PSC — Interim / Quarterly Report 2023

Dec 22, 2023

PRESIDENT SECURITIES CORPORATION AND

SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REVIEW REPORT MARCH 31, 2023 AND 2022

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For the convenience of readers and for information purpose only, the auditors’ review 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’ REVIEW REPORT TRANSLATED FROM CHINESE

PWCR23000163 To the Board of Directors and Shareholders of PRESIDENT SECURITIES CORPORATION

Introduction

We have reviewed the accompanying consolidated balance sheets of President Securities Corporation and subsidiaries as at March 31, 2023 and 2022, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the three months then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with “Regulations Governing the Preparation of Financial Reports by Securities Firms”, “Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants” and International Accounting Standard 34, “Interim Financial Reporting” that came into effect as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of Review

Except as stated in the following paragraph, we conducted our reviews in accordance with the Standard on Review Engagements 2410, “Review of Financial Information Performed by the Independent Auditor of the Entity” of the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express such an opinion.

Basis for Qualified Conclusion

As explained in Notes 4(3) and 6(11), the financial statements of certain insignificant consolidated subsidiaries and investments accounted for under the equity method were not reviewed by independent auditors. Those statements reflect total assets of $1,635,923 thousand and $2,832,075 thousand, constituting 1.44% and 2.75% of the consolidated total assets, and total liabilities of $116,218 thousand and $831,331 thousand, constituting 0.14 % and 1.17 % of the consolidated total liabilities as at March 31, 2023 and 2022, and total comprehensive income (loss) of $8,055 thousand and ($26,516) thousand, constituting 1.27% and 18.12% of the consolidated total comprehensive income for the three months then ended. The balance of such investments accounted for under the equity method as at March 31, 2023 and 2022 were $794,598 thousand and $ 836,668 thousand, respectively; President Securities Corporation and subsidiaries’

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share of comprehensive income of associates and joint ventures accounted for under the equity method, including share of profit or loss of associates and joint ventures accounted for under the equity method and share of other comprehensive income of associates and joint ventures accounted for under the equity method, for the three months then ended were $46,518 thousand and $75,881 thousand, constituting 7.33% and (51.85%) of total consolidated comprehensive income, respectively.

Qualified Conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain insignificant consolidated subsidiaries and investments accounted for under the equity method been reviewed by independent auditors, that we might have become aware of had it not been for the situation described above, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of President Securities Corporation and subsidiaries as at March 31, 2023 and 2022, and of its consolidated financial performance and its consolidated cash flows for the three months then ended 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 International Accounting Standard No. 34, “Interim Financial Reporting” that came into effect as endorsed by the Financial Supervisory Commission.

Lin, Se-Kai

Independent Auditors

Lo, Chiao-Sen

For and on behalf of PricewaterhouseCoopers, Taiwan May 4, 2023

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The accompanying consolidated financial statements are not intended to present the financial position and finance 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’ review 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

MARCH 31, 2023, DECEMBER 31, 2022 AND MARCH 31, 2022

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of March 31, 2023 and 2022 are reviewed, not audited)

Assets	Notes	March31,2023	% 6 31 3 11 - - 5 18 - 2 - 15 - - - - 1 92 - 1 3 3 - - - - 1 8 100	December31,2022 AMOUNT % $ 6,194,573 6 24,395,868 26 2,497,782 3 10,533,221 11 94,136 - 72,399 - 4,094,908 4 20,783,255 22 1,159,577 1 3,377,630 4 763 - 10,140,951 11 1,195 - 38,289 - 60,108 - 43 - 1,950,961 2 85,395,659 90 99,283 - 1,179,907 1 3,512,098 4 2,609,642 3 165,557 - 266,302 - 246,506 - 106,146 - 1,309,762 2 9,495,203 10 $ 94,890,862 100	March31,2022
		AMOUNT $ 6,465,825 34,758,788 3,198,523 11,952,731 2,670 2,170 5,589,215 20,512,413 196,914 2,271,290 476 17,488,914 1,305 53,993 58,143 61 1,682,599 104,236,030 123,038 1,231,843 3,570,049 2,580,968 149,929 265,777 249,647 96,875 1,290,940 9,559,066 $ 113,795,096		AMOUNT $ 6,194,573 24,395,868 2,497,782 10,533,221 94,136 72,399 4,094,908 20,783,255 1,159,577 3,377,630 763 10,140,951 1,195 38,289 60,108 43 1,950,961 85,395,659 99,283 1,179,907 3,512,098 2,609,642 165,557 266,302 246,506 106,146 1,309,762 9,495,203 $ 94,890,862	AMOUNT $ 5,838,517 23,554,234 398,199 16,862,002 7,839 6,523 2,225,134 20,198,033 206,597 2,287,799 273 18,978,138 952 36,653 26,845 2,086 2,865,237 93,495,061 97,287 1,418,393 3,184,725 2,468,351 202,376 267,877 203,234 157,434 1,365,845 9,365,522 $ 102,860,583	%
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	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(46) 6(17)					6 23 - 16 - - 2 20 - 2 - 19 - - - - 3
						91
						- 2 3 3 - - - - 1
						9
						100

(Continued)

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PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2023, DECEMBER 31, 2022 AND MARCH 31, 2022

(Expressed in thousands of New Taiwan dollars) (The balance sheets as of March 31, 2023 and 2022 are reviewed, not audited)

Liabilities andEquity	Notes	March31,2023	% 2 12 8 9 1 1 2 18 - 16 - - 1 3 - - - 73 - - - - - 73 13 - 4 8 1 1 27 - 27 100	December31,2022 AMOUNT % $ 275,000 - 5,827,431 6 9,157,320 10 6,965,424 7 1,809,356 2 1,809,962 2 1,806,591 2 20,763,586 22 265,926 - 10,852,394 12 2,276 - 744,720 1 1,582,207 2 2,784,086 3 161,117 - 72,740 - 83,213 - 64,963,349 69 15,418 - 86,061 - 11,618 - 7,928 - 121,025 - 65,084,374 69 14,558,313 15 91,261 - 3,877,849 4 9,090,989 10 816,933 1 1,283,747 1 29,719,092 31 87,396 - 29,806,488 31 $ 94,890,862 100	March31,2022
		AMOUNT $ 1,951,100 13,690,763 9,447,280 9,677,565 630,014 712,176 1,822,600 20,446,473 310,382 18,437,878 2,765 552,631 1,362,660 3,787,486 260,739 68,019 88,804 83,249,335 15,441 73,439 7,612 7,829 104,321 83,353,656 14,558,313 91,261 3,877,849 9,090,989 1,274,465 1,458,437 30,351,314 90,126 30,441,440 $ 113,795,096		AMOUNT $ 275,000 5,827,431 9,157,320 6,965,424 1,809,356 1,809,962 1,806,591 20,763,586 265,926 10,852,394 2,276 744,720 1,582,207 2,784,086 161,117 72,740 83,213 64,963,349 15,418 86,061 11,618 7,928 121,025 65,084,374 14,558,313 91,261 3,877,849 9,090,989 816,933 1,283,747 29,719,092 87,396 29,806,488 $ 94,890,862	AMOUNT $ 1,151,575 5,898,601 7,672,025 4,917,312 622,163 814,006 1,460,927 20,160,818 163,463 19,637,679 4,526 643,082 1,588,048 5,436,535 703,966 82,185 94,225 71,051,136 14,100 110,632 3,098 61,337 189,167 71,240,303 14,558,313 91,261 3,487,748 8,314,199 3,358,817 1,717,797 31,528,135 92,145 31,620,280 $ 102,860,583	%
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-non-current 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	6(18) 6(19) 6(20) 6(21) 6(5) 6(22) 6(23) 6(24) 6(46) 6(25) 6(27) 6(27) 6(27)(28)					1 6 7 5 1 1 1 20 - 19 - 1 1 5 1 - -
						69
						- - - -
						-
						69
						14 - 4 8 3 2
						31
						-
						31
						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

THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except earnings per share amounts) (Reviewed, not audited)

Items

Three months ended March 31 2023 2022 Notes AMOUNT % AMOUNT % 6(29) $ 693,980 37 $ 901,999 103 6(30) 14,473 1 20,855 2 7,504 - 10,144 1 6(31) 811,568 44 ( 643,311) ( 73 ) 20,437 1 19,820 2 6(32) 281,693 15 268,162 31 41,865 2 38,679 4 6(33) 890,256 48 ( 715,360) ( 81 ) 6(34) ( 144,678 ) ( 8) ( 40,604) ( 5 ) 6(35) ( 906,985 ) ( 49) 532,530 61 ( 151,394 ) ( 8) 296,493 34 2,396 - 4,278 - 6(36) ( 85,724 ) ( 4) 481,785 55 6(37) 237,616 13 ( 431,082) ( 49 ) 6(38) ( 2,879 ) - 3,359 - 6(39) 156,278 8 131,451 15 1,866,406 100 879,198 100 6(40) ( 114,522 ) ( 6) ( 152,173) ( 17 ) ( 3,053 ) - ( 3,155) - 6(41) ( 156,588 ) ( 8) ( 15,782) ( 2 ) ( 22,886 ) ( 1) ( 25,571) ( 3 ) ( 27,360 ) ( 2) ( 35,550) ( 4 ) - - ( 2) - 6(42) ( 682,837 ) ( 37) ( 629,070) ( 72 ) 6(43) ( 77,233 ) ( 4) ( 62,063) ( 7 ) 6(44) ( 409,200 ) ( 22) ( 463,041) ( 53 ) ( 1,493,679 ) ( 80) ( 1,386,407) ( 158 )

400000 Revenues 401000 Brokerage handling fee revenue 404000 Revenues from underwriting business 406000 Net gain (loss )on wealth management 410000 Net gain (loss) on sale of operating securities 421100 Revenue from providing agency service for stock affairs 421200 Interest income 421300 Dividend income 421500 Net valuation gain (loss) on operating securities at fair value through profit or loss 421600 Net gain (loss) on covering of borrowed securities and bonds with resale agreements-short sales 421610 Net valuation gain (loss) on borrowed securities and bonds with resale agreements-short sales at fair value through profit or loss 422000 Net gain (loss) on issuance of ETNs 422100 Administrative and handling fee revenues from issuance of ETNs 422200 Net gain (loss) from issuance of call (put) warrants 424400 Net gain (loss) from derivatives 425300 Expected credit impairment loss and reversal of impairment gain 428000 Other operating income Total revenues 500000 Expenditures and expenses 501000/ 502000/ 503000 Handling charges 507000 ETNs administrative expenses 521200 Financial costs 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

THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except earnings per share amounts) (Reviewed, not audited)

Items	Three 2023 Notes AMOUNT $ 372,727 6(11) 41,112 6(45) 158,759 572,598 6(46) ( 113,155 ) ( $ 459,443 $ 108,298 2,413 ( 4,856 ) 69,654 $ 175,509 $ 634,952 $ 457,532 $ 1,911 $ 632,222 $ 2,730 6(47) $ $	Three	months ended March 31	months ended March 31
		2023		2022
Operating profit (loss) 601000 Share of the profit or loss of associates and joint ventures accounted for under the equity method 602000 Other gains and losses 902001Profit (loss) before tax 701000 Income tax (expense) benefit 902005Net income (loss) Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 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 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 (loss) Income (loss) attributable to: 913100 Parent company 913200 Non-controlling interests Current comprehensive income (loss) 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 THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

For the three months ended March 31, 2022 Balance at January 1, 2022 Net income (loss) for the three months ended March 31, 2022 Other comprehensive income for the three months ended March 31, 2022 Total comprehensive income (loss) Balance at March 31, 2022 For the three months ended March 31, 2023 Balance at January 1, 2023 Net income for the three months ended March 31, 2023 Other comprehensive income (loss) for the three months ended March 31, 2023 Total comprehensive income (loss) Balance at March 31, 2023							Equity attributable	Equity attributable	to owners of the parent	to owners of the parent	to owners of the parent	to owners of the parent			Non-controlling interests	Non-controlling interests		Total equity
		Common stock		Capital reserve			R	etainedEarnings		Otherequityinterest				Total
						Legal reserve		Special reserve	Unappropriated earnings	Exchange differences on translation of foreign financial statements		Unrealised gains (losses) on financial assets measured at fair value through other comprehensive income
		$ 14,558,313 - - - $ 14,558,313 $ 14,558,313 - - - $ 14,558,313		$ 91,261 - - - $ 91,261 $ 91,261 - - - $ 91,261		$ 3,487,748 - - - $ 3,487,748 $ 3,877,849 - - - $ 3,877,849		$ 8,314,199 - - - $ 8,314,199 $ 9,090,989 - - - $ 9,090,989	$ 3,922,562 ( 563,745 ) - ( 563,745 ) $ 3,358,817 $ 816,933 457,532 - 457,532 $ 1,274,465	($ 65,809 ) - 124,410 124,410 $ 58,601 $ 103,010 - ( 4,856 ) ( 4,856 ) $ 98,154		$ 1,375,310 - 283,886 283,886 $ 1,659,196 $ 1,180,737 - 179,546 179,546 $ 1,360,283	$ 31,683,584 ( 563,745 ) 408,296 ( 155,449 ) $ 31,528,135 $ 29,719,092 457,532 174,690 632,222 $ 30,351,314			$ 83,046 1,273 7,826 9,099 $ 92,145 $ 87,396 1,911 819 2,730 $ 90,126	$ 31,766,630 ( 562,472 ) 416,122 ( 146,350 ) $ 31,620,280 $ 29,806,488 459,443 175,509 634,952 $ 30,441,440

