FEDS — AGM Information 2013

Jul 5, 2013

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Minutes of 2013 Annual General Shareholders’ Meeting of Far Eastern Department Stores

Date: Thursday, 20 June 2013

Time: 9:00 a.m. Taipei time

• Place: Auditorium in the Taipei Hero House

No. 20, Changsha Street, Section 1, Taipei, Taiwan

Shareholders present:

Number of shareholders and shareholder representatives (including e-voting) present:

669 persons.

Total shares (including e-voting) represented by shareholders present: 875,373,882 shares, which was 64.268% of total number of outstanding shares 1,362,067,946 shares.

Invited observers:

Certified Public Accountant: Mrs. Yeh Shu-Chuan and Mr. Shih Ching-Pin Attorney : Mr. Yang Xiao-Bang and Mr.Li Chin-Shu

Chairman: Mr. Douglas T. Hsu, Chairman of the Board of Directors

Recorder: Mr. Frank Jou

The aggregate shareholding of the shareholders present constituted a quorum. The Chairman called the meeting to order.

The speech of Chairman (omitted)

The speech of invited observers (none)

I. Matters to be Reported:

1. 2012 Messages to shareholders (please refer to P.4-P.10 of handbook for 2013 AGM)

2. Financial report of 2012 (please refer to P.11-P.19 of handbook for 2013 AGM)

3. Supervisors’ audit report on 2012 business report and financial statements (please refer to P.20 of handbook for 2013 AGM)

4. Report of the amendment of certain provisions of the Company’s “ Meeting Rules of Board of Directors” (please refer to P.21-P.24 of handbook for 2013 AGM)

5. Report of the establishment of the Company’s “Code of Ethics” and “Best Practice Principles of Ethical Corporate Management” (please refer to P.25-P.34 of handbook for

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2013 AGM)

1. The adjustments of Retained Earnings and Special Reserve in accordance with the adoption of International Financial Reporting Standards (please refer to P.35 of handbook for 2013 AGM)

Shareholder # 0212298 Mr. Liu Tai Ann raised questions with respect to the advices of FEDS’s operation.

The questions were answered by Chairman and acknowledged by all attending shareholders.

RESOLVED, that the above proposals were approved for reference.

II. Matters to be Approved:

1. To accept the 2012 financial statements.

The Board of Directors proposes and recommends that each shareholder votes FOR the acceptance of 2012 business report and financial statements.

Explanatory Notes:

• (1) FEDS’s 2012 financial report, including balance sheet, income statement, statement of changes in shareholders’ equity, and statement of cash flows, has been audited by independent auditors, Ms. Yeh Shu-Chuan and Mr. Shih Ching-Pin of Deloitte & Touche (please refer to P.12-P.17), and has been examined by and determined to be correct and accurate by Supervisors of FEDS. We thereby submit this report.

• (2) The 2012 business report, independent auditors’ audit report, and the above-mentioned financial statements are attached within “Matters to be reported”.

• (3) Please approve the above-mentioned business report and financial statements.

Resolution: The number of shares represented by the shareholders present at the time of voting (including e-voting) was 875,373,882 and 753,549,294 votes (including e-voting) were cast for the proposal, which was 86.1% of votes represented by the shareholders present.

2. To approve the proposal for the distribution of 2012 surplus earning.

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The Board of Directors proposes and recommends that each shareholder votes FOR the distribution of 2012 surplus earning.

Explanatory Notes:

• (1) All the closing transactions as of December 31, 2012 have been completely closed, and have been audited by the accounting firm, Deloitte and Touche. We thereby submit the proposal for distribution of 2012 profits:

1.	Net Income of 2012	N.T$1,692,858,164
2.	10% legal reserve (1*10%)	(169,258,816)
3.	Undistributed profits of previous years	969,558,592
4.	Earnings available for distribution (4=1-2+3)	2,493,130,940

• (2) The earnings available for distribution are allocated as the following:

1. Dividend (60%)	N.T$ 972,172,682
2. Cash bonus to shareholders (33%)	543,694,970
3. Total Distribution	1,560,867,642

Note: To distribute employee bonus of NT 64,811,511 and compensation of directors and supervisors of NT 46,608,643.

