FEDS — Annual Report 2015

May 5, 2016

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

Dec. 31, 2015, Dec. 31, 2014 and Jan. 1, 2014

(In thousands of New Taiwan Dollars, Expect Par Value)

Code 1100 1110 1125 1147 1150 1170 1180 1200 1220 130X 1410 1460 1470 11XX 1523 1543 1546 1550 1600 1760 1780 1840 1975 1985 1990 15XX 1XXX Code 2100 2110 2150 2170 2180 2200 2230 2250 2313 2310 2321 2322 2399 21XX 2530 2540 2550 2570 2640 2670 25XX 2XXX 3110 3200 3310 3320 3350 3300 3400 3500 31XX 36XX 3XXX	Assets CURRENT ASSETS Cash and cash equivalents Financial assets at fair value through profit or loss - current Available-for-sale financial assets - current Bond investments without active market-current Notes receivable Accounts receivable Accounts receivable due from related parties Other receivables Current tax assets Inventories Prepayments Noncurrent asset held for sale Other current assets Total current assets NONCURRENT ASSETS Available-for-sale financial assets - noncurrent Financial assets measured at cost – noncurrent Bond investments without active market－non-current Investments accounted for by equity method Property, plant and equipment Investment properties Intangible assets Deferred tax assets Net defined benefit asset, non-current Long-term prepayments for lease Other noncurrent assets Total noncurrent assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term debts Short-term notes and bills payable Notes payable Accounts payables Notes and accounts payable to related parties Other payables Current tax liabilities Provision-current Deferred revenue - current Advance receipts Bond issued – current portion Long-term borrowings – current portion Other current liabilities Total current liabilities NONCURRENT LIABILITIES Bonds issued Long-term borrowings Provision-noncurrent Deferred tax liabilities Net defined benefit liability, non-current Other noncurrent liabilities Total noncurrent liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY Share Capital Ordinary share Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Treasury stock Total equity attributable to owners of the Company NON-CONTROLLING INTERESTS Total equity TOTAL		2015/12/31	％ 9 - - 1 - 1 - 2 - 3 1 - - 17 3 - - 9 43 9 7 1 - 9 2 83 100 9 2 - 16 - 5 - - - 7 - 2 - 41 1 18 - 2 1 2 24 65 13 3 3 2 3 8 4 - 28 7 35 100	2014/12/31 (Retrospective application) Amount ％ $ 10,952,918 10 290,895 - 487,231 - 1,204,317 1 2,410 - 527,659 1 191,931 - 1,508,732 1 200,615 - 2,870,727 3 975,457 1 115 - 102,260 - 19,315,267 17 4,989,668 4 783,652 1 125,000 - 9,546,534 9 47,426,385 43 9,667,344 9 7,226,592 6 926,612 1 185,782 - 9,472,460 8 1,954,939 2 92,304,968 83 $ 111,620,235 100 $ 6,674,285 6 2,991,683 3 63,303 - 17,601,054 16 153,238 - 5,495,103 5 512,116 - 4,135 - 65,656 - 7,829,288 7 1,000,000 1 1,764,429 2 265,157 - 44,419,447 40 992,560 1 21,548,341 19 31,222 - 1,729,061 2 563,292 - 2,878,845 3 27,743,321 25 72,162,768 