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

THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

CASH FLOWS FROM OPERATING ACTIVITIES Profit (loss) before tax Adjustments Income and expenses having no effect on cash flows Net valuation (gain) loss on operating securities at fair value through profit or loss Net valuation (gain) loss on borrowed securities and bonds with resale agreements-short sales at fair value through profit or loss Expected credit impairment loss and reversal of impairment gain Depreciation Amortization Financial expense Interest income (including financial income) Dividend income Share of the profit of associates and joint ventures accounted for under the equity method (Gain) loss on disposal of property and equipment (Gain) loss on valuation of non-operating financial instruments Changes in assets/liabilities relating to operating activities Net changes in assets relating to operating activities Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income 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 Net changes in liabilities relating to operating activities Financial liabilities at fair value through profit or loss Bonds sold under repurchase agreements 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

Three months ended March 31 Notes 2023 2022 $ 572,598 ( $ 499,297 ) 6(2)(33) ( 890,256 ) 715,360 6(35) 906,985 ( 532,530 ) 6(38) 2,926 ( 3,008 ) 6(43) 59,588 49,667 6(43) 17,645 12,396 6(41) 156,588 15,782 6(32)(45) ( 403,100 ) ( 292,891 ) ( 42,100 ) ( 38,679 ) 6(11) ( 41,112 ) 48,271 6(12) 74 3 6(45) ( 2,300 ) 6,809 ( 9,494,027 ) 9,286,057 ( 589,841 ) - - 27,401 ( 1,423,338 ) 1,484,854 91,466 22,091 70,229 18,410 ( 1,494,307 ) ( 643,141 ) 270,842 1,137,499 962,663 194,422 1,106,340 ( 850,504 ) 287 546 ( 7,203,320 ) ( 2,210,420 ) ( 110 ) 195 ( 15,425 ) ( 11,641 ) 6,556 5,842 268,362 6,096,809 ( 617,025 ) 31,953 2,712,141 ( 4,725,728 ) ( 1,179,342 ) ( 580,424 ) ( 1,097,786 ) ( 745,156 ) 16,009 ( 508,280 ) ( 317,113 ) ( 1,167,356 ) 44,456 65,467 7,464,148 1,287,696 489 489 ( 192,089 ) ( 5,099,018 ) ( 227,356 ) ( 1,039,583 ) 1,003,400 453,396 5,591 10,377

(Continued)

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PRESIDENT SECURITIES CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

(Reviewed, not audited)

Cash (outflow) inflow generated from operations Interest received Dividends received Income tax paid Net cash flows (used in) from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property and equipment Acquisition of intangible assets (Increase) decrease in other non-current assets (Increase) decrease in prepayment for equipment Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term loans Increase (decrease) in commercial papers payable Increase (decrease) in other non-current liabilities Payments of lease liabilities Interest paid Net cash flows from (used in) financing activities Effect of exchange rate changes on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period

Three months ended March 31 Notes 2023 2022 ( $ 9,490,564 ) $ 2,024,136 373,117 276,553 31,885 34,346 ( 8,286 ) ( 3,810 ) ( 9,093,848 ) 2,331,225 6(12) ( 8,168 ) ( 23,883 ) 6(16) ( 5,752 ) ( 11,550 ) 22,307 35,292 ( 18,798 ) ( 44,342 ) ( 10,411 ) ( 44,483 ) 1,676,100 561,575 7,870,000 ( 2,750,000 ) ( 99 ) ( 7,948 ) ( 24,004 ) ( 25,234 ) ( 144,770 ) ( 22,122 ) 9,377,227 ( 2,243,729 ) ( 1,716 ) 38,492 271,252 81,505 6,194,573 5,757,012 $ 6,465,825 $ 5,838,517

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 THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated) (Reviewed, not audited)

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 March 31, 2023, 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 1,699 and 1,713 as of March 31, 2023 and 2022, 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 May 4, 2023.

• APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

• 1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments that came into effect as endorsed by FSC and became effective from 2023 are as follows:

and became effective from 2023 are as follows:
New Standards,Interpretations and Amendments	Effective Date by International Accounting Standards Board
Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023 January 1, 2023

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New Standards,Interpretations and Amendments	Effective Date by International Accounting Standards Board
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising from a single transaction’	January 1, 2023

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 that came into effect as endorsed by

the FSC but not yet adopted by the Group

None.

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:

==> picture [454 x 49] intentionally omitted <==

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Effective Date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
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New Standards, Interpretations and Amendments	Effective Date by International Accounting Standards Board
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’	January 1, 2024
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, 'Insurance contracts'	January 1, 2023
Amendment to IFRS 17, 'Initial application of IFRS 17 and IFRS 9	January 1, 2023
- comparative information'
Amendments to IAS 1, ‘ Classification of liabilities as current or	January 1, 2024
non-current’
Amendments to IAS 1, ‘Non-current liabilities with covenants’	January 1, 2024

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, and Regulations Governing the Preparation of Financial Reports by Futures Commission Merchants, and International Accounting Standards No. 34, ‘Interim financial reporting’ that came into effect as endorsed by the FSC.

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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 International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the 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 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

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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 Insurance Agent Consultation of investment management and venture capital; other unprohibited or unrestricted businesses beyond the permit Wealth management Nominee Service		Ownership (%)
			March 31,2023 96.69% 100% 100% 100% 100% 100% 100%	December 31,2022 96.69% 100% 100% 100% 100% 100% 100%	March 31,2022
The Company 〃 〃 〃 〃 〃 〃	President Futures Corp. (President Futures) President Capital Management Corp. (President Capital Management) President Securities (HK) Ltd.(President Securities (HK)) (Note 1) 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)				96.69% 100% 100% 100% 100% 100% 100%

Note 1: The dissolution and liquidation of President Securities (HK), President Wealth Management (HK), and President Securities (Nominee) was approved by the Board of Directors in March 2022.

Note 2: Except for President Futures’ financial statements for the three months ended

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March 31, 2023 and 2022 that were reviewed by independent auditors, the above-listed subsidiaries included in the consolidated financial statements for the three months ended March 31, 2023 and 2022, were not reviewed by independent auditors.

• 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;

  • (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. 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

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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 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

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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.

• B. On a regular way purchase or sale basis, available-for-sale financial assets 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

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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.

• 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-associates

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-associates

• 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

~18~

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.

• 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:

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Useful lives Buildings 5~50 years Equipment 3~10 years Leasehold improvements 3~5 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.

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

~20~

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.

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

~21~

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.

• 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

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Plan are portable upon termination of employment. Net defined benefit asset can only be recognized when there is a cash refund or elimination in the future accrued pension liabilities.

• (B) Defined benefit plans

  • a. In a defined benefit plan, the pension paid is determined based on the amount that an employee shall receive upon retirement, which could vary with age, work seniority and salary compensations. The 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.

  • c. Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. And, the related information is disclosed accordingly.

• 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.

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• C. Gains (losses) on futures contracts: The margin of futures transaction is recognized as cost. Costs and expenses are recognized as incurred.

• D. Operating expenses: operating expenses refer to required expenses invested in the 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.

• 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 balance sheet 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

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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.

• E. The interim period income tax expense is recognised based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.

• F. If a change in tax rate is enacted or substantively enacted in an interim period, the Group recognises the effect of the change immediately in the interim period in which the change occurs. The effect of the change on items recognised outside profit or loss is recognised in other comprehensive income or equity while the effect of the change on items recognised in profit or loss is recognised in profit or loss.

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 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.

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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:

• 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.

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• (B)The selection of appropriate models and assumptions for measuring expected credit losses.

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

• C. Impairment assessment on investment accounted for under the equity method When there are impairment indicators that show the investments accounted for under equity method are impaired and the carrying amount can no longer be recovered, the 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.

6. DETAILS OF SIGNIFICANT ACCOUNTS

1) Cash and cash equivalents

Cash and cash equivalents
Petty cash Checking deposits Current deposits: Deposits denominated in NTD Deposits denominated in foreign currencies Time deposits Total	March 31,2023 1,650 $ 511,055 608,497 1,937,466 3,407,157 6,465,825 $	December 31, 2022 150 $ 533,970 565,586 1,432,460 3,662,407 6,194,573 $	March 31,2022
			1,668 $ 981,994 661,121 1,781,857 2,411,877
			5,838,517 $

As of March 31, 2023,December 31, 2022 and March 31, 2022, the annual interest rates of time deposits, including foreign time deposits were 0.330%~5.014%, 0.335%~5.150%, and 0.050%~2.700%, respectively.

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2) Financial assets at fair value through profit or loss

		March 31,2023		December 31,2022		March 31,2022
Current items:
Financial assets mandatorily measured at fair
value through profit or loss:
Security lending
Security lending	$	252,895	$	208	$	-
Adjustment of security lending	(	222)	(	45)		-
Total		252,673		163		-
Open-ended funds, money market instruments
and securities investment by brokers
Open-ended mutual funds beneficiary		153,622		156,336		94,488
Exchange-traded funds		63,035		36,450		19,535
Subtotal		216,657		192,786		114,023
Adjustment of open-ended funds ,money
market instruments and securities investment
by brokers		2,052	(	2,653)		6,662
Total		218,709		190,133		120,685
Trading securities-dealer
Listed (TSE and OTC) stocks		5,573,987		2,701,353		2,917,870
Government bonds		899,802		850,036		999,498
Corporate bonds		1,712,237		1,575,767		2,194,032
Convertible corporate bonds		524,767		487,753		444,934
Emerging stocks		174,080		156,736		150,199
Overseas stocks		8,136,461		3,838,545		4,559,537
Exchange-traded funds		2,599,429		2,375,510		1,451,851
Unlisted stocks		138,121		138,121		78,406
Subtotal		19,758,884		12,123,821		12,796,327
Adjustment of trading securities - dealer		282,420	(	107,376)	(	58,325)
Total		20,041,304		12,016,445		12,738,002
Trading securities-underwriter
Listed (TSE and OTC) stocks		5,253		2,122		109,520
Convertible corporate bonds		572,539		728,535		532,957
Subtotal		577,792		730,657		642,477
Adjustment of trading securities - underwriter		114,764		58,520		95,785
Total Trading securities-hedging		692,556		789,177		738,262
Listed (TSE and OTC) stocks		3,745,898		2,758,422		5,039,442
Convertible corporate bonds		3,852,933		3,371,436		53,929
Warrants		13,820		24,283		36,194
Overseas stocks		174,402		190,309		220,297
Exchange traded funds		10,515		7,320		32,983
Subtotal		7,797,568		6,351,770		5,382,845
Adjustment of trading securities - hedging		145,378	(	287,674)	(	114,452)
Total		7,942,946		6,064,096		5,268,393
Options bought-futures		17,900		11,935		11,888
Futures Margin-Own Funds		5,588,335		5,318,882		4,663,337
Derivative financial instrument assets-OTC		4,365		5,037		13,667
Total	$	34,758,788	$	24,395,868	$	23,554,234

~28~

Non-current items: Financial assets mandatorily measured at fair value through profit or loss: Trading securities - dealer - government bonds Unlisted stocks Others Subtotal Adjustment of trading securities Total	March 31,2023 49,792 $ 2,609 50,000 102,401 20,637 123,038 $	December 31,2022 49,779 $ 2,609 35,000 87,388 11,895 99,283 $	March 31,2022
			49,979 $ 2,609 35,000
			87,588 9,699
			97,287 $

• a. For the three months ended March 31, 2023 and 2022, net realized and unrealized gains (losses) on financial assets and liabilities at fair value through profit or loss amounted to $653,055 and ($515,271), 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

others as collateral are provided in Note 8. c. Information relating to credit risk is provided in Note 12(2). Financial assets at fair value through other comprehensive income
March 31,2023 December 31,2022 Current items: Equity instruments Trading securities-dealer Listed (TSE and OTC) stocks 189,812 $ 189,812 $ Adjustment of trading securities - dealer 165,699 109,338 Subtotal 355,511 299,150 Debt instruments Trading securities-dealer Overseas bonds 2,863,145 2,317,088 Adjustment of trading securities - dealer 20,133) ( 118,456) ( Subtotal 2,843,012 2,198,632 Total 3,198,523 $ 2,497,782 $ March 31,2023 December 31,2022 Non-current items: Equity instruments Unlisted stocks 37,565 $ 37,565 $ Adjustment of trading securities 1,194,278 1,142,342 Total 1,231,843 $ 1,179,907 $	March 31, 2022
	189,812 $ 208,387
	398,199 - -
	-
	398,199 $
	March 31,2022
	37,565 $ 1,380,828
	1,418,393 $

• a. The Group has elected to classify stocks investments 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 $1,587,354, $1,479,057 and $1,816,592 as of March 31, 2023, December 31, 2022 and March 31, 2022, respectively.

