maximum	274,866	VaR Maximum		168,442
VaR Average	158,787	VaR Average		93,088
VaR Minimum	76,059	VaR Minimum		27,518

Statistical table for VaR of various risk indicators of transactions Year ended

Year ended
December 31,2020 December 31, 2020 VaR Maximum VaR Average VaR Minimum Year ended December 31,2019 December 31, 2019 VaR Maximum VaR Average VaR Minimum	Foreignexchange 3,413 $ 55,596 7,103 1,489 Foreignexchange 5,000 $ 27,860 6,610 1,566	Interest 24,024 $ 91,620 39,354 15,428 Interest 17,268 $ 72,934 35,173 8,308	Share ownership
			175,695 $ 267,430 155,821 67,873 Share ownership
			101,873 $ 168,753 90,473 24,844

C. Information on gap of foreign exchange risk

The following table summarizes financial instruments of foreign assets or liabilities by currency and the foreign exchange exposure presented by book value as of December 31, 2020 and 2019 ：

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Financialassetsin foreigncurrencies Cash and cash equivalents Financial assets at fair value through profit or loss Investments under equity method Others Financial liabilities in foreign currencies Short-term loans Financial liabilities at fair value through profit or loss Bonds sold under repurchase agreements Others	USD 350,244 $ 13,281,876 - 808,186 318,976 50,740 9,996,698 2,945,156	EUR 2,479 $ 3,486,806 - 10,371 - 3,898 3,080,106 -	AUD RMB HKD 2,247 $ 260,037 $ 269,730 $ 1,006,892 1,267,289 378,212 - 2,531,901 1,419,007 1,918 34,377 5,161 - - - 3,441 3,426 172 853,836 871,401 - 240 263,221 52,811 December31,2020	Others 173,112 $ 424,984 - 28,645 - 5,422 286,703 27,835	Total
					1,057,849 $ 19,846,059 3,950,908 888,658 318,976 67,099 15,088,744 3,289,263

Note: As of December 31, 2020, foreign exchange rates of the above currencies to TWD were 1 USD = 28.48 TWD; 1 EUR = 35.02 TWD; 1 AUD = 21.95 TWD; 1 RMB = 4.377 TWD; and 1 HKD = 3.673 TWD, respectively.

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Financial assets in foreign currencies Cash and cash equivalents Financial assets at fair value through profit or loss Investments under equity method Others Financial liabilities in foreign currencies Short-term loans Financial liabilities at fair value through profit or loss Bonds sold under repurchase agreements Others	USD 247,624 $ 15,858,467 2,301,733 1,023,068 2,245,502 12,434 12,219,296 3,016,289	EUR 954 $ 1,834,006 - 2,274 - 2,749 1,445,146 -	AUD RMB HKD 2,447 $ 282,302 $ 276,838 $ 852,473 1,299,213 164,475 - - 72,935 3,593 126,910 101,145 - - - 1,710 13,715 465 700,804 1,023,554 - 5,729 371,927 83,056 December31,2019	Others 176,979 $ 236,952 - 721 - 1,072 119,876 33,166	Total
					987,144 $ 20,245,586 2,374,668 1,257,711 2,245,502 32,145 15,508,676 3,510,167

Note: As of December 31, 2019, foreign exchange rates of the above currencies to TWD were 1 USD = 29.98 TWD; 1 EUR = 33.59 TWD; 1 AUD = 21.005 TWD; 1 RMB = 4.305 TWD; and 1 HKD = 3.849 TWD, respectively.

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D. The total exchange gain (loss), including realized and unrealized, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2020 and 2019, amounted to ($ 326,402) and $196,750, respectively.
5) Fair value and hierarchy information
A. Financial instruments and non-financial instruments not measured at fair value. Except for those listed in the table below, the carrying amounts of the Company’s financial instruments not measured at fair value (including cash and cash equivalents, bonds purchased under resale agreements, margin loans receivable, refinancing guaranty deposits, guaranteed proceeds receivable from refinancing, guaranteed price deposits for security borrowing, security borrowing deposits, customer margin deposit account, notes and accounts receivable, other receivables, short-term loans, commercial paper payable, bonds sold under repurchase agreements, guarantee deposit received from short sales, guaranteed price deposits received from securities borrowers, security borrowing deposits, equity of futures traders, accounts payable, collection for others, and other payables) approximate their fair values. The fair value information of financial instruments measured at fair value is provided in Note 12(5)3.

Non-financial assets December 31, 2020 Investment property December 31, 2019 Investment property	Total Quoted prices of the same assets in active markets (level 1) 667,546 $ - $ 665,646 $ - $	Other significant observable inputs (level 2) Significant non-observable inputs (level 3) 667,546 $ - $ 665,646 $ - $

The fair value of investment property held by the Company was assessed by external valuation experts using comparison approach and income approach, or the fair value can be assessed based on the market price of the area adjacent to the location where the Company’s investment property is located.

B. Valuation techniques
(A) For financial instruments held for trading purposes which are classified as non-derivative instruments, their fair values are based on their quoted prices in an active market. If there is no quoted market price for reference, a valuation technique will be adopted to measure the fair value. Estimates and assumptions of valuation technique adopted by the Company are in agreement with the information of estimates and assumptions adopted by market users for financial instrument pricing and the said information shall be accessible to the Company. For those classified as derivative instruments, their fair values are based on their market prices if their quoted prices are available from an active market. If quoted market prices in an active market are not available, SWAP and IRS are valued at the discounted cash flow method, and options are valued at the Black-Scholes model.
(B) When available-for-sale financial assets have quoted market prices available in an active market, the fair value is determined using the market price.
C. Fair value hierarchy of the financial instruments
(A) Definitions for the hierarchy classifications of financial instruments measured at fair value
- a. Level 1
  - Level 1, are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date. An active market has to satisfy

241

all the following conditions: a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The Company’s investments in listed stocks, beneficiary certificates, onthe-run Taiwan central government bonds and derivative instruments with quoted market prices, are deemed as level 1.

b. Level 2

Inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Investments of the Company such as off-the-run issue of emerging stock, government bonds, corporate bonds, bank debentures, convertible corporate bonds, currency swaps, interest rate swaps, options, asset swaps, and most derivatives are all classified within level 2. For the years ended December 31, 2020 and 2019, there was no significant transfer of financial instruments between Level 1 and Level 2.

c. Level 3

Unobservable inputs for the assets or liability. The fair value of the Company’s investment in unlisted stocks is included in Level 3.

(Blank below)

242

(B) Hierarchy of fair value estimation of financial instruments

Financial instrument items measured at fair value Recurring fair value Non-derivative financial instruments Assets Financial assets at fair value through profit or loss-current Stock investments Bond investments Others Financial assets at fair value through comprehensive income-current Stock investments Financial assets at fair value through profit or loss - non-current Stock investments Bond investments Financial assets at fair value through other comprehensive income-non-current Stock investments Liabilities Financial liabilities at fair value through profit or loss -current Derivative financial instruments Assets Financial assets at fair value through profit or loss-current Liabilities Financial liabilities at fair value through profit or loss - current		December	31,2020
	Total 11,927,130 $ 23,302,082 2,237,129 353,510 16,991 50,493 186,334 1,039,794 3,365,537 1,582,347	Level 1 11,903,943 $ 1,170,822 2,237,129 353,510 - - - 1,039,794 3,356,164 1,430,919	Level 2 23,187 $ 22,131,260 - - - 50,493 - - 9,373 151,428	Level3
				- $ - - - 16,991 - 186,334 - - -

243

Financial instrument items measured at fair value Recurring fair value Non-derivative financial instruments Assets Financial assets at fair value through profit or loss-current Stock investments Bond investments Others Financial assets at fair value through profit or loss - non-current Stock investments Bond investments Financial assets at fair value through other comprehensive income-non-current Stock investments Liabilities Financial liabilities at fair value through profit or loss -current Derivative financial instruments Assets Financial assets at fair value through profit or loss-current Liabilities Financial liabilities at fair value through profit or loss - current	Total Level 1 11,988,505 $ 11,975,770 $ 25,159,729 870,587 3,562,680 3,562,680 21,180 - 50,116 - 157,656 - 391,227 391,227 2,799,187 2,798,218 457,038 421,322 December	Level 2 12,735 $ 24,289,142 - - 50,116 - - 969 35,716 31,2019	Level3
			- $ - - 21,180 - 157,656 - - -

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(C) The following table is the movement of financial assets at Level 3:

Financial assets at fair value through profit or loss - non-current Equity investments Financial assets at fair value through other comprehensive income - non-current Equity investments	January1	Recorded in profit or loss Recorded in other comprehensive income(loss) Acquired/ Issued Transfers into level 3 4,189) ($ - $ - $ - $ - 28,678 - - Year ended December 31, 2019 Year ended December31,2020 Valuation amount Increased	Recorded in profit or loss Recorded in other comprehensive income(loss) Acquired/ Issued Transfers into level 3 4,189) ($ - $ - $ - $ - 28,678 - - Year ended December 31, 2019 Year ended December31,2020 Valuation amount Increased	Recorded in profit or loss Recorded in other comprehensive income(loss) Acquired/ Issued Transfers into level 3 4,189) ($ - $ - $ - $ - 28,678 - - Year ended December 31, 2019 Year ended December31,2020 Valuation amount Increased	Recorded in profit or loss Recorded in other comprehensive income(loss) Acquired/ Issued Transfers into level 3 4,189) ($ - $ - $ - $ - 28,678 - - Year ended December 31, 2019 Year ended December31,2020 Valuation amount Increased	Decreased	Decreased	December 31
				Acquired/ Issued	Transfers into level 3	Sold/ Settled	Transfers out from level 3
	21,180 $ 157,656				- $ -	- $ -	- $ -	16,991 $ 186,334
Financial assets at fair value through profit or loss - non-current Equity investments Financial assets at fair value through other comprehensive income - non-current Equity investments	January1	Valuation amount		Increased		Decreased		December 31
		Recorded in profit or loss	Recorded in other comprehensive income(loss)	Acquired/ Issued Transfers into level 3 - $ - $ - -		Sold/ Settled	Transfers out from level 3
	16,445 $ 146,545	4,735 $ -	- $ 11,111			- $ -	- $ -	21,180 $ 157,656

(D)The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

value measurement:
December31,2020	Fairvalue	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
Financial assets at fair value through profit or loss - non-current Venture capital shares Financial assets at fair value through other comprehensive income - non-current Unlisted stocks	16,991 $ 186,334	Net asset value Market approach	Not applicable Price to earnings ratio multiple Discount for lack of marketability	- 1.46~1.90 6.99%~9.65%	Not applicable The higher the multiple,the higher the fair value The higher the discount for lack of marketability, the lower the fair value

245

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Range
Valuation Significant (weighted Relationship of inputs
December 31, 2019 Fair value technique unobservable input average) to fair value
Financial assets at fair value
----- End of picture text -----

Financial assets at fair value
through profit or loss
- non-current
Venture capital shares	$	21,180	Net asset value	Not applicable	Not applicable	Not applicable
Financial assets at fair value
through other comprehensive
income - non-current
Unlisted stocks		157,656	Market approach	Price to earnings ratio multiple Discount for lack of marketability	1.32~1.76 7.93% ~9.75%	The higher the multiple,the higher the fair value The higher the discount for lack of marketability, the
						lower the fair value

(E) Valuation process for fair value at Level 3

The Company’s risk management department is responsible for the verification of fair value categorized in Level 3. The department assesses the independence, reliability, consistency and representativeness of the source information, regularly verifies the valuation models and calibrates the parameters to ensure the valuation process and results are in compliance with IFRSs.

(F) For the fair value measurement of Level 3, the sensitivity analysis of the fair value to the reasonable alternative hypothesis shows that the fair value measurement of the financial assets by the Company is reasonable. However, use of different valuation models or assumptions may result in different measurement. The following is the impact to profit or loss or to other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used in valuation models have changed up or down by 1%:

December 31,2020	Recognised in profit or loss	Recognised in profit or loss	Recognised in other comprehensive income	Recognised in other comprehensive income
	Favourable change	Unfavourable change	Favourable change	Unfavourable change
Financial assets at fair value through profit or loss -non- current Venture capital shares Financial assets at fair value through other comprehensive income - non-current Unlisted stocks	Not applicable -	Not applicable -	- $ 1,863	- $ 1,863) (

246

				Recognised in	Recognised in	other
	Recognised in	profit or loss		comprehensive		income
	Favourable	Unfavourable		Favourable	Unfavourable
December 31, 2019	change	change		change		change
Financial assets at fair value
through profit or loss -non-
current
Venture capital shares	Not applicable	Not applicable	$	-	$	-
Financial assets at fair value
through other comprehensive
income - non-current
Unlisted stocks	-	-		1,577	(	1,577)

6) Capital management
A. Objective of capital management
- (A) The represented capital adequacy ratio basically shall not be lower than 200% in compliance with the warning standard addressed in the “Rules Governing Securities Firms”.
- (B) The Company includes all risks involved in the investment position as a part of risk management, such as market risk, credit risk, liquidity risk, operating risk, legal risk, and model risk and so on. Each risk management responsive unit should identify, evaluate, monitor and control various risks in order to enable the Company to defend impact from financial market, reflect the current operating strategies and make the investment portfolio applied to business planning and development.
B. Capital management policy and procedure

In order to secure the long-term and stable development of various businesses and effectively assume risks, the Company manages capital based on the business development, related regulations and financial market environment. Major capital evaluation processes include:

(A) Each segment should provide accurate and valid source of information to maintain calculation accuracy of capital adequacy ratio.
(B) After the reporting at the 10th of each month, capital adequacy ratio should be computed by the end of every month. If the result is close to the legal standard, every unit will be called to attend a meeting for discussion and strategic planning to ensure that the basic objective of capital adequacy ratio is not less than 200%.
(C) Both the risk limits and economic capital of the Company should be agreed by the Board of Directors. The Company should quarterly report details of risk control with disclosure of investment condition in order to assess whether the risk position exceeds the limit and whether the investment direction is in line with the market trend. Within the authorized risk limits, the Company is actively engaged in development of various businesses and continually increases profit, creates company value, and complies with the capital management objective.

The Company calculates and reports the capital adequacy ratio according to “Rules Governing Securities Firms”. As of December 31, 2020 and 2019, the capital adequacy ratios were 339% and 378%, respectively, as required by the regulations.

7) Assets and liabilities of trust accounts

Pursuant to Article 17 of Enforcement Rules of the Trust Enterprise Act, balance sheet, income statement, and property list of trust accounts shall be disclosed in the parent company only financial statements on a semiannual basis.

247

A. Balance sheet of trust accounts

A. Balance sheet of trust accounts
B. Income statement of trust accounts Trust assets Bank savings Structured notes Stock Bond Bonds sold under repurchase agreements Fund Securities lending Accounts receivable Total of trust assets Trustliabilities Accounts payable Trust capital Net income (loss) Cumulative loss Total of trust liabilities Item Trust income Interest income Cash dividends received Income from stocks lending Investment gains (losses) - realized Investment gains (losses) - unrealized Subtotal Trust expenses Management fee Service fee Borrowing costs Remittance fee Income before income tax Income tax expense Net income			December31,2019 283,288 $ 347,256 135,196 402,246 115,006 3,270,575 71,047 74,063 4,698,677 $ December 31, 2019 53,204 $ 4,586,918 100,346 41,791) ( 4,698,677 $ Year ended December 31,2019
	20,430 $ 47,788 587 225,435 806,875 1,101,115 1,099) ( 526) ( 134) ( - 1,099,356 10 1,099,366 $	17,631 $ 5,780 6,145 7,188 64,616 101,360 - 227) ( 764) ( 1) ( 100,368 22) ( 100,346 $

248

C. Property list of trust accounts

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Item December 31, 2020 December 31, 2019
Bank savings $ 492,979 $ 283,288
Structured notes 664,243 347,256
Funds 3,877,584 3,270,575
Bond 423,452 402,246
Bonds sold under repurchase agreements 21,794 115,006
Stock 928,705 135,196
-
Securities lending 71,047
Others 36,087 74,063
Total $ 6,444,844 $ 4,698,677
----- End of picture text -----

13. OTHER DISCLOSURE ITEMS

1) Information about significant transactions

A. Lending to others: Excluding security margin trading and conditional bond trading business, there is no lending of funds to either the shareholders or other parties.
B. Endorsements and guarantees for others ： None.
C. Acquisitions of real estate exceeding $300 million or 20 percent of contributed capital ： None.
D. Disposals of real estate exceeding $300 million or 20 percent of contributed capital ： None.
E. Purchases or sales transactions discount on brokers’ charges with related parties in excess of $5,000,000 ： None.
F. Receivables from related parties exceeding $100 million or 20 percent of contributed capital ： None.
G. Significant transactions between parent company and subsidiaries are provided in Note 7.

(Blank below)

249

2) Related information of investee companies

A. Related information of investee companies

Name of the investor	Name of the investee company	Location	Date of registration	Reference number and the date of approval letter issued byFSC	Major operatingactivities	Balance on December 31,2020 Original i	Balance on December 31, 2019 nvestment	EndingBalance	EndingBalance		Revenue of investee company	Net income (loss) of investee company	Investment income (loss) recognised by the Company	Cash dividends	Notes
								Shares 63,817,303 30,000,000 192,600,000 23,400,000 1,000,000 67,746,000 14,904,630 1,000,000 30,000,000 12,000	Percentage 96.69% 100.00% 100.00% 100.00% 100.00% 100.00% 42.46% 100.00% 100.00% 0.03%	Bookvlaue
President Securities Corp. President Insurance Agency Corp.	President Futures Corp. President Capital Management Corp. President Securities (HK) Ltd. President Wealth Management (HK) Ltd. President Securities (Nominee) Ltd. President Securities (BVI) Ltd.(Note 3) Uni-President Asset Management Corp. President Insurance Agency Corp. PSC Venture Capital Investment Limited Company Uni-President Asset Management Corp.	Taipei Taipei Hong Kong Hong Kong Hong Kong British Virgin Islands Taipei Taipei Taipei Taipei	1994.03.01 1997.04.15 1994.07.26 2002.03.31 1999.08.06 1998.02.26 1992.09.03 2008.04.29 2013.10.29 1992.09.03	1994.03.01 Jing- Tou-Shen (83) Gong-Shang Letter No.1114 (Note 1) 1997.02.25 (86) Tai-Cai-Zheng (4) Letter No.17769 1993.11.4 (82) Tai- Cai-Zheng (2) Letter No.40913 2001.12.11 (90) Tai-Cai-Zheng (2) Letter No.166728 1997.10.27 (86) Tai-Cai-Zheng (2) Letter No.04840 1997.10.27 (86) Tai-Cai-Zheng (2) Letter No.04840 2000.07.19 (89) Tai-Cai-Zheng (2) Letter No.56407 (Note2) 2013.08.08 Jing- Guan-Zheng-Chuan Letter No.1020028529 2000.07.19 (89) Tai-Cai-Zheng (2) Letter No.56407	Futures brokerage and dealer Securities investment consulting Securities dealer, brokerage, underwriting and consulting Wealth management Nominee Service Securities investment and holding company Investment Trust Insurance Agent Consultation of investment management and venture capital; other unprohibited or unrestricted businesses beyond the permit Investment Trust	644,650 $ 326,000 848,735 92,091 3,403 - 667,622 10,000 300,000 478	644,650 $ 326,000 34,030 - - 2,264,573 667,622 10,000 300,000 478			2,102,027 $ 320,169 1,361,333 56,002 1,672 - 602,375 29,698 242,139 490	943,742 $ 70,759 139,983 - - - 941,595 45,243 2,331 941,595	214,024 $ 2,095) ( 21,051 362 73) ( 5,644 258,096 9,489 6,411) ( 258,096	206,956 $ 2,061) ( 28,615 209 40) ( 5,644 109,597 9,493 6,410) ( 88	112,318 $ - - - - - 94,466 8,363 - 76	Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Associates Subsidiary of the Company Subsidiary of the Company Associates

Note1 ： As FSC was established in July, 2004, President Futures Corp. was apporved by the Investment Commission, Ministry of Economic Affairs. Note2 ： When securities corporations invest in domestic business within FSC's limitation, there is no need to obtain the approval from FSC in advance, according to Tai-Cai-Zheng (2) Letter No.0930000005. Therefore, there was no reference numbers for President Personal Insurance Agency Co., Ltd. and President Insurance Agency Corp.

Note3 ： President Securities (BVI) Ltd. was approved by the board of directors in March 2020 to deal with the dissolution and liquidation matters, and the Company has received the original investment funds remitted by President Securities (BVI) Ltd. on July 31, 2020. The liquidation process is currently in progress.

250

Name of the investor Name of the investee company	Location	Date of registration	Reference number and the date of approval letter issued byFSC Major operatingactivities 1993.11.4 (82) Tai- Cai-Zheng (2) Letter No.40913 Securities dealer, brokerage, underwriting and consulting 2001.12.11 (90) Tai-Cai-Zheng (2) Letter No.166728 Wealth management 1997.10.27 (86) Tai-Cai-Zheng (2) Letter No.04840 Nominee Service	Balance on December 31,2020 Original i	Balance on December 31, 2019 nvestment	Shares Percentage Book vlaue - 0.00% - $ - 0.00% - - 0.00% - EndingBalance	Revenue of investee company	Net income (loss) of investee company	Investment income (loss) recognised by the Company	Cash dividends	Notes
President Securities (BVI) Ltd. President Securities (HK) Ltd. President Wealth Management (HK) Ltd. President Securities (Nominee) Ltd.	Hong Kong Hong Kong Hong Kong	1994.07.26 2002.03.31 1999.08.06		- $ - -	814,705 $ 92,091 3,403		139,983 $ - -	21,051 $ 362 73) (	7,564) ($ 153 33) (	- $ - -	Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company

B. Lending to others: Excluding security margin trading and conditional bond trading business, there is no lending of funds to either the shareholders or other parties.
C. Endorsements and guarantees for others ： None.
D. Acquisitions of real estate exceeding $300 million or 20 percent of contributed capital ： None.
E. Disposals of real estate exceeding $300 million or 20 percent of contributed capital ： None.
F. Purchases or sales transactions discount on brokers’ charges with related parties in excess of $5,000,000 ： None.
G. Receivables from related parties exceeding $100 million or 20 percent of contributed capital ： None.
H. Accordance with Jing-Guan-Zheng-Quan-Zi Letter No. 10300375782, the Company is required to disclose details of businesses run by foreign enterprises that were incorporated in the countries identified as non-signatories to the IOSCO MMoU or have not obtained securities or futures license of signatories to the IOSCO MMoU ：
a) Securities held as of December 31, 2020 of President Securities (BVI) Ltd ： None.
b) Derivative financial instrument transactions and the source of capital of President Securities (BVI) Ltd.: None.
c) Revenue from engagement in consultation on assets management business, service contents and litigation ： None.

251

d) Balance sheets

PRESIDENT SECURITIES (BVI) LTD. BALANCE SHEETS

December 31, 2019

	PRESIDENT SECURITIES (BVI) LTD. BALANCE SHEETS December 31, 2019	PRESIDENT SECURITIES (BVI) LTD. BALANCE SHEETS December 31, 2019
Assets Current assets Cash and cash equivalents Other receivables Total current assets Investment in associates Total assets	Amount % Liabilities and shareholders’equity Amount Current liabilties 30,135,890 $ 39 Other payables 3,565 $ 195,869 1 Total liabilities 3,565 30,331,759 40 Shareholders’equity 46,447,436 60 Share capital 67,746,000 Capital reserve 757,813 Retained earnings Accumulated deficit 7,702,523 Other equity Exchange differences on translation of foreign financial statements 569,294 Total shareholders’ equity 76,775,630 76,779,195 $ 100 Total liabilities and shareholders’ equity 76,779,195 $ Expressed in U.S. December31,2019 December31,		dollars 2019
	Amount	Amount	%
	30,135,890 $ 195,869 30,331,759 46,447,436 76,779,195 $	3,565 $ 3,565 67,746,000 757,813 7,702,523 569,294 76,775,630 76,779,195 $	- - 88 1 10 1 100 100

Note ： President Securities (BVI) Ltd. was approved by the board of directors in March 2020 to deal with the dissolution and liquidation matters, and the Company has received the original investment funds remitted by President Securities (BVI) Ltd. on July 31, 2020. The liquidation process is currently in progress.

