PSC — Audit Report / Information 2020

Nov 11, 2020

PRESIDENT SECURITIES CORPORATION AND

SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2020 AND 2019

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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.

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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:

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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:

1. 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;

2. Ascertained whether the measurement methods used by the management is commonly used by the industry;

3. Assessed the reasonableness of parameter of similar companies used by management;

4. Examined inputs and calculation formulas used in valuation models and agreed such data to supporting documents.

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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:

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;

3. 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.

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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.

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:

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1. 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.

2. 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.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. 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.

5. 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.

6. 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.

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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.

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 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

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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.

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PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(4) 6(5) 6(6) 6(6) 6(7) 6(8) 6(2) 6(3) 6(11) 6(12) 6(13) 6(15) 6(16) 6(47) 6(17)	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)

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PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	Notes 6(18) 6(19) 6(20) 6(21) 6(5) 6(22) 6(23) 6(24) 6(47) 6(25) 6(27) 6(27) 6(28)	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.

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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)

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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.

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PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED 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 loss 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 Changes in non-controlling interests 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 (loss) 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 Changes in non-controlling interests Balance at December 31, 2020	Notes								Equity attri	butable to owners o	f the parent	f the parent	f the parent						Non- controlling interests		Total equity
			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.

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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)

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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.

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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)

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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

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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

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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%

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Name of Investor	Name of Subsidiary	Main Business Activities December 31,2020 December 31,2019 Insurance Agent 100% 100% Consultation of investment management and venture capital; other unprohibited or unrestricted businesses beyond the permit 100% 100% Wealth management 100% - Nominee Service 100% - Securities dealer, brokerage, underwriting and consulting - 94.81% Wealth management - 100% Nominee Service - 100% Ownership (%)	Main Business Activities December 31,2020 December 31,2019 Insurance Agent 100% 100% Consultation of investment management and venture capital; other unprohibited or unrestricted businesses beyond the permit 100% 100% Wealth management 100% - Nominee Service 100% - Securities dealer, brokerage, underwriting and consulting - 94.81% Wealth management - 100% Nominee Service - 100% Ownership (%)
The Company 〃 〃 〃 President Securities (BVI) 〃 〃	President Insurance Agency Corp. (President Insurance Agency) PSC Venture Capital Investment Company Limited (President Venture Capital) President Wealth Management(HK) Ltd.(President Wealth Management (HK)) (Note 1) President Securities (Nominee) Ltd. (President Securities (Nominee)) (Note 1) President Securities (HK) Ltd. (Note 1) President Wealth Management (HK) Ltd.(President Wealth Management (HK)) (Note 1) President Securities (Nominee) Ltd. (President Securities (Nominee)) (Note 1)		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;

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  - (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

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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.

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• 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.

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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.

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• 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

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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:

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• 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 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.

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6. DETAILS OF SIGNIFICANT ACCOUNTS

1) Cash and cash equivalents

Petty cash Checking deposits Current deposits: Deposits denominated in NTD Deposits denominated in foreign currencies Time deposits Total	December 31,2020 December 31,2019 168 $ 169 $ 639,368 1,111,097 505,005 287,249 1,256,458 1,091,712 2,723,863 4,029,919 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:

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

Equity instruments at fair value through other Year ended Year ended
comprehensive income December 31, 2020 December 31, 2019
Fair value change recognised in other
comprehensive income - parent company $ 453,860 ($ 12,186)
Fair value change recognised in other
comprehensive income - non-controlling
interest 2,888 ( 797)
Total $ 456,748 ($ 12,983)
Cumulative gains (losses) reclassified to ($ 177,031) $ -
retained earnings due to derecognition
Dividend income recognised in profit or loss
Held at end of period $ 25,486 $ 24,192
Derecognised during the period 66,894 -
$ 92,380 $ 24,192
Debt instruments at fair value through other
comprehensive income
Fair value change recognised in other
($ 100,330) ($ 20,832)
comprehensive income
Due to derecognition $ 100,358 $ 15,309
Interest income recognised in profit or loss $ 28,276 $ 784
----- End of picture text -----

• 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, 2020		December 31,2019	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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----- 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).
Other current assets
	December 31,2020			December 31,2019
Pending settlements	$		1,489,800	$		950,487
Pledged time deposits			525,249			531,251
Deposits-in for foreign currency securities			647,622			-
Underwriting share proceeds collected on behalf of
customers			651,290			18
Temporary payments			1,841			138,591
Others			28,825			1,350
Total	$		3,344,627	$		1,621,697

8) Other current assets

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

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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
----- End of picture text -----