~29~

• b. 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:

==> picture [424 x 203] intentionally omitted <==

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

Equity instruments at fair value through Three months ended Three months ended
other comprehensive income March 31, 2023 March 31, 2022
Fair value change recognised in other
comprehensive income - parent company $ 107,479 $ 260,804
Fair value change recognised in other
comprehensive income - non-controlling interest 819 7,826
Total $ 108,298 $ 268,630
Dividend income recognised in profit or loss
Held at end of period $ 1,834 $ 1,834
Debt instruments at fair value through Three months ended Three months ended
other comprehensive income March 31, 2023 March 31, 2022
Fair value change recognised in other
comprehensive income $ 69,654 $ -
Interest income recognised in profit or loss $ 22,119 $ -
----- End of picture text -----

• c. Details of the Group’s financial assets at fair value through other comprehensive income pledged to others as collateral are provided in Note 8.

• d. 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%.

5) Customer margin account

Customer margin account
Bank deposit Futures clearing house Other futures commission merchant Securities Total	March 31,2023 13,846,015 $ 4,101,411 2,564,736 251 20,512,413 $	December 31,2022 14,648,460 $ 3,713,648 2,420,946 201 20,783,255 $	March 31,2022
			14,375,771 $ 3,704,642 2,117,138 482
			20,198,033 $

The difference between the customer margin deposits accounts and futures traders’ equity as of March 31, 2023, December 31, 2022 and March 31, 2022 were outlined below:

		March 31,2023		December 31,2022	December 31,2022		March 31,2022
Customer margin deposits accounts	$	20,512,413	$		20,783,255	$	20,198,033
Futures trading margins receivable		-			2		-
Add: Early customer margin deposits		15,361			9,962		11,269
Less: Service fee income pending for transfer	(	44,790)	(		11,628)	(	24,096)
Futures exchange tax pending for transfer	(	1,042)	(		872)	(	1,201)
Net interest income pending for transfer	(	20,536)	(		6,920)	(	1,917)
Temporary receipts	(	14,933)	(		10,213)	(	21,270)
Futures traders' equity	$	20,446,473	$		20,763,586	$	20,160,818

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6) Accounts receivable

Accounts receivable
			March 31,2023		December 31,2022				March 31,2022
Accounts receivable - related parties		$	1,305		$	1,195		$	952
Accounts receivable - non related parties
Settlement price receivable-brokers		$	10,686,913		$	8,317,064		$	13,269,528
Settlement price receivable-dealer			453,865			87,067			592,233
Settlement price receivable-foreign bonds			4,295,935			757,711			2,591,683
Spot exchange receivable, foreign currencies			158,375			47,624			17,895
Interest receivable			337,913			315,061			353,612
Settlement price			1,328,088			438,735			1,696,763
Others			228,384			178,348			457,302
Subtotal			17,489,473			10,141,610			18,979,016
Less: Allowance for uncollectable accounts	(		559)	(		659)	(		878)
Total	$		17,488,914	$		10,140,951	$		18,978,138

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

follows:
Accounts receivable Accounts receivable - related parties Accounts receivable - non related parties Total Accounts receivable Accounts receivable - related parties Accounts receivable - non related parties Total Accounts receivable Accounts receivable - related parties Accounts receivable - non related parties Total						March 31,2023						Total
		Up to 30 days		31 to 90 days		91 to 180 days		181 days to 12 months		More than 12 months
		1,305 $ 17,163,424 17,164,729 $		- $ 43,263 43,263 $		- $ - $ 89,745 107,727 89,745 $ 107,727 $ December 31, 2022				- $ 85,314 85,314 $		1,305 $ 17,489,473 17,490,778 $ Total
		Up to 30 days		31 to 90 days		91 to 180 days 181 days to 12 months - $ - $ 52,096 95,860 52,096 $ 95,860 $ March 31,2022				More than 12 months
		1,195 $ 9,837,104 9,838,299 $		- $ 46,581 46,581 $						- $ 109,969 109,969 $		1,195 $ 10,141,610 10,142,805 $ Total
		Up to 30 days		31 to 90 days		91 to 180 days		181 days to 12 months		More than 12 months
		952 $ 18,635,853 18,636,805 $		- $ 38,139 38,139 $		- $ 69,571 69,571 $		- $ 156,794 156,794 $		- $ 78,659 78,659 $		952 $ 18,979,016 18,979,968 $

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

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

~31~

7) Other receivables

Other receivables
			March 31,2023		December	31,2022			March 31,2022
Interest receivable		$	35,646		$	31,085		$	6,349
Others			22,822			29,378			21,341
Subtotal			58,468			60,463			27,690
Less: Allowance for uncollectible accounts	(		325)	(		355)	(		845)
Total		$	58,143		$	60,108		$	26,845

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

8) Other current assets

Other current assets
Pending settlements Pledged time deposits Deposits-in for foreign currency securities Underwriting share proceeds collected on behalf of customers Amounts held for each customer in the account Others Total	March 31,2023 December 31, 2022 343,125 $ 196,758 $ 400,000 400,000 612,174 808,290 15 249,404 310,382 265,925 16,903 30,584 1,682,599 $ 1,950,961 $	March 31, 2022
		937,267 $ 524,670 1,110,936 111,821 163,463 17,080
		2,865,237 $

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 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:

liabilities are analysed below:
	March 31,2023	Carrying amount of related financial liabilities
Financial assets category Financial assets measured at fair value through profit or loss Repurchase agreement Financial assets measured at fair value through other comprehensive income Repurchase agreement	Carrying amount of transferred financial assets
	6,976,156 $ 2,843,012	6,879,239 $ 2,798,326

~32~

	December 31,2022	December 31,2022
		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	$	4,814,535	$	4,738,787
Financial assets measured at fair value
through other comprehensive income
Repurchase agreement		2,198,632		2,226,637
	March 31,2022
		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	$	4,946,841	$	4,917,312

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:

~33~

(1) Financial assets

nancial assets
			March 31,2023
Derivative financial instruments Derivative financial instruments Description Description		Gross amounts of recognised financial assets	- $ 4,351 $ Gross amounts of recognised financial liabilities set off in the balance sheet Net amounts of financial assets presented in the balance sheet December 31,2022 Gross amounts of recognised financial liabilities set off in the balance sheet Net amounts of financial assets presented in the balance sheet				Financial instruments Cash collateral received 4,351 $ - $ Financial instruments Cash collateral received 5,037 $ - $ Not set off in the balance sheet Not set off in the balance sheet		Net amount
							Financial instruments
		4,351 $ Gross amounts of recognised financial assets							- $
									Net amount
							Financial instruments
		5,037 $		- $ 5,037 $ March 31, 2022			5,037 $		- $
Derivative financial instruments Description		Gross amounts of recognised financial assets	Gross amounts of recognised financial liabilities set off in the balance sheet		Net amounts of financial assets presented in the balance sheet		Financial instruments Cash collateral received 6,123 $ - $ Not set off in the balance sheet		Net amount
							Financial instruments
		13,334 $	- $		13,334 $		6,123 $		7,211 $

~34~

(2) Financial liabilities

nancial liabilities
				March 31,2023
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 4,350 $ - $ 7,042,930 - 7,047,280 $ - $ Not set off in the balance sheet		Net amount
								Financial instruments
		6,605 $ 7,042,930 7,049,535 $		- $ 6,605 $ - 7,042,930 - $ 7,049,535 $ December 31,2022				4,350 $ 7,042,930 7,047,280 $		2,255 $ -
										2,255 $
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 5,037 $ - $ 4,718,843 - 4,723,880 $ - $ Not set off in the balance sheet		Net amount
								Financial instruments
		8,320 $ 4,718,843 4,727,163 $		- $ 8,320 $ - 4,718,843 - $ 4,727,163 $ March 31,2022				5,037 $ 4,718,843 4,723,880 $		3,283 $ -
										3,283 $
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 6,123 $ - $ 2,138,312 - 2,144,435 $ - $ Not set off in the balance sheet		Net amount
								Financial instruments
		6,123 $ 2,138,312 2,144,435 $		- $ - - $		6,123 $ 2,138,312 2,144,435 $		6,123 $ 2,138,312 2,144,435 $		- $ -
										- $

~35~

11) Investments accounted for under the equity method

nvestments accounted for under the equity method
March 31,2023 Uni-President Asset Management Corp. 794,598 $ Jin Yuan President Securities Co., Ltd. 2,775,451 3,570,049 $	December 31,2022 748,080 $ 2,764,018 3,512,098 $	March 31,2022
		836,668 $ 2,348,057
		3,184,725 $

• 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 three months ended March 31, 2023 and 2022 were $41,112 and ($48,271), respectively.

• B. The Group holds 42.49% of the equity of Uni-President Asset Management Corp., making it the single largest shareholder of the company, while the other equity is mainly held by the other 17 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 company. 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		Nature of relationship Shareholdingratio	Methods of measurement
Uni-President Asset Management Corp. Jin Yuan President Securities Co., Ltd. (Note)	Taipei city Xiamen	March 31,2023	December 31,2022 March 31, 2022 42.49% 42.49% Associate 49% 49% Associate	Equity method Equity method
		42.49% 49%

• Note: The Company participated in the cash capital increase of Jin Yuan President Securities Co., Ltd. in proportion to its shareholdings in the third quarter of 2022.

• (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 Share in associate net assets Goodwill and others Carrying amount of the associate
		March 31, 2023(Note)	December 31, 2022
	964,475 $ 807,998 286,920) ( 38,229) ( 1,447,324 $ 615,076 $ 179,522 794,598 $		944,707 $ 784,976 334,677) ( 57,145) ( 1,337,861 $ 568,558 $ 179,522 748,080 $	1,120,569 $ 839,798 351,037) ( 63,014) ( 1,546,316 $ 657,146 $ 179,522 836,668 $

~36~

Balance sheet

Balance sheet
Current assets Non-current assets Current liabilities Non-current liabilities Total net assets Share in associate net assets Carrying amount of the associate	Jin Yuan President Securities Co.,Ltd.
	March 31,2023	December 31,2022	March 31,2022
	6,931,191 $ 277,263 1,480,101) ( 64,167) ( 5,664,186 $ 2,775,451 $ 2,775,451 $	6,937,077 $ 233,398 1,491,521) ( 38,100) ( 5,640,854 $ 2,764,018 $ 2,764,018 $	8,086,842 $ 295,933 3,531,134) ( 59,687) ( 4,791,954 $ 2,348,057 $ 2,348,057 $

Statement of comprehensive income

Statement of comprehensive income
Revenue Profit for the period from continuing operations Other comprehensive income (loss) - net of tax Total comprehensive income (loss) Revenue Loss for the period from continuing operations Total comprehensive income (loss)		Three months ended March 31,2023(Note) Three months ended March 31,2022(Note) 317,336 $ 340,430 $ 103,784 $ 124,237 $ 5,679 54,314 109,463 $ 178,551 $ Uni-President Asset Management Corp. Jin Yuan President Securities Co., Ltd.
		317,336 $ 103,784 $ 5,679 109,463 $ Jin Yuan President
		Three months ended March 31, 2023	Three months ended March 31,2022
	128,139 $ 16,727) ($ 16,727) ($		43,397) ($ 206,263) ($ 206,263) ($

Note: The financial statements for the three months ended March 31, 2023 and 2022, that were not reviewed by independent auditors, were prepared by the company. 12) Property and equipment