252

PRESIDENT WEALTH MANAGEMENT (HK) LTD. BALANCE SHEETS

December 31, 2020 AND 2019

			PRESIDENT WEALTH MANAGEMENT (HK) LTD. BALANCE SHEETS December 31, 2020 AND 2019
Assets	Amount 15,254,818 $ 12,553 15,267,371 15,267,371 $ December31,	% 2020	Amount % Liabilities and shareholders’equity Current liabilities 15,116,479 $ 100 Other payables 55,378 - Total liabilities 15,171,857 100 Shareholders’ equity Share capital Retained earnings Accumulated deficit Total shareholders’ equity 15,171,857 $ 100 Total liabilities and shareholders’ equity December31,2019
			Amount 15,116,479 $ 55,378 15,171,857 15,171,857 $				Amount		%
Current assets Cash and cash equivalents Other receivables Total current assets Total assets	15,254,818 $ 12,553 15,267,371 15,267,371 $	100 - 100 100		20,400 $ 20,400 23,400,000 8,153,029) ( 15,246,971 15,267,371 $	- - 153 53) ( 100 100	20,075 $ 20,075 23,400,000 8,248,218) ( 15,151,782 15,171,857 $		- - 154 54) ( 100 100

253

PRESIDENT SECURITIES (NOMINEE) LTD. BALANCE SHEETS December 31, 2020 AND 2019

			BALANCE SHEETS December 31, 2020 AND 2019 PRESIDENT SECURITIES (NOMINEE) LTD.
Assets	Amount 472,052 $ 6 472,058 472,058 $ December31,	% 2020	Amount % Liabilities and shareholders’equity Current liabilities 491,537 $ 100 Other payables 109 - Total liabilities 491,646 100 Shareholders’ equity Share capital Retained earnings Accumulated deficit Total shareholders’ equity 491,646 $ 100 Total liabilities and shareholders’ equity December31,2019
			Amount 491,537 $ 109 491,646 491,646 $			Amount		%
Current assets Cash and cash equivalents Other receivables Total current assets Total assets	472,052 $ 6 472,058 472,058 $	100 - 100 100		16,800 $ 16,800 1,000,000 544,742) ( 455,258 472,058 $	3 3 212 (115) 97 100	17,190 $ 17,190 1,000,000 525,544) ( 474,456 491,646 $	4 4 203 107) ( 96 100

254

e) Statements of comprehensive income

PRESIDENT SECURITIES (BVI) LTD. STATEMENTS OF COMPREHENSIVE INCOME

SEVEN MONTHS ENDED JULY 31, 2020 AND FOR THE YEARS ENDED DECEMBER 31, 2019

SEVEN MONTHS ENDED JU	LY 31, 2020 AND FOR THE YEARS ENDED DECEMBER 31, 2019	LY 31, 2020 AND FOR THE YEARS ENDED DECEMBER 31, 2019
Accounts Expenditures Employee benefits Other operating expenses Total expenditures and expenses Non-operating gains and losses Share of the profit or loss of associates and joint ventures accounted for using the equity method Other gains and losses Total non-operating gains and losses Profit before tax Income tax expense Net income	Expressed in U.S. dollars Amount % Amount % 15,501 $ 63 49,953) ($ 3) ( 9,039 37 18,574) ( 1) ( 24,540 100 68,527) ( 4) ( - - 916,448 54 49 - 838,335 50 49 - 1,754,783 104 24,589 100 1,686,256 100 - - - - 24,589 $ 100 1,686,256 $ 100 Seven months endedJuly 31,2020 December31,2019
	Amount 15,501 $ 9,039 24,540 - 49 49 24,589 - 24,589 $
		54 50
		104
		100 -
		100

255

PRESIDENT WEALTH MANAGEMENT (HK) LTD STATEMENTS OF COMPREHENSIVE INCOME

SEVEN MONTHS ENDED JULY 31, 2020 AND FOR THE YEARS ENDED DECEMBER 31, 2019

SEVEN MONTHS EN	DED JULY 3	1, 2020 AND FOR	THE YEARS ENDED	DE	CEMBER 31, 2019	CEMBER 31, 2019
					Expressed in HK dollars
		December	31,2020		December	31,2019
Accounts		Amount	%		Amount	%
Expenditures
Other operating expenses	($	41,435)	44) (	($	43,730)	25) (
Total expenditures and expenses	(	41,435)	44) (	(	43,730)	25) (
Non-operating gains and losses
Other gains and losses		136,625	144		222,028	125
Profit before tax		95,190	100		178,298	100
Income tax expense		-	-		-	-
Net income	$	95,190	100	$	178,298	100

256

PRESIDENT WEALTH MANAGEMENT (HK) LTD STATEMENTS OF COMPREHENSIVE INCOME

SEVEN MONTHS ENDED JULY 31, 2020 AND FOR THE YEARS ENDED DECEMBER 31, 2019

SEVEN MONTHS EN	DED JULY 3	1, 2020 AND FOR	THE YE	ARS ENDED	DE	CEMBER 31, 2019	CEMBER 31, 2019	CEMBER 31, 2019
						Expressed in HK dollars
		December	31, 2020			December	31, 2019
Accounts		Amount		%		Amount		%
Expenditures
Other operating expenses	($	23,535)		123	($	25,071)		129
Total expenditures and expenses	(	23,535)		123	(	25,071)		129
Non-operating gains and losses
Other gains and losses		4,337	(	23)		5,662	(	29)
Loss before tax	(	19,198)		100	(	19,409)		100
Income tax expense		-		-		-		-
Net loss	($	19,198)		100	($	19,409)		100

f) Transactions between related parties and foreign business ： None.

3) Information of overseas branches and representative office

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----- Start of picture text -----

Reference number and
the date of approval Material
Overseas branches letter given by Securities (Loss) profit Assignment of working capital transaction
and representative Date of and Futures Bureau of Main business Operating before tax Balance on Increase of Deduction of Balance on account with
office Nationality registration FSC activities income (Note 1) January 1,2020 working capital working capital December 31, 2020 head office Note
Representative Xiamen 2008.08.22 2008.01.21 Jing-Guan- Non-operating - ($ 5,339) - - - - - -
office of President Zheng-Chuan Letter activities of securities
Securities Corp. No.0960073542 business consultation,
in Xiamen (Note 2) contact, and market
survey
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Note 1 : Operating expenses generated by the representative office.

Note 2：The office in Xiamen was permitted to cancel the registration by Market and Quality Supervision Commission of Xiamen Municipality at August 24, 2020.

257

4) Disclosure of investment in Mainland China

a) Information of investment in Mainland China

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Accumulated Investment
amount of Amount remitted from Taiwan to Accumulated income (loss) Accumulated
remittance Mainland China/ Amount amount of recognized by the Book value of amount of
from Taiwan remitted back to Taiwan for the remittance from Ownership Company for the investments in investment
to Mainland year ended December 31, 2020 Taiwan to Net income of held by the year ended Mainland income remitted
Investee in Investment China as of Remitted to Mainland China investee as of Company December 31, China as of back to Taiwan
Mainland Main business Paid-in capital method January 1, Mainland Remitted back to as of December December 31, (direct or 2020 December 31, as of December
China activities (Note 4) (Note 1) 2020 China Taiwan 31, 2020 2020 indirect) (Note 2) 2020 31, 2020
Jin Yuan Securities brokering, $ 5,252,400 Directly $ - $ 2,481,388 $ - $ 2,481,388 ($ 83,388) 49% ($ 40,860) $ 2,531,901 $ -
President securities dealing, invest in a
The financial
Securities securities company in
statements that
Co.,Ltd. underwriting and Mainland
sponsoring service China are audited by
international
accounting firm
which has
cooperative
relationship with
accounting firm in
R.O.C.
----- End of picture text -----

b) Limitation on investment in Mainland China (expressed in thousands of dollars)

==> picture [714 x 79] intentionally omitted <==

----- Start of picture text -----

Investment amount approved Ceiling on investments in
Accumulated amount of remittance from
by the Investment Commission Mainland China imposed
Company name Taiwan to Mainland China as of December
of the Ministry of Economic by the Investment
31, 2020
Affairs (MOEA) Commission of MOEA
Jin Yuan President Securities Co.,Ltd. $ 2,481,388 $ 2,481,388 $ 17,644,389
----- End of picture text -----

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1) Directly invest in a company in Mainland China.

(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland. (Please indicate investment

258

company in the third area.)

(3) Others.
Note 2: In the ‘Investment income (loss) recognized by the Company for the year ended December 31, 2020’ column:
(1) It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period.
(2) Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:.
- a. The financial statements that are audited and attested by international accounting firm which has cooperative relationship with accounting firm in R.O.C.
- b. The financial statements that are audited and attested by R.O.C. parent company's CPA.
- c. Others.

Note 3: The numbers in this table are expressed in New Taiwan Dollars.

Note 4: The paid-in capital of Jin Yuan President Securities Co.,Ltd. is CNY 1.2 billion.

5) Major shareholder information

Major shareholder Number of shares held (thousands) Shareholding ratio Uni-President Enterprises Corp. 401,458 28.67%

Note 1: The information of major shareholders in this table is based on the last business day of the end of each quarter by Taiwan Depository and Clearing Corp., which determines shareholders holding more than 5% of ordinary shares and special shares of securities firms that have completed unregistered delivery (including treasury shares). As for the share capital recorded in the financial report of the securities firm and the actual number of shares delivered by the securities firm without physical registration, there may be differences due to different calculation bases.
Note 2: In the case of the above information, if a shareholder delivers shares to the trust, it is disclosed in individual accounts by the trustee who opened the trust account by the trustee. As for the shareholders’ declaration of insider’s shareholding in accordance with the Securities and Exchange Act, their shareholding includes their own shareholding plus the shares delivered to the trust and the right to use the trust property. For information on insider’s equity declaration, please refer to the Market Observation Post System.

259

PRESIDENT SECURITIES CORPORATION AND

SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2020 AND 2019

260

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR20004103

To the Board of Directors and Shareholders of President Securities Corporation

Opinion

We have audited the accompanying consolidated balance sheets of President Securities Corporation and subsidiaries (the “Group”) as at December 31, 2020 and 2019, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2020 and 2019, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Firms, and 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.

Basis for opinion

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. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Group’s 2020 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s 2020 consolidated financial statements are stated as follows:

261

Fair value measurement of unlisted stocks without active market

Description

Please refer to Note 4(8) for the accounting policies on unlisted stocks without active market (shown as “financial assets at fair value through other comprehensive income”) and Note 5(2) for details of critical accounting judgements, estimates and assumption uncertainty. As at December 31, 2020, the unlisted stocks without active market held by the Group totaled 707,616 thousand New Taiwan Dollars and were shown as “financial assets at fair value through other comprehensive income” (Level 3 fair value).

Due to the lack of an active market, the fair value of the unlisted stocks held by the Group was determined using valuation method. Management measured their fair value by using comparable listed companies in the market approach. The main assumptions of the market approach are calculated based on the latest published price-to-book ratio of comparable listed companies in similar industries and considering discounts on market liquidity or assessment of risk.

Above-mentioned estimation of fair value involves various assumptions and material unobservable inputs, which has high uncertainty and relies on the subjective judgement of management. Any changes in judgements and estimates may affect the ultimate result of accounting estimates and have an impact on the financial statements of the Group. Thus, we have included the fair value measurement of unlisted stocks without active market as a key audit matter in our audit.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

Obtained an understanding and assessed policy documents, internal control system, fair value measurement models and approval processes that are related to fair value measurement of unlisted stocks;
Ascertained whether the measurement methods used by the management is commonly used by the industry;
Assessed the reasonableness of parameter of similar companies used by management;
Examined inputs and calculation formulas used in valuation models and agreed such data to supporting documents.

262

Impairment assessment of investments accounted for under the equity method

Description

Please refer to Note 4(14) for accounting policies on investments accounted for under the equity method and its impairment, Note 5(2) for the uncertainty of accounting estimates and assumptions applied on asset impairment, and Note 6(11) for details of investments accounted for under the equity method.

The Group held 42.49% of equity of Uni-President Asset Management Corp. which was accounted for under the equity method, and the excess of the carrying amount over the share of the investee company’s net assets is mainly goodwill. As of December 31, 2020, the amount was 602,865 thousand New Taiwan Dollars. Impairment assessment is based on the expected future cash flow of the investee, discounted at an appropriate discount rate, to measure the recoverable amount of the cash generating unit.

The recoverable amount of the investee is based on its expected future cash flows which involve multiple estimates and assumptions on discount rate and financial forecast. These are subjective judgements, have a high degree of uncertainties, and are material to the recoverable amount. Thus, we consider the impairment assessment of investments accounted for under the equity method as one of the matters of most significance to our audit.

How our audit addressed the matter

We performed the following audit procedures on the above key audit matter:

Obtained the impairment assessment report prepared by an external valuation expert who was commissioned by the management;
Assessed the reasonableness of expected future cash flows, discount rate and other significant assumptions applied in the cash flow model;
Inspected valuation model parameters, formula setting and the accuracy of calculation.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of President Securities Corporation, as at and for the years ended December 31, 2020 and 2019.

263

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance 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, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statement that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process.

Auditors’ responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the generally accepted auditing standards in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

264

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

265

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Lin, Se-Kai

Independent Auditors

Lo, Chiao-Sen

For and on behalf of PricewaterhouseCoopers, Taiwan March 23, 2021

The accompanying consolidated financial statements are not intended to present the financial position and financial performance 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 Independent Auditors’ report 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 any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

266

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Assets	December 31, 2020 AMOUNT % `$` `5,124,862` `4` `41,611,722` `37` `353,510` `-` `12,248,272` `11` `51,532` `-` `42,889` `-` `1,288,127` `1` `21,106,170` `19` `240,796` `-` `1,007,090` `1` `737` `-` `18,852,396` `17` `875` `-` `24,300` `-` `23,950` `-` `28` `-` `3,344,627` `3` `105,321,883` `93` `67,484` `-` `707,616` `1` `3,134,766` `3` `2,453,712` `2` `203,579` `-` `270,503` `-` `151,765` `-` `103,749` `-` `1,296,708` `1` `8,389,882` `7` `$` `113,711,765` `100`	December 31, 2019	December 31, 2019
	AMOUNT `$` `5,124,862` `41,611,722` `353,510` `12,248,272` `51,532` `42,889` `1,288,127` `21,106,170` `240,796` `1,007,090` `737` `18,852,396` `875` `24,300` `23,950` `28` `3,344,627` `105,321,883` `67,484` `707,616` `3,134,766` `2,453,712` `203,579` `270,503` `151,765` `103,749` `1,296,708` `8,389,882` `$` `113,711,765`	AMOUNT `$` `6,520,146` `44,512,465` `-` `10,024,189` `102,545` `88,759` `517,809` `13,735,712` `101,043` `543,171` `697` `12,183,585` `1,003` `22,557` `105,548` `1,048` `1,621,697` `90,081,974` `71,296` `591,596` `578,853` `2,443,964` `221,669` `272,603` `129,160` `135,265` `1,228,020` `5,672,426` `$` `95,754,400`	%
110000 Current assets 111100 Cash and cash equivalents 112000 Financial assets at fair value through profit or loss - current 113200 Financial assets at fair value through other comprehensive income - current 114030 Margin loans receivable 114040 Refinancing security deposits 114050 Receivables from refinance guaranty 114060 Receivable of securities business money lending 114070 Customer margin account 114090 Receivables from security lending 114100 Security lending deposits 114110 Notes receivable 114130 Accounts receivable 114140 Accounts receivable - related parties 114150 Prepayments 114170 Other receivables 114600 Current tax assets 119000 Other current assets 110000 Total current assets 120000 Non-current assets 122000 Financial assets at fair value through profit or loss - non-current 123200 Financial assets at fair value through other comprehensive income - non- current 124100 Investments accounted for under the equity method 125000 Property and equipment, net 125800 Right-of-use assets 126000 Investment property 127000 Intangible assets 128000 Deferred tax assets 129000 Other assets - non-current 120000 Total non-current assets 906001 Total Assets			`7` `46` `-` `10` `-` `-` `1` `14` `-` `1` `-` `13` `-` `-` `-` `-` `2`
			`94`
			`-` `1` `1` `3` `-` `-` `-` `-` `1`
			`6`
			`100`

(Continued)

267

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	December 31, 2020 AMOUNT % `$` `946,276` `1` `7,298,896` `6` `2,624,419` `2` `19,096,165` `17` `1,381,470` `1` `1,809,955` `2` `903,852` `1` `21,087,134` `19` `28,105` `-` `19,178,484` `17` `5,142` `-` `1,101,065` `1` `2,116,413` `2` `6,008,310` `5` `332,075` `-` `86,697` `-` `83,230` `-` `84,087,688` `74` `8,627` `-` `111,621` `-` `9,933` `-` `14,414` `-` `144,595` `-` `84,232,283` `74` `13,998,378` `12` `91,261` `-` `3,111,013` `3` `7,600,316` `7` `3,771,859` `3` `834,488` `1` `29,407,315` `26` `72,167` `-` `29,479,482` `26` `$` `113,711,765` `100`	December 31, 2019	December 31, 2019
	AMOUNT `$` `946,276` `7,298,896` `2,624,419` `19,096,165` `1,381,470` `1,809,955` `903,852` `21,087,134` `28,105` `19,178,484` `5,142` `1,101,065` `2,116,413` `6,008,310` `332,075` `86,697` `83,230` `84,087,688` `8,627` `111,621` `9,933` `14,414` `144,595` `84,232,283` `13,998,378` `91,261` `3,111,013` `7,600,316` `3,771,859` `834,488` `29,407,315` `72,167` `29,479,482` `$` `113,711,765`	AMOUNT `$` `2,964,959` `9,596,704` `848,628` `20,956,256` `1,558,717` `1,888,832` `56,004` `13,713,667` `633` `12,456,602` `2,373` `378,293` `1,347,681` `2,743,866` `203,745` `82,407` `21,893` `68,821,260` `4,180` `134,780` `12,894` `15,514` `167,368` `68,988,628` `13,723,900` `91,261` `2,876,769` `7,130,830` `2,355,105` `521,815` `26,699,680` `66,092` `26,765,772` `$` `95,754,400`	%
210000 Current liabilities 211100 Short-term loans 211200 Commercial papers payable 212000 Financial liabilities at fair value through profit or loss - current 214010 Bonds sold under repurchase agreements 214040 Deposits on short sales 214050 Short sale proceeds payable 214070 Guarantee deposit received on borrowed securities 214080 Futures traders' equity 214090 Equity for each customer in the account 214130 Accounts payable 214150 Advance receipts 214160 Collections on behalf of third parties 214170 Other payables 214200 Other financial liabilities - current 214600 Current tax liability 216000 Current lease liabilities 219000 Other current liabilities 210000 Total current liabilities 220000 Non-current liabilities 225100 Non-current provisions 226000 Non-current lease liabilities 228000 Deferred tax liabilities 229000 Other liabilities-noncurrent 220000 Total non-current liabilities 906003 Total Liabilities 300000 Equity attributable to owners of the parent company 301000 Capital 301010 Common stock 302000 Capital reserve 304000 Retained earnings 304010 Legal reserve 304020 Special reserve 304040 Unappropriated earnings 305000 Other equity interest 300000 Total 306000 Non-controlling interests 906004 Total Equity 906002 Total liabilities and equity			`3` `10` `1` `22` `2` `2` `-` `14` `-` `13` `-` `-` `2` `3` `-` `-` `-`
			`72`
			`-` `-` `-` `-`
			`-`
			`72`
			`14` `-` `3` `7` `3` `1`
			`28`
			`-`
			`28`
			`100`

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

268

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except earnings per share)

Items Year ended December 31
2020
2019
Notes
AMOUNT
%
AMOUNT
%
6(29)
$
3,331,030
35
$
2,236,426
31
6(30)
76,506
1
62,811
1
22,312
-
22,192
-
6(31)
3,356,129
35
2,827,800
40
77,666
1
75,766
1
6(32)
1,118,658
12
1,206,807
17
385,051
4
312,919
4
6(33)
989,219
10
741,327
10
6(34)
268,439
3
37,413
1
6(35)
(
117,021) (
1) (
21,418)
-
6(36)
100,358
1
15,309
-
(
83,151) (
1) (
2,377)
-
2,870
-
-
-
6(37)
95,405
1
93,864
1
6(38)
20,120
- (
892,686) (
12)
6(39)
(
15,979)
- (
6,497)
-
6(40)
(
46,340) (
1)
432,741
6
9,581,272
100
7,142,397
100
6(41)
(
548,487) (
6) (
534,451) (
8)
(
5,658)
-
-
-
6(42)
(
276,884) (
3) (
531,821) (
7)
(
100,691) (
1) (
84,424) (
1)
(
123,083) (
1) (
94,747) (
1)
(
26)
- (
39)
-
6(43)
(
3,202,336) (
33) (
2,394,137) (
34)
6(44)
(
209,839) (
2) (
205,625) (
3)
6(45)
(
1,507,158) (
16) (
1,235,351) (
17)
(
5,974,162) (
62) (
5,080,595) (
71)

400000Revenues
401000
Brokerage handling fee revenue
404000
Revenues from underwriting
business
406000
Net gain on wealth management
410000
Net gain on sale of operating
securities
421100
Revenue from providing agency
service for stock affairs
421200
Interest income
421300
Dividend income
421500
Net valuation gain on operating
securities at fair value through
profit or loss
421600
Net gain on covering of
borrowed securities and bonds
with resale agreements-short
sales
421610
Net valuation loss on borrowed
securities and bonds with resale
agreements-short sales at fair
value through profit or loss
421750
Net realized gain on financial
assets measured at fair value
through other comprehensive
income - bonds
422000
Net loss on issuance of ETNs
422100
Administrative and handling fee
revenues from issuance of ETNs
422200
Net gain from issuance of call
(put) warrants
424400
Net gain (loss) from derivatives
425300
Impairment loss and reversal of
impairment loss
428000
Other operating income
Total revenues
500000 Expenditures and expenses
501000/
502000/
503000
Handling charges
507000
ETNs administrative expenses
521200
Interest expenses
524100
Futures commission expense
524300
Expense of clearing and
settlement
528000
Other operating expenditure
531000
Employee benefits expense
532000
Depreciation and amortization
533000
Other operating expenses
Total expenditures and
expenses

(Continued)

269

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in thousands of New Taiwan dollars, except earnings per share)

Items Year ended December 31
2020
2019
Notes
AMOUNT
%
AMOUNT
%
$
3,607,110
38
$
2,061,802
29
6(11)
68,825
1
107,016
2
6(46)
306,887
3
388,990
5
3,982,822
42
2,557,808
36
6(47)
(
368,226) (
4) (
183,973) (
3)
$
3,614,596
38
$
2,373,835
33
($
21,997)
- ($
30,217)
-
456,748
5 (
12,983)
-
8,870
- (
4,150)
-
4,399
-
6,044
-
27,298
- (
77,467) (
1)
28
- (
5,523)
-
$
475,346
5 ($
124,296) (
1)
$
4,089,942
43
$
2,249,539
32
$
3,607,518
38
$
2,368,536
33
$
7,078
-
$
5,299
-
$
4,080,025
43
$
2,244,912
32
$
9,917
-
$
4,627
-
6(48)
$
2.58
$
1.69
$
2.57
$
1.69

Operating profit
601000
Share of the profit or loss of
associates and joint ventures
accounted for under the equity
method
602000
Other gains and losses
902001Profit before tax
701000
Income tax expense
902005Net income
Other comprehensive income
Components of other
comprehensive income that will
not be reclassified to profit or
loss
805510
Remeasurements of defined
benefit plans
805540
Net unrealized gain (loss) from
investments in equity
instruments at fair value through
other comprehensive income
805550
Other comprehensive gain (loss)
of associates and joint ventures
accounted for under the equity
method
805599
Income tax benefit relating to
components of other
comprehensive income
Items may be reclassified to
profit or loss subsequently
805610
Translation gain (loss) on the
financial statements of foreign
operating entities
805615
Net unrealized gain (loss) from
investments in debt instruments
at fair value through other
comprehensive income
805000 Current other comprehensive
income (loss) (post-tax)
902006Total current comprehensive
income
Income attributable to:
913100
Parent company
913200
Non-controlling interest
Current comprehensive income
attributable to:
914100
Parent company
914200
Non-controlling interests
Earnings per share
975000
Basic earnings per share (in
dollars)
985000
Diluted earnings per share (in
dollars)

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

270

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

Notes							Equity attri	butable to owners o	f the parent	f the parent	f the parent
		Common stock		Capital reserve		R	etained earnings		Other equity interest				Treasury shares		Total
					Legal reserve		Special reserve	Unappropriated earnings	Translation gain and loss on the financial statements of foreign operating entities	a f	Unrealised gain or loss on financial ssets measured at air value through other comprehensive income
6(28) 6(28)	`$ 13,904,281` `-` `-` `-` `-` `-` `-` `-` `(` `180,381 )` `-` `$ 13,723,900` `$ 13,723,900` `-` `-` `-` `-` `-` `-` `274,478` `-` `-` `$ 13,998,378`		`$ 142,702` `-` `-` `-` `-` `-` `-` `-` `(` `51,441` `)` `-` `$ 91,261` `$ 91,261` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$ 91,261`		`$ 2,755,737` `-` `-` `-` `121,032` `-` `-` `-` `-` `-` `$ 2,876,769` `$ 2,876,769` `-` `-` `-` `234,244` `-` `-` `-` `-` `-` `$ 3,111,013`		`$ 6,945,453` `-` `-` `-` `-` `185,377` `-` `-` `-` `-` `$ 7,130,830` `$ 7,130,830` `-` `-` `-` `-` `469,486` `-` `-` `-` `-` `$ 7,600,316`	`$ 1,278,472` `2,368,536` `(` `26,099 )` `2,342,437` `(` `121,032 )` `(` `185,377 )` `(` `959,395 )` `-` `-` `-` `$ 2,355,105` `$ 2,355,105` `3,607,518` `(` `17,197 )` `3,590,321` `(` `234,244 )` `(` `469,486 )` `(` `1,372,390 )` `(` `274,478 )` `177,031` `-` `$ 3,771,859`	`$` `19,251` `-` `(` `77,467 )` `(` `77,467 )` `-` `-` `-` `-` `-` `-` `($` `58,216 )` `($` `58,216 )` `-` `27,298` `27,298` `-` `-` `-` `-` `-` `-` `($` `30,918 )`	`$` `600,089` `-` `(` `20,058 )` `(` `20,058 )` `-` `-` `-` `-` `-` `-` `$` `580,031` `$` `580,031` `-` `462,406` `462,406` `-` `-` `-` `-` `(` `177,031 )` `-` `$` `865,406`		`$` `-` `-` `-` `-` `-` `-` `-` `( 231,822` `)` `231,822` `-` `$` `-` `$` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `-`		`$ 25,645,985` `2,368,536` `(` `123,624 )` `2,244,912` `-` `-` `(` `959,395 )` `(` `231,822 )` `-` `-` `$ 26,699,680` `$ 26,699,680` `3,607,518` `472,507` `4,080,025` `-` `-` `(` `1,372,390 )` `-` `-` `-` `$ 29,407,315`		`$ 66,462` `5,299` `(` `672` `)` `4,627` `-` `-` `-` `-` `-` `(` `4,997` `)` `$ 66,092` `$ 66,092` `7,078` `2,839` `9,917` `-` `-` `-` `-` `-` `(` `3,842` `)` `$ 72,167`	`$ 25,712,447` `2,373,835` `(` `124,296` `)` `2,249,539` `-` `-` `(` `959,395` `)` `(` `231,822` `)` `-` `(` `4,997` `)` `$ 26,765,772` `$ 26,765,772` `3,614,596` `475,346` `4,089,942` `-` `-` `(` `1,372,390` `)` `-` `-` `(` `3,842` `)` `$ 29,479,482`