65 14,391,956 13 3,498,252 3 2,575,473 2 2,461,168 2 2,936,463 3 7,973,104 7 5,900,851 5 ( 97,110) - 31,667,053 28 7,790,414 7 39,457,467 35 $ 111,620,235 100	2014/12/31 (Retrospective application) Amount ％ $ 10,952,918 10 290,895 - 487,231 - 1,204,317 1 2,410 - 527,659 1 191,931 - 1,508,732 1 200,615 - 2,870,727 3 975,457 1 115 - 102,260 - 19,315,267 17 4,989,668 4 783,652 1 125,000 - 9,546,534 9 47,426,385 43 9,667,344 9 7,226,592 6 926,612 1 185,782 - 9,472,460 8 1,954,939 2 92,304,968 83 $ 111,620,235 100 $ 6,674,285 6 2,991,683 3 63,303 - 17,601,054 16 153,238 - 5,495,103 5 512,116 - 4,135 - 65,656 - 7,829,288 7 1,000,000 1 1,764,429 2 265,157 - 44,419,447 40 992,560 1 21,548,341 19 31,222 - 1,729,061 2 563,292 - 2,878,845 3 27,743,321 25 72,162,768 65 14,391,956 13 3,498,252 3 2,575,473 2 2,461,168 2 2,936,463 3 7,973,104 7 5,900,851 5 ( 97,110) - 31,667,053 28 7,790,414 7 39,457,467 35 $ 111,620,235 100	2014/1/1 (Retrospective application)	2014/1/1 (Retrospective application)	2014/1/1 (Retrospective application)
			Amount $ 10,026,630 351,111 468,682 876,847 3,393 515,195 182,970 1,687,802 5,782 2,997,240 871,542 - 90,102 18,077,296 3,689,341 611,576 127,000 9,163,153 45,612,886 10,036,266 7,240,992 727,394 - 9,177,719 1,873,863 88,260,190 $ 106,337,486 $ 9,499,733 2,351,020 52,224 16,605,966 119,754 4,895,382 182,997 3,000 98,552 8,063,527 - 1,959,200 309,764 44,141,119 994,419 18,829,745 31,058 1,991,395 802,608 2,695,271 25,344,496 69,485,615 14,169,406 3,315,420 2,728,379 2,461,168 2,673,946 7,863,493 3,995,790 97,110) 29,246,999 7,604,872 36,851,871 $ 106,337,486			Amount $ 10,952,918 290,895 487,231 1,204,317 2,410 527,659 191,931 1,508,732 200,615 2,870,727 975,457 115 102,260 19,315,267 4,989,668 783,652 125,000 9,546,534 47,426,385 9,667,344 7,226,592 926,612 185,782 9,472,460 1,954,939 92,304,968 $ 111,620,235 $ 6,674,285 2,991,683 63,303 17,601,054 153,238 5,495,103 512,116 4,135 65,656 7,829,288 1,000,000 1,764,429 265,157 44,419,447 992,560 21,548,341 31,222 1,729,061 563,292 2,878,845 27,743,321 72,162,768 14,391,956 3,498,252 2,575,473 2,461,168 2,936,463 7,973,104 5,900,851 97,110) 31,667,053 7,790,414 39,457,467 $ 111,620,235		Amount $ 13,221,405 239,974 552,555 437,497 28,119 766,445 57,302 1,779,487 418,064 2,976,244 1,090,656 377 83,987 21,652,112 4,986,339 776,374 521,897 9,050,368 52,166,888 3,070,495 7,715,184 940,225 222,615 9,464,677 1,920,123 90,835,185 $ 112,487,297 $ 7,462,340 3,047,306 159,194 17,693,401 151,909 5,252,331 401,874 4,135 101,136 7,720,500 2,493,512 1,445,159 252,891 46,185,688 1,990,702 21,841,434 30,483 1,608,841 535,105 2,841,682 28,848,247 75,033,935 14,109,761 3,498,174 2,358,917 1,931,285 4,107,920 8,398,122 3,659,643 97,110) 29,568,590 7,884,772 37,453,362 $ 112,487,297	％
		(			(		(		12 - - - - 1 - 2 - 3 1 - - 19 4 1 1 8 46 3 7 1 - 8 2 81 100 7 3 - 16 - 5 - - - 7 2 1 - 41 2 19 - 1 1 3 26 67 13 3 2 2 3 7 3 - 26 7 33 100