• (3) Undistributed earnings after distribution N.T$ 986,263,298

(3)	Undistributed earnings after distribution	N.T$ 986,263
(4)	The major items of the Distribution of 2012 Dividend：
	1.Cash dividends to holders of common share
	(NT$ 0.80 per share)	N.T$ 1,095,903,742
	2.Stock dividends to holders of common share
	(NT$ 0.30 per share at par value)	410,963,900
	3.Total amount of 1.10 per share	1,506,867,642

• (5) The distribution of 2012 dividends composes of 2012 surplus earning in priority and the undistributed profit from 1998 to 2011 in case 2012 surplus earning are insufficient to cover 2012 dividends.

• (6) After being approved at the annual General Shareholders’ meeting (2013), the cash dividends to holders of common share will be distributed on the record date to be

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determined by the Board of Directors. Should FEDS subsequently repurchase its common shares or issue new common shares according to Article 28-2 of the ROC Securities and Exchange Law and other relevant regulations, the total numbers of common shares outstanding may change, and the ultimate cash and stock to be distributed to each common share may need to be adjusted accordingly. It is proposed that the Board of Directors of FEDS be authorized to adjust the cash and stock to be distributed to each common share based on the total amount of profits resolved to be distributed, the amount of earnings resolved to be capitalized, and the number of actual common shares outstanding on the record date for distribution.

• (7) Please approve the above-mentioned proposal for the distribution of 2012 profits.

Resolution: The number of shares represented by the shareholders present at the time of voting (including e-voting) was 875,373,882 and 753,534,141 votes (including e-voting) were cast for the proposal, which was 86.1% of votes represented by the shareholders present.

Shareholder # 0212298 Mr. Liu Tai Ann raised questions with respect to the advices of FEDS’s operation.

The questions were answered by Chairman and acknowledged by all attending shareholders.

III. Discussion

1. Proposal to amend the certain provisions of the Company’s “Articles of

Incorporation”.

The Board of Directors proposes and recommends that each shareholder votes FOR the amendments of certain provisions of the Company’s “Articles of Incorporation”.

Please vote. Board of Directors proposes:

Explanatory Notes:

• (1) We propose to amend Article 14, Article 17 and Article 30 of the Company’s “Articles of Incorporation”. The amended provisions are shown in the attached comparison table.

• (2) Please approve the proposed resolutions.

Resolution: The number of shares represented by the shareholders present at the

time of voting (including e-voting) was 875,373,882 and 753,536,747 votes (including e-voting) were cast for the proposal, which was 86.1% of votes represented by the shareholders present.

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Section	Proposed Changes	Proposed Changes	Current Articles	Current Articles
Article 14		Shareholders may by way of power of attorney appoint proxies to attend the said shareholders’ meeting. Except for trust enterprises or share registration agencies approved by the securities management authorities, when one shareholder is entrusted by two or more shareholders, the voting right represented by the said shareholder shall not exceed 3% of the voting rights of total shares issued. Where it has so exceeded, the voting right in excess shall not be included. Unless otherwise stipulated by the Company Law, attendance of shareholder's proxies shall be in accordance with the provisions of "Regulation Governing the Use of Proxies For Attendance of Shareholders’ Meetingof Public Companies".		Shareholders may by way of power of attorneystamped with the seal of the Company appoint proxies to attend the said shareholders’ meeting. Except for trust enterprises or share registration agencies approved by the securities management authorities, when one shareholder is entrusted by two or more shareholders, the voting right represented by the said shareholder shall not exceed 3% of the voting rights of total shares issued. Where it has so exceeded, the voting right in excess shall not be included. Unless otherwise stipulated by the Company Law, attendance of shareholder's proxies shall be in accordance with the provisions of "Regulation Governing the Use of Proxies For Attendance of Shareholders’ Meetingof Public Companies".
Article 17		There shall be 7 to 9 Directors and 2 Supervisors of the Company, who are elected and appointed from the persons with legal capacity at the shareholders’ meeting. The total shares number of the registered shares of the Company held by all of the Directors and Supervisors shall be determined according to the provisions of "Rules and Review Procedures for Director and Supervisor Ownership Ratios at Public Companies". Independent directors shall not be less than two in number and not less than one-fifth of the total number of directors. In accordance with Article 192-1 of the Company Act, the Company shall adopt a candidate nomination system for election of thedirectors and supervisors ,and the shareholders shall elect thedirectors and supervisors from among the nominees listed in the roster of candidates. Independent and non-independent directors and supervisors shall be elected at the same time but on separate ballots.		There shall be 7 to 9 Directors and 2 Supervisors of the Company, who are elected and appointed from the persons with legal capacity at the shareholders’ meeting. The total shares number of the registered shares of the Company held by all of the Directors and Supervisors shall be determined according to the provisions of "Rules and Review Procedures for Director and Supervisor Ownership Ratios at Public Companies". Independent directors shall not be less than two in number and not less than one-fifth of the total number of directors. In accordance with Article 192-1 of the Company Act, the Company shall adopt a candidate nomination system for election of the independent directors , and the shareholders shall elect the independent directors from among the nominees listed in the roster ofindependent director candidates. Independent and non-independent directors shall be elected at the same time but on separate ballots.
Article 30		These Articles of Incorporation were drafted on August 2, 1967, and came into effect following its approval by a resolution of the General Shareholders’ Meeting and the competent authorities. Amendments shall take effect following their approval at the Shareholders’ Meetings. Forty-third amendment of June 20, 2013		These Articles of Incorporation were drafted on August 2, 1967, and came into effect following its approval by a resolution of the General Shareholders’ Meeting and the competent authorities. Amendments shall take effect following their approval at the Shareholders’ Meetings. Forty-second amendment of June 23, 2011