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

271

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation

Amortization

Impairment loss and reversal of impairment loss

Net valuation gain on operating securities at fair value
through profit or loss
Net valuation loss on borrowed securities and bonds with
resale agreements-short sales at fair value through profit or
loss
Interest expenses

Interest income (including financial income)

Dividend income
Share of the profit of associates and joint ventures accounted
for under the equity method
Loss on disposal of property and equipment

Gain on valuation of non-operating financial instruments

Net loss from lease modification
Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or loss
Financial assets at fair value through other comprehensive
income - current
Bonds purchased under resale agreements
Margin loans receivable
Refinancing security deposits
Receivables from refinance guaranty
Receivable of securities business money lending
Customer margin account
Receivables from security lending
Security lending deposits
Notes receivable
Accounts receivable
Accounts receivable - related parties
Prepayments
Other receivables
Other current assets
Changes in operating liabilities
Bonds sold under repurchase agreements
Financial liabilities at fair value through profit or loss -
current
Deposits on short sales
Short sale proceeds payable
Guarantee deposit received on borrowed securities
Futures traders’ equity
Equity for each customer in the account
Accounts payable
Advance receipts
Collections on behalf of third parties
Other payables
Other financial liabilities - current
Other current liabilities Years ended December 31
Notes
2020
2019
$
3,982,822
$
2,557,808
6(44)
181,478
181,005
6(44)
28,361
24,620
6(39)
18,181
7,170
6(2)(33)
(
989,219 ) (
741,327 )
6(35)
117,021
21,418
6(42)
276,884
531,821
6(32)(46)
(
1,273,261 ) (
1,395,998 )
(
407,049 ) (
339,434 )
6(11)
(
68,825 ) (
107,016 )
6(12)
154
930
6(46)
(
25,279 ) (
10,859 )
-
(
4 )
3,904,263
(
16,100,206 )
(
13,884 )
290,559
-
93,193
(
2,239,117 ) (
2,023,767 )
51,013
(
98,143 )
45,870
(
80,372 )
(
770,318 ) (
517,809 )
(
7,370,458 ) (
2,144,410 )
(
139,753 ) (
22,727 )
(
463,919 )
242,260
(
40 )
488
(
7,111,640 ) (
3,032,872 )
128
(
1,003 )
(
1,743 ) (
6,151 )
73,236
(
74,594 )
(
1,722,930 )
18,526
(
1,860,091 )
5,889,657
1,658,769
(
38,887 )
(
177,247 ) (
208,552 )
(
78,877 ) (
118,370 )
847,848
55,383
7,373,467
2,139,033
27,472
633
7,115,640
3,721,592
2,769
1,398
722,772
15,715
769,620
434,820
3,264,444
56,857
61,337
612

(Continued)

272

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

Cash inflow (outflow) generated from operations
Interest received
Dividends received
Income tax paid
Net cash flows from (used in) operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property and equipment
Proceeds from disposal of property and equipment
Acquisition of intangible assets
Proceeds from disposal of intangible assets
Acquisition of investments accounted for under the equity
method
(Increase) decrease in other non-current assets
Increase in prepayment for equipment
Net cash flows used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
(Decrease) increase in short-term loans
(Decrease) increase in commercial papers payable
Payments of lease liabilities
(Decrease) increase in other non-current liabilities
Distribution of cash dividends
Acquisition of treasury stocks
Interest paid
Changes in non-controlling interest
Net cash flows (used in) from financing activities
Effect of exchange rate changes
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year Years ended December 31
Notes
2020
2019
$
5,809,899
( $
10,777,003 )
1,353,284
1,452,332
505,200
419,418
(
205,923 ) (
119,414 )
7,462,460
(
9,024,667 )
6(12)
(
36,654 ) (
49,102 )
177
24
6(16)
(
17,887 ) (
14,353 )
31
-
(
2,481,388 )
-
(
99,626 )
17,017
(
78,687 ) (
61,939 )
(
2,714,034 ) (
108,353 )
(
2,018,684 )
2,025,081
(
2,300,000 )
9,600,000
(
92,782 ) (
103,551 )
(
2,965 )
2,778
(
1,372,390 ) (
959,395 )
6(27)
-
(
231,822 )
(
288,944 ) (
528,228 )
(
3,842 ) (
4,997 )
(
6,079,607 )
9,799,866
(
64,103 ) (
79,369 )
(
1,395,284 )
587,477
6,520,146
5,932,669
$
5,124,862
$
6,520,146

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

273

PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANIZATION

1) President Securities Corporation (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Law of the Republic of China (R.O.C.) on December 17, 1988, and was renamed as President Securities Corporation on March 4, 1989. The Company started commercial operations on April 3, 1989. As of December 31, 2020, the Company had 31 operating branches (including the Head Office), and established Offshore Securities Unit in July 2014.
2) The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in underwriting of securities, dealing or brokerage business of securities at the securities exchange markets and business premises, registration and transfer agency service for securities, margin loans and short sales business of securities, securities lending and borrowing business, futures introducing brokerage services, futures dealing, issuance of call (put) warrants, new financial instrument transactions, wealth management business, and trust business.
3) The Company’s shares are listed on the Taiwan Stock Exchange.
4) The number of employees of the Group were 1,703 and 1,693 as of December 31, 2020 and 2019, respectively.
THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED
FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION
These consolidated financial statements were authorized for issuance by the Board of Directors on March 23, 2021.
APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS
1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by FSC effective from 2020 are as follows:

as follows:
New Standards,Interpretations and Amendments	Effective Date by International Accounting Standards Board
Amendments to IAS 1 and IAS 8, ‘Disclosure initiative-definition of material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘ Interest rate benchmark reform’ Amendment to IFRS 16, ‘Covid-19-related rent concessions’	January 1, 2020 January 1, 2020 January 1, 2020 June 1, 2020 (Note)

274

Note ： Earlier application from January 1, 2020 is allowed by FSC.

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

New standards, interpretations and amendments endorsed by FSC effective from 2021 are as follows:

as follows:
	Effective Date by
	International
	Accounting Standards
New Standards, Interpretations and Amendments	Board
Amendments to IFRS 4, ‘Extension of the temporary exemption from applying IFRS 9’	January 1, 2021
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16, ‘ Interest Rate Benchmark Reform— Phase 2’	January 1, 2021

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

3) IFRSs issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

IFRSs issued by IASB but not yet endorsed by the FSC
New standards, interpretations and amendments issued by IASB but
IFRSs as endorsed by the FSC are as follows:

not yet included in the

New Standards,Interpretations and Amendments
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of
assets between an investor and its associate or joint venture’
Amendments to IFRS 3, ‘Reference to the conceptual
framework’
Amendments to IAS 16, ‘Property, plant and equipment:
proceeds before intended use’
Amendments to IAS 37, ‘Onerous contracts—
cost of fulfilling a contract’
Annual improvements to IFRS Standards 2018–2020
IFRS 17, ‘Insurance contracts’
Amendments to IFRS 17, 'Insurance contracts'
Amendments to IAS 1, ‘Classification of liabilities as current or
non-current’
Amendments to IAS 1, ‘Disclosure of accounting policies’
Amendments to IAS 8, ‘Definition of accounting estimates’

Effective Date by
International Accounting
Standards Board

To be determined by
International
Accounting Standards
Board
January 1, 2022
January 1, 2022
January 1, 2022
January 1, 2022
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023

275

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “ Regulations Governing the Preparation of Financial Reports by Securities Firms”, “ Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).
2) Basis of preparation
A. Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:
- (A) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
- (B) Financial assets at fair value through other comprehensive income.
- (C) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligations.
B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:
(A) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
(B) Intercompany transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of

276

subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

(C) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
(D) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the noncontrolling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
(E) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.
B. Subsidiaries included in the consolidated financial statements:

Name of Investor	Name of Subsidiary	Main Business Activities Futures brokerage and dealer Securities investment consulting Securities dealer, brokerage, underwriting and consulting Securities investment and holding company	Ownership (%)	Ownership (%)
			December 31,2020 96.69% 100% 100% 100%	December 31,2019
The Company `〃` `〃` `〃`	President Futures Corp. (President Futures) President Capital Management Corp. (President Capital Management) President Securities (HK) Ltd.(President Securities (HK)) (Note 1) President Securities (BVI) Ltd.(President Securities (BVI)) (Note 2)			96.69% 100% 5.19% 100%

277

Name of Investor	Main Business Name of Subsidiary Activities President Insurance Agency Corp. (President Insurance Agency) Insurance Agent PSC Venture Capital Investment Company Limited (President Venture Capital) Consultation of investment management and venture capital; other unprohibited or unrestricted businesses beyond the permit President Wealth Management(HK) Ltd.(President Wealth Management (HK)) (Note 1) Wealth management President Securities (Nominee) Ltd. (President Securities (Nominee)) (Note 1) Nominee Service President Securities (HK) Ltd. (Note 1) Securities dealer, brokerage, underwriting and consulting President Wealth Management (HK) Ltd.(President Wealth Management (HK)) (Note 1) Wealth management President Securities (Nominee) Ltd. (President Securities (Nominee)) (Note 1) Nominee Service	Ownership (%)	Ownership (%)
		December 31,2020 100% 100% 100% 100% - - -	December 31,2019
The Company `〃` `〃` `〃` President Securities (BVI) `〃` `〃`			100% 100% - - 94.81% 100% 100%

  - Note 1: In July 2020, the Company acquired equity in the overseas reinvestment business invested by President Securities (BVI). Currently, the Company holds 100% equity of President Securities (HK), President Wealth Management (HK) and President Securities (Nominee).

  - Note 2: The dissolution and liquidation of President Securities (BVI) was approved by the Board of Directors in March 2020.

4) Classification of current and non-current items
A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
- (A) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

278

  - (B) Assets held mainly for trading purposes;

  - (C) Assets that are expected to be realized within twelve months from the balance sheet date;

  - (D) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
- (A) Liabilities that are expected to be paid off within the normal operating cycle;
- (B) Liabilities arising mainly from trading activities;
- (C) Liabilities that are to be paid off within twelve months from the balance sheet date;
- (D)Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
5) Translation of foreign currency transactions
A. Foreign currency translation and presentation
- Items included in the consolidated financial statements of the Group are measured using the currency of the primary economic environment in which the Group operates (the “functional currency”). Functional currency and bookkeeping currency of the Company and its domestic subsidiaries are all New Taiwan Dollars; functional currency and bookkeeping currency of overseas subsidiaries-President Securities (HK), President Wealth Management (HK), and President Securities (Nominee) are Hong Kong Dollars; and functional currency and bookkeeping currency of President Securities (BVI) are US Dollars. The consolidated financial statements are presented in New Taiwan Dollars.
B. Foreign currency transactions and balances
- Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated by the closing exchange rate at balance sheet date. The closing exchange rate is determined by the market exchange rate. Non-monetary assets and liabilities denominated in foreign currencies which are carried at historical cost are translated by the exchange rates prevailing at the original transaction date. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are retranslated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their

279

translation differences are recognized in other comprehensive income.

C. Translation of foreign operations
- The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- (A) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
- (B) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
- (C) All resulting exchange differences are recognized in other comprehensive income.
6) Cash and cash equivalents
A. In the consolidated statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with banks, and other short-term highly liquid investments.
B. Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.
7) Financial assets and financial liabilities at fair value through profit or loss
A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.
D. The Group recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
8) Financial assets at fair value through other comprehensive income
A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:
- (a)The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and
- (b)The assets’ contractual cash flows represent solely payments of principal and interest.

280

B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:
(A) The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
(B) Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognized in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.
9) Notes and accounts receivable, other receivables and margin loans receivable
A. Accounts and notes receivable and margin loans receivables entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.
10) Bonds sold under repurchase agreements and bonds purchased under resale agreements Bond transactions under repurchase or resale agreements are stated at the amount of actual payment or receipt. When transactions of bonds with a condition of resale agreements occur, the actual payment or receipt shall be recognized in ‘bonds purchased under resale agreements’ under current assets. When transactions of bonds with a condition of repurchase agreements occur, the actual payment or receipt shall be recognized in ‘bonds sold under repurchase agreements’ under current liabilities. Any difference between the actual payment/receipt and predetermined redemption (repurchase) price is recognized in interest income or interest expense.
11) Impairment of financial assets
For debt instruments measured at fair value through other comprehensive income, at each reporting date, the Group recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognizes the impairment provision for lifetime ECLs.

281

12) Derecognition of financial instruments

A. Derecognition of financial assets

The Group derecognizes a financial asset when one of the following conditions is met:

(A) The contractual rights to receive cash flows from the financial asset expire.
(B) The contractual rights to receive cash flows from the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.
(C) The contractual rights to receive cash flows of the financial asset have been transferred; however, the Group has not retained control of the financial asset.
B. Derecognition of financial liabilities
A financial liability is derecognized when the obligation under the liability specified in the contract is discharged or cancelled or expires.
13) Offsetting financial instruments
Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

14) Investments accounted for under the equity method

A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.
B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred statutory/constructive obligations or made payments on behalf of the associate.
C. When changes in an associate’s equity that are not recognized in profit or loss or other comprehensive income of the associate and such changes not affecting the Group’s ownership percentage of the associate, the Group recognizes its share of change in equity of the associate in ‘capital reserve’ in proportion to its ownership.
D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

282

E. When there are objective evidences of impairment at balance sheet date, the Group considers the whole investment carrying amount as single asset, and compares its recoverable amount (value in use or fair value less costs of disposal) with the carrying amount, to test its impairment. Value in use is determined by the present value of the Group’s share of the expected future cash flow from the associates. If the recoverable amount is less than its carrying amount, an impairment loss should be recognized. The loss will not be allocated to any of the components (including goodwill), which comprise the carrying amount of the investment. An impairment loss recognized in prior periods shall be reversed if circumstances of impairment no longer exist or have decreased.
15) Property and equipment
A. Property and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property and equipment are subsequently measured using the cost model and depreciated using the straight-line method to allocate their cost over their estimated useful lives.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property and equipment are as follows:

Buildings Furniture and fixtures Computer equipment Electrical equipment Leasehold improvements	Useful lives
	5~50 years 4~10 years 3~5 years 3~10 years 5 years

E. When an asset is sold or retired, the cost and accumulated depreciation are removed from the respective accounts and the resulting gain or loss is included in current operations.

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16) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities

A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of low value assets, lease payments are recognized as an expense on a straightline basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are mainly comprised of fixed payments.
- The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.
C. At the commencement date, the right-of-use asset is stated at cost comprising mainly the amount of the initial measurement of lease liability.
- The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.
17) Investment property
A. Investment property of the Group is the property held either to earn long-term rental income or for capital appreciation or for both.
B. Part of the property may be held by the Group for self-use purpose and the remaining are used to generate rental income or capital appreciation. If the property held by the Group can be sold individually, then the accounting treatment should be made respectively. If each part of the property cannot be sold individually and the self-use proportion is not material, then the property is deemed as investment property in its entirety.
C. When the future economic benefit related to the investment property is highly likely to flow into the Group and the costs can be reliably measured, the investment property shall be recognized as assets. When the future economic benefit generated from subsequent costs is highly likely to flow into the entity and the costs can be reliably measured, the subsequent expenses of the assets shall be capitalized. All maintenance cost are recognized in profit or loss as incurred.
D. Investment property is subsequently measured using the cost model. Depreciated cost is used to calculate amortization expense after initial measurement. The depreciation method, remaining useful life and residual value should apply the same rules as applicable for property and equipment.

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18) Intangible assets

A. The cost of computer software is amortized using the straight-line method over the useful lives based on acquisition cost, with an amortization period of 4 years.
B. Membership in a foreign futures exchange is stated at acquisition cost and has an indefinite useful life as it was assessed to generate continuous net cash inflow in the foreseeable future. It is not amortized, but is tested annually for impairment.
C. In accordance with IFRS 3 ‘Business combinations’ as endorsed by FSC, goodwill arises when the acquisition cost exceeds the fair value of identifiable assets and liabilities of the consolidated subsidiary on the consolidation date. The goodwill arising from the consolidated subsidiary is included in the intangible asset. Goodwill is tested annually for impairment and any impairment loss will be recognized when impairment occurs. Impairment losses on goodwill are not reversed.
19) Impairment of non-financial assets
A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.
B. The recoverable amounts of goodwill, intangible assets with an indefinite useful life and intangible assets that have not yet been available for use are evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss shall not be reversed in the following years.
C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

20) Financial liabilities at fair value through profit or loss

A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorized as financial liabilities held for trading unless they are designated as hedges.

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B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognized in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognized in profit or loss.
21) Contingent liabilities

Contingent liability is a possible obligation that arises from past event, whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. Or it could be a present obligation as a result of past event but the payment is not probable or the amount cannot be measured reliably. The Group did not recognize any contingent liabilities but made appropriate disclosure in compliance with relevant regulations.

22) Employee benefits
A. Short-term employee benefits
- Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service.
B. Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employee. The Group recognized expense as it can no longer withdraw an offer of termination benefit or it recognizes relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

C. Pensions
(A) Defined contribution plans

Effective July 1, 2005, the Group established the defined contribution plan for employees of R.O.C. nationality. The employees have the option to participate in the New Plan. Under the New Plan, the Company contributes monthly an amount equivalent to 6% of employees’ salaries to the employees’ personal pension accounts with the “Bureau of Labor Insurance”. Benefits accrued under the New Plan are portable upon termination of employment. Net defined benefit asset can only be recognized when there is a cash refund or elimination in the future accrued pension liabilities.

(B) Defined benefit plans
a. In a defined benefit plan, the pension paid is determined based on the amount that an employee shall receive upon retirement, which could vary with age, work

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seniority and salary compensations. The Group recognizes the accrued pension obligations in the consolidated balance sheet based on the net amount of actuarial present value of defined benefit obligation less the fair value of fund, which is adjusted with the net of past service cost recognized as liabilities. Defined benefit obligation is assessed annually using projected unit credit method by the actuary. The present value of the defined benefit obligation is determined using the market yield of government bonds of a currency and term consistent with the currency and term of the employment benefit obligations.

  - b. Remeasurement arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

D. Employees’ remuneration and directors’ remuneration
Employees’ and directors’ remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

23) Revenues and expenses

The Group’s revenues and expenses are recognized as incurred, which mainly include:

A. Gains (losses) on sale of securities, securities brokerage fees, and commissions on brokerage and trading are recognized on the transaction date.
B. Underwriting fees and related service charges: application fees are recognized upon collection; underwriting fees and service charges are recognized when the contract is completed.
C. Gains (losses) on futures contracts: The margin of futures transaction is recognized as cost. Costs and expenses are recognized as incurred.
D. Operating expenses: operating expenses refer to required expenses incurred in the Group’s operations, which primarily include employee benefit expense, depreciation and amortization, and other business and administrative expenses.

24) Income tax

A. Current income tax

Income tax payable (refundable) is calculated on the basis of the tax laws enacted in the countries where a company operates and generates taxable income. Except for the transactions or other matters directly recognized in other comprehensive income or equity, in which cases the related income taxes in the period are recognized in other comprehensive income or directly derecognized from equity, all the others should be recognized as income or expense for the period.

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B. Deferred income tax

Deferred income tax assets and liabilities are measured based on the tax rate of the anticipated period that the future assets realization or the liabilities settlement requires, which is based on the effective or existing tax rate at the consolidated balance sheet date. The carrying amounts and temporary differences of assets and liabilities included in the consolidated balance sheet are calculated using the liability method and recognized as deferred income tax. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit (loss). Deferred income tax assets are recognized only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized. If the future taxable income is probable to provide unused loss carryforwards or deferred income tax credit which can be realized in the future, the proportion of realization is deemed as deferred income tax asset.
C. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions for income tax liabilities where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
D. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

25) Share capital

A. Incremental costs directly attributable to the issuance of new shares are shown as a deduction, net of tax, from equity. Dividends from common stocks are recognized as equity in the financial period in which they are approved by the Company’s shareholders. If the date of dividends declared is later than the consolidated balance sheet date, common stocks are disclosed in the subsequent events.
B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net

288

of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

26) Earnings per share

A. Earnings per share is calculated by dividing net income by the weighted average number of shares outstanding during the year after taking into consideration the retroactive effect of stock dividends and capital reserve capitalized.
B. When the Group calculates earnings per share, basic earnings per share and diluted earnings per share for all potential ordinary shares shall all be disclosed in accordance with IAS 33 “Earnings per share”.

27) Operating segments

The Group’s operating segments are reported in a manner consistent with the internal reports provided to the Chief Operating Decision-Maker. The Group’s performance of segment profit (loss) is assessed based on the profit (loss) before tax, but not segment income, assets and liabilities. The Chief Operating Decision-Maker is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF

ASSUMPTION UNCERTAINTY

1) As the consolidated financial statements of the Group may be affected by the adoption of accounting policy, accounting estimate and assumption, the Group’s management shall properly exercise its professional judgement, estimates, and assumptions on the information of the key risks that is obtained from other resources and could affect the carrying amounts of financial assets and liabilities in the next fiscal year while adopting critical accounting policies as stated in Note 4. Estimates and assumptions of the Group are the best estimates made in compliance with IFRSs as endorsed by the FSC. Estimates and assumptions are made based on past experience and other factors (including the influence of COVID 19) deemed relevant; however, the actual results may differ from the estimates. The Group evaluates the estimates and assumptions on an ongoing basis and recognizes the adjustment of the estimates only in the period which is affected by the adjustment. If the adjustment simultaneously affects both the current and future periods, it should be recognized in both periods.
2) Relevant information on key assumptions to be made in the future, key sources of assumption uncertainty made at balance sheet date, and assumptions and estimates that may cause key risks that could affect the carrying amounts of financial assets and liabilities are as follows:

289

A. Fair value of financial instruments
Financial instruments with no active market or quoted price use valuation technique to determine the fair value. Under such condition, fair value is assessed through the observable information or models of similar financial instruments. If there is no observable input available in a market, the fair value of financial instrument is assessed through appropriate assumptions. When valuation models are adopted to determine the fair value, all the models should be calibrated to ensure that the output can actually reflect actual information and market price. Models should try to take only observable information as much as possible.
B. Expected credit losses

(A)The criteria used to judge whether there is significant increase in credit risk.
(B)The selection of appropriate models and assumptions for measuring expected credit losses.

For judgements and estimations of the above expected credit losses, please refer to Note 12(2).

C. Impairment assessment on investments accounted for under the equity method When there are impairment indicators that show the investments accounted for under the equity method are impaired and the carrying amount can no longer be recovered, the Group will assess the impairment of the investment. The Group assesses its share of the recoverable amount which is based on the discounted value of expected cash flow, and assess the reasonableness of relevant assumptions, including revenue growth rate, operating profit margin, net profit margin, financial forecast, and discount rate.
D. Impairment assessment of goodwill
The periodic impairment assessment of goodwill includes allocation of assets, liabilities, and goodwill to brokerage segment, and determines the recoverable amount based on brokerage segment’s present value of expected future cash flow. The periodic assessment also analyzes reasonableness of relevant assumptions, including expected future trading volumes, market share, segment’s operating profit margin, and discount rates.

290

6. DETAILS OF SIGNIFICANT ACCOUNTS

1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
	December 31, 2020		December 31,2019
Petty cash	$	168	$	169
Checking deposits		639,368		1,111,097
Current deposits:
Deposits denominated in NTD		505,005		287,249
Deposits denominated in foreign currencies		1,256,458		1,091,712
Time deposits		2,723,863		4,029,919
Total	$	5,124,862	$	6,520,146

As of December 31, 2020 and 2019, the annual interest rates of time deposits, including foreign time deposits were 0.02% ~ 2.95% and 0.04%~3.21%, respectively.

2) Financial assets at fair value through profit or loss

Current items: Financial assets mandatorily measured at fair value through profit or loss: Open-ended funds, money market instruments and securities investment by brokers Open-ended mutual funds beneficiary certificates Listed (TSE and OTC) stocks Exchange-traded funds Subtotal Adjustment of open-ended funds ,money market instruments and securities investment by brokers Total Trading securities-dealer Listed (TSE and OTC) stocks Government bonds Corporate bonds Convertible corporate bonds Emerging stocks Overseas stocks Exchange-traded funds Unlisted stocks Subtotal Adjustment of trading securities - dealer Total Trading securities-underwriter Listed (TSE and OTC) stocks Convertible corporate bonds Subtotal Adjustment of trading securities - underwriter Total	December 31,2020 170,000 $ 5,799 35,148 210,947 34,433 245,380 5,610,556 2,699,935 3,317,423 417,025 125,046 17,722,487 2,099,505 35,964 32,027,941 1,114,737 33,142,678 469,460 170,407 639,867 49,913 689,780	December 31,2019
		266,298 $ 4,887 82,660
		353,845 2,610
		356,455
		6,276,195 3,364,452 6,992,481 146,703 65,207 15,829,161 3,091,765 48,289
		35,814,253 441,238
		36,255,491
		807,209 238,046
		1,045,255 101,417
		1,146,672

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Trading securities-hedging Listed (TSE and OTC) stocks Convertible corporate bonds Warrants Overseas stocks Exchange traded funds Subtotal Adjustment of trading securities - hedging Total Options bought-futures Futures guarantee deposits receivable Derivative financial instrument assets-OTC Total Non-current items: Financial assets mandatorily measured at fair value through profit or loss: Trading securities - dealer - government bonds Unlisted stocks Subtotal Adjustment of trading securities Total	December 31,2020 3,535,818 $ 20,561 52,681 - 12,084 3,621,144 117,091 3,738,235 37,316 3,748,960 9,373 41,611,722 $ 49,947 $ 2,609 52,556 14,928 67,484 $	December 31,2019
		3,142,111 $ 7,647 47,966 64,648 165,249 3,427,621 83,999 3,511,620 17,136
		3,224,122
		969
		44,512,465 $
		49,921 $ 2,609
		52,530 18,766
		71,296 $

a. For the years ended December 31, 2020 and 2019, net realized and unrealized gains on financial assets and liabilities at fair value through profit or loss amounted to $4,532,010 and $2,783,923, respectively.
b. Details of the Group’s financial assets at fair value through profit or loss pledged to others as collateral are provided in Note 8.
c. Information relating to credit risk is provided in Note 12(2).