Three months ended March 31, 2023

January1		Land	Buildings	Equipment	Leasehold improvements	Total
Cost Accumulated depreciation and impairment Total January 1 Additions Disposal Reclassifications Depreciation March 31		1,680,129 $ - 1,680,129 $ 1,680,129 $ - - - - 1,680,129 $	1,140,158 $ 520,097) ( 620,061 $ 620,061 $ - - - 10,299) ( 609,762 $	500,641 $ 206,465) ( 294,176 $ 294,176 $ 8,168 74) ( 1) ( 25,196) ( 277,073 $	47,035 $ 31,759) ( 15,276 $ 15,276 $ - - - 1,272) ( 14,004 $	3,367,963 $ 758,321) ( 2,609,642 $ 2,609,642 $ 8,168 74) ( 1) ( 36,767) ( 2,580,968 $

~37~

Three months ended March 31, 2023

			Three months ended March 31,2023	Three months ended March 31,2023	ch 31,2023
March 31		Land	Buildings Equipment Leasehold improvements 1,140,158 $ 488,856 $ 32,056 $ 530,396) ( 211,783) ( 18,052) ( 609,762 $ 277,073 $ 14,004 $ Buildings Equipment Leasehold improvements 1,110,116 $ 313,717 $ 35,121 $ 488,075) ( 177,406) ( 26,474) ( 622,041 $ 136,311 $ 8,647 $ 622,041 $ 136,311 $ 8,647 $ 1,613 22,270 - - 3) ( - 15,220 7,562 - 9,395) ( 15,067) ( 977) ( 629,479 $ 151,073 $ 7,670 $ Buildings Equipment Leasehold improvements 1,126,949 $ 340,625 $ 35,313 $ 497,470) ( 189,552) ( 27,643) ( 629,479 $ 151,073 $ 7,670 $ Three months ended March 31,2022		Leasehold improvements	Total
Cost Accumulated depreciation and impairment Total January1		1,680,129 $ - 1,680,129 $ Land 1,680,129 $ - 1,680,129 $ 1,680,129 $ - - - - 1,680,129 $ Land				3,341,199 $ 760,231) ( 2,580,968 $ Total 3,139,083 $ 691,955) ( 2,447,128 $ 2,447,128 $ 23,883 3) ( 22,782 25,439) ( 2,468,351 $ Total
Cost Accumulated depreciation and impairment Total January 1 Additions Disposal Reclassifications Depreciation March 31 March 31			1,110,116 $ 488,075) ( 622,041 $ 622,041 $ 1,613 - 15,220 9,395) ( 629,479 $ Buildings	313,717 $ 177,406) ( 136,311 $ 136,311 $ 22,270 3) ( 7,562 15,067) ( 151,073 $ Equipment	35,121 $ 26,474) ( 8,647 $ 8,647 $ - - - 977) ( 7,670 $ Leasehold improvements
Cost Accumulated depreciation and impairment Total		1,680,129 $ - 1,680,129 $	1,126,949 $ 497,470) ( 629,479 $	340,625 $ 189,552) ( 151,073 $	35,313 $ 27,643) ( 7,670 $	3,183,016 $ 714,665) ( 2,468,351 $

• A. No interest was capitalized for property and equipment for the three months ended March 31, 2023 and 2022.

• B. The information on property and equipment pledged or restricted as of March 31, 2023, December 31, 2022 and March 31, 2022 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.

~38~

• 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		March 31,2023		December 31,2022	March 31,2022
		CarryingAmount		CarryingAmount	CarryingAmount
		126,621 $ 16,333 6,975 149,929 $		141,233 $ 16,576 7,748 165,557 $ Three months ended March 31, 2023	174,895 $ 18,687 8,794 202,376 $ Three months ended March 31,2022 Depreciation charge
				Depreciation charge
				19,926 $ 1,671 699 22,296 $	21,374 $ 1,656 673 23,703 $

• C. For the three months ended March 31, 2023 and 2022, the additions to right-of-use assets amounted to $6,796 and $23,633, respectively.

• D. The information on income and expense accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on variable lease payment	Three months ended March 31,2023 267 $ 1,267 16	Three months ended March 31,2022
		331 $ 284 14

• E. For the three months ended March 31, 2023 and 2022, the Group’s total cash outflow for leases amounted to $25,554 and $25,863, respectively.

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 three months ended March 31, 2023 and 2022, the Group recognized rent income in the amounts of $4,586 and $4,438, 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:

2022 2023 2024 Total		March 31,2023		December 31,2022	March 31,2022
		- $ 13,757 4,303 18,060 $		- $ 18,299 4,850 23,149 $	13,700 $ 17,752 4,303 35,755 $

~39~

15) Investment property

==> picture [488 x 399] intentionally omitted <==

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

Three months ended March 31, 2023
January 1 Land Buildings Total
Cost $ 198,099 $ 107,076 $ 305,175
Accumulated depreciation and impairment - ( 38,873) ( 38,873)
Total $ 198,099 $ 68,203 $ 266,302
January 1 $ 198,099 $ 68,203 $ 266,302
Depreciation - ( 525) ( 525)
March 31 $ 198,099 $ 67,678 $ 265,777
March 31 Land Buildings Total
Cost $ 198,099 $ 107,076 $ 305,175
Accumulated depreciation and impairment - ( 39,398) ( 39,398)
Total $ 198,099 $ 67,678 $ 265,777
Three months ended March 31, 2022
January 1 Land Buildings Total
Cost $ 198,099 $ 107,076 $ 305,175
Accumulated depreciation and impairment - ( 36,773) ( 36,773)
Total $ 198,099 $ 70,303 $ 268,402
January 1 $ 198,099 $ 70,303 $ 268,402
Depreciation - ( 525) ( 525)
March 31 $ 198,099 $ 69,778 $ 267,877
March 31 Land Buildings Total
Cost $ 198,099 $ 107,076 $ 305,175
Accumulated depreciation and impairment - ( 37,298) ( 37,298)
Total $ 198,099 $ 69,778 $ 267,877
----- End of picture text -----

A. For the three months ended March 31, 2023 and 2022, rental income from the lease of the investment property were $4,006 and $4,279,respectively, and direct operating expenses arising from the investment property were $922 and $918, respectively.

• B. Details of fair value of investment property are provided in Note 12(5).

~40~

16) Intangible assets

) Intangible assets
January1	Three months ended March 31,2023
	Computer software			Goodwill
Cost Accumulated amortization and impairment Total January 1 Additions Reclassifications Amortization March 31 March 31	362,033 $ 193,242) ( 168,791 $ 168,791 $ 5,752 14,997 17,603) ( 171,937 $ Computer software			42,004 $ - 42,004 $ 42,004 $ - - - 42,004 $ Goodwill
Cost Accumulated amortization and impairment Total January1
		Computer sofware		Goodwill	Customer relationships and others Total 89,929 $ 405,273 $ 54,199) ( 209,805) ( 35,730 $ 195,468 $ 35,730 $ 195,468 $ - 11,550 - 8,490 5) ( 12,274) ( 35,725 $ 203,234 $ Customer relationships and others Total 89,929 $ 424,629 $ 54,204) ( 221,395) ( 35,725 $ 203,234 $
Cost Accumulated amortization and impairment Total January 1 Additions Reclassifications Amortization March 31 March 31	273,340 $ 155,606) ( 117,734 $ 117,734 $ 11,550 8,490 12,269) ( 125,505 $ Computer software			42,004 $ - 42,004 $ 42,004 $ - - - 42,004 $ Goodwill
Cost Accumulated amortization and impairment Total	292,696 $ 167,191) ( 125,505 $			42,004 $ - 42,004 $

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• A. No interest was capitalized for intangible assets for the three months ended March 31, 2023 and 2022.

• 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:

follows:
	Brokerage Segment
	2022
Growth rate	0.00%
Discount rate	13.26%

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 non-current assets

		March 31,2023	December 31,2022	December 31,2022		March 31,2022
Operation guaranteed deposits	$	655,000	$	655,000	$	655,000
Clearing and settlement fund		299,980		316,017		321,462
Refundable deposits		185,779		196,823		263,069
Deferred expenses		87		131		14,879
Prepaid pension expenses		81,975		77,193		1,042
Prepayment for equipment		65,619		62,098		107,893
Overdue receivables		7,452		8,224		11,487
Others		2,500		2,500		2,500
		1,298,392		1,317,986		1,377,332
Less: Allowance for
uncollectible accounts	(	7,452)	(	8,224)	(	11,487)
Total	$	1,290,940	$	1,309,762	$	1,365,845
Short-term loans
		March 31,2023	December 31,2022			March 31,2022
Unsecured loans	$	1,766,100	$	275,000	$	1,151,575
Secured loans		185,000		-		-
Total	$	1,951,100	$	275,000	$	1,151,575

18) Short-term loans

As of March 31, 2023, December 31, 2022 and March 31, 2022, the interest rates of short-term loans, including foreign interest rates were 1.650%~5.360%, 1.700%, and 0.820%~1.030%, respectively.

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19) Commercial papers payable

Commercial papers payable
		March31,2023	December31,2022			March31,2022
Face value	$	13,700,000	$	5,830,000	$	5,900,000
Less: discount on commercial
papers payable	(	9,237)	(	2,569)	(	1,399)
Total	$	13,690,763	$	5,827,431	$	5,898,601

As of March 31, 2023, December 31, 2022 and March 31, 2022, the interest rates of commercial papers, including foreign interest rates were 1.240%~1.430%, 1.250%~1.400%, and 0.350%~0.750%, respectively.

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

			March 31,2023		December 31,2022	December 31,2022			March 31,2022
Liabilities on sale of borrowed securities
- hedged		$	483,468		$	1,769,451		$	425,038
Valuation adjustment on liabilities on
sale of borrowed securities - hedged	(		193)	(		47,847)			682
Liabilities on sale of borrowed securities
- non-hedged			6,748,240			6,668,328			5,330,932
Valuation adjustment on liabilities on sale
of borrowed securities - non-hedged	(		52,733)	(		912,064)	(		112,106)
Subtotal			7,178,782			7,477,868			5,644,546
Issuance of call ( put ) warrants			8,527,311			8,388,823			17,912,245
Loss (Gain) on price fluctuation	(		371,140)	(		3,700,001)	(		6,622,513)
Market value (A)			8,156,171			4,688,822			11,289,732
Warrants redeemed	(		7,688,827)	(		6,461,030)	(		16,097,662)
Loss on price fluctuation			60,660			2,084,404			5,634,100
Market value (B)	(		7,628,167)	(		4,376,626)	(		10,463,562)
Warrants - net (A+B)			528,004			312,196			826,170
Options sold - TAIFEX			16,938			3,970			8,172
Outstanding Liability for Issuance of ETNs			887,099			971,128			962,578
Valuation adjustment on outstanding
Liability for Issuance of ETNs	(		47,009)	(		198,830)	(		21,400)
Subtotal			840,090			772,298			941,178
Derivative financial liabilities - OTC			883,466			590,988			251,959
Total	$		9,447,280	$		9,157,320	$		7,672,025

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 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.

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21) Bonds sold under repurchase agreements

Bonds sold under repurchase agreements
Government bonds Corporate bonds Bank debentures International bonds Foreign bonds Total	March 31,2023 976,097 $ 1,194,401 100,000 364,137 7,042,930 9,677,565 $	December 31,2022 919,875 $ 1,001,131 100,408 225,167 4,718,843 6,965,424 $	March 31,2022
			1,087,483 $ 500,331 300,000 891,186 2,138,312
			4,917,312 $

The above bonds sold under repurchase agreements as of March 31, 2023, December 31, 2022 and March 31, 2022 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 $9,762,353, $7,016,989 and $4,922,516, respectively, and the annual interest rates in every currency were shown as follows:

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Currency March 31, 2023 December 31, 2022 March 31, 2022
NTD 0.76%~1.30% 0.72%~1.22% 0.19%~0.47%
Foreign currencies (Note) 1.80%~5.15% 1.40%~4.80% -0.55%~2.40%
Note ： Foreign currencies include AUD, EUR, USD, GBP and RMB.
Accounts payable
March 31, 2023 December 31, 2022 March 31, 2022
Settlement accounts payable
- brokered trading $ 11,452,381 $ 7,705,822 $ 15,157,478
Settlement proceeds 542,782 1,252,785 737,617
Settlement accounts payable - operating 377,678 935,022 336,772
Settlement accounts payable - foreign bonds 5,596,352 703,424 2,933,757
Spot exchange payable, foreign currencies 158,274 47,566 17,895
Others 310,411 207,775 454,160
Total $ 18,437,878 $ 10,852,394 $ 19,637,679
----- End of picture text -----

22) Accounts payable

23) Other payables

Other financial liabilities-current Salary and bonus payable Employees' and directors' remuneration payable Others Total Equity-linked notes (ELN) - Options Principal guaranteed notes (PGN) - fixed income Total	March31,2023 699,840 $ 75,900 586,920 1,362,660 $ March 31,2023 2,000 $ 3,785,486 3,787,486 $	December31,2022 952,907 $ 49,470 579,830 1,582,207 $ December 31,2022 - $ 2,784,086 2,784,086 $	March31,2022
			762,156 $ 198,027 627,865
			1,588,048 $
			March 31,2022
			52,000 $ 5,384,535
			5,436,535 $

24) Other financial liabilities - current

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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

March 31, 2023 Guarantee deposits received 7,119 $ Net defined benefit obligation 710 Total 7,829 $	December 31,2022 7,056 $ 872 7,928 $	March 31,2022 8,028 $ 53,309 61,337 $

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 March 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) Under the defined benefit pension plan, the Group recognized the pension costs for the three months ended March 31, 2023 and 2022 in the statement of comprehensive income in the amounts of $55 and $913, respectively.