Note *In case of any discrepancy between this English translation and the Chinese text of this document, the Chinese text shall prevail.

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2. To approve the capitalization of 2012 stock dividends.

The Board of Directors proposes and recommends that each shareholder votes FOR the capital increase of 2012 stock dividends.

Please vote. Board of Directors proposes:

Explanatory Notes:

• (1) For the purpose of improving the financial structure, it is proposed that FEDS’s paid-in capital be increased by capitalizing the stock dividends to common shareholders of NT$ 410,963,900. A total number of 41,096,390 common shares, at par value of NT$ 10 each share, shall be issued for such capital increase.

• (2) After being approved at the Annual General Shareholders’ Meeting and accepted by the regulatory authority in charge, the new shares will be distributed on a record date to be determined by the Board of Directors. Each common share holder will be entitled to receive a stock dividend of 30 common shares for each 1,000 common shares held by such shareholders. If the stock dividends include any fractional shares which are less than one full share, in accordance with Article 204 of the Company Law, the distribution will be made in the form of cash rounded to the nearest dollar amount calculated at par value. Such fractional shares will be purchased by Far Eastern Recreation Center Employee’s Welfare Committee of FEDS. The new issued common shares should have the right to enjoy dividends of 2013 and the same rights & obligation as the previous issued common shares.

• (3) Should FEDS subsequently repurchase its common shares or issue new common 、

• shares according to Article 28-2 of the ROC Securities and Exchange Law regulations of conversion of bonds and other relevant regulations, the total numbers of common shares outstanding may change, and the ultimate stock to be distributed to each common share may need to be adjusted accordingly. It is proposed that the Board of Directors of FEDS be authorized to adjust the cash and stock to be distributed to each common share based on the total amount of profits resolved to be distributed, the amount of earnings resolved to be capitalized, and the number of actual common shares outstanding on the record date for distribution.

• (4) Please approve the proposal for the capitalization of 2012 stock dividends.

Resolution: The number of shares represented by the shareholders present at the time of voting (including e-voting) was 875,373,882 and 753,501,755 votes (including e-voting) were cast for the proposal, which was 86.1% of votes represented by the shareholders present.

3. Proposal to amend the certain provisions of the Company’s “Procedures for Endorsements and Guarantees" and Company’s “Procedures for Lending of Capital to Others".

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The Board of Directors proposes and recommends that each shareholder votes FOR the amendments of certain provisions of the Company’s “Procedures for Endorsements and Guarantees" and Company’s “Procedures for Lending of Capital to Others".