3) Financial assets at fair value through other comprehensive income

Current items: Equity instruments Trading securities-dealer Listed (TSE and OTC) stocks Adjustment of trading securities - dealer Total Non-current items: Equity instruments Unlisted stocks Adjustment of trading securities Total	December 31,2020 189,812 $ 163,698 353,510 $ 37,565 $ 670,051 707,616 $	December 31,2019
		- $ -
		- $
		37,565 $ 554,031
		591,596 $

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a. The Group has elected to classify stocks investment that are considered to be strategic investments and receive steady dividend as financial assets at fair value through other comprehensive income. The fair value of such investments amounts to $1,061,126 and $591,596 as at December 31, 2020 and 2019, respectively.
b. For the year ended December 31, 2020, the Group sold its stock investments listed on TSE and OTC with fair value of $1,525,695, and an accumulated gain on disposal of $177,031, in order to adjust the investment position.
c. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other
comprehensive income
Year ended
December 31,2020
Fair value change recognised in other
comprehensive income - parent company
453,860
$ Fair value change recognised in other
comprehensive income - non-controlling
interest
2,888
Total
456,748
$ Cumulative gains (losses) reclassified to
retained earnings due to derecognition
177,031)
($ Dividend income recognised in profit or loss
Held at end of period
25,486
$ Derecognised during the period
66,894
92,380
$
Debt instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income
100,330)
($ Due to derecognition
100,358
$ Interest income recognised in profit or loss
28,276
$

Year ended
December 31,2019

12,186)
($ 797)
(
12,983)
($ -
$ 24,192
$ -

24,192
$ 20,832)
($ 15,309
$ 784
$

d. Details of the Group’s financial assets at fair value through other comprehensive income pledged to others as collateral are provided in Note 8.
e. Information relating to credit risk is provided in Note 12(2).

4) Margin loans receivable

Margin loans receivable were secured by the securities purchased by customers under margin loans. The annual interest rate was 6.4%.

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5) Customer margin account

Customer margin account
Bank deposit Futures clearing house Other futures commission merchant Securities Total	December 31,2020 15,149,252 $ 2,372,222 3,584,333 363 21,106,170 $	December 31,2019 10,020,199 $ 1,346,810 2,368,427 276
		13,735,712 $

The difference between the customer margin deposits accounts and futures traders’ equity as of December 31, 2020 and 2019 were outlined below:

		December 31, 2020		December 31,2019
Customer margin deposits accounts	21,106,170 $		$	13,735,712
Futures trading margins receivable		-		32
Add: Early customer margin deposits		2,202		7,078
Less: Service fee income pending for transfer	(	12,815)	(	16,998)
Futures exchange tax pending for transfer	(	967)	(	696)
Net interest income pending for transfer	(	1,549)	(	3,078)
Temporary receipts	(	5,907)	(	8,383)
Futures traders' equity	21,087,134 $		$	13,713,667

6) Accounts receivable

Accounts receivable
		December 31,2020			December 31,2019
Accounts receivable - related parties		$	875		$	1,003
Accounts receivable - non related parties
Settlement price receivable-brokers	$		16,022,037	$		9,135,975
Settlement price receivable-dealer			132,304			857,731
Accounts receivable-foreign bonds			4,454			601,111
Spot exchange receivable, foreign currencies			55,001			435,180
Interest receivable			244,723			301,206
Settlement price			2,287,777			777,031
Others			106,725			76,007
Subtotal			18,853,021			12,184,241
Less: Allowance for uncollectable accounts	(		625)	(		656)
Total	$		18,852,396	$		12,183,585

A. The ageing analysis of accounts receivable that were past due but not impaired is as follows:

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==> picture [459 x 228] intentionally omitted <==

----- Start of picture text -----

December 31, 2020
181 days to 12 More than 12
Up to 30 days 31 to 90 days 91 to 180 days months months Total
Accounts receivable
Accounts receivable
$ 875 $ - $ - $ - $ - $ 875
- related parties
Accounts receivable
- non related parties 18,627,147 44,729 86,828 62,638 31,679 18,853,021
$ 18,628,022 $ 44,729 $ 86,828 $ 62,638 $ 31,679 $ 18,853,896
December 31, 2019
181 days to 12 More than 12
Up to 30 days 31 to 90 days 91 to 180 days months months Total
Accounts receivable
Accounts receivable
$ 1,003 $ - $ - $ - $ - $ 1,003
- related parties
Accounts receivable
- non related parties 11,890,629 69,156 102,519 75,034 46,903 12,184,241
$ 11,891,632 $ 69,156 $ 102,519 $ 75,034 $ 46,903 $ 12,185,244
----- End of picture text -----

Note ： The above ageing analysis was based on invoice date.

B. Information relating to credit risk is provided in Note 12(2).
7) Other receivables

Other receivables
		December	31,2020		December	31,2019
Interest receivable	$		6,121	$		13,812
Others			18,554			91,790
Subtotal			24,675			105,602
Less: Allowance for uncollectible accounts	(		725)	(		54)
Total	$		23,950	$		105,548

Information relating to credit risk is provided in Note 12(2).

8) Other current assets

Other current assets
Pending settlements Pledged time deposits Deposits-in for foreign currency securities Underwriting share proceeds collected on behalf of customers Temporary payments Others Total	December 31,2020 1,489,800 $ 525,249 647,622 651,290 1,841 28,825 3,344,627 $	December 31,2019
		950,487 $ 531,251 - 18 138,591 1,350
		1,621,697 $

9) Transfer of financial assets

A. During the Group’s activities, the transferred financial assets that do not meet derecognition conditions are mainly debt instruments with purchase agreements or debt instruments lent out in accordance with securities borrowing and lending agreement. The cash flow of the contract has been transferred and related liabilities of transferred financial assets that will be repurchased at a fixed price in the future have been reflected. The Group may not use, sell or pledge the transferred financial assets during the valid

295

period of the transaction. The financial assets were not derecognized as the Group is still exposed to interest rate risk and credit risk.

B. Financial assets that do not meet the derecognition conditions and related financial liabilities are analysed below:

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----- Start of picture text -----

December 31, 2020
Carrying amount of Carrying amount of related
Financial assets category transferred financial assets financial liabilities
Financial assets measured at fair value
through profit or loss
Repurchase agreement $ 20,375,875 $ 19,096,165
December 31, 2019
Carrying amount of Carrying amount of related
Financial assets category transferred financial assets financial liabilities
Financial assets measured at fair value
through profit or loss
Repurchase agreement $ 21,964,175 $ 20,956,256
----- End of picture text -----

10) Offsetting financial assets and financial liabilities
A. The Group has transactions that are or are similar to net settled master netting arrangements but do not meet the offsetting criteria, i.e. derivative financial instruments, resale and repurchase agreements. If one party breaches the contract, the counterparty can choose to use net settlement for the above transactions.
B. The offsetting of financial assets and financial liabilities are set as follows:

(Blank below)

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(1) Financial assets

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----- Start of picture text -----

December 31, 2020
Gross amounts of Not set off in the balance sheet
Gross amounts recognised financial Net amounts of financial
of recognised liabilities set off in the assets presented in the Financial Cash collateral
Description financial assets balance sheet balance sheet instruments received Net amount
Derivative financial
$ 9,303 $ - $ 9,303 $ 9,303 $ - $ -
instruments
December 31, 2019
Gross amounts of Not set off in the balance sheet
Gross amounts recognised financial Net amounts of financial
of recognised liabilities set off in the assets presented in the Financial Cash collateral
Description financial assets balance sheet balance sheet instruments received Net amount
Derivative financial
$ 938 $ - $ 938 $ 938 $ - $ -
instruments
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(2) Financial liabilities

nancial liabilities
		December 31,2020
Derivative financial instruments Bonds sold under repurchase agreements Total Description	Gross amounts of recognised financial liabilities	Gross amounts of recognised financial assets set off in the balance sheet	Net amounts of financial liabilities presented in the balance sheet	Financial instruments Cash collateral received 9,303 $ - $ 14,051,616 - 14,060,919 $ - $ Not set off in the balance sheet	Net amount
				Financial instruments
	26,252 $ 14,051,616 14,077,868 $	- $ 26,252 $ - 14,051,616 - $ 14,077,868 $ December 31,2019		9,303 $ 14,051,616 14,060,919 $	16,949 $ -
					16,949 $

Derivative financial instruments Bonds sold under repurchase agreements Total Description	Gross amounts of recognised financial liabilities	Gross amounts of recognised financial assets set off in the balance sheet	Net amounts of financial liabilities presented in the balance sheet	Financial instruments Cash collateral received 938 $ - $ 11,622,022 - 11,622,960 $ - $ Not set off in the balance sheet	Net amount
				Financial instruments
	8,371 $ 11,622,022 11,630,393 $	- $ - - $	8,371 $ 11,622,022 11,630,393 $	938 $ 11,622,022 11,622,960 $	7,433 $ -
					7,433 $

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11) Investments accounted for under the equity method

	December 31,2020	December 31,2020	December	31,2019
Uni-President Asset Management Corp.	$	602,865	$	578,853
Jin Yuan President Securities Co.,Ltd.		2,531,901		-
	$	3,134,766	$	578,853

A. The Group’s share of its associates’ profits or losses recognized in long-term equity investment accounted for under the equity method for the years ended December 31, 2020 and 2019 were $68,825 and $107,016, respectively.
B. The Group holds 42.49% of the equity of Uni-President Asset Management Corp., making it the single largest shareholder of the associate, while the other equity is mainly held by the other 15 shareholders. Half of the voting rights of the shareholders attending the shareholders meeting exceeds the voting rights of the Group, and the Group does not take an active role in the management of the associate. This shows that the Group has no actual ability to direct relevant activities. The Group has no control over Uni-President Asset Management Corp., but has significant influence over it.
C. The financial information of the Group’s principal associates is summarized as follows: (a)The basic information of the associates that are material to the Group is as follows:

Companyname	Princial place of businesss December 31, 2020 December 31, 2019 Taipei city 42.49% 42.49% Xiamen 49% - Shareholding ratio	Nature of relationship Methods of measurement
Uni-President Asset Management Corp. Jin Yuan President Securities Co.,Ltd.		Associate Equity method Associate Equity method

Note:The Company participated in the establishment of Jin Yuan President Securities Co., Ltd. since May 2020.

(b)The summarized financial information of the associates that are material to the Group is as follows:

Balance sheet

Balance sheet
Current assets Non-current assets Current liabilities Non-current liabilities Total net assets		Uni-President Asset	December 31,2019 Management Corp.
		December 31,2020
	656,152 $ 687,024 292,750) ( 54,266) ( 996,160 $		543,681 $ 627,350 176,271) ( 55,102) ( 939,658 $

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Uni-President Asset	Uni-President Asset	Uni-President Asset	Uni-President Asset
$

	Year ended December 31,2020
	941,595 $ 258,096 $ 20,871 278,967 $ 94,542 $	831,987 $ 251,386 $ 9,768) ( 241,618 $ 93,706 $ Jin Yuan President Securities Co.,Ltd.
			Eight months ended December 31,2020
		74,454 $ 83,388) ($ 83,388) ($ - $

300

12) Property and equipment

) Property and equipment
January1				2020
	Land	Buildings		Equipment		Leasehold improvements		Total
Cost Accumulated depreciation and impairment Total January 1 Additions Disposal Reclassifications Depreciation December 31 December 31	1,680,129 $ - 1,680,129 $ 1,680,129 $ - - - - 1,680,129 $ Land	1,060,323 $ 428,805) ( 631,518 $ 631,518 $ 4,262 - 37,170 29,748) ( 643,202 $ Buildings		259,114 $ 143,409) ( 115,705 $ 115,705 $ 30,779 244) ( 19,213 46,964) ( 118,489 $ Equipment		48,000 $ 31,388) ( 16,612 $ 16,612 $ 1,613 87) ( - 6,246) ( 11,892 $ Leasehold improvements		3,047,566 $ 603,602) ( 2,443,964 $ 2,443,964 $ 36,654 331) ( 56,383 82,958) ( 2,453,712 $ Total
Cost Accumulated depreciation and impairment Total January1	1,680,129 $ - 1,680,129 $	1,098,380 $ 455,178) ( 643,202 $		277,347 $ 158,858) ( 118,489 $ 2019		39,669 $ 27,777) ( 11,892 $		3,095,525 $ 641,813) ( 2,453,712 $ Total
	Land		Buildings		Equipment		Leasehold improvements
Cost Accumulated depreciation and impairment Total January 1 Additions Disposal Reclassifications Depreciation December 31 December 31	1,680,129 $ - 1,680,129 $ 1,680,129 $ - - - - 1,680,129 $ Land	1,053,129 $ 410,315) ( 642,814 $ 642,814 $ 6,019 - 7,293 24,608) ( 631,518 $ Buildings		234,426 $ 132,048) ( 102,378 $ 102,378 $ 40,808 172) ( 13,084 40,393) ( 115,705 $ Equipment		57,963 $ 40,914) ( 17,049 $ 17,049 $ 2,275 782) ( 6,030 7,960) ( 16,612 $ Leasehold improvements		3,025,647 $ 583,277) ( 2,442,370 $ 2,442,370 $ 49,102 954) ( 26,407 72,961) ( 2,443,964 $ Total
Cost Accumulated depreciation and impairment Total	1,680,129 $ - 1,680,129 $	1,060,323 $ 428,805) ( 631,518 $		259,114 $ 143,409) ( 115,705 $		48,000 $ 31,388) ( 16,612 $		3,047,566 $ 603,602) ( 2,443,964 $

A. No interest was capitalized for property and equipment for the years ended December 31, 2020 and 2019.

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B. The information on property and equipment pledged or restricted as of December 31, 2020 and 2019, is described in Note 8.
－
13) Leasing arrangements lessee
A. The Group leases various assets including buildings, machinery and equipment, business vehicles and multifunction printers. Rental contracts are typically made for periods of 1 to 10 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Buildings Transportation equipment (Business vehicles) Office equipment (Photocopiers) Total Buildings Transportation equipment (Business vehicles) Office equipment (Photocopiers) Total		December 31,2020		December 31, 2019
		CarryingAmount		Carrying Amount
		174,624 $ 17,350 11,605 203,579 $ Year ended December 31, 2020		202,057 $ 18,384 1,228 221,669 $ Year ended December 31,2019
		Depreciation charge		Depreciation charge
		88,224 $ 6,440 1,756 96,420 $		96,820 $ 7,326 1,798 105,944 $

C. For the years ended December 31, 2020 and 2019, the additions to right-of-use assets amounted to $84,449 and $147,604, respectively.
D. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss	Year ended December 31,2020	Year ended December 31,2019
Interest expense on lease liabilities Expense on short-term lease contracts Expense on variable lease payment	2,293 $ 3,567 224	2,461 $ 3,843 317

E. For the years ended December 31, 2020 and 2019, the Group’s total cash outflow for leases amounted to $98,866 and $110,172, respectively.
F. The Group has applied the practical expedient to “Covid-19-related rent concessions”, and recognized the other gains or losses from changes in lease payments arising from the rent concessions amounting to $116 by decreasing rent expense for the year ended December 31, 2020.

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14) Leasing arrangements – lessor

A. The Group leases various assets including office and parking space. Rental contracts are typically made for periods of 1 and 5 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
B. For the years ended December 31, 2020 and 2019, the Group recognized rent income in the amount of $18,836 and $19,071, respectively, based on the operating lease agreement, which does not include variable lease payments.
C. The maturity analysis of the lease payments under the operating leases is as follows:

2020 2021 2022 2023 2024 Total	December 31, 2020 December 31, 2019 - $ 19,003 $ 17,584 17,620 17,284 17,284 17,284 17,284 4,195 4,195 56,347 $ 75,386 $

15) Investment property

) Investment property
January1		2020
	Land Buildings Total 198,099 $ 107,076 $ 305,175 $ - 32,572) ( 32,572) ( 198,099 $ 74,504 $ 272,603 $ 198,099 $ 74,504 $ 272,603 $ - 2,100) ( 2,100) ( 198,099 $ 72,404 $ 270,503 $ Land Buildings Total 198,099 $ 107,076 $ 305,175 $ - 34,672) ( 34,672) ( 198,099 $ 72,404 $ 270,503 $ 2019
Cost Accumulated depreciation and impairment Total January 1 Depreciation December 31 December 31
Cost Accumulated depreciation and impairment Total January1
	Land Buildings Total 198,099 $ 107,076 $ 305,175 $ - 30,472) ( 30,472) ( 198,099 $ 76,604 $ 274,703 $ 198,099 $ 76,604 $ 274,703 $ - 2,100) ( 2,100) ( 198,099 $ 74,504 $ 272,603 $ Land Buildings Total 198,099 $ 107,076 $ 305,175 $ - 32,572) ( 32,572) ( 198,099 $ 74,504 $ 272,603 $
Cost Accumulated depreciation and impairment Total January 1 Depreciation December 31 December 31
Cost Accumulated depreciation and impairment Total

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A. For the years ended December 31, 2020 and 2019, rental income from the lease of the investment property were $16,570 and $17,652, respectively, and direct operating expenses arising from the investment property were $3,864, and $3,609, respectively.

B. Details of fair value of investment property are provided in Note 12(5).

16) Intangible assets

Intangible assets
January1			2020
	Computer software		Goodwill
Cost Accumulated depreciation and impairment Total January 1 Additions Reclassifications Disposals Depreciation December 31 December 31	153,387 $ 101,997) ( 51,390 $ 51,390 $ 17,887 32,640 31) ( 27,873) ( 74,013 $ Computer software		42,004 $ - 42,004 $ 42,004 $ - - - - 42,004 $ Goodwill
Cost Accumulated depreciation and impairment Total January1	196,733 $ 122,720) ( 74,013 $
		Computer sofware	Goodwill	Customer relationships and others Total 89,829 $ 270,452 $ 54,160) ( 146,242) ( 35,669 $ 124,210 $ 35,669 $ 124,210 $ 100 14,353 - 14,475 3) ( 23,878) ( 35,766 $ 129,160 $
Cost Accumulated depreciation and impairment Total January 1 Additions Reclassifications Depreciation December 31	138,619 $ 92,082) ( 46,537 $ 46,537 $ 14,253 14,475 23,875) ( 51,390 $		42,004 $ - 42,004 $ 42,004 $ - - - 42,004 $

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December 31 Cost Accumulated depreciation and impairment Total	Computer software	Goodwill Customer relationships and others Total 42,004 $ 89,929 $ 285,320 $ - 54,163) ( 156,160) ( 42,004 $ 35,766 $ 129,160 $	Goodwill Customer relationships and others Total 42,004 $ 89,929 $ 285,320 $ - 54,163) ( 156,160) ( 42,004 $ 35,766 $ 129,160 $
	153,387 $ 101,997) ( 51,390 $
			129,160 $

A. No interest was capitalized for intangible assets for the years ended December 31, 2020 and 2019.
B. Goodwill and customer relationships were acquired through acceptance of transfer of the securities brokerage business of Standard Chartered (Taiwan) Bank's retail banking business, and were all allocated to the Group’s brokerage segment.
C. The recoverable amount of goodwill was periodically determined based on its value in use. Calculations of value in use after-tax cash flow projections are based on financial budgets approved by the management covering a five-year period. Cash flows beyond the five-year period are extrapolated using the estimated growth rates stated below.

The recoverable amount calculated based on the value in use exceeded the carrying amount, thus the goodwill was not impaired. The key assumptions used for calculation of value in use are as follows:

Growth rate Discount rate	Brokerage Segment 2020 0.00% 9.79%	Brokerage Segment 2019 0.00% 11.16%

17) Other noncurrent assets

risks related to relevant operating segments. Other noncurrent assets
		December		31,2020		December		31,2019
Operation guaranteed deposits	$			655,000	$			660,000
Clearing and settlement fund				346,349				343,866
Refundable deposits				238,840				173,210
Deferred expenses				15,564				16,373
Net defined benefit assets				17,625				904
Prepayment for equipment				22,610				32,947
Overdue receivables				39,388				240,073
Others				720				720
			1,336,096				1,468,093
Less: Allowance for uncollectible accounts	(			39,388)	(			240,073)
Total	$		1,296,708		$		1,228,020

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18) Short-term loans

19)
20)

Commercial papers payable
Financial liabilities at fair value through profit or loss-current
December 31,2020
December 31,2019
Unsecured loans
946,276
$ 2,964,959
$ Interest rates
0.590%~1.154%
0.880%~3.000%
December 31,2020
December 31, 2019
Face value
7,300,000
$ 9,600,000
$ Less: discount on commercial papers payable
1,104)
(
3,296)
(
Total
7,298,896
$ 9,596,704
$ Interest rates
0.200%~0.340%
0.530%~0.695%
December 31,2020
December 31,2019
Liabilities on sale of borrowed securities
- hedged
243,446
$ 192,174
$ Valuation adjustment on liabilities on sale of
borrowed securities - hedged
28,741
8,617
Liabilities on sale of borrowed securities
- non-hedged
688,401
208,143
Valuation adjustment on liabilities on sale of
borrowed securities - non-hedged
79,206
17,707)
(
Subtotal
1,039,794
391,227
Issuance of call ( put ) warrants
10,937,977
6,639,919
Gain on price fluctuation
912,291)
(
945,819)
(
Market value (A)
10,025,686
5,694,100
Warrants redeemed
9,807,568)
(
5,473,503)
(
Loss on price fluctuation
461,682
163,564
Market value (B)
9,345,886)
(
5,309,939)
(
Warrants - net (A+B)
679,800
384,161
Options sold - TAIFEX
17,683
17,753
Outstanding Liability for Issuance of ETNs
683,685
19,222
Valuation adjustment on outstanding Liability for
Issuance of ETNs
52,029
549

Subtotal
735,714
19,771
Derivative financial liabilities - OTC
151,428
35,716
Total
2,624,419
$ 848,628
$

Among the warrants issued by the Group, except for contract-based warrants which are Europeanstyle warrants, all other warrants are American-style warrants. Warrants are stated as liabilities for issuance of warrants at issuance price prior to expiration. Upon repurchase of warrants after issuance, the repurchased amounts are recognized as warrants repurchase and charged as a deduction to

306

liabilities for issuance of warrants. The warrants have six to twelve months exercise period from the date of issuance. The issuer has the option to settle either by cash or stock delivery. 21) Bonds sold under repurchase agreements

Government bonds Corporate bonds Bank debentures International bonds Foreign bonds Total	December 31,2020 December 31, 2019 2,856,072 $ 3,445,144 $ 951,350 1,601,547 200,000 400,889 1,037,127 3,886,654 14,051,616 11,622,022 19,096,165 $ 20,956,256 $

The above bonds sold under repurchase agreements as of December 31, 2020 and 2019 were due within one year and were contracted to be repurchased at the agreed-upon price plus interest charge on the specific date after the transaction. The total repurchase amounts were $19,112,268 and $21,035,116, respectively, and the annual interest rates in every currency were shown as follows:

22) Accounts payable 23) Other payables 24) Other financial liabilities-current Currency December 31,2020 NTD 0.17%~0.26% Foreign currencies (Note) -0.40%~3.10% Note`：`Foreign currencies include AUD, EUR, USD, GBP, RMB and SGD. December 31,2020 Settlement accounts payable - brokered trading 17,947,954 $ Settlement proceeds 471,589 Settlement accounts payable - operating 519,434 Accounts payable - foreign bonds 14,454 Accounts payable - international bonds 27,575 Spot exchange payable, foreign currencies 54,719 Others 142,759 Total 19,178,484 $ December 31,2020 Salary and bonus payable 1,329,809 $ Employees’ and directors’ remuneration payable 175,255 Others 611,349 Total 2,116,413 $ December 31,2020 Equity-linked notes (ELN) - Options 17,000 $ Principal guaranteed notes (PGN) - fixed income 5,991,310 Total 6,008,310 $	December 31,2019 0.47%~0.62% -0.50%~3.40% December 31,2019 9,370,880 $ 1,223,127 616,917 709,611 223 434,980 100,864 12,456,602 $ December 31,2019 788,324 $ 113,140 446,217 1,347,681 $ December 31,2019 4,000 $ 2,739,866 2,743,866 $	December 31,2019

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The Group deals in equity-linked products and combines fixed income instruments with call or put options. These products are categorized into ELN (Equity-Linked Notes) and PGN (Principal Guaranteed Notes). On trade date, the contracted amounts are collected in full from the counterparties. The payout amount on maturity will depend on the price fluctuation of the instruments linked to these contracts and be calculated as trading price less option strike price on maturity. All the linked products are financial instruments under the supervision of the SFB (Securities and Futures Bureau).

25) Other liabilities-non-current

Guarantee deposits received Net defined benefit obligation Total	December 31,2020 December 31,2019 7,802 $ 8,396 $ 6,612 7,118 14,414 $ 15,514 $

26) Pension plan

A. Defined benefit plans

(A) The Group has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. The Group contributes monthly an amount which ranges between 2.0% and 7.2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the supervisory committee of workers' retirement reserve fund, and with Cathay United Bank, under the name of the management committee of employees’ retirement fund. Also, the Group would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method, to the employees expected to be qualified for retirement next year, the Group will make contributions to cover the deficit by next March.