• (C) Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2024 amount to $24,041.

• 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

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the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The payment of pension benefits is based on the employees’ individual pension fund accounts and the cumulative profit in such accounts. The employees can choose to receive such pension benefits monthly or in lump sum. The pension costs under defined contribution pension plans of the Group for the three months ended March 31, 2023 and 2022 were $19,596 and $21,329, 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 $1,811 and $387, respectively, for the three months ended March 31, 2023 and 2022.

27) Equity

A. Common stock

• (A) As of March 31, 2023, the Company’s authorized capital was $15,000,000 with a par value of $10 (in dollars) per share. As of March 31, 2023, December 31, 2022 and March 31, 2022, the common stocks issued and the outstanding common stocks were all 1,455,831 thousand shares.

B. Capital reserve

March 31, 2023 December 31, 2022 March 31, 2022	Share premium		Treasury share transactions		Expired stock options		Difference between consideration and carrying amount of subsidiaries acquired or disposed		Total
	24,663 $ 24,663 $ 24,663 $		65,675 $ 65,675 $ 65,675 $		483 $ 483 $ 483 $		440 $ 440 $ 440 $		91,261 $ 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

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current year's earnings, after paying all taxes and offsetting prior years' operating losses, and plus the items other than the after-tax net profit for the period, that are included in the unappropriated earnings of the period, if any, shall be set aside as special reserve until the cumulative balance equals the total amount of paid-in capital. The special reserve shall be used exclusively to cover accumulated deficit or to increase capital and shall not be used for any other purpose. Such capitalization shall not be permitted unless the Company had already accumulated a special reserve of at least 25% of its paid-in capital stock and only quarter of such special reserve may be capitalized.

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

In accordance with Jing-Guan-Zheng-Chuan 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-Chuan 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.

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.

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• D. The earnings distribution for 2022 as resolved by the Board of Directors on March 8, 2023; the appropriation of 2021 earnings was resolved by the shareholders on June 23, 2022. Details are as follows:

Provision of legal reserve Provision of special reserve Reversal of special reserve (Note) Cash dividends Total		For the year ended December 31,2022	For the year ended December 31,2022	For the year ended December 31,2021	For the year ended December 31,2021
		Amount	Dividends per share (in dollars)	Amount	Dividends per share (in dollars)
		81,278 $ 162,557 - 567,774 811,609 $	0.39 $	390,101 $ 780,203 3,413) ( 2,751,521 3,918,412 $	1.89 $

• Note: Special reserve was provided for employees’ transition for financial technology development according to Jing-Guan-Zheng-Chuan Letter No. 1080321644 and can be reversed for employees’ transition.

29) Brokerage handling fee revenue

Revenues from brokered trading - TWSE Revenues from brokered trading - OTC Revenues from brokered trading - Futures Others Total	Three months ended March 31,2023 354,478 $ 138,533 169,887 31,082 693,980 $		Three months ended March 31,2022
			504,379 $ 151,555 213,649 32,416 901,999 $

30) Revenues from underwriting business

Revenues from underwriting business
Revenues from underwriting securities on a firm commitment basis Others Total		Three months ended March 31,2023		Three months ended March 31,2022
		5,806 $ 8,667 14,473 $		17,551 $ 3,304 20,855 $

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31) Net gain (loss) on sale of operating securities

		Three months ended	Three months ended		Three months ended	Three months ended
			March 31,2023			March 31,2022
Dealers:
-TAIEX	$		345,107	($		172,684)
-OTC			116,694	(		32,299)
-Overseas trading			67,394	(		235,686)
Subtotal			529,195	(		440,669)
Underwriters:
-TAIEX			2,699			17,706
-OTC			77,510			5,340
Subtotal			80,209			23,046
Hedging:
-TAIEX			129,812	(		157,223)
-OTC			75,074	(		70,141)
-Overseas trading	(		2,722)			1,676
Subtotal			202,164	(		225,688)
Total	$		811,568	($		643,311)

32) Interest income

Interest income
Interest income from margin loans Interest income from bonds Others Total		Three months ended March 31,2023 Three months ended March 31,2022 144,698 $ 228,799 $ 114,393 29,859 22,602 9,504 281,693 $ 268,162 $

33) Net valuation gain (loss) on operating securities at fair value through profit or loss

Gain (loss) on sale of securities - dealer Gain (loss) on sale of securities - underwriting Gain (loss) on sale of securities - hedging Total		Three months ended March 31,2023	Three months ended March 31,2022
		400,962 $ 56,245 433,049 890,256 $	270,698) ($ 25,685) ( 418,977) ( 715,360) ($

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34) Net gain (loss) on covering of borrowed securities and bonds with resale agreements - short sales

	Three months ended	Three months ended	Three months ended	Three months ended
		March 31,2023		March 31, 2022
Gain (loss) from securities borrowing
transactions	($	46,383)	($	59,397)
Gain (loss) from covering	(	98,295)		18,793
Total	($	144,678)	($	40,604)

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

fair value through profit or loss
36) Net gain (loss) from issuance of call (put) warrants 37) Net gain (loss) from derivatives Valuation gain (loss) from securities borrowing transactions Valuation gain (loss) from covering Total Net gain (loss) on changes in fair value of call (put) warrant liabilities and redemption Net gain (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 gain (loss) OTC option trading gain (loss) Net gain (loss) on foreign exchange derivatives Asset SWAP Others Total	Three months ended March 31, 2023		Three months ended March 31, 2022
	859,127) ($ 47,858) ( 906,985) ($ Three months ended March 31,2023		517,303 $ 15,227 532,530 $ Three months ended March 31,2022
	2,976 $ 11,245) ( 77,455) ( 85,724) ($ Three months ended March 31,2023	628,373 $ 67,150) ( 79,438) ( 481,785 $ Three months ended March 31,2022
	377,132 $ 5,316 84,268 14,708 222,441) ( 21,367) ( 237,616 $	434,254) ($ 55,103) ( 50,887 15,493 1,447) ( 6,658) ( 431,082) ($

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38) Expected credit impairment loss and reversal of impairment gain

Impairment (loss) and reversal of impairment gain Recovery of bad debts Total	Three months ended March31,2023	Three months ended March31,2022
	2,926) ($ 47 2,879) ($	3,008 $ 351 3,359 $

39) Other operating income

Income from securities lending Net currency exchange gain (loss) Handling fee revenues from funds Others Total	Three months ended March 31, 2023 93,221 $ 522 18,507 44,028 156,278 $	Three months ended March 31,2022
		95,469 $ 15,116) ( 15,399 35,699 131,451 $

40) Handling charges

Handling charges
Brokerage handling fee expense Dealer handling fee expense Refinancing processing fee expense Total	Three months ended March 31, 2023 84,260 $ 29,771 491 114,522 $	Three months ended March 31,2022
		110,634 $ 41,213 326 152,173 $

41) Financial costs

Financial costs
Interest expense from repurchase agreements Loans interest expense Other interest expense Total	Three months ended March 31,2023 80,993 $ 48,786 26,809 156,588 $	Three months ended March 31,2022
		4,729 $ 8,382 2,671 15,782 $

42) Employee benefits expense

Employee benefits expense
Salaries Labor and health insurance Pension Other employee benefits Total	Three months ended March 31,2023 581,193 $ 47,584 21,462 32,598 682,837 $	Three months ended March 31,2022
		528,027 $ 39,115 22,629 39,299 629,070 $

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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 three months ended March 31, 2023 and 2022, employees’ compensation was accrued at $11,525 and $0, respectively; directors’ remuneration was accrued at $11,525 and $0, respectively. The aforementioned amounts were recognized in salary expenses.

• C. For the three months ended March 31, 2022, 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 2022 as resolved by the Board of Directors was in agreement with the estimates in the 2022 financial statements.

• E. Information on the appropriation of the Company’s earnings as resolved by the Board of Directors would be posted in the “Market Observation Post System” on the Taiwan Stock Exchange official website.

43) Depreciation and amortization

website. Depreciation and amortization
Depreciation Amortization Total		Three months ended March 31,2023 59,588 $ 17,645 77,233 $	Three months ended March 31, 2022
			49,667 $ 12,396 62,063 $

44) Other operating expenses

Other operating expenses
Taxes Security lending expenses Computer information expenses TDCC service fee Postage Others Total		Three months ended March 31,2023		Three months ended March 31,2022
		149,951 $ 62,279 48,875 18,409 22,568 107,118 409,200 $		226,376 $ 54,546 44,480 23,216 22,455 91,968 463,041 $

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45) Other gains and losses

Other gains and losses
Financial income Net gain (loss) on disposal of investments Net gain (loss) on valuation of non-operating financial instrument Net currency exchange gain (loss) Other non-operating revenues Total	Three months ended March 31,2023	Three months ended March 31,2022
	121,407 $ 1,308) ( 2,300 1,258) ( 37,618 158,759 $	24,729 $ 256 6,809) ( 6,261 31,746 56,183 $

46) Income tax

• A. Income tax expense

• (a) Components of income tax expense:

e tax ome tax expense Components of income tax expense:
Current tax: Current tax on profits for the periods Total current tax Deferred taxes: Temporary differences Total deferred taxes Income tax expense		Three months ended March 31,2023		Three months ended March 31,2022
		107,890 $ 107,890 5,265 5,265 113,155 $		60,022 $ 60,022 3,153 3,153 63,175 $

B. As of March 31, 2023, the Company’s income tax returns have been approved by the Tax Authority until 2018. The income tax returns through 2021 of all company subsidiaries have been assessed, except for President Futures approval until 2019.

C. With respect to the income tax returns of the Company for 2018, the Tax Authority assessed to increase income tax payable by $4,581. 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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47) Earnings per share

Three months ended March 31, 2023

Basic earnings per share Net income attributable to common shareholders Dilutive effect of common stock equivalents Employee bonus Basic earnings per share Net income attributable to common shareholders Dilutive effect of common stock equivalents Employee bonus		Amount after tax Weighted-average outstanding common shares(In thousands) 457,532 $ 1,455,831 - 716 457,532 $ 1,456,547 Three months ended March 31,		Weighted-average outstanding common shares(In thousands)		Earnings per share (In dollars)
						0.31 $ 0.31 $ Earnings per share (In dollars) 2022
		Amount after tax		Weighted-average outstanding common shares(In thousands)
		563,745 $ - 563,745 $		1,455,831 - 1,455,831		0.39 $ 0.39 $

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. President Tokyo Auto Leasing Co., Ltd. ScinoPharm Taiwan, Ltd. Ton Yi Industrial Corp. President Chain Store Corp. (PCSC) Presco Netmarketing Co., Ltd. Q-WARE Systems & Services Corp. Tung Ho Development Co., Ltd. Cayman President 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 Other related party Security investment trust fund raised by the Uni-President Assets Management Corp.

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2) Significant related party transactions and balances

A. Accounts receivable

A. Accounts receivable
B. Prepayments C. Other receivables D. Guarantee deposit received E. Other payables F. Lease transactions－lessee Entity having significant influence on the company: Uni-President Enterprises Corp. Associate: Uni-President Assets Management Corp. Other related party: ScinoPharm Taiwan, Ltd. Ton Yi Industrial Corp. President Chain Store Corp. (PCSC) Others Total Other related party: Q-WARE Systems & Services Corp. Tung Ho Development Co., Ltd. Others Total Other related party: President Tokyo Co., Ltd. Associate: Uni-President Assets Management Corp. Other related party: President Tokyo Co., Ltd. Total Other related party: President Tokyo Co., Ltd.	March 31,2023 350 $ 40 336 100 406 73 1,305 $ March 31, 2023	December 31,2022 350 $ - 336 - 406 103 1,195 $ December 31,2022	March 31,2022
			312 $ 10 350 - 207 73 952 $ March 31,2022
	8,531 $ 600 348 9,479 $ March 31, 2023	245 $ - - 245 $ December 31,2022	- $ - - - $ March 31, 2022
	13 $ March 31,2023	14 $ December 31,2022	- $ March 31,2022
	1,044 $ 1,418 2,462 $ March 31,2023	1,044 $ 1,418 2,462 $ December 31,2022	1,044 $ 1,418 2,462 $ March 31, 2022
	8 $	- $	- $

(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.