Please vote. Board of Directors proposes:

Explanatory Notes:

• (1) We propose to amend Article 2, Article 3, Article 4, Article 6 and Article 8 of the Company’s “Procedures for Endorsements and Guarantees”, and amend Article 2, Article 3, Article 4, Article 5 and Article 8 of the Company’s “Procedures for Lending of Capital to Others” pursuant to the official letter of Financial Supervisory Commission under Ching-Kuan-Cheng-Shen-Tze No. 1010029874 dated on 6 July, 2012. The amended provisions are shown in the attached comparison table.

• (2) Please approve the proposed resolutions.

Resolution: The number of shares represented by the shareholders present at the time of voting (including e-voting) was 875,373,882 and 753,509,560 votes (including e-voting) were cast for the proposal, which was 86.1% of votes represented by the shareholders present.

4. Proposal to amend the certain provisions of the “Election Procedures of Directors and Supervisors”.

The Board of Directors proposes and recommends that each shareholder votes FOR the amendments of certain provisions of the Company’s “Election Procedures of Directors and Supervisors”.

Please vote. Board of Directors proposes:

Explanatory Notes:

• (1) We propose to amend Article 3 of the Company’s “Election Procedures of Directors and Supervisors”. The amended provisions are shown in the attached comparison table.

• (2) Please approve the proposed resolutions.

Resolution: The number of shares represented by the shareholders present at the time of voting (including e-voting) was 875,373,882 and 753,493,917 votes (including e-voting) were cast for the proposal, which was

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86.1% of votes represented by the shareholders present.

IV. Extemporary motion

Shareholder # 0212298 Mr. Liu Tai Ann raised questions with respect to the SOGO and leisure activities of FEDS’s employees.

The questions were answered by Chairman and acknowledged by all attending shareholders.

V. Motion to Adjourn

Chairman: Mr. Douglas T. Hsu, Chairman of the Board of Directors

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Recorder: Mr. Frank Jou

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FAR EASTERN DEPARTMENT STORES, LTD.

BALANCE SHEETS DECEMBER 31, 2012 AND 2011 (In Thousands of New Taiwan Dollars, Except Par Value)

ASSETS CURRENT ASSETS Cash Available-for-sale financial assets - current Notes receivable Accounts receivable, net of allowance for doubtful accounts of $3,575 thousand in 2012 and $3,550 thousand in 2011 Related parties - notes and accounts receivable Related parties - other receivable Other receivables Inventories Prepayments Deferred tax assets - current Other current assets Total current assets LONG-TERM INVESTMENTS Investments accounted for by the equity method Available-for-sale financial assets - noncurrent Financial assets carried at cost - noncurrent Total long-term investments PROPERTIES Cost Land Buildings and equipment Furniture and equipment Total cost Revaluation increment Cost and appreciation Less: Accumulated depreciation Construction in progress and prepayments for equipment Leasehold rights, net Net properties OTHER ASSETS Idle assets, net Refundable deposits Prepaid pension costs Miscellaneous Total other assets		2012 Amount % $ 870,675 2 254,779 - 30,439 - 495,705 1 14,187 - 414,799 1 118,471 - 430,141 1 252,803 - 5,749 - 5,720 - 2,893,468 5 19,634,717 33 2,812,603 5 62,570 - 22,509,890 38 6,995,873 12 14,294,377 24 6,179,105 11 27,469,355 47 1,408,269 2 28,877,624 49 6,252,880 11 22,624,744 38 2,764,099 5 7,215,010 12 32,603,853 55 561,047 1 163,445 - 262,930 1 35,785 - 1,023,207 2		2011 Amount % $ 566,057 1 233,559 - 38,768 - 469,848 1 52,118 - 306,523 - 98,523 - 372,957 1 323,090 1 4,024 - 17,363 - 2,482,830 4 19,356,620 33 2,577,430 5 62,570 - 21,996,620 38 6,995,873 12 14,081,814 24 5,815,882 10 26,893,569 46 1,408,269 3 28,301,838 49 5,270,671 9 23,031,167 40 1,822,511 3 7,584,367 13 32,438,045 56 567,439 1 163,565 - 245,449 1 45,127 - 1,021,580 2