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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 Associate	Equity method 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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Share in associate's net assets Goodwill and others Carrying amount of the associate Balance sheet Current assets Non-current assets Current liabilities Non-current liabilities Total net assets Share in associate'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 Net income Loss for the period from continuing operations Total comprehensive loss Dividends received from associates	December 31,2020 December 31,2019 423,343 $ 399,331 $ 179,522 179,522 602,865 $ 578,853 $ 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 $ Uni-President Asset Management Corp. Year ended December 31,2020 Year ended December 31,2019 941,595 $ 831,987 $ 258,096 $ 251,386 $ 20,871 9,768) ( 278,967 $ 241,618 $ 94,542 $ 93,706 $ Jin Yuan President Securities Co.,Ltd. Eight months ended December 31,2020 74,454 $ 83,388) ($ 83,388) ($ - $ Uni-President Asset Management Corp.	December 31,2020 December 31,2019 423,343 $ 399,331 $ 179,522 179,522 602,865 $ 578,853 $ 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 $ Uni-President Asset Management Corp. Year ended December 31,2020 Year ended December 31,2019 941,595 $ 831,987 $ 258,096 $ 251,386 $ 20,871 9,768) ( 278,967 $ 241,618 $ 94,542 $ 93,706 $ Jin Yuan President Securities Co.,Ltd. Eight months ended December 31,2020 74,454 $ 83,388) ($ 83,388) ($ - $ Uni-President Asset Management Corp.	December 31,2020 December 31,2019 423,343 $ 399,331 $ 179,522 179,522 602,865 $ 578,853 $ 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 $ Uni-President Asset Management Corp. Year ended December 31,2020 Year ended December 31,2019 941,595 $ 831,987 $ 258,096 $ 251,386 $ 20,871 9,768) ( 278,967 $ 241,618 $ 94,542 $ 93,706 $ Jin Yuan President Securities Co.,Ltd. Eight months ended December 31,2020 74,454 $ 83,388) ($ 83,388) ($ - $ Uni-President Asset Management Corp.	December 31,2020 December 31,2019 423,343 $ 399,331 $ 179,522 179,522 602,865 $ 578,853 $ 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 $ Uni-President Asset Management Corp. Year ended December 31,2020 Year ended December 31,2019 941,595 $ 831,987 $ 258,096 $ 251,386 $ 20,871 9,768) ( 278,967 $ 241,618 $ 94,542 $ 93,706 $ Jin Yuan President Securities Co.,Ltd. Eight months ended December 31,2020 74,454 $ 83,388) ($ 83,388) ($ - $ Uni-President Asset Management Corp.	December 31,2020 December 31,2019 423,343 $ 399,331 $ 179,522 179,522 602,865 $ 578,853 $ 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 $ Uni-President Asset Management Corp. Year ended December 31,2020 Year ended December 31,2019 941,595 $ 831,987 $ 258,096 $ 251,386 $ 20,871 9,768) ( 278,967 $ 241,618 $ 94,542 $ 93,706 $ Jin Yuan President Securities Co.,Ltd. Eight months ended December 31,2020 74,454 $ 83,388) ($ 83,388) ($ - $ Uni-President Asset Management Corp.
	$
			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) ($ - $

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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 $
	153,387 $ 101,997) ( 51,390 $

• 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%

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.

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

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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		Present value of defined benefit obiligations	Fair value of plan assets		Net defined benefit liabilities (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

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 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)

		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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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 changes 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		Total
		24,663 $ 24,663 $	65,675 $ 65,675 $		483 $ 483 $	440 $ 440 $		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

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 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-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
Revenues from brokered trading - TWSE Revenues from brokered trading - OTC Revenues from brokered trading - Futures Others Total	Year ended December 31, 2020		Year ended December 31,2019
	1,787,310 $ 617,121 790,960 135,639 3,331,030 $		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

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32) Interest income Underwriters: -TAIEX -OTC Subtotal Hedging: -TAIEX -OTC -Overseas trading Subtotal Total Interest income from margin loans Interest income from bonds Others Total	Year ended December 31,2020 59,566 $ 65,373 124,939 159,062 53,329 3,280 215,671 3,356,129 $ Year ended December 31, 2020	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
	566,024 $ 535,601 17,033 1,118,658 $		525,291 $ 674,048 7,468 1,206,807 $

December 31, 2020 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 $	December 31, 2020 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 $	December 31,2019 525,291 $ 674,048 7,468 1,206,807 $
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 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
	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 $