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(B) Right-of-use assets:

• a. Acquisition of right-of-use assets

ight-of-use assets: . Acquisition of right-of-use assets
	Three months ended	Three months ended
	March 31,2023	March 31,2022
Other related party:
President Tokyo Co., Ltd.	1,427 $	1,331 $

• b. There were no disposal of right-of-use assets with related party for the three months ended March 31, 2023 and 2022.

• (C) Lease liabilities

• －

• a. Lease liabilities current

March 31, 2023 and 2022. ease liabilities Lease liabilities－current
. Lease liabilities－non-current Other related party: President Tokyo Co., Ltd. President Tokyo Auto Leasing Co., Ltd. Total Other related party: President Tokyo Co., Ltd. President Tokyo Auto Leasing Co., Ltd. Total	March 31, 2023		December 31, 2022			March 31,2022
	$	7,624 743 8,367 March 31,2023 11,771 $ 2,006	$		7,616 742 8,358 December 31,2022	7,457 $ 738 8,195 $ March 31,2022
	$		$
					12,362 $ 2,192 14,554 $	14,650 $ 2,749 17,399 $
		13,777 $

－ b. Lease liabilities non-current

• c. Interest expense

Other related party: President Tokyo Co., Ltd. President Tokyo Auto Leasing Co., Ltd. Total		Three months ended March 31,2023	Three months ended March 31, 2022
		36 $ 5 41 $	47 $ 6 53 $

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G. Handling fee revenue

Three months ended March 31,2023 Entity having significant influence on the company: Uni-President Enterprises Corp. $ - Security investment trust fund raised by the Uni-President Asset Management Corp.: Fund managed by Uni-President Asset Management Corp. 17,233 Other related party: Others 217 Total 17,450 $	Three months ended March 31,2022 $ 1 19,786 631 20,418 $

Terms of handling fee revenue mentioned above are similar to those of transactions with third parties. H. Net gain (loss) on wealth management - trust income from sales of funds

Associates: Uni-President Assets Management Corp.	Three months ended March 31, 2023		Three months ended March 31,2022
	3,413 $		2,218 $

The revenues were collected on a monthly basis in accordance with contract terms.

I. Other operating revenue - Other

I.	Other operating revenue-Other	Other operating revenue-Other
J.	Other operating revenue-handling fee revenues from Associates: Uni-President Assets Management Corp.		Three months ended March 31, 2023		Three months ended March 31,2022
			underwriting funds 720 $ Three months ended March 31,2023		600 $ Three months ended March 31,2022
	Associates: Uni-President Assets Management Corp.
			17,955 $		14,416 $

The revenues were collected on a monthly basis in accordance with contract terms.

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K. Rent income

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. Period Deposit Three months ended March 31,2023 Three months ended March 31,2022 Associates: Uni-President Assets Management Corp. 2016.01.01~2024.03.31 1,044 $ 1,714 $ 1,566 $ Other related party: President Tokyo Co., Ltd. 2019.04.01~2024.03.31 1,418 2,235 2,235 Total 3,949 $ 3,801 $		Three months ended March 31,2023		Three months ended March 31,2022

L. Stock custodian income

Entity having significant influence on the company: Uni-President Enterprises Corp. Associate: Uni-President Assets Management Corp. Other related party: ScinoPharm Taiwan, Ltd. Ton Yi Industrial Corp. President Chain Store Corp. (PCSC) Others Total	Three months ended March 31,2023 1,050 $ 40 510 308 609 166 2,683 $	Three months ended March 31,2022 936 $ 39 530 308 620 167 2,600 $

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

M.Other operating expenses

a. Equipment rental

a. Equipment rental
b. Copy expense Other related party: President Tokyo Co., Ltd. Other related party: President Tokyo Co., Ltd.	Three months ended March 31,2023 5 $ Three months ended March31,2023 8 $	Three months ended March 31,2022
		5 $ Three months ended March31,2022
		41 $

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c. Advertising expense

Other related party: Presco Netmarketing Co., Ltd.

Three months ended Three months ended March 31, 2023 March 31, 2022 $ 86 $ 3,268

N. Financial expense

Other related party: Cayman President Holdings, Ltd.

Three months ended Three months ended March 31, 2023 March 31, 2022 $ - $ 54

O. Purchases of trading securities - dealer

Purchases of trading securities-dealer Other related party: Cayman President Holdings, Ltd.		Mar $	c	h 31, 2023 March 31,2022 - 54 $
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. Others Total 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. Others Total				March 31,2023
		Ending Shares (In thousands)		EndingBalance Gain(loss) 30,773 $ 378 $ 488,834 5,902) ( 5,121 - - 11 524,728 $ 5,513) ($ EndingBalance Gain(loss) 4,795 $ 588) ($ 501,237 25,384) ( - 275) ( 358 726 506,390 $ 25,521) ($ December 31,2022
		428 - 19 -
		Ending Shares (In thousands)
		72 - - 21

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March 31, 2022

		March 31,2022	22
Ending Shares (In thousands) Entity having significant influence on the company: Uni-President Enterprises Corp. 56 Security investment trust fund raised by the Uni-President Asset Management Corp.: Uni-President Asset Management Corp. - Other related parties: President Chain Store Corp. 3 Others 212 Total		EndingBalance Gain(loss) 3,674 $ 263) ($ 95,605 5,442 789 49) ( 3,835 31 103,903 $ 5,161 $	Gain(loss)
			5,161 $

P. Compensation of key management personnel

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

ere as follows:
Salary and short-term employee benefits Retirement benefits Other long-term employee benefits Termination benefits Share-based payment Total		Three months ended March 31,2023 Three months ended March 31, 2022 20,546 $ 21,262 $ 405 418 - - - - - - 20,951 $ 21,680 $

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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 - Overseas bonds - International bonds - Bank debentures Financial assets at fair value through other comprehensive income - current - Overseas bonds (par value) Others current assets: - Pledged 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:	March 31,2023 1,200,000 $ 898,300 4,477,379 388,689 100,000 2,945,600 733 400,000 50,000 1,089,709 655,000 2,000	December 31,2022 1,000,000 $ 848,100 2,661,333 237,302 100,000 2,400,355 250,167 400,000 50,000 1,091,048 655,000 2,000	March 31,2022 500,000 $ 997,700 2,267,323 922,486 300,000 - 112,539 524,670 50,000 1,103,138 655,000 2,000	Purposes
				Securities for bonds sold under repurchase agreements Securities for bonds sold under repurchase agreements Securities for bonds sold under repurchase agreements Securities for bonds sold under repurchase agreements Securities for bonds sold under repurchase agreements 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.

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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.

• 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, reputation risk and climate 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, Settlement segment and General Affair 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

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• (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

  • 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.

• (K) General Affair segment is responsible for the following:

  • a. Verify and manage greenhouse gas.

  • b. Sustainable resources management, responsible procurement and supplier management.

• 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

~63~

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 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.

• (D) Operating risks

Settlement segment is responsible for confirming the settlement and clearing, accounts opening and the actual disbursement. Finance segment prepares vouchers based on the actual transaction evidence and compares whether the accounts and cash accounts are matched, and confirms the operating risks of accuracy of the transaction from an accounting perspective. Auditing segment is responsible for internal audit and internal control, and regularly samples and checks the performance of each unit.

• (E) Legal risk

Legal segment is responsible for reviewing of the Company’s various derivative financial instrument contracts, ISDA and individual account contracts, etc. and handle all legalrelated issues.

• (F) Climate risks

The potential climate risk on investment position is estimated based on the two main risk indicators of climate risk, the physical risk and the transition risk. The Company complies with the policy guidelines set by the competent authorities and initiatives or guidelines internationally and generally recognised to enhance the quality and transparency of information disclosure.

• 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.

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• (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 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:

• (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. 19% 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

~65~

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 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).

Types of OTC derivative transactions in which the Group is engaged include structured notes 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

~66~

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.

• (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

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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 sheet date.	Significant deterioration of credit quality of the financial asset since initial recognition, but the asset is not yet credit impaired.	The financial asset is credit impaired at the financial reporting date.
Expected credit losses recognition	12-month expected credit losses	Lifetime expected credit losses	Lifetime expected credit losses

• (A) Judgements of the significant increase in credit risk since initial recognition Judgements and assumptions used to determine whether the credit risk has a significant increase since initial recognition when the 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.

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• (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. Investments in bills and bonds

• (a)Probability of default was based on external credit rating, which include forward-looking 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 March 31, 2023, December 31, 2022 and March 31, 2022, 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 receivable-others and other non-current assetsoverdue receivables of the Group are as follows:

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At January 1 Provision (reversal of provision) for impairment At March 31 At January 1 Provision (reversal of provision) for impairment Derecognized At December 31 At January 1 Provision (reversal of provision) for impairment At March 31		Marginal receivable	Accounts receivable Other receivables Other non-current assets-overdue receivables 659 $ 355 $ 8,224 $ 100) ( 30) ( 772) ( 559 $ 325 $ 7,452 $ Accounts receivable Other receivables Other non-current assets-overdue receivables 742 $ 853 $ 12,517 $ 54) ( 317) ( 1,455) ( 29) ( 181) ( 2,838) ( 659 $ 355 $ 8,224 $ Three months ended March 31,2022 Three months ended March 31,2023 Year ended December 31,2022	Accounts receivable Other receivables Other non-current assets-overdue receivables 659 $ 355 $ 8,224 $ 100) ( 30) ( 772) ( 559 $ 325 $ 7,452 $ Accounts receivable Other receivables Other non-current assets-overdue receivables 742 $ 853 $ 12,517 $ 54) ( 317) ( 1,455) ( 29) ( 181) ( 2,838) ( 659 $ 355 $ 8,224 $ Three months ended March 31,2022 Three months ended March 31,2023 Year ended December 31,2022	Accounts receivable Other receivables Other non-current assets-overdue receivables 659 $ 355 $ 8,224 $ 100) ( 30) ( 772) ( 559 $ 325 $ 7,452 $ Accounts receivable Other receivables Other non-current assets-overdue receivables 742 $ 853 $ 12,517 $ 54) ( 317) ( 1,455) ( 29) ( 181) ( 2,838) ( 659 $ 355 $ 8,224 $ Three months ended March 31,2022 Three months ended March 31,2023 Year ended December 31,2022	Other non-current assets-overdue receivables March 31,2023		Total
		28,315 $ 3,828 32,143 $ Marginal receivable	659 $ 100) ( 559 $ Accounts receivable Year					37,553 $ 2,926 40,479 $ Total
	47,433 $ 19,118) ( - 28,315 $ Marginal receivable					12,517 $ 1,455) ( 2,838) ( 8,224 $ March 31,2022	61,545 $ 20,944) ( 3,048) ( 37,553 $ Total
		Marginal receivable		Accounts receivable	Other receivables	Other non-current assets-overdue receivables
	47,433 $ 2,106) ( 45,327 $			742 $ 136 878 $	853 $ 8) ( 845 $	12,517 $ 1,030) ( 11,487 $	61,545 $ 3,008) ( 58,537 $

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.