TOTAL $ 59,030,418 100 $ 57,939,075 100

LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Short-term debts Short-term notes and bills payable Notes and accounts payable Related parties - accounts payable Related parties - other payable Income tax payable Other payables Advance receipts Bonds issued - current portion Long-term borrowings - current portion Other current liabilities Total current liabilities LONG-TERM LIABILITIES, NET OF CURRENT PORTION Bonds issued Long-term borrowings Total long-term liabilities, net of current portion RESERVES Reserve for land revaluation increment tax OTHER LIABILITIES Deposits received Deferred tax liabilities - noncurrent Deferred credits - gains on related-party transactions Total other liabilities Total liabilities STOCKHOLDERS’ EQUITY Capital stock NT$10.00 par value Authorized - 1,750,000 thousand shares Issued and outstanding - 1,369,880 thousand shares in 2012 and 1,317,192 thousand shares in 2011 Capital surplus: Additional paid-in capital - share issuance in excess of par Treasury stock transactions Long-term investments Stock options Total capital surplus Retained earnings: Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity adjustments Cumulative translation adjustments Net loss not recognized as pension costs Unrealized valuation gains on financial instruments Unrealized asset revaluation increment Treasury stock - 7,812 thousand shares in 2012 and 7,511 thousand shares in 2011 Total other equity adjustments Total stockholders’ equity TOTAL		2012 Amount % $ 2,500,000 4 1,699,455 3 3,848,239 7 89,723 - 732,133 1 - - 1,608,264 3 2,233,798 4 1,200,000 2 600,000 1 712,792 1 15,224,404 26 3,454,937 6 11,696,733 19 15,151,670 25 508,719 1 38,403 - 355,994 1 11,366 - 405,763 1 31,290,556 53 13,698,797 23 2,175,718 4 1,213,526 2 364,937 1 108,930 - 3,863,111 7 2,189,631 4 1,069,595 2 2,662,417 4 5,921,643 10 (270,769 ) - (64,589 ) - 3,785,134 6 843,305 1 (36,770 ) - 4,256,311 7 27,739,862 47 $ 59,030,418 100		2011
				Amount % $ 4,400,000 8 1,699,268 3 3,132,810 5 82,106 - 651,106 1 38,262 - 3,287,517 6 1,679,299 3 - - - - 855,765 1 15,826,133 27 4,616,958 8 9,696,646 17 14,313,604 25 508,719 1 40,632 - 201,548 - 11,366 - 253,546 - 30,902,002 53 13,171,921 23 2,175,718 4 1,213,526 2 364,937 1 108,930 - 3,863,111 7 1,975,319 3 1,069,595 2 3,027,939 5 6,072,853 10 (14,294 ) - (20,949 ) - 3,157,896 5 843,305 2 (36,770 ) - 3,929,188 7 27,037,073 47 $ 57,939,075 100

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

(With Deloitte & Touche audit report dated March 25, 2013)

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FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 2012 AND 2011 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

REVENUES Sales Other operating revenues Total revenues COSTS Cost of goods sold Other operating costs Total costs GROSS PROFIT OPERATING EXPENSES Selling General and administrative Total operating expenses OPERATING INCOME NONOPERATING INCOME AND GAINS Equity in earnings of equity-method investees, net Dividend income Interest income Gain on disposal of investments, net Other income Total nonoperating income and gains NONOPERATING EXPENSES AND LOSSES Interest expense Loss on disposal of property, net Impairment loss on financial assets carried at cost Other expenses Total nonoperating expenses and losses INCOME BEFORE INCOME TAX INCOME TAX EXPENSE NET INCOME		2012 Amount % $ 38,704,716 99 423,349 1 39,128,065 100 31,772,333 81 140,617 1 31,912,950 82 7,215,115 18 1,513,220 4 4,557,394 11 6,070,614 15 1,144,501 3 711,997 2 168,790 1 3,616 - - - 118,819 - 1,003,222 3 201,005 1 4,438 - - - 63,774 - 269,217 1 1,878,506 5 185,648 1 $ 1,692,858 4		2011
				Amount % $ 27,339,765 99 300,884 1 27,640,649 100 22,115,164 80 59,269 - 22,174,433 80 5,466,216 20 1,140,866 4 3,135,861 11 4,276,727 15 1,189,489 5 1,148,081 4 146,820 1 1,605 - 4,962 - 98,475 - 1,399,943 5 79,401 1 6,619 - 38,500 - 78,662 - 203,182 1 2,386,250 9 243,135 1 $ 2,143,115 8 (Continued)