(B) The amounts recognized in the balance sheet are as follows:

Net present value of defined benefit liabilities Fair value of plan assets Net defined benefit (assets) liabilities	December 31,2020	December 31,2019
	$ 829,660 (840,673) ($11,013)	$ 850,830 (844,616) $6,214

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(C) Movements in net defined benefit liabilities (assets) are as follows:

Year ended December 31,2020		Fair value of plan assets
	$ 850,830 4,678 5,982 861,490 - 28,169 4,332 32,501 - (64,331) (64,331) $829,660 Present value of defined benefit obiligations	($ 844,616) - (5,933) (850,549) ( 10,504) - -	$ 6,214 4,678 49 10,941 ( 10,504) 28,169 4,332 21,997 ( 43,951) -
Blance at January 1 Current service cost Interest expense (income) Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in financial assumptions Experience adjustments Pension fund contribution Paid pension Blance at December 31 Year ended December 31,2019
		(10,504) ( 43,951) 64,331 20,380 ($840,673) Fair value of plan assets
			(43,951) ($11,013) Net defined benefit liabilities (assets)
	$ 826,184 5,006 9,089 840,279 - 29,946 8,546 38,492 - (27,941) (27,941) $850,830	($ 816,313) - (8,979) (825,292) ( 8,275) - -	$ 9,871 5,006 110 14,987 ( 8,275) 29,946 8,546 30,217 ( 38,990) -
Blance at January 1 Current service cost Interest expense (income) Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) Change in financial assumptions Experience adjustments Pension fund contribution Paid pension Blance at December 31
		(8,275) ( 38,990) 27,941 (11,049) ($844,616)
			(38,990) $6,214

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(D) The Bank of Taiwan was commissioned to manage the Fund of the Group’s defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “ Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator.

The Group has no right to participate in managing and operating that fund and hence the Group is unable to disclose the classification of plan asset fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2020 and 2019 is given in the Annual Labor Retirement Fund Utilization Report published by the government. In addition, for retirement fund deposits with Cathay United Bank, under the name of the management committee of employees’ retirement fund, the fund invests in time deposit accounts under Cathay United Bank.

(E) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases		Year ended December 31,2020 0.30% 2.00%~3.00%	Year ended December 31, 2019
			0.70%~0.80% 2.00%~3.00%

Assumptions regarding future mortality rate are set based on the Taiwan Standard Ordinary Experience Mortality Table (2011).

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

December 31,2020 Effect on present value of defined benefit obligation December 31,2019 Effect on present value of defined benefit obligation	Discount rate	Discount rate	Discount rate		Increase 0.25% Decrease 0.25% 15,634 $ 15,264) ($ 17,201 $ 16,773) ($ Future salaryincreases	Increase 0.25% Decrease 0.25% 15,634 $ 15,264) ($ 17,201 $ 16,773) ($ Future salaryincreases
	Increase 0.25%		Decrease 0.25%		Increase 0.25%
	17,560) ($ 19,094) ($		18,115 $ 19,719 $		15,634 $ 17,201 $	15,264) ($ 16,773) ($

B. Defined contribution plans:

Effective from July 1, 2005, the Group established a defined contribution plan pursuant to the “Labor Pension Act”, which covers employees with R.O.C. nationality and those who chose or are required to apply the “Labor Pension Act”. The contributions are made monthly based on not less than 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The payment of pension benefits is based on the employees’ individual pension fund accounts and the cumulative profit in such accounts. The employees can choose to receive such pension benefits monthly or in lump sum. The pension

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costs under defined contribution pension plans of the Group for the years ended December 31, 2020 and 2019 were $70,873 and $64,134, respectively.

C. President Securities (HK), President Wealth Management (HK), and President Securities (Nominee) have defined benefit pension plans in accordance with local laws, and recognized the current pension expenses by contributing to the accrued pension assets. President Securities (HK) recognized pension expenses of $1,778 and $1,780, respectively, for the years ended December 31, 2020 and 2019.

27) Equity

A. Common stock
(A) As of December 31, 2020, the Company’s authorized capital was $15,000,000 with a par value of $10 (in dollars) per share. As of December 31, 2020 and 2019, the outstanding common stocks were 1,399,838 and 1,372,390 thousand shares, respectively.

Movements in the number of the Company’s ordinary shares outstanding are as follows:

January 1 Acquisition of treasury stocks Stock dividends December 31		(Expressed in thousands) Year ended December 31,2020 Year ended December 31,2019 1,372,390 1,390,428 - 18,038) ( 27,448 - 1,399,838 1,372,390	(Expressed in thousands) Year ended December 31,2020 Year ended December 31,2019 1,372,390 1,390,428 - 18,038) ( 27,448 - 1,399,838 1,372,390
		1,372,390 - 27,448 1,399,838	1,390,428 18,038) ( - 1,372,390

(B) Treasury shares

In order to maintain the Company’s credit and stockholders’ rights and interests, the Company bought back outstanding shares. The movement of the number of treasury shares is as follows:

(Expressed in thousands)

		Year ended December 31,2019	Year ended December 31,2019	Year ended December 31,2019	Year ended December 31,2019
Reason for buyback		Shares at the beginning of theperiod		Period increase	Period decrease	Shares at the end of the period			Period-end amount
To maintain the Company's credit and stockholders' rights and interests		-		18,038	18,038) (		-		- $

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B. Capital reserve

Capital reserve
December 31, 2020 December 31, 2019		Sharepremium	Treasury share transactions		Expired stock options	Difference between consideration and carrying amount of subsidiaries acquired or disposed		Total
		24,663 $ 24,663 $	65,675 $ 65,675 $		483 $ 483 $	440 $ 440 $		91,261 $ 91,261 $

C. Legal reserve

D. Special reserve

In accordance with the “Rules Governing the Administration of Securities Firms”, 20% of the current year's earnings, after paying all taxes and offsetting prior years' operating losses, if any, shall be set aside as special reserve until the cumulative balance equals the total amount of paidin capital. The special reserve shall be used exclusively to cover accumulated deficit or to increase capital and shall not be used for any other purpose. Such capitalization shall not be permitted unless the Company had already accumulated a special reserve of at least 25% of its paid-in capital stock and only quarter of such special reserve may be capitalized.

In accordance with Jing-Guan-Zheng-Chuang Letter No. 10500278285 dated August 5, 2016, securities firms should set aside 0.5% to 1% of net income after tax as special reserve, upon the distribution of earnings from 2016 to 2018. From fiscal year 2017, special reserve as mentioned above may be reversed based on an amount equal to employees’ transformation training expenditure, transfer and arrangement expenditure arising from the development of Fintech. Further, according to Jing-Guan-Zheng-Chuang Letter No. 1080321644 dated July 10, 2019, securities firms are no longer required to set aside special reserve starting from 2019. And the special reserve, within the balance of special reserve set aside in the previous years, could be reversed at the same amount for the aforementioned expenditures.

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28) Unappropriated earnings and dividends policy
A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall be used to pay all taxes and offset prior years’ operating losses first, and then set aside as legal reserve, accounted for as 10% of the remaining amount, and special reserve, accounted for as 20% of the remaining amount. Upon provision or reversal of special reserve in accordance with the law, any remaining amount together with unappropriated earnings at beginning of the period shall be distributed according to the following resolution adopted at the stockholders’ meeting: Distribution shall not be made if the balance of distributable earnings is less than 5% of paid-in capital.
B. In addition, the total amount of dividends declared every year shall be at least 70% of distributable earnings, of which stock dividends shall be at least 50% and cash dividends shall be lower than 50%.
C. The Company may determine a better proportion of cash and stock dividends distribution based on its actual operating conditions and capital utilization plan for the following year.
D. The earnings distribution for 2019 as resolved by the shareholders on June 19, 2020; the appropriation of 2018 earnings was resolved by the shareholders on June 18, 2019. Details are as follows:

Provision of legal reserve Provision of special reserve Provision of special reserve (Note 1) Reversal of special reserve (Notes 1&3) Reversal of special reserve (Note 2) Cash dividends Stock dividends Total	Year ended December 31,2019	Year ended December 31,2019	Year ended December 31,2018	Year ended December 31,2018
	Amount	Dividends per share (in dollars)	Amount 121,032 $ 242,064 6,052 4,365) ( 58,374) ( 959,395 - 1,265,804 $	Dividends per share (in dollars)
	234,244 $ 473,707 - 4,221) ( - 1,372,390 274,478 2,350,598 $	1.00 $ 0.20		0.69 $ -

Note 1 ： Special reserve was provided for employees’ transition for financial technology
development according to Jing-Guan-Zheng-Chuang Letter No. 10500278285 and can be reversed for employees’ transition.
Note 2 ： Special reserve shall be set aside in the same amount of net debit amount of other equity interest recorded in current year from the profit or loss of current year and the accumulated unappropriated earnings pursuant to paragraph 1 of Article 41 of Securities and Exchange Act and Jing-Guan-Zheng-Chuang Letter No. 1010028514.
Note 3 ： Special reserve was reversed according to Jing-Guan-Zheng-Chuang Letter No. 10800321644.

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E. The earnings distribution for 2020 as resolved by the Board of Directors on March 23, 2021 is set forth below:

orth below:
		Year ended December 31,2020
			Dividends per share
		Amount		(in dollars)
Provision of legal reserve	$	376,735
Provision of special reserve		721,504
Reversal of special reserve (Note 4)	(	7,620)
Cash dividends		2,099,756	$	1.50
Stock dividends		559,935		0.40
Total	$	3,750,310

Note 4 ： Special reserve was provided for employees’ transition for financial technology development according to Jing-Guan-Zheng-Chuang Letter No. 1080321644 and can be reversed for employees’ transition.

29) Brokerage handling fee revenue

be reversed for employees’ transition. Brokerage handling fee revenue
Year ended December 31, 2020 Revenues from brokered trading - TWSE 1,787,310 $ Revenues from brokered trading - OTC 617,121 Revenues from brokered trading - Futures 790,960 Others 135,639 Total 3,331,030 $		Year ended December 31,2019
		1,069,390 $ 426,700 604,329 136,007 2,236,426 $

30) Revenues from underwriting business

Revenues from underwriting business
Revenues from underwriting securities on a firm commitment basis Others Total		Year ended December 31,2020	Year ended December 31,2019
		25,222 $ 51,284 76,506 $	25,139 $ 37,672 62,811 $

31) Net gain on sale of operating securities

Net gain on sale of operating securities
Dealers: -TAIEX -OTC -Overseas trading Subtotal		Year ended December 31,2020		Year ended December 31,2019
		1,750,883 $ 32,375 1,232,261 3,015,519		1,684,876 $ 124,807 515,109 2,324,792

314

32) Interest income 33) Net valuation gain on trading securities at fair value through profit or loss 34) Net gain on covering of borrowed securities and bonds with resale agreements-short sales Year ended December 31,2020 Year ended December 31,2019 Underwriters: -TAIEX 59,566 $ 47,543 $ -OTC 65,373 73,592 Subtotal 124,939 121,135 Hedging: -TAIEX 159,062 340,461 -OTC 53,329 52,232 -Overseas trading 3,280 10,820) ( Subtotal 215,671 381,873 Total 3,356,129 $ 2,827,800 $ Year ended December 31, 2020 Year ended December 31,2019 Interest income from margin loans 566,024 $ 525,291 $ Interest income from bonds 535,601 674,048 Others 17,033 7,468 Total 1,118,658 $ 1,206,807 $ Year ended December 31, 2020 Year ended December 31,2019 Gain on sale of securities - dealer 1,007,647 $ 685,896 $ Loss on sale of securities - underwriting 51,505) ( 22,420) ( Gain on sale of securities - hedging 33,077 77,851 Total 989,219 $ 741,327 $ Year ended December 31,2020 Year ended December 31,2019 Loss from the bond investments under resale agreements 5,861) ($ 6,528) ($ Gain from securities borrowing transactions - dealer 262,471 46,294 Gain (loss) from covering - warrants 8,731 3,919) ( Loss from securities borrowing transactions - PGN 147) ( 1,295) ( Gain from covering - PGN 1,504 2,861 Gain from covering - equity options 1,540 - Gain from securities borrowing transactions - equity options 201 - Total 268,439 $ 37,413 $	Year ended December 31,2019 47,543 $ 73,592 121,135 340,461 52,232 10,820) ( 381,873 2,827,800 $ Year ended December 31,2019	Year ended December 31,2019 47,543 $ 73,592 121,135 340,461 52,232 10,820) ( 381,873 2,827,800 $ Year ended December 31,2019
		525,291 $ 674,048 7,468 1,206,807 $ Year ended December 31,2019
Year ended December 31,2020
5,861) ($ 262,471 8,731 147) ( 1,504 1,540 201 268,439 $	6,528) ($ 46,294 3,919) ( 1,295) ( 2,861 - - 37,413 $

315

35) Net valuation loss on borrowed securities and bonds with resale agreements-short sales at fair value through profit or loss

through profit or loss	through profit or loss
36) Net realized gain on financial assets measured at fair bonds 37) Net gain from issuance of call (put) warrants 38) Net gain (loss) from derivatives Valuation loss from securities borrowing transactions - dealer Valuation gain (loss) from covering - warrants Valuation loss from the bond investments under resale agreements Valuation gain from securities borrowing transactions - equity options Valuation loss from covering - equity options Total Foreign bonds Net gain on changes in fair value of call (put) warrant liabilities and redemption Loss on exercise of call (put) warrants before maturity Expenses arising out of issuance of call (put) warrants Total Futures contract gain (loss) Option trading loss (Loss) gain on foreign exchange derivatives Others Total	Net realized gain on financial assets measured at fair Valuation loss from securities borrowing transactions - dealer Valuation gain (loss) from covering - warrants Valuation loss from the bond investments under resale agreements Valuation gain from securities borrowing transactions - equity options Valuation loss from covering - equity options Total	value through other comprehensive income– Year ended December 31,2020 Year ended December 31,2019 92,095) ($ 5,546) ($ 5,292 10,607) ( - 5,265) ( 2 - 30,220) ( - 117,021) ($ 21,418) ($
		Year ended December 31, 2020 100,358 $ Year ended December 31, 2020

		367,407 $ 114,508) ( 157,494) ( 95,405 $ Year ended December 31,2020
		450,510 $ 203,770) ( 43,196) ( 183,424) ( 20,120 $

316

39) Impairment loss and reversal of impairment loss

39) Impairment loss and reversal of impairment loss
40) Other operating income 41) Handling charges 42) Interest expenses 43) Employee benefits expense Provision for impairment Recovery of bad debts Total Income from securities lending Net currency exchange (loss) gain Handling fee revenues from funds Others Total Brokerage handling fee expense Dealer handling fee expense Refinancing processing fee expense Total Interest expense from repurchase agreements Loans interest expense Other interest expense Total Salaries Labor and health insurance Pension Other employee benefits Total	Year ended December 31,2020 18,181) ($ 2,202 15,979) ($ Year ended December 31, 2020		Year ended December 31,2019
			7,170) ($ 673 6,497) ($ Year ended December 31, 2019 113,544 $ 191,648 45,384 82,165 432,741 $ Year ended December 31,2019
	151,265 $ 316,918) ( 46,873 72,440 46,340) ($ Year ended December 31, 2020
		378,899 $ 164,884 4,704 548,487 $ Year ended December 31,2020		255,994 $ 276,157 2,300 534,451 $ Year ended December 31,2019
		180,657 $ 82,378 13,849 276,884 $ Year ended December 31,2020		382,546 $ 130,026 19,249 531,821 $ Year ended December 31,2019
		2,872,161 $ 137,785 77,378 115,012 3,202,336 $		2,097,446 $ 124,249 71,030 101,412 2,394,137 $

317

A. In accordance with the Company’s Article of Incorporation, the remainder of the year-end income before taxes less income before appropriating employees’ compensation and directors’ remuneration, if any, shall appropriate an employees’ compensation no less than 1.6% and directors’ remuneration no more than 2%. However, when the Company has an accumulated deficit, earnings to cover the deficit shall first be retained before appropriating employees’ compensation and directors’ remuneration.
B. For the years ended December 31, 2020 and 2019, employees’ compensation was accrued at $81,804 and $52,103, respectively; directors’ remuneration was accrued at $81,804 and $52,103, respectively. The aforementioned amounts were recognized in salary expenses.
C. For the year ended December 31, 2020, employees’ compensation was estimated at 2% and directors’ remuneration at 2%, based on the period-end income before taxes less income before appropriating employees’ compensation and directors’ remuneration.
D. The actual distributed amount of employees’ and directors’ remuneration for 2019 as resolved by the Board of Directors was in agreement with the estimates in the 2019 financial statements.
E. Information on the appropriation of the Company’s earnings as resolved by the Board of Directors would be posted in the “Market Observation Post System” on the Taiwan Stock Exchange official website.

44) Depreciation and amortization

website. Depreciation and amortization
Other operating expenses Depreciation Amortization Total Taxes Computer information expenses Postage Security lending expenses Others Total	Year ended December 31, 2020	Year ended December 31, 2019
	181,478 $ 28,361 209,839 $ Year ended December 31,2020	181,005 $ 24,620 205,625 $ Year ended December 31,2019
	771,087 $ 161,286 85,087 93,702 395,996 1,507,158 $	569,152 $ 158,719 74,844 85,186 347,450 1,235,351 $

45) Other operating expenses

46) Other gains and losses

Other gains and losses
Financial income Net (loss) gain on disposal of investments Gain on valuation of non-operating financial instruments Net currency exchange loss Other net non-operating revenues Total	Year ended December 31,2020	Year ended December 31,2019
	154,603 $ 49,665) ( 25,279 6,149) ( 182,819 306,887 $	189,277 $ 21,629 10,859 5,400) ( 172,625 388,990 $

318

47) Income tax

A. Income tax expense

(a) Components of income tax expense:

		Year ended		Year ended
	December 31,2020		December 31,2019
Current tax:
Current tax on profits for the periods	$	354,773	$	203,253
Prior year income tax overestimation	(	19,501)	(	12,328)
Total current tax		335,272		190,925
Deferred taxes:
Temporary differences		32,954	(	6,952)
Total deferred taxes		32,954	(	6,952)
Income tax expense	$	368,226	$	183,973

(b) The income tax expense relating to components of other comprehensive income is as follows:

follows:	follows:
Reconciliation between income tax expense and accounting profit Year ended December 31, 2020 Remeasurement of defined benefit obligations 4,399) ($ Year ended December 31,2020 Tax calculated based on profit before tax and statutory tax rate 840,916 $ Expenses disallowed by tax regulation 23,050 Prior year income tax overestimation 19,501) ( Tax exempt income by tax regulation 772,176) ( Effect from Alternative Minimum Tax 295,937 Income tax expense 368,226 $		Year ended December 31, 2019
		6,044) ($ Year ended December 31,2019
	840,916 $ 23,050 19,501) ( 772,176) ( 295,937 368,226 $	549,033 $ 93,358 12,328) ( 601,162) ( 155,072 183,973 $

B. Reconciliation between income tax expense and accounting profit

C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows:

319

		Year ended	Year ended	Recognized in other comprehensive income December 31 - $ - $ 4,404 94,947 - 8,802 4,404 $ 103,749 $ - $ - $ - 8,950) ( 5) ( 983) ( 5) ($ 9,933) ($ 4,399 $ 93,816 $ Recognized in other comprehensive income December 31 - $ 39,479 $ 5,885 95,786 5,885 $ 135,265 $ - $ 12,148) ($ 159 746) ( 159 $ 12,894) ($ 6,044 $ 122,371 $ December 31,2020 December 31, 2019	Recognized in other comprehensive income December 31 - $ - $ 4,404 94,947 - 8,802 4,404 $ 103,749 $ - $ - $ - 8,950) ( 5) ( 983) ( 5) ($ 9,933) ($ 4,399 $ 93,816 $ Recognized in other comprehensive income December 31 - $ 39,479 $ 5,885 95,786 5,885 $ 135,265 $ - $ 12,148) ($ 159 746) ( 159 $ 12,894) ($ 6,044 $ 122,371 $ December 31,2020 December 31, 2019
	January1	Recognized in profit or loss		Recognized in other comprehensive income
39,479 $ 90,543 5,243 135,265 $ 12,148) ($ - 746) ( 12,894) ($ 122,371 $ January1		39,479) ($ - 3,559 35,920) ($
		12,148 $ 8,950) ( 232) ( 2,966 $ 32,954) ($ Year ended
	January1		Recognized in profit or loss	Recognized in other comprehensive income
29,635 $ 95,813 125,448 $ 15,044) ($ 1,029) ( 16,073) ($ 109,375 $		9,844 $ 5,912) ( 3,932 $ 2,896 $ 124 3,020 $ 6,952 $		- $ 5,885 5,885 $ - $ 159 159 $ 6,044 $	39,479 $ 95,786 135,265 $ 12,148) ($ 746) ( 12,894) ($ 122,371 $

D. As of December 31, 2020, the Company’s income tax returns have been approved by the Tax Authority until 2018, except for 2017.
E. With respect to the income tax returns of the Company for 2016, the Tax Authority assessed to increase income tax payable by $2,822. The Company disagreed with the assessment and had filed for administrative remedy and had recognized the income tax expense based on the assessment.

320

48) Earnings per share

==> picture [488 x 386] intentionally omitted <==

----- Start of picture text -----

Year ended December 31, 2020
Weighted-average
outstanding Earnings per
Amount common shares share
after tax (In thousands) (In dollars)
Basic earnings per share
Net income attributable to common
shareholders $ 3,607,518 1,399,838 $ 2.58
Dilutive effect of common stock
equivalents
Employee bonus - 4,446
$ 3,607,518 1,404,284 $ 2.57
Year ended December 31, 2019
Weighted-average
outstanding Earnings per
Amount common shares share
after tax (In thousands) (In dollars)
Basic earnings per share
Net income attributable to common
shareholders $ 2,368,536 1,400,927 $ 1.69
Dilutive effect of common stock
equivalents
Employee bonus - 3,678
$ 2,368,536 1,404,605 $ 1.69
----- End of picture text -----

321

7. RELATED PARTY TRANSACTIONS

1) Names and relationships of related parties

Names of related parties Uni-President Enterprises Corp.

Uni-President Asset Management Corp. President Tokyo Co., Ltd. ScinoPharm Taiwan, Ltd. Ton Yi Industrial Corp. President Chain Store Corp. (PCSC) Kai Yu (BVI) Investment Co., Ltd Cayman President Holdings, Ltd. President Life Sciences Cayman Co., Ltd President (BVI) International Investment Holdings Ltd. Fund managed by Uni-President Asset Management Corp.

Relationship with the Company Entity having significant influence on the Company Associate Other related party Other related party Other related party Other related party Other related party Other related party Other related party Other related party

Security investment trust fund raised by the Uni-President Assets Management Corp.

2) Significant related party transactions and balances

A. Accounts receivable

nificant related party transactions and balances Accounts receivable
Other receivables Guarantee deposit received Entity having significant influence on the company: Uni-President Enterprises Corp. Other related party: ScinoPharm Taiwan, Ltd. President Chain Store Corp. (PCSC) Others Total Other related party: Others Associate: Uni-President Assets Management Corp. Other related party: President Tokyo Co., Ltd. Total	December 31,2020	December 31,2019
	25 $ 399 378 73 875 $ December 31,2020	274 $ 515 161 53 1,003 $ December 31,2019
	18 $ December 31,2020	- $ December 31,2019
	1,044 $ 1,434 2,478 $	1,044 $ 1,434 2,478 $

B. Other receivables

C. Guarantee deposit received

322

D. Accounts payable

December 31, 2020 December 31, 2019 Other related party: President Tokyo Co., Ltd. $ - $ 452

－
E. Lease transactions lessee
(A) The Group leases business vehicles and multifunction printers, etc., from President Tokyo Co., Ltd. Rental contracts periods are typically 1 to 5 years. Rents are paid monthly.
(B) Right-of-use assets:
- a. Acquisition of right-of-use assets

December 31, 2020 December 31, 2019 Other related party: President Tokyo Co., Ltd. $ 15,818 $ 8,599 b. Disposition of right-of-use assets December 31, 2020 December 31, 2019 Other related party: President Tokyo Co., Ltd. $ - $ 1,887

b. Disposition of right-of-use assets
(C) Lease liabilities
－
a. Lease liabilities current

ease liabilities . Lease liabilities`－`current
. Lease liabilities`－`non-current . Interest expense d. Net gain on lease modification Other related party: President Tokyo Co., Ltd. Other related party: President Tokyo Co., Ltd. Other related party: President Tokyo Co., Ltd. Other Total Other related party: President Tokyo Co., Ltd.		December 31, 2020		December 31,2019
		8,004 $ December 31,2020		5,775 $ December 31,2019
		18,108 $ Year ended December 31,2020		11,325 $ Year ended December 31,2019
		Year ended December 31,2020
	154 $ - 154 $ Year ended December 31,2020	154 $ -	135 $ 1 136 $ Year ended December 31,2019 26 $
		154 $
	- $

－
b. Lease liabilities non-current
c. Interest expense

323

F. Bonds sold under repurchase agreements

F. Bonds sold under repurchase agreements
	December 31,2020		December 31,2019
Other related party:
President Life Sciences Cayman Co., Ltd	$	-	$	24,475
Kai Yu (BVI) Investment Co., Ltd		148,096		-
Cayman President Holdings, Ltd.		489,856		-
Total	$	637,952	$	24,475
G. Handling fee revenue
		Year ended		Year ended
	December 31, 2020		December 31, 2019
Security investment trust fund raised by the Uni-
President Asset Management Corp.:
Uni-President Asset Management Corp.	$	47,845	$	33,529
Other related party:
Other		2,354		810
Total	$	50,199	$	34,339
Terms of handling fee revenue mentioned above are similar to those of transactions with third
parties.
H. Net gain on wealth management-trust income from sales		of funds
		Year ended		Year ended
	December31,2020		December31,2019
Associates:
Uni-President Assets Management Corp.	$	5,260	$	9,817

The revenues were collected on a monthly basis in accordance with contract			terms.
I. Other operating revenue-consultation revenue
				Year ended
			December 31,2020
Associates:
Uni-President Assets Management Corp.			$	2,400
There were no transactions with related party for the year		ended December 31,		2019.
J. Other operating revenue-handling fee revenues	from underwriting funds
		Year ended		Year ended
	December 31,2020		December 31,2019
Associates:
Uni-President Assets Management Corp.	$	45,022	$	43,792
The revenues were collected on a monthly basis in accordance with contract terms.