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35) Net valuation loss on borrowed securities and bonds with resale agreements-short sales at fair value through profit or loss

hrough profit or loss
		Year ended		Year ended
	December 31,2020		December 31,2019
Valuation loss from securities
borrowing transactions - dealer	($	92,095)	($	5,546)
Valuation gain (loss) from covering - warrants		5,292	(	10,607)
Valuation loss from the bond
investments under resale agreements		-	(	5,265)
Valuation gain from securities
borrowing transactions - equity options		2		-
Valuation loss from covering - equity options	(	30,220)		-
Total	($	117,021)	($	21,418)

investments under resale agreements Valuation gain from securities borrowing transactions - equity options Valuation loss from covering - equity options Total	investments under resale agreements Valuation gain from securities borrowing transactions - equity options Valuation loss from covering - equity options Total	- 5,265) ( 2 - 30,220) ( - 117,021) ($ 21,418) ($	- 5,265) ( 2 - 30,220) ( - 117,021) ($ 21,418) ($	- 5,265) ( 2 - 30,220) ( - 117,021) ($ 21,418) ($	- 5,265) ( 2 - 30,220) ( - 117,021) ($ 21,418) ($
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 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	value through other comprehensive income–
		Year ended December 31, 2020 100,358 $ Year ended December 31, 2020	Year ended December 31, 2020
			100,358 $
		367,407 $ 114,508) ( 157,494) ( 95,405 $ Year ended December 31,2020
		450,510 $ 203,770) ( 43,196) ( 183,424) ( 20,120 $

~57~

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
	151,265 $ 316,918) ( 46,873 72,440 46,340) ($ Year ended December 31, 2020			113,544 $ 191,648 45,384 82,165 432,741 $ Year ended December 31,2019
		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 $

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• 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 $

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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:
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
	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:

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Deferred tax assets: -Temporary differences: Losses on doubtful debts Pension Other Subtotal Deferred tax liabilities: -Temporary differences: Unrealised exchange gain Valuation gain from financial instruments Other Subtotal Total Deferred tax assets: -Temporary differences: Losses on doubtful debts Other Subtotal Deferred tax liabilities: -Temporary differences: Unrealised exchange gain Other Subtotal Total			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	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.

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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 -----

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.

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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

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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

Lease liabilities a. Lease liabilities－current
b. Lease liabilities－non-current c. 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 $
		- $

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F. Bonds sold under repurchase agreements

F. Bonds sold under repurchase agreements
G. Handling fee revenue Other related party: President Life Sciences Cayman Co., Ltd Kai Yu (BVI) Investment Co., Ltd Cayman President Holdings, Ltd. Total Security investment trust fund raised by the Uni- President Asset Management Corp.: Uni-President Asset Management Corp. Other related party: Other Total	December 31,2020 - $ 148,096 489,856 637,952 $ Year ended December 31, 2020 47,845 $ 2,354 50,199 $	December 31,2019 24,475 $ - - 24,475 $ Year ended December 31, 2019
		33,529 $ 810 34,339 $

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 $	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 $	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 $	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 $	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		December 31, 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.

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K. Rent income

Period Deposit Associates: Uni-President Assets Management Corp. 2016.01.01~2024.03.31 1,044 $ Other related party: President Tokyo Co., Ltd. 2018.04.01~2024.03.31 1,434 Total	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 Year ended December 31,2020 Entity having significant influence on the company: Uni-President Enterprises Corp. 300 $ Year ended December 31,2020 Entity having significant influence on the company: Uni-President Enterprises Corp. 3,697 $ Associate: Uni-President Assets Management Corp. 135 Other related party: ScinoPharm Taiwan, Ltd. 2,635 Ton Yi Industrial Corp. 1,220 President Chain Store Corp. (PCSC) 2,097 Others 663 Total 10,447 $	Year ended December 31,2020			Year ended December 31,2019 - $ 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) ($

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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 1,889 $ Year ended December 31, 2020 1,134 $ 155 212 564 2,065 $	Year ended December 31,2019 544 $ Year ended December 31, 2019
			1,477 $ - 528 - 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 $

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R.

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)

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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 December 31,2019 950,000 $ 1,600,000 $ 2,634,800 3,330,800 200,000 400,000 15,119,396 12,421,911 1,034,879 4,110,169 652,010 735 525,249 531,251 50,000 50,000 1,101,768 1,107,127 655,000 660,000 2,181 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.

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• 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

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  - 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

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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

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 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).

• (C) Financial assets at fair value through other comprehensive income - current

• 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
	2,661 $ 528 - - - 2,533) ( 656 $

• 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 Group’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 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.