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• (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:

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

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

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

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

• C. Maturity analysis for the financial assets and financial liabilities held for liquidity risk management

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

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

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						March 31,2023
		Immediately		Less than 3 months		3-12 months		1-5years - $ - - - - - - 41,653 - - 87,739 - - 73,439 202,831 $	Total
		- $ - 7,178,782 2,268,217 - 630,014 712,176 - 20,446,473 18,357,293 455,720 9,169 - - 50,057,844 $		1,951,100 $ 13,700,000 - - 9,762,353 - - 1,035,685 - 80,585 9,172 247,996 3,297,878 15,856 30,100,625 $		- $ - - 281 - - - 745,262 - - - 1,105,495 489,608 52,163 2,392,809 $			1,951,100 $ 13,700,000 7,178,782 2,268,498 9,762,353 630,014 712,176 1,822,600 20,446,473 18,437,878 552,631 1,362,660 3,787,486 141,458
									82,754,109 $

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December 31, 2022

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 - $ - - - - - - 33,278 - - 87,709 - - 86,061 207,048 $	Total
		- $ - 7,477,868 1,679,452 - 1,809,356 1,809,962 - 20,763,586 10,791,302 639,497 9,064 - - 44,980,087 $		275,000 $ 5,830,000 - - 7,016,989 - - 829,409 - 61,092 17,514 309,281 2,158,151 23,767 16,521,203 $		- $ - - - - - - 943,904 - - - 1,263,862 625,935 48,973 2,882,674 $			275,000 $ 5,830,000 7,477,868 1,679,452 7,016,989 1,809,356 1,809,962 1,806,591 20,763,586 10,852,394 744,720 1,582,207 2,784,086 158,801
									64,591,012 $

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March 31, 2022

					March 31,2022
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		Immediately		Less than 3 months - $ 5,600,000 - - 4,922,516 - - 769,279 - 51,509 9,094 236,600 3,090,747 21,320 14,701,065 $	3-12 months - $ - - - - - - 628,693 - - - 1,345,243 2,345,788 60,865 4,380,589 $		1-5years - $ - - - - - - 62,955 - - 88,516 - - 110,632 262,103 $	Total
		1,151,575 $ 300,000 5,644,546 2,027,479 - 622,163 814,006 - 20,160,818 19,586,170 545,472 6,205 - - 50,858,434 $						1,151,575 $ 5,900,000 5,644,546 2,027,479 4,922,516 622,163 814,006 1,460,927 20,160,818 19,637,679 643,082 1,588,048 5,436,535 192,817
								70,202,191 $

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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.

Statistical table Statistical table

Statistic	al table	Statistical table
for one-day VaR	of transactions	for one-dayVaR of transactions
Three months ended March 31, 2023 March 31, 2023 VaR Maximum VaR Average VaR Minimum	Amount 122,535 $ 143,579 76,218 33,479	Three months ended March 31,2022 Amount March 31, 2022 43,502 $ VaR Maximum 167,015 VaR Average 81,746 VaR Minimum 26,060

Statistical table for VaR of various risk indicators of transactions

Three months ended

Three months ended
March 31,2023		Foreign exchange 10,921 $ 47,965 11,164 2,100 Foreign exchange 3,624 $ 16,205 3,160 857	Interest 81,522 $ 81,522 51,224 25,359 Interest 12,699 $ 25,100 9,499 3,554		Share ownership
March 31, 2023 VaR Maximum VaR Average VaR Minimum Three months ended March 31,2022					87,575 $ 114,445 51,554 28,108 Share ownership 42,455 $ 167,807 81,431 24,960
March 31, 2022 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 March 31, 2023, December 31, 2022 and March 31, 2022 ：

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Financial assets in foreign currencies Cash and cash equivalents Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income - current Investments accounted for under equity method Others Financial liabilities in foreign currencies Short-term loans Financial liabilities at fair value through profit or loss Bonds sold under repurchase agreements Others				March 31,2023
	USD 1,586,743 $ 6,523,610 1,470,806 - 9,821,144 1,766,100 175,343 4,661,578 12,946,278	EUR 4,175 $ 705,649 - - 430,290 - 1,029 474,411 380,729	AUD 2,065 $ 780,018 1,372,206 - 961,525 - 282 1,885,306 879,318	RMB 107,017 $ 161,415 - 2,775,451 4,754 - 940 82,458 209,021	HKD 1,031,376 $ 127,446 - - 159,998 - 8 - 166,752	Others 38,080 $ 746,147 - - 201,314 - 3,963 303,314 180,819	Total
							2,769,456 $ 9,044,285 2,843,012 2,775,451 11,579,025 1,766,100 181,565 7,407,067 14,762,917

Note: As of March 31, 2023, foreign exchange rates of the above currencies to TWD were 1 USD = 30.450 TWD; 1 EUR= 33.150 TWD; 1 AUD= 20.330 TWD; 1 RMB= 4.431 TWD; and 1 HKD= 3.879 TWD, respectively.

Financial assets in foreign currencies Cash and cash equivalents Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income - current Investments accounted for under equity method Others Financial liabilities in foreign currencies Financial liabilities at fair value through profit or loss Bonds sold under repurchase agreements Others			December 31,2022	December 31,2022	December 31,2022
	USD 1,086,414 $ 3,696,267 1,118,655 - 7,579,012 347,447 3,243,659 9,408,659	EUR 4,306 $ 150,892 - - 18,804 57 89,976 18,296	AUD 1,854 $ 414,575 1,079,977 - 157,024 598 1,459,403 43,949	RMB 66,762 $ 105,713 - 2,764,018 3,985 1,347 81,148 206,124	HKD 1,508,479 $ 61,214 - - 169,872 99 - 150,830	Others 44,017 $ 280,670 - - 326,549 1,821 69,823 308,288	Total
							2,711,833 $ 4,709,330 2,198,632 2,764,018 8,255,247 351,369 4,944,009 10,136,145

Note: As of December 31, 2022, foreign exchange rates of the above currencies to TWD were 1 USD =30.710 TWD; 1 EUR= 32.720 TWD; 1 AUD= 20.830 TWD; 1 RMB= 4.408 TWD; and 1 HKD= 3.938 TWD, respectively.

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Financial assets in foreign currencies Cash and cash equivalents Financial assets at fair value through profit or loss Investments accounted for under equity method Others Financial liabilities in foreign currencies Short-term loans Financial liabilities at fair value through profit or loss Bonds sold under repurchase agreements Others	USD 1,143,167 $ 5,043,745 - 7,224,351 841,575 207,724 2,577,330 11,107,384	EUR 5,290 $ 616,469 - 1,948 - 4,773 43,627 347,519	AUD 2,655 $ 104,021 - 822,872 - 840 54,672 554,570	RMB 207,760 $ 402,183 2,348,057 39,380 - 1,859 285,679 292,597 March 31,2022	HKD Others 987,185 $ 90,001 $ 44,127 349,425 - - 1,016,279 6,229 - - - 64 - 68,190 838,850 123,473	Total
						2,436,058 $ 6,559,970 2,348,057 9,111,059 841,575 215,260 3,029,498 13,264,393

Note: As of March 31, 2022, foreign exchange rates of the above currencies to TWD were 1 USD = 28.625 TWD; 1 EUR= 31.920 TWD; 1 AUD= 21.420 TWD; 1 RMB= 4.506 TWD; and 1 HKD= 3.656 TWD, respectively.

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     - D. The total exchange gain (loss), including realized and unrealized, arising from significant foreign exchange variation on the monetary items held by the Group for the three months ended March 31, 2023 and 2022, amounted to ($736) and ($8,855), 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 March 31, 2023 Investment property December 31, 2022 Investment property March 31, 2022 Investment property	Total 698,655 $ 743,741 698,655	Quoted prices of the same assets in active markets (level 1) Other significant observable inputs (level 2) - $ $ 698,655 - 743,741 - 698,655	Significant non-observable inputs(level 3)
			- $ - -

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

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their quoted prices are available from an active market. If quoted market prices in an active market are not available, SWAP and IRS are valued at the discounted cash flow method, and options are valued at the Black-Scholes model.

• (B)When available-for-sale financial assets have quoted market prices available in an active market, the fair value is determined using the market price.

• C. Fair value hierarchy of the financial instruments

• (A)Definitions for the hierarchy classifications of financial instruments measured at fair value a. Level 1

Level 1, are quoted prices (unadjusted) in active markets for identical assets or liabilities that the 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 three months ended March 31, 2023 and 2022, there was no significant transfer of financial instruments between Level 1 and Level 2.

• c. Level 3

Unobservable inputs for the assets or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3. For the three months ended March 31, 2023 and 2022, some of the unlisted stocks became the emerging stocks, therefore these stocks were transferred from Level 3 to Level 2.

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(B)Hierarchy of fair value estimation of financial instruments

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 Bond investments Financial assets at fair value through profit or loss - non-current Stock investments Bond investments Others 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		March31,2023	March31,2023
	Total 10,970,047 $ 15,094,926 3,083,215 355,511 2,843,012 14,802 49,736 58,500 1,231,843 7,178,782 5,610,600 2,268,498	Level 1 10,750,037 $ 4,966,007 3,083,215 355,511 2,843,012 - - - - 7,178,782 5,606,235 1,385,032	Level 2 76,728 $ 10,128,919 - - - - 49,736 - - - 4,365 883,466	Level3
				143,282 $ - - - - 14,802 - 58,500 1,231,843 - - -

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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 Bond investments Financial assets at fair value through profit or loss - non-current Stock investments Bond investments Others 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	31,2022
	Total 5,798,959 $ 10,677,908 2,583,147 299,150 2,198,632 16,604 49,779 32,900 1,179,907 7,477,868 5,335,854 1,679,452	Level 1 5,568,337 $ 2,916,006 2,583,147 299,150 2,198,632 - - - - 7,477,868 5,330,817 1,088,464	Level 2 90,128 $ 7,761,902 - - - - 49,779 - - - 5,037 590,988	Level3
				140,494 $ - - - - 16,604 - 32,900 1,179,907 - - -

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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 Others 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		March31,2022	March31,2022
	Total 8,631,412 $ 8,573,472 1,660,458 398,199 13,633 50,054 33,600 1,418,393 5,644,546 4,688,892 2,027,479	Level 1 8,548,882 $ 914,076 1,660,458 398,199 - - - - 5,644,546 4,675,225 1,775,520	Level 2 17,802 $ 7,659,396 - - - 50,054 - - - 13,667 251,959	Level3
				64,728 $ - - - 13,633 - 33,600 1,418,393 - - -

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(C) The following table is the movement of financial assets at Level 3:

		Three months ended March 31,2023	Three months ended March 31,2023	Three months ended March 31,2023	Three months ended March 31,2023
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 Others Financial assets at fair value through other comprehensive income - non-current Unlisted stocks	January1	Valuation amount		Increased		Decreased		March 31
		Recorded in profit or loss	Recorded in other comprehensive income(loss)	Acquired/ Issued	Transfers into level 3	Sold/ Diposed or Settled	Transfers out from level 3
	140,494 $ 16,604 32,900 1,179,907	2,788 $ - $ - $ 1,802) ( - - 10,600 - 15,000 - 51,936 - Year ended December 31,2022			- $ - - -	- $ - - -	- $ - - -	143,282 $ 14,802 58,500 1,231,843
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 Others Financial assets at fair value through other comprehensive income - non-current Unlisted stocks	January1	Valuation amount		Increased		Decreased		December 31
		Recorded in profit or loss	Recorded in other comprehensive income(loss)	Acquired/ Issued	Transfers into level 3	Sold/ Diposed or Settled	Transfers out from level 3
	65,712 $ 12,650 13,950 1,137,756	433) ($ - $ 106,765 $ 3,954 - - 1,050) ( - 20,000 - 42,151 - Three months ended March 31,2022			- $ - - -	3,750) ($ - - -	27,800) ($ - - -	140,494 $ 16,604 32,900 1,179,907
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 Others Financial assets at fair value through other comprehensive income - non-current Unlisted stocks	January1	Valuation amount		Increased		Decreased		March 31
		Recorded in profit or loss	Recorded in other comprehensive income(loss)	Acquired/ Issued	Transfers into level 3	Sold/ Diposed or Settled	Transfers out from level 3
	65,712 $ 12,650 13,950 1,137,756	1,484) ($ 983 350) ( -	- $ - - 280,637	500 $ - 20,000 -	- $ - - -	- $ - - -	- $ - - -	64,728 $ 13,633 33,600 1,418,393

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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:

March 31,2023	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 Venture capital shares Others Financial assets at fair value through other comprehensive income - non-current December 31,2022 Unlisted stocks Unlisted stocks	14,802 58,500 Fair value 143,282 $ 1,231,843	Net asset value Net asset value Valuation technique Market approach Market approach	Price to book ratio multiple Discount for lack of marketability Latest transaction price Not applicable Not applicable Market price net profit after tax multiplier Price to book ratio multiple Discount for lack of marketability Significant unobservable input	1.42~5.19 25% Not applicable Not applicable Not applicable 20.3~23.14 3.12~3.44 33% 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 Not applicable Not applicable The higher the discount for lack of marketability, the lower the fair value Relationship of inputs to fair value The higher the multiple, the higher the fair value
Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - non-current Venture capital shares Others Unlisted stocks	16,604 32,900 140,494 $	Net asset value Net asset value Market approach	Price to earnings ratio multiple Price to book ratio multiple Discount for lack of marketability Latest transaction price Not applicable Not applicable	8.27 1.43~5.49 25% Not applicable Not applicable Not applicable	The higher the discount for lack of marketability, the lower the fair value Not applicable Not applicable Not applicable The higher the multiple, the higher the fair value