324

K. Rent income

Period Associates: Uni-President Assets Management Corp. 2016.01.01~2024.03.31 Other related party: President Tokyo Co., Ltd. 2018.04.01~2024.03.31 Total	Deposit 1,044 $ 1,434	Year ended December 31,2020 Year ended December 31,2019
		6,811 $ 7,045 $ 9,422 9,422 16,233 $ 16,467 $

Rental income mentioned above is derived from leasing part of the Group’s office space and business premises to various related parties and calculated as agreed by both parties. Lease payments are collected on schedule in accordance with the terms of the lease contracts. L. Revenues from underwriting business

L. Revenues from underwriting business
M. Stock custodian income Entity having significant influence on the company: Uni-President Enterprises Corp. Entity having significant influence on the company: Uni-President Enterprises Corp. Associate: Uni-President Assets Management Corp. Other related party: ScinoPharm Taiwan, Ltd. Ton Yi Industrial Corp. President Chain Store Corp. (PCSC) Others Total	Year ended December 31, 2020	Year ended December 31, 2019
	300 $ Year ended December 31,2020	- $ Year ended December 31,2019
	3,697 $ 135 2,635 1,220 2,097 663 10,447 $	3,506 $ 133 2,371 1,225 1,929 663 9,827 $

	ScinoPharm Taiwan, Ltd. Ton Yi Industrial Corp. President Chain Store Corp. (PCSC) Others Total	2,635 2,371 1,220 1,225 2,097 1,929 663 663 10,447 $ 9,827 $	2,635 2,371 1,220 1,225 2,097 1,929 663 663 10,447 $ 9,827 $
N.	Terms of stock custodian income mentioned above Net loss from derivatives Other related party: Cayman President Holdings, Ltd. Kai Yu (BVI) Investment Co., Ltd Total	are similar to third parties. Year ended December 31,2020 Year ended December 31,2019 1,189) ($ - $ 36) ( 240) ( 1,225) ($ 240) ($
		1,189) ($ 36) ( 1,225) ($	- $ 240) ( 240) ($

325

O. Other operating expenses - equipment rental and copy expense

P. Q.	Financial expense Purchases of trading securities–dealer Other related party: President Tokyo Co., Ltd. Other related party: Cayman President Holdings, Ltd. Kai Yu (BVI) Investment Co., Ltd President Life Sciences Cayman Co., Ltd President (BVI) International Investment Holdings Ltd. Total	Year ended December 31, 2020 Year ended December 31,2019 1,889 $ 544 $ Year ended December 31,2020 Year ended December 31,2019 1,134 $ 1,477 $ 155 - 212 528 564 - 2,065 $ 2,005 $

urchases of trading securities–dealer
Entity having significant influence on the company: Uni-President Enterprises Corp. Security investment trust fund raised by the Uni-President Asset Management Corp.: Uni-President Asset Management Corp. Other related parties: President Chain Store Corp. ScinoPharm Taiwan, Ltd. Other Total	December 31,2020			Year ended December 31,2020
	Ending Shares (In thousands)	Ending Balance	Gain(loss) 2,029) ($ - 119) ( 47) ( 1) ( 2,196) ($
	5 - - - -	338 $ 10,315 - - - 10,653 $

326

Compensation of key management personnel
The compensation of key management such as directors, general managers, vice general managers
were as follows:
Year ended December
31,2019
Ending Shares
(In thousands)
Ending
Balance
Gain(loss)
Entity having significant influence on
the company:
Uni-President Enterprises Corp.
76

5,639
$ 2,458)
($ Security investment trust fund raised by
the Uni-President Asset Management
Corp.:
Uni-President Asset Management Corp.
-

10,277
-
Other related parties:
President Chain Store Corp.
-

-
209)
(
Total
15,916
$ 2,667)
($ December 31,2019

were as follows:
Salary and short-term employee benefits Retirement benefits Other long-term employee benefits Termination benefits Share-based payment Total	Year ended December 31,2020		Year ended December 31,2019
	328,118 $ 1,379 - - - 329,497 $		203,207 $ 1,437 - - - 204,644 $

(Blank below)

327

8. PLEDGED ASSETS

The Company’s assets pledged or restricted for use were as follows:

Assets Trading securities (par value) - Corporate bonds - Government bonds - Bank debentures - Overseas bonds - International bonds Other current assets: - Demand deposits - Pledged time deposits - Government bonds (par value) Property and equipment - Land and buildings (book value) Pledged time deposits - Operating guarantee deposits - Refundable deposits Financial assets at fair value through profit or loss - current: Financial assets at fair value through profit or loss - non-current:	December 31,2020 950,000 $ 2,634,800 200,000 15,119,396 1,034,879 652,010 525,249 50,000 1,101,768 655,000 2,181	December 31,2019 1,600,000 $ 3,330,800 400,000 12,421,911 4,110,169 735 531,251 50,000 1,107,127 660,000 2,000	Purposes
			Securities for bonds sold under repurchase agreements Securities for bonds sold under repurchase agreements Securities for bonds sold under repurchase agreements Securities for bonds sold under repurchase agreements Securities for bonds sold under repurchase agreements Collections on behalf of third parties and reimbursement for wages and stocks Securities for short-term loans and guarantees for issuance of commercial papers Trust fund deposit-out Securities for short-term loans and guarantees for issuance of commercial papers Security deposits Security deposits

9. SIGNIFICANT COMMITMENTS

None.

10. SIGNIFICANT LOSS FROM NATURAL DISASTER

None.

11. SIGNIFICANT SUBSEQUENT EVENT

None.

12. OTHER

1) Management objective and policy of financial risks

A. Risk management objective

The Group continually strengthens risk culture to every employee and makes sure that the Group can actively develop various businesses under a healthy and effective risk management system. At the same time, by creating value of an entity and continually increasing profit, profit maximization may be achieved within appropriate risk tolerance.

328

B. Risk management system
In order to ensure the completeness of risk management system, run the balancing mechanism of risk management, and improve the division efficiency of risk management, the Group sets up “Risk Management Policy”. Such policy aims to establish internal system compliance and the guiding tools for policies communication within the Group and enable every layer of the Group engaged in different tasks to identify, evaluate, monitor, and control various risks with establishment of consistent compliance rules for risks of each business so that the risks can be controlled within the limits set in advance.
The Group’s risk management system covers risks incurred from businesses on and off the balance sheet, such as market risk, credit risk, liquidity risk, operating risk, legal risk, model risk which are all included in the risk management.
C. Risk management organization
Risk management organization: Board of Directors, Risk Management Committee, Risk Control Office, Business units and other related segments (such as Office of Auditing, Office of General Manager, Compliance segment, Legal segment, Finance segment and Settlement segment) are in charge of planning, supervising and execution.
(A) The Board of Directors should ensure the effectiveness of risk management and be responsible for the ultimate result and the following duties:
- a. To establish proper risk management system, operating process, and risk management culture in the Group with allocation of necessary resource for better execution and operation.
- b. Policy of risk management review
- c. Review and approval of business application, transaction authorization and risk limit.
(B) The Risk Management Committee reports to the Board of Directors and is responsible for the following:
- a. Review risk management policy
- b. Review the highest risk tolerance
- c.Submit regular reports to the Board of Directors in relation to the risk management status of the whole Group
(C) The General Manager supervises daily risk management of the entire Group and is responsible for the following:
- a. Supervise and monitor daily risk management of the entire Group
- b. Approval of management exceptions
(D) Assets and Liabilities Committee reports to the General Manager and is responsible for the following:
- a. Set up the ultimate guidelines for assets and liabilities management of the entire Group
- b. Analyze and control the entire Group’s assets and liabilities portfolio
- c. Approval of various businesses’ quotas
- d. Gather and analyze information on domestic and offshore interest rate, exchange rate, prosperity fluctuation, political and economic environmental changes, and predict the financial trend in the future
(E) Risk Control Office implements risk management policy and related regulations and reports to the Risk Management Committee. Risk Control Office also reports daily risk management to the General Manager and is responsible for the following:
- a. Establish Risk Management Policy of the entire Group
- b. Develop effective method for measurement and risk management in an entity
- c. Review risk management system of business units
- d. Generate risk report through information gathering and consolidation
- e. Analyze various business risks and report to the General Manager

329

f. Report the risk management situation to the Risk Management Committee according to a meeting’s nature and needs
g. Carry out duties as designated by the Risk Management Committee and control risks of business units
(F) Auditing Office is responsible for the following:
a. Execute operating risk control
b. Include the risk management system into internal audit program and carry out the daily audit schedule.
c. Assess the effectiveness of internal control and verify the executed result.
(G) Compliance segment and legal segment under the Office of General Manager are responsible for the following:
a. Compliance segment should make sure that the business operation and risk management system are in compliance with relevant regulations.
b. Legal segment is responsible for legal risk control
c. Compliance segment also provides services of Anti-Money Laundering and Counter Terrorism Financing, including designs specification and internal control, establishes transaction monitoring, oversees the effective implementation of business units, conducts the employee training and reports any suspicion of money laundering.
(H) Finance segment is responsible for the following:
a. Verify the correctness of position information and reasonability of profit and loss calculation.
b. Control and analyze self-owned capital adequacy ratio.
c. Analyze the appropriateness of structures of the assets and liabilities.
(I) Business units are responsible for the following:
a. Set up risk management details of various businesses according to the risk management policy and other related regulations.
b. Provide sufficient position information and risk control information to the Risk Control Office.
(J) Settlement division is responsible for:
a. Clearing and settlement; risk control and management of margin purchase and short sale of securities.
b. Risk control and management of trading middle office and enforcement of rules governing

risk management of business segments.

D. Risk management policy

In order to ensure the completeness of risk management system, run the balancing mechanism of risk management, and improve the division efficiency of risk management, the Group sets up “Risk Management Policy”. Such policy aims to establish internal system compliance and the guiding tools for policies communication within the Group and enable every layer of the Group engaged in different tasks to identify, evaluate, monitor, and control various risks with establishment of consistent compliance rules for risks of each business so that the risks can be controlled within the limits set in advance.

Risk management processes include risk identification, risk evaluation, risk supervision and various risk control. Each kind of risk evaluations and responding strategies are described as follows:

(A) Market risk management

The Group has implemented risk management information system (Risk Manager) in relation to market risk control. All trading positions of the Group have been included in the daily risk control system for the calculation of Value at Risk (VaR). Limit exceeding

330

indicators are mainly the nominal principal, stop-loss, sensitivity (Greeks) and VaR. The risk management report is presented on a daily basis for implementation of regular control and limit exceeding handling procedures.

  - (B) Credit risk management

     - In relation to risk control, the quantitative model of default rate adopts KMV model to calculate the default rate of issuers with credit exposure of the issuing company and the trading counterparties, and credit risk of securities disclosed in the report. The credit exposure is mitigated through regular review of credit status.

  - (C) Fund liquidity risk

     - Unit in charge of fund procurement regularly predicts future fund demand and supply, and consolidates company guarantee or endorsement and capital lending businesses to monitor the condition of fund procurement on a daily basis.

E. Hedging and risk-offsetting strategy
- (A) Policies of hedging and risk mitigating are parts of the Group’s risk management policies, and the hedging position and hedged trading position are supposed to be one portfolio, of which the gain and loss and risk information are measured on a consolidated basis.
- (B) The overall position (hedging position and trading position) is included in the daily risk management system to calculate Value at Risk and other relevant information. Limit exceeding indicators mainly include nominal principal, stop-loss point, price sensitivity and VaR. With the presentation of daily risk management report, routine control and limit exceeding treatment can be executed.
- (C) The continued effectiveness of hedging and risk-offsetting strategy is measured by the gain and loss of overall position (hedging position and trading position), in order to track reasonableness of the profit or loss of hedging position and the offsetting relationship with the profit or loss of trading position, and to control them within a reasonable range.
2) Credit risk
A. Source and definition of credit risk

The credit risk exposure of the Group as a result of engagement in financial transactions include issuer’s credit risk, credit risk of counterparty and credit risk of underlying assets:

(A) Credit risk of the issuer refers to the issuers of financial debt instruments held by the Group failing to repay its obligation due to the fact that the issuer breaches the contract resulting in the risk of financial loss to the Group.
(B) Credit risk of counterparty refers to risk of financial loss to the Group arising from default by the counterparty of financial instruments on the settlement or payment obligation.
(C) Credit risk of the underlying assets happens when the credit rating of the underlying assets linked to the financial instrument is downgraded by the rating agency or when the losses occur as a result of contract default.
The financial assets held by the Group which could result in credit risk include bank deposit, debt securities, derivatives transactions in OTC, bonds purchased/sold under resale/repurchase agreements, refundable deposit of securities lending, futures trade margins, other refundable deposits and receivables.
B. Maximum credit risk exposure and credit risk concentration
The maximum exposure to credit risk of financial assets in the consolidated balance sheet, without consideration of the collateral or other credit enhancements, is equivalent to the carrying amount. In Taiwan, the sources of credit risk of the Group are primarily resulting from cash deposited with banks or other financial institutions, debt securities issued or guaranteed by a bank, derivative instruments transaction underwritten by the Group, and all counterparties of customer margin deposits accounts being financial institutions. Credit risks of various financial assets are as follows:

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(A) Cash and cash equivalents

Cash and cash equivalents include time deposit, demand deposits and checking deposits. Correspondent institutions are mainly domestic financial institutions.

(B) Financial assets at fair value through profit and loss -current
a. Fund

The funds held by the Group are bond funds. As the positions held are not significant, credit risk is deemed low.

b. Commercial papers

The commercial papers held by the Group are under resale agreements. As all the counterparties are financial institutions with good credit, the credit risk from counterparties is extremely low.

c. Debt securities

(a)Government bonds

The bonds held by the Group are mostly government bonds (inclusive of central and local government). As a whole, the credit risk of the bonds held by the Group is low.

(b) Corporate bonds

The corporate bonds held by the Group are mainly underlying investment with good credit rating and those with rating above (S&P BB).

(c)Convertible corporate bond

The convertible corporate bonds held by the Group are mostly issued by the domestic legal entities. The Group mitigates highly risky credit exposure of the issuers by control through Taiwan Corporate Credit Risk Index (TCRI).

(d)Foreign bonds

The foreign bonds held by the Group are mainly underlying investment with good credit rating and those with rating above (S&P BB).

The foreign government bonds held by the Group are classified as debt instruments at fair value through other comprehensive income. In general, the bonds held by the Group are with lower credit risk.

(D) Derivatives- futures trade margin

When engaging in futures trades in stock exchange market, the Group needs to deposit margin into a margin deposit account of a financial institution designated by the futures merchants as a guarantee to fulfil contractual obligation in the future. As a result, the credit risk is low.

(E) Derivatives-OTC

The Group signs International Swaps and Derivatives Association (ISDA) agreements with each counterparty when engaging in OTC derivatives as an agreement regarding such transactions for both parties. In the agreement, it provides a fundamental contractual model for OTC derivative transactions. If any party breaches the contract or terminates the transactions early, then all the open interest covered in the agreement should be settled by net amount as bound in the contract. When the ISDA agreement is signed, the Credit Support Annex (CSA) is also signed. According to the CSA, collateral will be transferred from a party to the other during transaction process to mitigate the risk of counterparty in open interest. Please refer to Note 6(10).

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Types of OTC derivative transactions in which the Group is engaged include PGN and swap transaction. The counterparties are all from financial service industry and mainly located in Taiwan, United States and United Kingdom.

(F) Bonds investment under a resale agreement Bonds sold under a resale agreement are the bonds that the client sold to the Group at a price, interest rate, length of period as agreed by two parties and the client shall repurchase the bonds at the specified price upon maturity. The Group needs to assume credit risk from counterparties when underwriting such business, as the payment being delivered to the other party. With consideration of good collateral obtained, the net of credit risk exposure from counterparties can be effectively reduced. As all the counterparties are financial institutions with good credit rating, the credit risks from counterparties are extremely low. Please refer to Note 6(10).
(G) Margin loans receivable
Margin loans receivable are the loans provided to the client in order to process businesses of margin trading and short sale using the securities purchased through financing as collateral. The Group monitors the clients’ margin ratio through information system on a daily basis. As the margin ratio of margin trading is set at 130% according to Regulations Governing the Conduct of Securities Trading Margin Purchase and Short Sale Operations by Securities Firms, the credit risk is extremely low.
(H) Receivables of securities business money lending Receivables of securities business money lending are the non-restricted purpose loan business and monetary financing business, pursuant to an agreement between a securities firm and a customer, using customer securities and other commodities as collateral. The Group regularly assesses its customer line of credit and implements appropriate credit control. As the margin ratio of margin trading is set at 130% according to Regulations Governing the Conduct of Securities Trading Margin Purchase and Short Sale Operations by Securities Firms, the credit risk is extremely low.
(I) Guaranteed price for securities lending Guaranteed price for securities lending is the sale price of the Group’s securities sold by other securities firms through margin trading after deduction of securities transactions tax and service fee, which is deposited in other securities firms as collateral. As all the counterparties are financial institutions with good credit rating, the credit risk from counterparties is extremely low.
(J) Refundable deposits for securities lending Refundable deposits for securities lending are the margins deposited in other securities firm as collateral when the Group’s securities are sold. As all the counterparties are financial institutions with good credit, the credit risk from counterparties is extremely low.
(K) Receivables
Receivables are the credit rights arising from the securities business including settlement receivables of consignment trading, settlement receivables of operating securities sold, financing interest receivables of self-operating credit transaction, receivables of consignment trading for securities, and receivables from banks’ underwriting on foreign exchange transactions and foreign fund demand. As the majority of the Group’s receivables from the consignment businesses and self-operating businesses are settlement of securities from OCT or TWSE, the credit risk is extremely low. As the foreign exchange transactions are simply the receipt or payment of different currencies and the correspondent banks are of good credit rating, the credit risk is extremely low.

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(L) Other current assets
- Other current assets are mainly the collateral deposited in the bank for application for shortterm debt limit and guarantee for application for issuance of commercial papers. As the correspondent banks are all financial institutions with good credit rating, the credit risk is extremely low.
(M) Financial assets at fair value through profit and loss – non-current In order to underwrite trust business, the Group deposits central government bonds in the Central Bank as collateral. Regardless of the bonds themselves or the financial institutions where the bonds are deposited, the credit risk is extremely low.
(N) Other non-current assets
- Other non-current assets mainly comprise operating guarantee deposits, settlement funds, and refundable deposits. Operating guarantee deposits are mainly deposited in domestic banks with good credit rating. Settlement funds are deposited in securities exchange. Settlement funds are used as compensation when a party to a marketable securities transaction fails to fulfil the settlement obligation. The credit risks from the institutions where these two assets are deposited are extremely low. The refundable deposits refer to cash or other assets which are deposited externally by the Group and can be used as refundable deposits. Because deposits are placed in various financial institutions and each deposit amount is small, the credit risk is dispersed and the credit exposure of overall refundable deposit is extremely low.
C. Expected credit loss assessment
In the assessment of impairment and calculation of expected credit losses, the Group considers reasonable and supporting information about past events, current conditions and future economic conditions. The Group determines at the balance sheet date whether there has been a significant increase in credit risk since initial recognition or whether credit impairment has occurred, and recognizes expected credit loss according to which stage the asset belongs: no significant increase in credit risk or low credit risk at balance sheet date (Stage 1), significant increase in credit risk (Stage 2), and credit impaired (Stage 3). 12-month expected credit losses are recognized for assets in Stage 1, and lifetime expected credit loses are recognized for assets in Stage 2 and Stage 3.

The definition of and expected credit losses recognized for each stage are as follows:

Item	Stage 1	Stage 2	Stage 3
Definition	No significant deterioration of credit quality of the financial asset since initial recognition, or the financial asset is considered low-risk at the balance sheetdate.	Significant deterioration of credit quality of the financial asset since initial recognition, but the asset is not yet credit impaired.	The financial asset is credit impaired at the financial reporting date.
Expected credit losses recognition	12-month expected credit losses	Lifetime expected credit losses	Lifetime expected credit losses

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(A) Judgements of the significant increase in credit risk since initial recognition
Judgements and assumptions used to determine whether the credit risk has a significant increase since initial recognition when the Group calculates expected credit loss under IFRS 9 are as follows:
a. If contractual payments are over 30 days past due according to the payment terms, the financial asset is considered to have significant increase in credit risk since initial recognition.
b. There is significant increase in credit risk at the reporting date if the credit rating of the issuer has been downgraded by more than 2 grades and the final external credit rating at the reporting date is non-investment grade, if the interest payments are over 30 days past due, or if there has been a default in the past.
(B) Definition of default and credit-impaired financial assets
According to the definition of credit impairment set by IFRS 9, a financial asset is creditimpaired when one or more events that have occurred and have a significant impact on the expected future cash flows of the financial asset. The criteria used to judge whether a financial asset is credit-impaired since initial recognition includes but is not limited to the following:
a. Contractual payments or principal or interest payments on bonds are over 3 months (90 days) past due.
b. Bond investment is rated as “in default” by external credit rating agencies.
c. Bond issuer has filed for bankruptcy, restructure, or other debt clearance procedures.
d. Issuer or counterparty has financial difficulties.
(C) Writing-off policy

If any of the following condition applies, the Group will write off the non-recoverable portion of the overdue receivables as bad debt.

a. Debt cannot be fully or partially recovered due to dissolution of, disappearance of, settlement with, bankruptcy declaration by the debtor, or any other reason.
b. The collateral and the assets of the primary and secondary debtors could not be auctioned off after multiple attempts and multiple price discounts, and the Company has not received any real benefits in assuming the collateral.
c. Payments are over two years past due and could not be recovered after attempts to collect.
(D) Measurement of expected credit losses
The Group considers reasonable supporting information which shows significant increase in credit risk since initial recognition when calculating expected credit losses. Main indexes include: internal/external credit rating, information of past due, credit spread, other market information in relation to the borrower, issuer or counterparty, and significant increase in credit risk of other financial instrument of the same borrower.
a. Investments in bills and bonds

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     - (a)Probability of default was based on external credit rating, which include forwardlooking information.

     - (b)Loss given default was based on the average loss given default of external credit rating of investment position and counterparties.

     - (c)Exposure at default

        - Stage 1, Stage 2 and Stage 3: Total carrying amount (including interest receivable).

(E) Consideration of forward-looking information
- Historical loss rate (based on the historical experience in the past 3 to 5 years) as obtained and compared with economic environment in the past, nowadays and future (forwardlooking factor) to see whether there is any significant change, and then to properly adjust future loss rate standards. If any significant default event occurs, the loss rate in the current year will be included in the calculation of future loss rate standard.
D.Table of movements in loss provision of the Group
(A) At December 31, 2020 and 2019, there were no changes in the loss allowance for investments in debt instruments measured at fair value through other comprehensive income.
(B) Except for bond interest receivable which was evaluated along with debt investments, the Group applies the simplified approach to measure the loss allowance at an amount equal to lifetime expected credit losses for marginal receivables, accounts receivable, other receivable-others and overdue receivables. The movements in loss provision of marginal receivables, accounts receivable, other receivables-others and other non-current assetsoverdue receivables of the Group are as follows:

At January 1 Provision (reversal of provision) for impairment Write-offs At December 31			Year ended December 31,2020	Year ended December 31,2020	Year ended December 31,2020	Year ended December 31,2020	Total
		Marginal receivable	Accounts receivable		Other receivables	Other non- current assets- overdue receivables
		43,806 $ 15,034 - 58,840 $	656 $ 31) ( - 625 $		54 $ 671 - 725 $	240,073 $ 2,507 203,192) ( 39,388 $	284,589 $ 18,181 203,192) ( 99,578 $

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Marginal receivable At January 1 61,669 $ Provision (reversal of Reversal of impairment 20,067 Write-offs - Derecognized - Effect of foreign exchange - Transfers 37,930) ( At December 31 43,806 $	Accounts receivable Other receivables Other non- current assets- overdue receivables Total 2,661 $ 11,333 $ 213,075 $ 288,738 $ 528 234) ( 13,191) ( 7,170 - 10,532) ( - 10,532) ( - 498) ( 274) ( 772) ( - 15) ( - 15) ( 2,533) ( - 40,463 - 656 $ 54 $ 240,073 $ 284,589 $ Year ended December 31,2019

3) Liquidity risk
A. Definition and source of liquidity risk

B. Liquidity risk management procedure and stimulation test

In order to prevent operational crisis as a result of liquidity risk, the Group has established responding crisis process with regular monitoring over liquidity gap of fund.

(A) Procedure

In addition to the operating capital for various business and long-term investment, the Group needs to maintain revolving funds at a certain level for daily operation. The use of remaining fund shall avoid high concentration and should be based on the principle of holding sound earning assets with high liquidity and treated in compliance with policies of the Group.

The responsive unit for fund procurement adjusts the liquidity gap to ensure proper liquidity according to the daily volume and movement in the market.