(Blank below)

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

Short-term loans Commercial papers payable 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 Financial liabilities at fair value through profit or loss-current					December 31,2020	December 31,2020	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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USD EUR Financial assets in foreign currencies Cash and cash equivalents 443,058 $ 4,174 $ Financial assets at fair value through profit or loss 13,300,410 3,486,806 Investments accounted for under equity method - - Others 7,745,156 23,028 Financial liabilities in foreign currencies Short-term loans 318,976 - Financial liabilities at fair value through profit or loss 50,740 3,898 Bonds sold under repurchase agreements 9,996,698 3,080,106 Others 9,879,276 12,626 USD EUR Financial assets in foreign currencies Cash and cash equivalents 1,266,500 $ 2,084 $ Financial assets at fair value through profit or loss 16,127,328 1,834,006 Others 5,828,140 42,691 Financial liabilities in foreign currencies Short-term loans 2,364,960 - Financial liabilities at fair value through profit or loss 12,434 2,749 Bonds sold under repurchase agreements 12,219,296 1,445,146 Others 7,757,580 40,361 Note: As of December 31, 2020, foreign exchange rates of the above currencies to TWD w 1 AUD= 21.950 TWD; 1 RMB= 4.377 TWD; and 1 HKD= 3.673 TWD, respectively.			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.

Non-financial assets December 31, 2020 Investment property December 31, 2019 Investment property	Total 667,546 $ 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.

(Blank below)

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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:

Financial assets at fair value through profit or loss- current Unlisted stocks 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 Financial assets at fair value through profit or loss- current Unlisted stocks 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	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
		Recorded in profit or loss				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

~89~

(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) (

~90~

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

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BALANCE SHEETS
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
B. Income statement of trust accounts
STATEMENTS OF INCOME
Year ended Year ended
Item December 31, 2020 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
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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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(Blank below)

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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.

(Blank below)

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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

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Details of transactions
Percentage (%) of
total consolidated
Relationship net revenues or
No.(Note1) Company Counterparty (Note 2) Account Amount Conditions 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 Clearing charges 11,731 Note 4 0.12%
0 President Securities Corp. President Futures Corp. 1 Other non-operating revenues 3,539 Note 4 0.04%
0 President Securities Corp. President Insurance Agency Corp. 1 Other non-operating revenues 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-operating revenues 3,644 Note 4 0.04%
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Note 1 ： The numbers in the No. column are represented as follows:

1. The number zero is for parent company.

2. 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.

~97~

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.

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• 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.

(Blank below)

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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.

~100~

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	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		December 31,	2020	2020	Amount % 20,075 $ - 20,075 - 23,400,000 154 8,248,218) ( 54) ( 15,151,782 100 15,171,857 $ 100 December 31,2019 Expressed in HK dollars Expressed in HK dollars December 31,2019	Amount % 20,075 $ - 20,075 - 23,400,000 154 8,248,218) ( 54) ( 15,151,782 100 15,171,857 $ 100 December 31,2019 Expressed in HK dollars Expressed in HK dollars December 31,2019	Amount % 20,075 $ - 20,075 - 23,400,000 154 8,248,218) ( 54) ( 15,151,782 100 15,171,857 $ 100 December 31,2019 Expressed in HK dollars Expressed in HK dollars December 31,2019	Amount % 20,075 $ - 20,075 - 23,400,000 154 8,248,218) ( 54) ( 15,151,782 100 15,171,857 $ 100 December 31,2019 Expressed in HK dollars Expressed in HK dollars December 31,2019
						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
							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

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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

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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	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 % 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
	41,435) ($ 41,435) ( 136,625 95,190 - 95,190 $	25) ( 25) ( 125 100 - 100

PRESIDENT SECURITIES (NOMINEE) LTD. STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019

Accounts	Amount % December 31,2020	Amount % December 31,2020	Amount % December 31,2020	December 31,2019 Expressed in HK dollars	December 31,2019 Expressed in HK dollars	December 31,2019 Expressed in HK dollars
			%	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

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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.

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4) Disclosure of investment in Mainland China

a) Information of investment in Mainland China

Investee in Mainland China Jin Yuan President Securities Co.,Ltd.	Main business activities Securities brokering, securities dealing, securities underwriting and sponsoring service	Paid-in capital (Note 4) $ 5,252,400	Paid-in capital (Note 4) $ 5,252,400	Investment method (Note 1) Directly invest in a company in Mainland China	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 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	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December 31, 2020	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2020 $ 2,481,388	Net income of investee as of December 31, 2020 ($ 83,388)	Ownership held by the Company (direct or indirect) 49%	($ 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)	($ 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)	Book value of investments in Mainland China as of December 31, 2020 $ 2,531,901	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2020 $ -
						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.

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• (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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