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FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENTS OF INCOME YEARS ENDED DECEMBER 31, 2012 AND 2011 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

EARNINGS PER SHARE (NEW TAIWAN DOLLARS) Basic Diluted		2012 Before Tax After Tax $ 1.38 $ 1.24 $ 1.38 $ 1.24		2011
				Before Tax After Tax $ 1.75 $ 1.57 $ 1.75 $ 1.57

Pro forma information on the assumption that the Company’s shares traded or held by subsidiaries are treated as investments instead of treasury stock:

EARNINGS PER SHARE (NEW TAIWAN DOLLARS) Basic Diluted		2012 Before Tax After Tax $ 1.37 $ 1.24 $ 1.37 $ 1.23		2011
				Before Tax After Tax $ 1.74 $ 1.56 $ 1.74 $ 1.56

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

(With Deloitte & Touche audit report dated March 25, 2013)

(Concluded)

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FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY YEARS ENDED DECEMBER 31, 2012 AND 2011 (In Thousands of New Taiwan Dollars, Except Dividends Per Share)

BALANCE, JANUARY 1, 2011 Appropriation of prior year's earnings: Legal reserve Cash dividends - NT$1.0 per share Stock dividends - 6% Translation adjustments on long-term equity investments Embedded conversion options derived from convertible bonds Adjustment reported by equity-method investees Adjustment arising from changes in percentage of ownership in investees Valuation loss on available-for-sale financial assets Net income in 2011 BALANCE, DECEMBER 31, 2011 Appropriation of prior year's earnings: Legal reserve Cash dividends - NT$1.0 per share Stock dividends - 4% Translation adjustments on long-term equity investments Adjustment reported by equity-method investees Valuation gain on available-for-sale financial assets Net income in 2012 BALANCE, DECEMBER 31, 2012		CapitalStock Issued and Outstanding $ 12,426,341 - - 745,580 - - - - - - 13,171,921 - - 526,876 - - - - $ 13,698,797	CapitalSurplus	CapitalSurplus	Stock Options $ - - - - - 108,930 - - - - 108,930 - - - - - - - $ 108,930		Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 1,718,606 $ 1,000,564 $ 3,129,751 256,713 - (256,713 ) - - (1,242,634 ) - - (745,580 ) - - - - - - - 69,031 - - - - - - - - - 2,143,115 1,975,319 1,069,595 3,027,939 214,312 - (214,312 ) - - (1,317,192 ) - - (526,876 ) - - - - - - - - - - - 1,692,858 $ 2,189,631 $ 1,069,595 $ 2,662,417			**Other **	Equity Adjustments Unrealized Valuation Unrealized Gains on Asset Financial Revaluation Instruments Increment Treasury Stock $ 3,578,911 $ 843,106 $ (36,770 ) - - - - - - - - - - - - - - - (261,963 ) 199 - - - - (159,052 ) - - - - - 3,157,896 843,305 (36,770 ) - - - - - - - - - - - - 370,845 - - 256,393 - - - - - $ 3,785,134 $ 843,305 $ (36,770 )	Total Stockholders' Equity $ 26,043,179 - (1,242,634 ) - 40,702 108,930 113,652 (10,819 ) (159,052 ) 2,143,115 27,037,073 - (1,317,192 ) - (27,589 ) 98,319 256,393 1,692,858 $ 27,739,862
									Cumulative Translation Adjustments $ (374,215 ) - - - 40,702 - 319,219 - - - (14,294 ) - - - (27,589 ) (228,886 ) - - $ (270,769 )	Net Loss Not Recognized as Pension Cost $ (8,300 ) - - - - - (12,649 ) - - - (20,949 ) - - - - (43,640 ) - - $ (64,589 )	Unrealized Valuation Gains on Financial Instruments $ 3,578,911 - - - - - (261,963 ) - (159,052 ) - 3,157,896 - - - - 370,845 256,393 - $ 3,785,134
			Additional Paid-in Capital - Share Issuance Treasury Stock in Excess of Par Transactions $ 2,175,718 $ 1,213,526 - - - - - - - - - - - - - - - - - - 2,175,718 1,213,526 - - - - - - - - - - - - - - $ 2,175,718 $ 1,213,526	Long-term Investments $ 375,941 - - - - - (185 ) (10,819 ) - - 364,937 - - - - - - - $ 364,937