(B) Stimulation test
a. The Group reviews fund liquidity risk from a perspective of supply and demand of fund every month with simulation analysis of available fund for emergency including scenario analysis of cash, funding limit of financial institutions, margin loans and short sale, and value of disposal of position in order to compute maximum available fund and fund demand. Finally, safety stock of fund is reviewed to monitor liquidity risk.
b. Above liquidity risk is generally reviewed monthly. However, if the available limit of increment banking credit risk in financing limit of a financial institution is lower than a certain amount (that is, the amount may be timely adjusted according to the fund liquidity in the market and the actual fund demand and supply in an entity), the safety stock will be reviewed weekly. After the early warning report for fund is submitted, the head of finance segment will call for a fund control meeting.
c. Other than individual funding liquidity risk of an entity, stress test of minimization funding supply and maximization funding demand in the event of significant crisis is simulated, including:

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  - (a)When there is a significant crisis in the market, the financing limit of the financial institutions and the value of disposal of position can be deemed the minimized ratio of fund supply which is then adjusted according to actual condition to compute the total fund supply under maximum stress.

  - (b)Except for the operating expense, the stock concept is adopted for the calculation of total fund demand under maximum stress.

  - (c)The Group should conduct a review to see whether the total minimized fund supply is more than maximized total fund demand. The Group should further review how long (by month) the difference may cover the operating expenses so that the safety stock of fund (by month) under stress test can be computed.

  - (d)The minimum safety stock of fund under stress test (by month) may be adjusted according to the crisis itself and only operating expense for at least 6 months under a normal stimulation can be deemed safe.

C. Maturity analysis for the financial assets and financial liabilities held for liquidity risk management
(A) The Group holds cash and sound earning assets with high liquidity in order to fulfil the payment obligation and potential emergency fund demand in the market. Financial assets held for liquidity risk management are mainly cash and cash equivalents, among which, all time deposits mature within a year. Financial assets at fair value through profit and loss are mainly listed stocks, convertible bonds and debt securities. As all of them have positions in active market, the liquidity risk is deemed low.

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(B) Maturity analysis for the financial liabilities is as follows:

		December 31,2020
Immediately	Less than 3 months	3-12 months	1-5years - $ - - - - - - - - - 80,784 - - 111,621 192,405 $	Total
- $ - 1,039,794 1,552,957 - 1,381,470 1,809,955 - 21,087,134 19,128,785 1,010,210 985 - - 47,011,290 $	946,276 $ 7,300,000 - - 19,112,268 - - 803,016 - 49,699 10,071 343,998 2,017,803 25,683 30,608,814 $	- $ - - 31,668 - - - 100,836 - - - 1,771,430 3,990,507 61,014 5,955,455 $		946,276 $ 7,300,000 1,039,794 1,584,625 19,112,268 1,381,470 1,809,955 903,852 21,087,134 19,178,484 1,101,065 2,116,413 6,008,310 198,318
				83,767,964 $

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December 31, 2019

Short-term loans Commercial papers payable Financial liabilities at fair value through profit or loss-current Non-derivative financial liabilities Derivative financial liabilities Bonds sold under repurchase agreements Deposits on short sales Deposits payable for securities financing Securities lending refundable deposits Futures traders’ equity Accounts payable (includes notes payable) Collections on behalf of third parties Other payables Other financial liabilities -current Lease liabilities Total		Immediately		Less than 3 months		3-12 months		1-5years - $ - - - - - - - - - 85,925 - - 184,819 270,744 $	Total
		600,000 $ 350,000 391,227 457,402 - 1,558,717 1,888,832 - 13,713,667 12,397,124 284,082 - - - 31,641,051 $		2,364,959 $ 9,250,000 - - 21,035,116 - - 56,004 - 59,478 8,286 272,368 1,797,292 7,690 34,851,193 $		- $ - - - - - - - - - - 1,075,313 946,574 24,678 2,046,565 $			`2,964,959` `$` 9,600,000 391,227 457,402 21,035,116 1,558,717 1,888,832 56,004 13,713,667 12,456,602 378,293 1,347,681 2,743,866 217,187
									68,809,553 $

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4) Market risk

A. Definition of market risk

Market risk refers to the risk of decrease in the Group’s revenue or value of investment portfolio as a result of the changes in exchange rate, commodity price, interest rate, and stock price or other market risk factors.

The Group continually exercises risk management tools such as sensitivity analysis, Value at Risk, stress test and so on to completely and effectively measure, monitor and manage market risk.

B. Value at Risk (VaR)

Value at Risk is used to measure the possible maximum potential losses in investment portfolio as a result of movement in market risk factor in a specified period and confidence level. The Group currently uses confidence level of 95% to calculate Value at Risk of one day. A VaR model must reasonably, completely and accurately measure the maximum potential risks of financial instruments or investment portfolio before being adopted as a risk management model by the Group. The VaR model used in risk management is continually certified and retrospectively tested to demonstrate that the model can reasonably and effectively measure the maximum potential risks of financial instruments or investment portfolios.

Year ended December 31, 2020 Amount December 31, 2020 173,104 $ VaR Maximum 276,264 VaR Average 161,107 VaR Minimum 77,219 Statistical table for one-dayVaR of transactions	Statistical table for one-day VaR of transactions
	Year ended December 31,2019 Amount December 31, 2019 100,535 $ VaR Maximum 170,328 VaR Average 93,998 VaR Minimum 27,505

Statistical table for VaR of various risk indicators of transactions

Year ended

Year ended
December 31,2020	Foreign exchange 3,433 $ 55,596 7,221 1,495 Foreign exchange 5,455 $ 29,951 6,897 1,479	Interest 24,026 $ 91,620 39,296 15,428 Interest 17,268 $ 72,934 35,173 8,308	Share ownership
December 31, 2020 VaR Maximum VaR Average VaR Minimum Year ended December 31,2019			176,351 $ 268,560 158,394 73,478 Share ownership 102,709 $ 171,470 91,793 24,906
December 31, 2019 VaR Maximum VaR Average VaR Minimum

C. Information on gap of foreign exchange risk

The following table summarizes financial instruments of foreign assets or liabilities by currency and the foreign exchange exposure presented by book value as of December 31, 2020 and 2019 ：

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		December 31,2020	December 31,2020	December 31,2020
		AUD RMB HKD Others 2,247 $ 455,155 $ 560,409 $ 173,237 $ 1,006,892 1,267,289 404,502 428,144 - 2,531,901 - - 1,918 55,006 2,553,641 96,586 - - 367,300 - 3,441 3,426 172 5,422 853,836 871,401 - 286,703 240 282,393 1,286,407 95,701 ere 1 USD = 28.480 TWD; 1 EUR= 35.020 TWD; December 31,2019				Total
						1,638,280 $ 19,894,043 2,531,901 10,475,335 686,276 67,099 15,088,744 11,556,643
USD 1,266,500 $ 16,127,328 5,828,140 2,364,960 12,434 12,219,296 7,757,580	EUR 2,084 $ 1,834,006 42,691 - 2,749 1,445,146 40,361	AUD 2,447 $ 852,473 3,593 - 1,710 700,804 5,729	RMB 472,541 $ 1,299,213 142,811 - 13,715 1,023,554 386,181	HKD 886,968 $ 185,712 1,617,554 - 465 - 1,098,824	Others 177,172 $ 238,446 35,456 - 1,072 119,876 67,505	Total
						2,807,712 $ 20,537,178 7,670,245 2,364,960 32,145 15,508,676 9,356,180

Note: As of December 31, 2019, foreign exchange rates of the above currencies to TWD were 1 USD = 29.980 TWD; 1 EUR= 33.590 TWD; 1 AUD= 21.005 TWD; 1 RMB= 4.305 TWD; and 1 HKD= 3.849 TWD, respectively.

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D. The total exchange gain, including realized and unrealized, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2020 and 2019, amounted to ($323,067) and $186,248, respectively.
5) Fair values and hierarchy information
A. Financial instruments and non-financial instruments not measured at fair value. Except for those listed in the table below, the carrying amounts of the Group’s financial instruments not measured at fair value (including cash and cash equivalents, bonds purchased under resale agreements, margin loans receivable, refinancing guaranty deposits, guaranteed proceeds receivable from refinancing, guaranteed price deposits for security borrowing, security borrowing deposits, customer margin deposit account, notes and accounts receivable, other receivables, short-term loans, commercial paper payable, bonds sold under repurchase agreements, guarantee deposit received from short sales, guaranteed price deposits received from securities borrowers, security borrowing deposits, equity of futures traders, accounts payable, collection for others, and other payables) approximate their fair values. The fair value information of financial instruments measured at fair value is provided in Note 12(5)3.

Total Non-financial assets December 31, 2020 Investment property 667,546 $ December 31, 2019 Investment property 665,646	Quoted prices of the same assets in active markets (level 1)	Other significant observable inputs (level 2)	Significant non-observable inputs(level 3)
	- $ -	$ 667,546 665,646	- $ -

The fair value of investment property held by the Group was assessed by external valuation experts using comparison approach and income approach, or the fair value can be assessed based on the market price of the area adjacent to the location where the Group’s investment property is located.

B. Valuation techniques
(A) For financial instruments held for trading purposes which are classified as non-derivative instruments, their fair values are based on their quoted prices in an active market. If there is no quoted market price for reference, a valuation technique will be adopted to measure the fair value. Estimates and assumptions of valuation technique adopted by the Group are in agreement with the information of estimates and assumptions adopted by market users for financial instrument pricing and the said information shall be accessible to the Group. For those classified as derivative instruments, their fair values are based on their market prices if their quoted prices are available from an active market. If quoted market prices in an active market are not available, SWAP and IRS are valued at the discounted cash flow method, and options are valued at the Black-Scholes model.
(B) When available-for-sale financial assets have quoted market prices available in an active market, the fair value is determined using the market price.

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C. Fair value hierarchy of the financial instruments
(A) Definitions for the hierarchy classifications of financial instruments measured at fair value
- a. Level 1

Level 1, are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Group can access at the measurement date. An active market has to satisfy all the following conditions: a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The Group’s investments in listed stocks, beneficiary certificates, on-the-run Taiwan central government bonds and derivative instruments with quoted market prices, are deemed as level 1.

b. Level 2

Inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Investments of the Group such as emerging stock without active markets, off-the-run issue of government bonds, corporate bonds, bank debentures, convertible corporate bonds, currency swaps, interest rate swaps, options, asset swaps, and most derivatives are all classified within level 2. For the years ended December 31, 2020 and 2019, there was no significant transfer of financial instruments between Level 1 and Level 2.

c. Level 3

Unobservable inputs for the assets or liability. The unlisted stocks invested by the Group are included in Level 3. For the year ended December 31, 2020, part of the unlisted stocks became the emerging stocks, therefore these stocks were transferred from Level 3 to Level 2.

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(B) Hierarchy of fair value estimation of financial instruments

Financial instrument items measured at fair value Recurring fair value Non-derivative financial instruments Assets Financial assets at fair value through profit or loss-current Stock investments Bond investments Others Financial assets at fair value through other comprehensive income-current Stock investments Financial assets at fair value through profit or loss - non-current Stock investments Bond investments Financial assets at fair value through other comprehensive income-non-current Stock investments Liabilities Financial liabilities at fair value through profit or loss -current Derivative financial instruments Assets Financial assets at fair value through profit or loss-current Liabilities Financial liabilities at fair value through profit or loss - current		December	31,2020
	Total 12,062,758 $ 23,302,082 2,451,233 353,510 16,991 50,493 707,616 1,039,794 3,795,649 1,584,625	Level 1 12,027,789 $ 1,170,822 2,451,233 353,510 - - - 1,039,794 3,786,276 1,433,197	Level 2 23,187 $ 22,131,260 - - - 50,493 - - 9,373 151,428	Level3
				11,782 $ - - - 16,991 - 707,616 - - -

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Financial instrument items measured at fair value Recurring fair value Non-derivative financial instruments Assets Financial assets at fair value through profit or loss-current Stock investments Bond investments Others Financial assets at fair value through profit or loss - non-current Stock investments Bond investments Financial assets at fair value through other comprehensive income-non-current Stock investments Liabilities Financial liabilities at fair value through profit or loss -current Derivative financial instruments Assets Financial assets at fair value through profit or loss-current Liabilities Financial liabilities at fair value through profit or loss - current	Total Level 1 12,152,248 $ 12,087,400 $ 25,159,729 870,587 3,958,261 3,958,261 21,180 - 50,116 - 591,596 - 391,227 391,227 3,242,227 3,241,258 457,401 421,685 December	Level 2 23,617 $ 24,289,142 - - 50,116 - - 969 35,716 31,2019	Level3
			41,231 $ - - 21,180 - 591,596 - - -

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(C) The following table is the movement of financial assets at Level 3:

January1	Recorded in profit or loss Recorded in other comprehensive income(loss) Acquired/ Issued Transfers into level 3 5,554) ($ - $ 2,500 $ - $ 4,189) ( - - - - 116,020 - - Year ended December 31, 2019 Valuation amount Increased Year ended December 31,2020 Valuation amount Increased	Recorded in profit or loss Recorded in other comprehensive income(loss) Acquired/ Issued Transfers into level 3 5,554) ($ - $ 2,500 $ - $ 4,189) ( - - - - 116,020 - - Year ended December 31, 2019 Valuation amount Increased Year ended December 31,2020 Valuation amount Increased	Recorded in profit or loss Recorded in other comprehensive income(loss) Acquired/ Issued Transfers into level 3 5,554) ($ - $ 2,500 $ - $ 4,189) ( - - - - 116,020 - - Year ended December 31, 2019 Valuation amount Increased Year ended December 31,2020 Valuation amount Increased	Recorded in profit or loss Recorded in other comprehensive income(loss) Acquired/ Issued Transfers into level 3 5,554) ($ - $ 2,500 $ - $ 4,189) ( - - - - 116,020 - - Year ended December 31, 2019 Valuation amount Increased Year ended December 31,2020 Valuation amount Increased	Decreased	Decreased	December 31
			Acquired/ Issued	Transfers into level 3	Sold/ Settled	Transfers out from level 3
41,231 $ 21,180 591,596 January1					- $ 26,395) ($ - - - - Sold/ Settled Transfers out from level 3 - $ - $ - - - - Decreased		11,782 $ 16,991 707,616 December 31
	Recorded in profit or loss	Recorded in other comprehensive income(loss)	Acquired/ Issued	Transfers into level 3
16,974 $ 16,445 604,579	3,768) ($ 4,735 -	- $ - (12,983)	28,025 $ - -	- $ - -		- $ - -	41,231 $ 21,180 591,596

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(D) The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

December 31,2020	Fair value	Valuation technique	Significant unobservable input	Range (weighted average)	Relationship of inputs to fair value
Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - non-current Equity investments Financial assets at fair value through other comprehensive income - non- current December 31,2019 Unlisted stocks Unlisted stocks	16,991 Fair value 11,782 $ 707,616	Net asset value Valuation technique Market approach Market approach	Price to earnings ratio multiple Discount for lack of marketability Not applicable Price to earnings ratio multiple Discount for lack of marketability Significant unobservable input	28.45 25% Not applicable 1.46~1.90 6.99%~9.65% Range (weighted average)	The higher the multiple, the higher the fair value The higher the discount for lack of marketability, the lower the fair value Not applicable The higher the multiple, the higher the fair value The higher the discount for lack of marketability, the lower the fair value Relationship of inputs to fair value
Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - non-current Equity investments Financial assets at fair value through other comprehensive income - non- current Unlisted stocks Unlisted stocks	21,180 41,231 $ 591,596	Net asset value Market approach Market approach	Price to earnings ratio multiple Discount for lack of marketability Not applicable Price to earnings ratio multiple Discount for lack of marketability	18.19~21.63 25% Not applicable 1.32~1.76 7.93%~9.75%	The higher the multiple, the higher the fair value The higher the discount for lack of marketability, the lower the fair value Not applicable The higher the multiple, the higher the fair value The higher the discount for lack of marketability, the lower the fair value

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(E) Valuation process for fair value at Level 3

The parent company’s risk management department is responsible for the verification of fair value categorized in Level 3. The department assesses the independence, reliability, consistency and representativeness of the source information, regularly verifies the valuation models and calibrates the parameters to ensure the valuation process and results are in compliance with IFRSs.

(F) For the fair value measurement of Level 3, the sensitivity analysis of the fair value to the reasonable alternative hypothesis shows that the fair value measurement of the financial assets by the Group is reasonable. However, use of different valuation models or assumptions may result in different measurement. The following is the impact to profit or loss or to other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used in valuation models have changed up or down by 1%:

down by 1%:
December 31,2020	Recognised inprofit or loss		Recognised in other comprehensive income
	Favourable change	Unfavourable change	Favourable change	Unfavourable change
Financial assets at fair value through profit or loss - current Unlisted stocks Financial assets at fair value through profit or loss -non-current Venture capital shares Financial assets at fair value through other comprehensive income - non-current Unlisted stocks December 31,2019	118 $ 118) ($ Not applicable Not applicable - - Recognised inprofit or loss		- $ - $ - - 7,076 7,076) ( Recognised in other comprehensive income
	Favourable change	Unfavourable change	Favourable change	Unfavourable change
Financial assets at fair value through profit or loss - current Unlisted stocks Financial assets at fair value through profit or loss -non-current Venture capital shares Financial assets at fair value through other comprehensive income - non-current Unlisted stocks	412 $ Not applicable -	412) ($ Not applicable -	- $ - 5,916	- $ - 5,916) (

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6) Capital management

A. Objective of capital management
(A) The represented capital adequacy ratio basically shall not be lower than 200% in compliance with the warning standard addressed in the “Rules Governing Securities Firms”.
(B) The Company includes all risks involved in the investment position as a part of risk management, such as market risk, credit risk, liquidity risk, operating risk, legal risk, and model risk and so on. Each risk management responsive unit should identify, evaluate, monitor and control various risks in order to enable the Company to defend impact from financial market, reflect the current operating strategies and make the investment portfolio applied to business planning and development.
B. Capital management policy and procedure
In order to secure the long-term and stable development of various businesses and effectively assume risks, the Company manages capital based on the business development, related regulations and financial market environment. Major capital evaluation processes include:
(A) Each segment should provide accurate and valid source of information to maintain calculation accuracy of capital adequacy ratio.
(B) After the reporting at the 10th of each month, capital adequacy ratio should be computed by the end of every month. If the result is close to the legal standard, every unit will be called to attend a meeting for discussion and strategic planning to ensure that the basic objective of capital adequacy ratio is not less than 200%.
(C) Both the risk limits and economic capital of the Company should be agreed by the Board of Directors. The Company should quarterly report details of risk control with disclosure of investment condition in order to assess whether the risk position exceeds the limit and whether the investment direction is in line with the market trend. Within the authorized risk limits, the Company is actively engaged in development of various businesses and continually increases profit, creates company value, and complies with the capital management objective.
The Company calculates and reports the capital adequacy ratio according to “Rules Governing Securities Firms”. As of December 31, 2020 and 2019, the capital adequacy ratios were 339% and 378%, respectively, as required by the regulations.

7) Assets and liabilities of trust accounts

Pursuant to Article 17 of Enforcement Rules of the Trust Enterprise Act, balance sheet, income statement, and property list of trust accounts shall be disclosed in the consolidated financial statements on a semiannual basis.

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A. Balance sheet of trust accounts

A. Balance sheet of trust accounts	A. Balance sheet of trust accounts
B. Income statement of trust accounts Trust assets December 31,2020 December 31,2019 Bank savings 492,979 $ 283,288 $ Structured notes 664,243 347,256 Stock 928,705 135,196 Bond 423,452 402,246 Repurchase bond 21,794 115,006 Fund 3,877,584 3,270,575 Securities lending - 71,047 Accounts receivable 36,087 74,063 Total of trust assets 6,444,844 $ 4,698,677 $ Trust liabilities Accounts payable 1,699 $ 53,204 $ Trust capital 5,562,920 4,586,918 Net income 1,099,366 100,346 Accumulated deficit 219,141) ( 41,791) ( Total of trust liabilities 6,444,844 $ 4,698,677 $ BALANCE SHEETS Item Year ended December 31,2020 Year ended December 31,2019 Trust income Interest income 20,430 $ 17,631 $ Cash dividends received 47,788 5,780 Income from stock lending 587 6,145 Investment gains-realised 225,435 7,188 Investment gains-unrealised 806,875 64,616 Subtotal 1,101,115 101,360 Trust expenses Administrative expenses 1,099) ( - Service fee 526) ( 227) ( Borrowing costs 134) ( 764) ( Remittance fee - 1) ( Income before income tax 1,099,356 100,368 Income tax benefit (expense) 10 22) ( Net income 1,099,366 $ 100,346 $ STATEMENTS OF INCOME

	17,631 $ 5,780 6,145 7,188 64,616 101,360 - 227) ( 764) ( 1) ( 100,368 22) ( 100,346 $

351

C. Property list of trust accounts

PROPERTY LIST OF TRUST ACCOUNTS DECEMBER 31, 2020 AND 2019

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Items December 31, 2020 December 31, 2019
Bank savings $ 492,979 $ 283,288
Structured notes 664,243 347,256
Stock 928,705 135,196
Bond 423,452 402,246
Bonds under repurchase agreements 21,794 115,006
Fund 3,877,584 3,270,575
-
Securities lending 71,047
Others 36,087 74,063
Total $ 6,444,844 $ 4,698,677
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8) Status of the Company is future department in the limitations on financial ratios imposed by futures trading act, and the related implementation The table below is prepared according to “Regulations Governing Futures Commission Merchants”.

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Article Calculation formula December 31, 2020 December 31, 2019 Standard Enforcement
Calculation Ratio Calculation Ratio
Stockholders’ equity 2,846,449 3,379,420 Met the
17 39.35 38.45 ≧ 1
(Total liability－futures trader’s equity) 72,340 87,895 requirement
Current assets 4,227,508 4,272,473 Met the
17 58.44 48.61 ≧ 1
Current liabilities 72,340 87,895 requirement
Stockholders’ equity 2,846,449 3,379,420 ≧ 60% Met the
22 711.61% 844.86%
Minimum paid-in capital 400,000 400,000 ≧ 40% requirement
Adjusted net capital 2,578,686 3,152,768 ≧ 20%
Met the
22 Total amount of customer margins required 634.60% 842.71%
406,350 374,121 ≧ 15% requirement
for the open positions of futures traders
9) Status of the subsidiary in the limitations on financial ratios imposed by the futures trading act and the related implementation
The table below is prepared according to “Regulations Governing Futures Commission Merchants”.
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Article	Calculation formula	December 31,2020	December 31,2020	December 31,2019	December 31,2019	Standard	Enforcement
		Calculation	Ratio	Calculation	Ratio
17	Stockholders’ equity (Total liability－futures trader’s equity)	2,173,904 204,613	10.62	1,990,192 172,048	11.57	`≧`1	Met the requirement
17	Current assets Current liabilities	25,273,422 24,066,160	1.05	16,970,531 15,857,926	1.07	`≧`1	Met the requirement
22	Stockholders’ equity Minimumpaid-in capital	2,173,904 645,000	337.04%	1,990,192 645,000	308.56%	`≧`60% `≧`40%	Met the requirement
22	Adjusted net capital Total amount of customer margins required for the openpositions of futures traders	1,833,493 4,060,614	45.15%	1,622,656 2,744,966	59.11%	`≧`20% `≧`15%	Met the requirement

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10) Prospective risk for futures trading

The main risk for futures merchants engaging in futures trading is credit risk, which could happen if the margin call cannot be made when it should have been made. While being consigned to conduct the futures trading, the Group pays attention to the individual margin account on a daily basis and request additional margin call or reduction in trading volume when necessary according to the condition of individual customer transactions in order to control the credit risk accordingly. The main risk faced by the Group while engaging in self-operating businesses is market price risk- that is risk of changes in market prices of futures or options contracts as a result of fluctuation in underlying investment index. Losses may occur if the market index price and underlying investment move adversely. However, the Group has set up stop-loss point to control such risk for reasons of risk management.

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13. OTHER DISCLOSURE ITEMS

1) Information about significant transactions

A. Lending to others: Excluding security margin trading and conditional bond trading business, there is no lending of funds to either the shareholders or other parties.
B. Endorsements and guarantees for others ： None.
C. Acquisitions of real estate exceeding $300 million or 20 percent of contributed capital ： None.
D. Disposals of real estate exceeding $300 million or 20 percent of contributed capital ： None.
E. Purchases or sales transactions discount on brokers’ charges with related parties in excess of $5,000,000 ： None.
F. Receivables from related parties exceeding $100 million or 20 percent of contributed capital ： None.
G. Significant transactions between parent company and subsidiaries

No.(Note1)	Company	Counterparty	Relationship (Note 2)	Details of transactions	Details of transactions	Details of transactions	Details of transactions
				Account	Amount	Conditions	Percentage (%) of total consolidated net revenues or assets (Note 3)
0	President Securities Corp.	President Futures Corp.	1	Futures Margin - Own Funds	$2,825,942	Note 4	2.49%
0	President Securities Corp.	President Futures Corp.	1	Deposit-out	34,000	Note 4	0.03%
0	President Securities Corp.	President Futures Corp.	1	Accounts receivable	3,384	Note 4	0.00%
0	President Securities Corp.	President Futures Corp.	1	Deposit-in	16,000	Note 4	0.01%
0	President Securities Corp.	President Futures Corp.	1	Future commission revenue	40,206	Note 4	0.42%
0	President Securities Corp.	President Futures Corp.	1	Clearingcharges	11,731	Note 4	0.12%
0	President Securities Corp.	President Futures Corp.	1	Other non-operatingrevenues	3,539	Note 4	0.04%
0	President Securities Corp.	President Insurance AgencyCorp.	1	Other non-operatingrevenues	1,077	Note 4	0.00%
0	President Securities Corp.	President Capital Management Corp.	1	Expense from investment advisory	50,400	Note 4	0.53%
0	President Securities Corp.	President Capital Management Corp.	1	Other non-operatingrevenues	3,644	Note 4	0.04%

Note 1 ： The numbers in the No. column are represented as follows:

The number zero is for parent company.
According to the sequential order, subsidiaries are numbered from 1.