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December 31,2022	Fair value	Valuation technique Significant unobservable input Market price net profit after tax multiplier Price to book ratio multiple Discount for lack of marketability Valuation technique Significant unobservable input Price to book ratio multiple Discount for lack of marketability Latest transaction price Net asset value Not applicable Net asset value Not applicable Price to book ratio multiple Discount for lack of marketability Market approach Market approach Market approach	Range (weighted average)	Relationship of inputs to fair value
Financial assets at fair value through other comprehensive income - non-current March 31,2022 Unlisted stocks	Fair value 1,179,907 $		23.03~24.62 2.93~4.92 20%~30% Range (weighted average)	The higher the discount for lack of marketability, the lower the fair value Relationship of inputs to fair value The higher the multiple, the higher the fair value
Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - non-current Venture capital shares Others Financial assets at fair value through other comprehensive income - non-current Unlisted stocks Unlisted stocks	13,633 33,600 1,418,393 64,728 $		2.71 25% Not applicable Not applicable Not applicable 2.11~2.80 5.95%~9.19%	The higher the multiple, the higher the fair value The higher the discount for lack of marketability, the lower the fair value Not applicable Not applicable Not applicable The higher the multiple, the higher the fair value The higher the discount for lack of marketability, the lower the fair value

(E) Valuation process for fair value at Level 3

• The 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%:

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March 31,2023	Recognised inprofit or loss	Recognised inprofit or loss	Recognised in other comprehensive income	Recognised in other comprehensive income
	Favourable change	Unfavourable change	Favourable change	Unfavourable change
Financial assets at fair value through profit or loss - current Unlisted stocks Financial assets at fair value through profit or loss -non-current Venture capital shares Others Financial assets at fair value through other comprehensive income - non-current Unlisted stocks December 31,2022	1,433 $ 1,433) ($ Not applicable Not applicable Not applicable Not applicable - - Recognised inprofit or loss		- $ - $ - - - - 12,318 (12,318) 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 Others Financial assets at fair value through other comprehensive income - non-current Unlisted stocks March 31,2022	1,405 $ 1,405) ($ Not applicable Not applicable Not applicable Not applicable - - Recognised inprofit or loss		- $ - $ - - - - 11,799 11,799) ( 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 Others Financial assets at fair value through other comprehensive income - non-current Unlisted stocks	647 $ Not applicable Not applicable -	647) ($ Not applicable Not applicable -	- $ - - 14,184	- $ - - 14,184) (

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 Group includes all risks involved in the investment position as a part of risk management, such as market risk, credit risk, liquidity risk, operating risk,

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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 Group 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 Group 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 Group should be agreed by the Board of Directors. The Group 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 Group is actively engaged in development of various businesses and continually increases profit, creates company value, and complies with the capital management objective.

The Group calculates and reports the capital adequacy ratio according to “Rules Governing Securities Firms”. As of March 31, 2023, December 31, 2022 and March 31, 2022, the capital adequacy ratios were 320%, 390% and 412%, 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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8) Status of the company 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 .

9)	22 22 17 17 Article		Stockholders’ equity (Total liability－futures trader’s equity) Current assets Current liabilities Stockholders’ equity Minimumpaid-in capital Adjusted net capital Total amount of customer margins required for the openpositions of futures traders Calculation formula		March 31,2023	March 31,2023		March 31,2022	March 31,2022	≧60% ≧40% ≧20% ≧15% ≧1 ≧1 Standard	Met the requirement Met the requirement Met the requirement Met the requirement Enforcement
					Calculation 2,320,587 28,766 6,169,881 28,766 2,320,587 400,000 1,629,728 1,223,838	Ratio 580.15% 133.17% 214.49 80.67		Calculation 2,205,334 18,022 5,035,317 18,022 2,205,334 400,000 1,692,077 906,157	Ratio 551.33% 186.73% 279.39 122.37
	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”.

Article		Calculation formula		March 31,2023	March 31,2023		March 31,2022	March 31,2022	Standard	Enforcement
				Calculation	Ratio		Calculation	Ratio
17		Stockholders’ equity (Total liability－futures trader’s equity)		2,716,942 225,048	12.07		2,777,989 201,347	13.80	≧1	Met the requirement
17		Current assets Current liabilities		27,143,757 25,797,818	1.05		25,744,018 24,542,053	1.05	≧1	Met the requirement
22		Stockholders’ equity Minimumpaid-in capital		2,716,942 645,000	421.23%		2,777,989 645,000	430.70%	≧60% ≧40%	Met the requirement
22		Adjusted net capital Total amount of customer margins required for the openpositions of futures traders		2,378,223 4,036,105	58.92%		2,447,750 4,217,176	58.04%	≧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 million ： 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 (Three months ended March 31, 2023)
Percentage (%) of
total consolidated
No. Relationship net revenues or
(Note1) Company Counterparty (Note 2) Account Amount Conditions assets (Note 3)
0 President Securities Corp. President Futures Corp. 1 Futures Margin - Own Funds 5,164,448 Note 4 4.54%
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 receivables 3,490 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 Other payables 2,272 Note 4 0.00%
0 President Securities Corp. President Futures Corp. 1 Equity for each customer in the account 3,104 Note 4 0.00%
0 President Securities Corp. President Futures Corp. 1 Future commission revenue 7,203 Note 4 0.39%
0 President Securities Corp. President Futures Corp. 1 Clearing charges 4,692 Note 4 0.25%
0 President Securities Corp. President Capital Management Corp. 1 Expense from investment advisory 12,600 Note 4 0.68%
0 President Securities Corp. President Insurance Agency Corp. 1 Other receivables 33,497 Note 4 0.03%
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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.

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

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• 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.

• Subsidiaries to parent company.

• 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 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 operating activities	Balance on March 31, 2023 Original i	Balance on December 31, 2022 Shares Percentage nvestment Ending Balanc	Balance on December 31, 2022 Shares Percentage nvestment Ending Balanc	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 Securities Corp. President Securities Corp. President Securities Corp.	President Futures Corp. President Capital Management Corp. President Securities (HK) Ltd. President Wealth Management (HK) Ltd.	Taipei Taipei Hong Kong Hong Kong	1994.03.01 1997.04.15 1994.07.26 2002.03.31	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	Futures brokerage and dealer Securities investment consulting Securities dealer, underwriting, brokerage and consulting Wealth management	644,650 $ 326,000 848,735 92,091	644,650 $ 63,817,303 326,000 30,000,000 848,735 192,600,000 92,091 23,400,000	96.69% 100.00% 100.00% 100.00%	2,627,106 $ 304,523 802,039 59,758	179,636 $ 17,118 119 -	57,802 $ 372) ( 9,908) ( 91	55,889 $ 371) ( 8,551) ( 91	- $ - 503,620 -	Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company Subsidiary of the Company

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Name of the investor	Name of the investee company	Location	Date of registration	Reference number and the date of approval letter issued byFSC	Major operating activities	Balance on March 31, 2023 Original i	Balance on December 31, 2022 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 Securities Corp. President Securities Corp. President Securities Corp. President Insurance Agency Corp.	President Securities (Nominee) Ltd. Uni-President Asset Management Corp. President Insurance Agency Corp. PSC Venture Capital Investment Limited Company Uni-President Asset Management Corp.	Hong Kong Taipei Taipei Taipei Taipei	1999.08.06 1992.09.03 2008.04.29 2013.10.29 1992.09.03	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	Nominee Service Investment Trust Insurance Agent Consultation of investment management and venture capital; other unprohibited or unrestricted businesses beyond the permit Investment Trust	3,403 $ 667,622 10,000 300,000 478	3,403 $ 667,622 10,000 300,000 478	1,000,000 14,904,630 1,000,000 30,000,000 12,000	100.00% 42.46% 100.00% 100.00% 0.03%	1,526 $ 793,954 37,905 281,250 644	- $ 317,336 36,565 15,458 317,336	2) ($ 103,784 14,219 13,750 103,784	2) ($ 44,070 14,219 13,749 35	- $ - 33,497 - -	Subsidiary of the Company Associates Subsidiary of the Company Subsidiary of the Company Associates

Note1 ： As FSC was established in July, 2004, President Futures Corp. was apporved by the Investment Commission, Ministry of Economic Affairs. 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 ： Subsidiary President Securities (HK) Ltd., President Wealth Management (HK) Ltd. and President Securities (Nominee) Ltd. were approved by the board of directors in March 2022 to deal with the dissolution and liquidation matters.

• B. Lending to others: Excluding security margin trading and conditional bond trading business, there is no lending of funds to either the shareholders or other parties.

• C. Endorsements and guarantees for others ： None.

• D. Acquisitions of real estate exceeding $300 million or 20 percent of contributed capital ： None.

• E. Disposals of real estate exceeding $300 million or 20 percent of contributed capital ： None.

• F. Purchases or sales transactions discount on brokers’ charges with related parties in excess of $5 million ： None.

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G. Receivables from related parties exceeding $100 million or 20 percent of contributed capital ： None.

• 3) Information of overseas branches and representative office: None.

• 4) Disclosure of investment in Mainland China

a) Information of investment in Mainland China

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Accumulated Amount remitted from Taiwan to
amount of Mainland China/ Amount remitted Accumulated Ownership Investment income Accumulated
Investee in Investment remittance from back to Taiwan for the three months amount of Net income of held by the (loss) recognized by Book value of amount of
Mainland Main business Paid-in capital method Taiwan to ended March 31, 2023 remittance from investee as of Company the Company for investments in investment income
activities (Note 4) Taiwan to March 31, the three months Mainland China as remitted back to
China (Note 1) Mainland China (direct or
as of January 1,2023 Remitted toMainland Remitted backto Taiwan Mainland China asof March 31, 2023 2023 indirect) ended March 31,2023 (Note 2) of March 31, 2023 March 31, 2023Taiwan as of
China
Jin Yuan Securities $ 6,646,500 Directly $ 3,138,169 $ - $ - $ 3,138,169 ($ 16,727) 49% ($ 2,993) $ 2,775,451 $ -
President brokering, securities invest in a
The financial
Securities dealing, securities company in
statements that are
Co., Ltd. underwriting and Mainland
reviewed by
sponsoring service China
international
accounting firm
which has
cooperative
relationship with
accounting firm in
R.O.C.
b) Limitation on investment in Mainland China (expressed in thousands of dollars)
Accumulated amount of remittance Investment amount approved by the Ceiling on investments in Mainland
Company name from Taiwan to Mainland China as of Investment Commission of the Ministry of China imposed by the Investment
March 31, 2023 Economic Affairs (MOEA) Commission of MOEA
Jin Yuan President Securities
$ 3,138,169 $ 3,138,169 $ 18,264,864
Co., Ltd.
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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

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company in the third area.)

(3) Others.

• Note 2: In the ‘Investment income (loss) recognized by the Company for the three months ended March 31, 2023’ column:

• (1) It should be indicated if the investee was still in the incorporation arrangements and had not yet any profit during this period.

• (2) Indicate the basis for investment income (loss) recognition in the number of one of the following three categories:.

  • a. The financial statements that are reviewed and attested by international accounting firm which has cooperative relationship with accounting firm in R.O.C.

  • b. The financial statements that are reviewed 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 1.5 billion.

• 5) Major shareholder information

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Major shareholder Number of shares held (thousands) Shareholding ratio
Uni-President Enterprises Corp. 417,516 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. Capital Market segment: assisted companies in applying for public offerings and listings, undertook cash capital increase assessments, assisted in corporate mergers and acquisitions, and provided professional consulting on finance and financial management.

• 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 Proprietary Trading segment, Financial Instrument 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

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Three months ended March 31, 2023
Brokerage Quantitative Capital Market Fixed Income Reinvestment Other operating
segment Trading segment segment segment segment segments Others Total
Segment revenues $ 797,197 $ 223,903 $ 173,429 $ 331,000 $ 248,896 $ 124,409 ($ 32,428) $ 1,866,406
Segment profit or loss $ 126,460 $ 99,056 $ 132,592 $ 180,891 $ 94,400 ($ 57,068) ($ 3,733) $ 572,598
Three months ended March 31, 2022
Brokerage Quantitative Capital Market Fixed Income Reinvestment Other operating
segment Trading segment segment segment segment segments Others Total
Segment revenues $ 1,043,545 $ 50,697 $ 17,103 ($ 145,175) $ 281,594 ($ 410,168) $ 41,602 $ 879,198
Segment profit or loss $ 331,065 ($ 88,364) ($ 11,997) ($ 169,319) $ 33,716 ($ 634,171) $ 39,773 ($ 499,297)
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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 disclosed 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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