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

(With Deloitte & Touche audit report dated March 25, 2013)

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FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2012 AND 2011 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Net income Depreciation Amortization of deferred charges Amortization of leasehold rights included in rental expense Equity in earnings of equity-method investees, net Cash dividends from equity-method investees Impairment loss on financial assets carried at cost Gain on disposal of investments, net Recognized interest on bonds payable Loss on disposal of property and idle assets, net Deferred income taxes Increase in prepaid pension cost Net changes in operating assets and liabilities Notes receivable Accounts receivable Related parties - notes and accounts receivable Related parties - other receivable Other receivables Inventories Prepayments Other current assets Notes and accounts payable Related parties - accounts payable Related parties - other payable Income tax payable Other payables Advance receipts Other current liabilities Net cash provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Related parties - other receivable Acquisition of investments accounted for by the equity method Proceeds of the disposal of available-for-sale financial assets Proceeds of the disposal of property and idle assets Acquisition of property (Increase) decrease in refundable deposits Increase in other assets Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in short-term debts	2012 $ 1,692,858 1,053,416 10,028 175,063 (711,997) 504,630 - - 37,979 4,438 152,721 (17,481) 8,329 (25,857) 37,931 36,135 (19,948) (57,184) 70,287 11,643 715,429 7,617 143,274 (38,262) (37,444) 712,528 (142,973 ) 4,323,160 (144,411) - - 609 (3,254,930) 120 (686 ) (3,399,298 ) (1,900,000)	2011 $ 2,143,115 403,283 3,204 74,822 (1,148,081) 1,166,581 38,500 (4,962) 31,199 6,619 122,315 (29,721) (23,252) (273,908) (11,028) (34,277) (12,039) (165,360) (60,655) (2,359) 801,007 20,721 (9,484) (159,958) 43,193 214,658 111,044 3,245,177 - (361,325) 8,407 598 (4,955,966) (4,422) (40,463 ) (5,353,171 ) 1,250,000 (Continued)

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FAR EASTERN DEPARTMENT STORES, LTD.

STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2012 AND 2011 (In Thousands of New Taiwan Dollars)

Increase in short-term notes and bills payable Issuance of bonds Increase (decrease) in long-term borrowings Increase (decrease) in deposits received Cash dividends Net cash provided by (used in) financing activities NET INCREASE IN CASH CASH, BEGINNING OF YEAR CASH, END OF YEAR SUPPLEMENTAL CASH FLOW INFORMATION Interest paid Less: Capitalized interest Interest paid, excluding capitalized interest Income tax paid NONCASH INVESTING AND FINANCING ACTIVITIES Adjustment to advance receipts and depreciation Adjustment to the cost of leasehold rights and other payables Bonds issued - current portion Long-term borrowings - current portion CASH PAID FOR THE ACQUISITION OF PROPERTY Acquisition of property Acquisition of leasehold rights Increase in construction in progress and prepayments for equipment (Increase) decrease in balance payable - property (Increase) decrease in balance payable - property - related parties Cash paid	2012 $ 187 - 2,600,087 (2,229) (1,317,289 ) (619,244 ) 304,618 566,057 $ 870,675 $ 242,766 73,388 $ 169,378 $ 77,801 $ 158,029 $ 254,908 $ 1,200,000 $ 600,000 $ 803,677 60,614 941,588 1,386,804 62,247 $ 3,254,930	2011 $ 399,812 2,493,658 (519,252) 2,683 (1,242,674 ) 2,384,227 276,233 289,824 $ 566,057 $ 387,476 183,265 $ 204,211 $ 282,875 $ 76,990 $ - $ - $ - $ 143,330 1,687,384 5,898,398 (2,243,474) (529,672 ) $ 4,955,966

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

(With Deloitte & Touche audit report dated March 25, 2013) (Concluded)

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