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  - Note 2 `：` There are three kinds of transactions between related parties and numbered from 1 to 3 were shown as follows (If transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.)

     1. Parent company to subsidiaries.

     2. Subsidiaries to parent company.

     3. Subsidiaries to subsidiaries.

  - Note 3 `：` The calculation basis of the trading amount accounting for the total consolidated net revenues or assets is that the account ending balance is divided by the total consolidated assets if it is attributed to the balance sheet accounts, and the accumulated trading amount of the interim period is divided by the total consolidated net revenues if it is attributed to the profit or loss accounts.

  - Note 4 `：` All the prices of the service revenues and consulting service provided between related parties were traded by contracts. Note 5 `：` Based on materiality, only the amounts of the transactions that were above $1 million would be shown in the table.

2) Related information of investee companies
A. Related information of investee companies

Name of the investor	Name of the investee company	Location	Date of registration	Reference number and the date of approval letter issued byFSC	Major operatingactivities	Balance on December 31,2020 Original i	Balance on December 31,2019 nvestment	Shares Percentage EndingBalanc	Shares Percentage EndingBalanc	e	Revenue of investee company	Net income (loss) of investee company	Investment income (loss) recognised by the Company	Cash dividends	Notes
									Percentage	Book vlaue
President Securities Corp.	President Futures Corp. President Capital Management Corp. President Securities (HK) Ltd. President Wealth Management (HK) Ltd. President Securities (Nominee) Ltd.	Taipei Taipei Hong Kong Hong Kong Hong Kong	1994.03.01 1997.04.15 1994.07.26 2002.03.31 1999.08.06	1994.03.01 Jing- Tou-Shen (83) Gong-Shang Letter No.1114 (Note 1) 1997.02.25 (86) Tai-Cai-Zheng (4) Letter No.17769 1993.11.4 (82) Tai- Cai-Zheng (2) Letter No.40913 2001.12.11 (90) Tai-Cai-Zheng (2) Letter No.166728 1997.10.27 (86) Tai-Cai-Zheng (2) Letter No.04840	Futures brokerage and dealer Securities investment consulting Securities dealer, brokerage, underwriting and consulting Wealth management Nominee Service	644,650 $ 326,000 848,735 92,091 3,403	644,650 $ 326,000 34,030 - -	63,817,303 30,000,000 192,600,000 23,400,000 1,000,000	96.69% 100.00% 100.00% 100.00% 100.00%	2,102,027 $ 320,169 1,361,333 56,002 1,672	943,742 $ 70,759 139,983 - -	214,024 $ 2,095) ( 21,051 362 73) (	206,956 $ 2,061) ( 28,615 209 40) (	112,318 $ - - - -	Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company

Note 1 ： As FSC was established in July, 2004, President Futures Corp. was approved by the Investment Commission, Ministry of Economic Affairs.

356

Name of the investor	Name of the investee company	Location	Date of registration	Reference number and the date of approval letter issued byFSC	Major operatingactivities	Balance on December 31,2020 Original i	Balance on December 31,2019 nvestment	Shares Percentage EndingBalanc	Shares Percentage EndingBalanc	e	Revenue of investee company	Net income (loss) of investee company	Investment income (loss) recognised by the Company	Cash dividends	Notes
									Percentage	Book vlaue
President Securities Corp. President Insurance Agency Corp. President Securities (BVI) Ltd.	President Securities (BVI) Ltd.(Note 3) Uni-President Asset Management Corp. President Insurance Agency Corp. PSC Venture Capital Investment Limited Company Uni-President Asset Management Corp. President Securities (HK) Ltd. President Wealth Management (HK) Ltd. President Securities (Nominee) Ltd.	British Virgin Islands Taipei Taipei Taipei Taipei Hong Kong Hong Kong Hong Kong	1998.02.26 1992.09.03 2008.04.29 2013.10.29 1992.09.03 1994.07.26 2002.03.31 1999.08.06	1997.10.27 (86) Tai-Cai-Zheng (2) Letter No.04840 2000.07.19 (89) Tai-Cai-Zheng (2) Letter No.56407 (Note2) 2013.08.08 Jing- Guan-Zheng-Chuan Letter No.1020028529 2000.07.19 (89) Tai-Cai-Zheng (2) Letter No.56407 1993.11.4 (82) Tai- Cai-Zheng (2) Letter No.40913 2001.12.11 (90) Tai-Cai-Zheng (2) Letter No.166728 1997.10.27 (86) Tai-Cai-Zheng (2) Letter No.04840	Securities investment and holding company Investment Trust Insurance Agent Consultation of investment management and venture capital; other unprohibited or unrestricted businesses beyond the permit Investment Trust Securities dealer, brokerage, underwriting and consulting Wealth management Nominee Service	- 667,622 10,000 300,000 478 - - -	2,264,573 667,622 10,000 300,000 478 814,705 92,091 3,403	67,746,000 14,904,630 1,000,000 30,000,000 12,000 - - -	100.00% 42.46% 100.00% 100.00% 0.03% - - -	- 602,375 29,698 242,139 490 - - -	- 941,595 45,243 2,331 941,595 139,983 - -	5,644 258,096 9,489 6,411) ( 258,096 21,051 362 73) (	5,644 109,597 9,493 6,410) ( 88 7,564) ( 153 33) (	- 94,466 8,363 - 76 - - -	Subsidiary of the Company Associates Subsidiary of the Company Subsidiary of the Company Associates Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company

Note 2 ： When securities corporations invest in domestic business within FSC's limitation, there is no need to obtain the approval from FSC in advance, according to Tai-Cai-Zheng (2) Letter No.0930000005. Therefore, there was no reference numbers for President Insurance Agency Corp. Note 3 ： President Securities (BVI) Ltd. was approved by the board of directors in March 2020 to deal with the dissolution and liquidation matters, and the Group has received the original investment funds from President Securities (BVI) Ltd. on July 31, 2020. The liquidation process is currently in progress.

B. Lending to others: Excluding security margin trading and conditional bond trading business, there is no lending of funds to either the shareholders or other parties.
C. Endorsements and guarantees for others ： None.
D. Acquisitions of real estate exceeding $300 million or 20 percent of contributed capital ： None.
E. Disposals of real estate exceeding $300 million or 20 percent of contributed capital ： None.

357

F. Purchases or sales transactions discount on brokers’ charges with related parties in excess of $5,000,000 ： None.
G. Receivables from related parties exceeding $100 million or 20 percent of contributed capital ： None.
H. Accordance with Jing-Guan-Zheng-Chuang Letter No. 10300375782, the Company is required to disclose details of businesses run by foreign enterprises that were incorporated in the countries identified as non-signatories to the IOSCO MMoU or have not obtained securities or futures license of signatories to the IOSCO MMoU:
a) Securities held as of December 31, 2020 of President Securities (BVI) Ltd ： None.
b) Derivative financial instrument transactions and the source of capital of President Securities (BVI) Ltd.: None.
c) Revenue from engagement in consultation on assets management business, service contents and litigation ： None.

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d) Balance sheets

PRESIDENT SECURITIES (BVI) LTD.

Assets		December 31,	% Liabilities and shareholders’equity Current liabilities 39 Other payables Total liabilities - 1 Shareholders’ equity 40 Share capital 60 Capital reserve Retained earnings Accumulated deficit Other equity Exchange differences on translation of foreign financial statements Total shareholders’ equity 100 Total liabilities and shareholders’ equity 2019 BALANCE SHEETS December 31, 2019		December 31,2019 Expressed in U.S. dollars	December 31,2019 Expressed in U.S. dollars	December 31,2019 Expressed in U.S. dollars
		Amount 30,135,890 $ - 195,869 30,331,759 46,447,436 76,779,195 $			Amount		%
Current assets Cash and cash equivalents Other receivables Total current assets Investment in associates Total assets Financial assets at fair value through profit or loss - current-					3,565 $ 3,565 67,746,000 757,813 7,702,523 569,294 76,775,630 76,779,195 $		- - 88 1 10 1 100 100

Note: President Securities (BVI) Ltd. was approved by the board of directors in March 2020 to deal with the dissolution and liquidation matters, and the Group has received the original investment funds from President Securities (BVI) Ltd. on July 31, 2020. The liquidation process is currently in progress.

359

PRESIDENT WEALTH MANAGEMENT (HK) LTD. BALANCE SHEETS

DECEMBER 31, 2020 AND 2019

Assets	Amount % 15,254,818 $ 100 12,553 - 15,267,371 100 15,267,371 $ 100 December 31,2020 December 31,2020	Amount % 15,254,818 $ 100 12,553 - 15,267,371 100 15,267,371 $ 100 December 31,2020 December 31,2020	December 31,	2019	2019	Liabilities and shareholders’equity		Amount December 31,	% 2020	% 2020	December 31,2019 Expressed in HK dollars	December 31,2019 Expressed in HK dollars	December 31,2019 Expressed in HK dollars	December 31,2019 Expressed in HK dollars
			Amount		%						Amount			%
Current assets Cash and cash equivalents Other receivables Total current assets Total assets Assets			Current liabilities 15,116,479 $ 100 Other payables 55,378 - Total liabilities 15,171,857 100 Shareholders’ equity Share capital Retained earnings Accumulated deficit Total shareholders’ equity 15,171,857 $ 100 Total liabilities and shareholders’ equity Amount % Liabilities and shareholders’equity PRESIDENT SECURITIES (NOMINEE) LTD. BALANCE SHEETS DECEMBER 31, 2020 AND 2019 December 31,2019				20,400 $ 20,400 23,400,000 8,153,029) ( 15,246,971 15,267,371 $ December 31,		- - 153 53) ( 100 100 2020		20,075 $ - 20,075 - 23,400,000 154 8,248,218) ( 54) ( 15,151,782 100 15,171,857 $ 100 Expressed in HK dollars December 31,2019
				2019
	Amount	%	Amount		%			Amount		%		Amount		%
Current assets Cash and cash equivalents Other receivables Total current assets Total assets	472,052 $ 6 472,058 472,058 $	100 - 100 100	491,537 $ 109 491,646 491,646 $		100 - 100 100	Current liabilities Other payables Total liabilities Shareholders’ equity Share capital Retained earnings Accumulated deficit Total shareholders’ equity Total liabilities and shareholders’ equity	16,800 $ 16,800 1,000,000 544,742) ( 455,258 472,058 $		3 3 212 115) ( 97 100		17,190 $ 17,190 1,000,000 525,544) ( 474,456 491,646 $		4 4 203 107) ( 96 100

360

e) Statements of comprehensive income

PRESIDENT SECURITIES (BVI) LTD.

STATEMENTS OF COMPREHENSIVE INCOME

SEVEN MONTHS ENDED JULY 31, 2020 AND FOR THE YEAR ENDED DECEMBER 31, 2019

Accounts		Seven months ended July31,2020	Seven months ended July31,2020	Seven months ended July31,2020	Expressed in U.S. dollars December 31,2019	Expressed in U.S. dollars December 31,2019
		Amount		%	Amount	%
Expenditures Employee benefits Other operating expenses Total expenditures and expenses Non-operating gains and losses Share of the profit or loss of associates and joint ventures accounted for using the equity method Other gains and losses Total non-operating gains and losses Profit before tax Income tax expense Net income		15,501 $ 9,039 24,540 - 49 49 24,589 - 24,589 $		63 37 100 - - - 100 - 100	49,953) ($ 18,574) ( 68,527) ( 916,448 838,335 1,754,783 1,686,256 - 1,686,256 $	3) ( 1) ( 4) ( 54 50 104 100 - 100

361

PRESIDENT WEALTH MANAGEMENT (HK) LTD STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

Accounts Expenditures Other operating expenses Total expenditures and expenses Non-operating gains and losses Other gains and losses Profit before tax Income tax expense Net income Accounts	Amount % Amount % 41,435) ($ 44) ( 43,730) ($ 25) ( 41,435) ( 44) ( 43,730) ( 25) ( 136,625 144 222,028 125 95,190 100 178,298 100 - - - - 95,190 $ 100 178,298 $ 100 Expressed in HK dollars December 31,2020 December 31,2019 Amount % Amount % December 31,2020 December 31,2019 Expressed in HK dollars PRESIDENT SECURITIES (NOMINEE) LTD. STATEMENTS OF COMPREHENSIVE INCOME THE YEARS ENDED DECEMBER 31, 2020 AND 2019	Amount % Amount % 41,435) ($ 44) ( 43,730) ($ 25) ( 41,435) ( 44) ( 43,730) ( 25) ( 136,625 144 222,028 125 95,190 100 178,298 100 - - - - 95,190 $ 100 178,298 $ 100 Expressed in HK dollars December 31,2020 December 31,2019 Amount % Amount % December 31,2020 December 31,2019 Expressed in HK dollars PRESIDENT SECURITIES (NOMINEE) LTD. STATEMENTS OF COMPREHENSIVE INCOME THE YEARS ENDED DECEMBER 31, 2020 AND 2019	Amount % Amount % 41,435) ($ 44) ( 43,730) ($ 25) ( 41,435) ( 44) ( 43,730) ( 25) ( 136,625 144 222,028 125 95,190 100 178,298 100 - - - - 95,190 $ 100 178,298 $ 100 Expressed in HK dollars December 31,2020 December 31,2019 Amount % Amount % December 31,2020 December 31,2019 Expressed in HK dollars PRESIDENT SECURITIES (NOMINEE) LTD. STATEMENTS OF COMPREHENSIVE INCOME THE YEARS ENDED DECEMBER 31, 2020 AND 2019	Amount % Amount % 41,435) ($ 44) ( 43,730) ($ 25) ( 41,435) ( 44) ( 43,730) ( 25) ( 136,625 144 222,028 125 95,190 100 178,298 100 - - - - 95,190 $ 100 178,298 $ 100 Expressed in HK dollars December 31,2020 December 31,2019 Amount % Amount % December 31,2020 December 31,2019 Expressed in HK dollars PRESIDENT SECURITIES (NOMINEE) LTD. STATEMENTS OF COMPREHENSIVE INCOME THE YEARS ENDED DECEMBER 31, 2020 AND 2019	Amount % Amount % 41,435) ($ 44) ( 43,730) ($ 25) ( 41,435) ( 44) ( 43,730) ( 25) ( 136,625 144 222,028 125 95,190 100 178,298 100 - - - - 95,190 $ 100 178,298 $ 100 Expressed in HK dollars December 31,2020 December 31,2019 Amount % Amount % December 31,2020 December 31,2019 Expressed in HK dollars PRESIDENT SECURITIES (NOMINEE) LTD. STATEMENTS OF COMPREHENSIVE INCOME THE YEARS ENDED DECEMBER 31, 2020 AND 2019	Amount % Amount % 41,435) ($ 44) ( 43,730) ($ 25) ( 41,435) ( 44) ( 43,730) ( 25) ( 136,625 144 222,028 125 95,190 100 178,298 100 - - - - 95,190 $ 100 178,298 $ 100 Expressed in HK dollars December 31,2020 December 31,2019 Amount % Amount % December 31,2020 December 31,2019 Expressed in HK dollars PRESIDENT SECURITIES (NOMINEE) LTD. STATEMENTS OF COMPREHENSIVE INCOME THE YEARS ENDED DECEMBER 31, 2020 AND 2019


			%	Amount		%
Expenditures Other operating expenses Total expenditures and expenses Non-operating gains and losses Other gains and losses Loss before tax Income tax expense Net loss	23,535) ($ 23,535) ( 4,337 19,198) ( - 19,198) ($	123 123 23) ( 100 - 100		25,071) ($ 25,071) ( 5,662 19,409) ( - 19,409) ($	129 129 29) ( 100 - 100

362

f) Dealings with foreign businesses in related party transactions: None

3) Information of overseas branches and representative office

Overseas branches and representative office	Nationality	Date of registration	Reference number and the date of approval letter given by Securities and Futures Bureau of FSC	Main business activities	Operating income	(Loss) profit before tax (Note 1)	Assignment of workingcapital	Assignment of workingcapital	Assignment of workingcapital	Assignment of workingcapital	Material transaction account with head office	Note
							Balance on January 1, 2020	Increase of working capital	Deduction of working capital	Balance on December 31, 2020
Representative office of President Securities Corp. in Xiamen	Xiamen	2008.08.22	2008.01.21 Jing-Guan- Zheng-Chuan Letter No.0960073542	Non-operating activities of securities business consultation, contact, and market survey	-	($ 5,339)	-	-	-	-	-	-

Note 1 `：` Operating expenses generated by the representative office.

Note 2 ： The office in Xiamen was permitted to cancel the registration by Market and Quality Supervision Commission of Xiamen Municipality at August 24, 2020.

363

4) Disclosure of investment in Mainland China

a) Information of investment in Mainland China

Investee in Mainland China Jin Yuan President Securities Co.,Ltd.	Paid-in capital (Note 4) $ 5,252,400	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31, 2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31, 2020	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31, 2020	($ 40,860) The financial statements that are audited by international accounting firm which has cooperative relationship with accounting firm in R.O.C. Investment income (loss) recognized by the Company for the year ended December 31, 2020 (Note 2)
		Remitted to Mainland China $ 2,481,388	Remitted back to Taiwan $ -
b) Limitation on investment in Mainland China (expressed in thousands of dollars) Company name Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2020 Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA) Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA Jin Yuan President Securities Co.,Ltd. 2,481,388 $ 2,481,388 $ 17,644,389 $
Company name	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2020			Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Jin Yuan President Securities Co.,Ltd.	2,481,388 $			2,481,388 $	17,644,389 $

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1) Directly invest in a company in Mainland China.
(2) Through investing in an existing company in the third area, which then invested in the investee in Mainland. (Please indicate investment company in the third area.)

(3) Others.

Note 2: In the ‘Investment income (loss) recognized by the Company for the year ended December 31, 2020’ column:

(1) It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period.

364

(2) Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:.
a. The financial statements that are audited and attested by international accounting firm which has cooperative relationship with accounting firm in R.O.C.
b. The financial statements that are audited and attested by R.O.C. parent company's CPA.
c. Others.

Note 3: The numbers in this table are expressed in New Taiwan Dollars.

Note 4: The paid-in capital of Jin Yuan President Securities Co.,Ltd is CNY 1.2 billion.

5) Major shareholder information

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Major shareholder Number of shares held (thousands) Shareholding ratio
Uni-President Enterprises Corp. 401,458 28.67%
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Note 1: The information of major shareholders in this table is based on the last business day of the end of each quarter by Taiwan Depository and Clearing Corp., which determines shareholders holding more than 5% of ordinary shares and special shares of securities firms that have completed unregistered delivery (including treasury shares). As for the share capital recorded in the financial report of the securities firm and the actual number of shares delivered by the securities firm without physical registration, there may be differences due to different calculation bases.
Note 2: In the case of the above information, if a shareholder delivers shares to the trust, it is disclosed in individual accounts by the trustee who opened the trust account by the trustee. As for the shareholders’ declaration of insider’s shareholding in accordance with the Securities and Exchange Act, their shareholding includes their own shareholding plus the shares delivered to the trust and the right to use the trust property. For information on insider’s equity declaration, please refer to the Market Observation Post System.

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14. SEGMENTS INFORMATION

1) General information

Financial information by the Group’s segments is disclosed in accordance with IFRS 8. Management has determined the reportable operating segments based on the reports reviewed by the Chief Operating Decision-Maker (CODM) that are used to make strategic decisions. The Group’s operating segments are classified into Brokerage, Quantitative Trading, Proprietary Trading, Fixed Income and Reinvestment according to the sources of income. The remaining operating results which have not reached the threshold requirements are consolidated in ‘other operating segments’. Sources of income from products and services rendered by each segment are as follows:

A. Brokerage segment: consigned trading of the listed securities, margin trading and short sale, assistance in futures trading and other instruments trading as approved by the regulations.
B. Quantitative Trading segment: trading of domestic/overseas futures and options, ETF arbitrage, market maker, liquidity provider, hedging, spot/futures arbitrage as approved by Law.
C. Proprietary Trading segment: using the self-owned equity to conduct securities trading such as stocks and bonds trading, and futures and options hedging in Stock Exchange and OTC.
D. Fixed Income segment: bonds segment is engaged in central government bonds, ordinary corporate bonds, convertible corporate bonds, and bills and bonds under repurchase or resale agreements transactions in OTC.
E. Reinvestment segment: companies reinvested by the consolidated entities.
F. Other operating segments include Capital Market segment, Financial Product segment, and Shareholder Services segment.

2) Segments information

The accounting policies applied to the Group’s operating segments and summary of accounting policies disclosed in the notes to the financial statements are consistent and identical. The operating gains and losses are measured by the amount before tax and used as basis for performance appraisal. Income and expense attributable to each operating segment are attributed to the segmental gains and losses. Non-attributable indirect expenses and expenses from logistic support segment are amortized to each operating segment based on reasonable calculation standards and the expense nature. Those that cannot be reasonably amortized are listed under “Others”.

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3) Profit or loss of segments information

Year ended December 31, 2020

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Brokerage Quantitative Proprietary Fixed income Reinvestment Other operating
segment Trading segment Trading segment segment segment segments Others Total
Segment revenues $ 3,188,195 $ 1,053,299 $ 1,816,970 $ 1,588,659 $ 1,211,542 $ 908,496 ($ 185,889) $ 9,581,272
Segment profit or loss $ 776,046 $ 535,516 $ 1,227,947 $ 1,155,823 $ 877,943 $ 321,457 ($ 911,910) $ 3,982,822
Year ended December 31, 2019
Brokerage Quantitative Proprietary Fixed income Reinvestment Other operating
segment Trading segment Trading segment segment segment segments Others Total
Segment revenues $ 2,190,228 $ 652,568 $ 1,157,345 $ 1,673,421 $ 1,007,566 $ 598,641 ($ 137,372) $ 7,142,397
Segment profit or loss $ 282,369 $ 165,663 $ 689,190 $ 997,884 $ 266,187 $ 213,503 ($ 56,988) $ 2,557,808
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Note 1: As operating income (loss) in total is consistent with consolidated statement of comprehensive income, there is no need for adjustment.

Note 2: The Company measures the performance of reportable operating segment based on specific performance indicators instead of assets and liabilities. The performance of reportable operating segment is regularly reviewed and assessed by the CODM as a reference for making resources allocation decision.

4) Information on products and services

The Group’s segments are based on different products and services, and had disclosed in general information. It disclosures the types of products and services of the Group’s segments 's source of income. There is no additional disclosure requirement on the income information of products and services.

5) Geographical information

The Group's external customer income from a single foreign country is immaterial, so it would not be disclosed.

6) Major customer information

The Group did not have any significant customers that account for more than 10% of its revenue, so it would not be disclosed.

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AI assistant

PSC — Annual Report 2020

52209_rns_2021-07-28_eea189d0-a5b8-4c72-a0d8-f1f2dead86bf.pdf

2020 ANNUAL REPORT

Notice to readers

I. A Letter to Shareholders

Dear Shareholders,

II. Company Profile

Incorporated

III. Corporate Governance

III. Corporate Governance

I. Business Organization

A. Organizational Chart

B. Function of Each Division

II. Directors’, Supervisors’ and Managers’ Information

A. Directors

1. Information Regarding Directors

2. Major Shareholders of PSCʹs Institutional Shareholders

3. Professional qualifications and independence analysis of directors

B. Information regarding directors, supervisors, management team and branch manager

C. Remuneration of Directors, Supervisors, President, Vice Presidents, and Chief Auditor

1. Remuneration of Directors

1.1 Remuneration of Directors (disclosing the name of each individual )

1.2 Remuneration of Directors (Independent Directors Included)

III. Corporate Governance

Range of remuneration for directors

2. Remuneration of the President, Vice Presidents, and Chief Auditor

D. Comparison of Remuneration for Directors, Supervisors, President and Vice Presidents in the Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, President and Vice Presidents

III. Corporate Governance

E. President’s, senior vice presidents’ and senior managers’ remuneration

III. Corporate Governance

III. Implementation of Corporate Governance

A. Board of Directors Meeting

III. Corporate Governance

Other mentionable items:

Independent director attendance is detailed below:

III. Corporate Governance

B. Evaluation of the Board of Directors

C. Operations of the Audit Committee: Number of Meetings, Actual Attendance Rate of each Independent Director, and other mentionable items

III. Corporate Governance

III. Corporate Governance

D. Corporate Governance Implementation Status and Deviations from “the Corporate Governance Best -Practice Principles for TWSE/TPEx Listed Companies”

III. Corporate Governance

III. Corporate Governance

III. Corporate Governance

III. Corporate Governance

Communication methods:

Communication methods:

Communication methods:

III. Corporate Governance

III. Corporate Governance

C. Employee rights and wellness

D. Rights of the stakeholders

F. Directors training

III. Cor rate Governance po

III. Corporate Governance

E. Composition, responsibilities, and operation of the Remuneration Committee

1. Information Regarding Remuneration Committee

2. Operations of the Remuneration Committee

III. Corporate Governance

F. Corporate Social Responsibility (CSR) and Deviations from “ Corporate Social Responsibility Best Practice Principles for TWSE/GTSM Listed Companies ”

III. Corporate Governance

III. Corporate Governance

III. Corporate Governance

G. Ethical business operation at the Company and related implementation and Deviations from “Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies”

1. Ethical business operation

III. Corporate Governance

2. Ethical Corporate Management:

III. Corporate Governance

H. Corporate Governance Guidelines and Regulations

I. Other Important Information Regarding Corporate Governance

J. Internal Control Systems:

1. Internal Control Declaration:

Internal control declaration

Implementation of the internal control system of President Securities Corporation

President Securities Corporation Internal Control System Findings and Remediation Action Plans

III. Corporate Governance

1. Punishments imposed on the Company and its internal personnel in accordance with laws

III. Corporate Governance

L. Major Resolutions of Shareholders Meeting and Board of Directors Meeting

PSC Annual Report 2020