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Year ended Dec. 31, 2015 and 2014

(In thousands of New Taiwan Dollars, Expect Par Value)

C o d e 4000 REVENUES 5000 COSTS 5900 GROSS PROFIT OPERATING EXPENSES 6100 Selling 6200 General and administrative 6000 Total operating expenses 6900 OPERATING INCOME NONOPERATING INCOME AND EXPENSES 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit (loss) of associates accounted for using equity method 7000 Total Non-operating income and expenses 7900 INCOME BEFORE INCOME TAX 7950 INCOME TAX EXPENSE 8200 NET INCOME		2015 Year ended Dec.	2015 Year ended Dec.

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C o d e Other comprehensive income 8310 Components of other comprehensive income that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans 8312 Gains on revaluation of property, plant and equipment 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8360 Components of other comprehensive income that will be reclassified to profit or loss 8361 Exchange differences on translation 8362 Unrealised gains (losses) on valuation of available-for-sale financial assets 8370 Share of other comprehensive income of associates accounted for using equity method 8300 Total other comprehensive income, net 8500 COMPREHENSIVE INCOME 8600 CONPREHENSIVE INCOME CONTRIBUTED TO： 8610 Owners of parent 8620 Non-controlling interests 8700 CONPREHENSIVE INCOME CONTRIBUTED TO： 8710 Owners of parent 8720 Non-controlling interests EARNINGS PER SHARE 9750 Basic 9850 Diluted (Concluded)		2015 Year ended Dec. 31 Amount ％ ( 422,992 ) ( 1 ) - - ( 3,313 ) - 72,026 - ( 354,279) ( 1) ( 24,562 ) - ( 1,318,876 ) ( 3 ) ( 566,750) ( 1) ( 1,910,188) ( 4) ( 2,264,467) ( 5) ($ 111,166) - $ 1,714,770 4 438,531 1 $ 2,153,301 5 ($ 530,347 ) ( 1) 419,181 1 ($ 111,166) - $ 1.20 $ 1.20			2014 Year ended Dec. 31 (Retrospective application)
		Amount ( 422,992 ) - ( 3,313 ) 72,026 ( 354,279) ( 24,562 ) ( 1,318,876 ) ( 566,750) ( 1,910,188) ( 2,264,467) ($ 111,166) $ 1,714,770 438,531 $ 2,153,301 ($ 530,347 ) 419,181 ($ 111,166) $ 1.20 $ 1.20			Amount ( 62,170 ) 2,328,026 ( 2,893 ) ( 146,321 ) 2,116,642 48,411 ( 61,995 ) 92,499 78,915 2,195,557 $ 4,354,975 $ 1,524,441 634,977 $ 2,159,418 $ 3,721,008 633,967 $ 4,354,975 $ 1.07 $ 1.07		％
							- 5 - - 5 - - - - 5 9 3 2 5 8 1 9

FAR EASTERN DEPARTMENT STORES, LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Year ended Dec. 31, 2015 and 2014

(In thousands of New Taiwan Dollars)

Code CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES A00010 INCOME BEFORE INCOME TAX A20000 Adjustments to reconcile profit(loss) A20100 Depreciation expense A20200 Amortization expense A20300 Gain on reversal of losses on doubtful debts A20400 Net loss (gain) on financial assets or liabilities at fair value through profit or loss A20900 Finance costs A21200 Interest income A21300 Dividend income A22300 Share of loss (profit) of associates accounted for using equity method A22500 Loss (gain) on disposal of property, plant and equipment, net A22800 Losses on disposals of intangible assets A23000 Loss (gain) on disposal of non-current assets classified as held for sale A23500 Impairment loss on financial assets A23700 Loss for market price decline and obsolete and slow-moving inventories A23700 Impairment loss recognized on intangible assets A23700 Impairment loss recognized on property, plant and equipment A24600 Loss (gain) on change in fair value of investment properties A29900 Amortization of prepayments A29900 Amortization of prepayments for lease A29900 Reversal of provisions A29900 Reversal of deferred revenue A29900 Reversal unrealized purchase discounts A30000 Net changes in operating assets and liabilities A31110 Financial assets held for trading A31130 Notes receivable A31150 Accounts receivable	2015 Year ended Dec. 31 $ 3,414,673 3,061,186 35,644 ( 8,882 ) ( 16,658 ) 461,215 ( 76,018 ) ( 302,019 ) ( 405,335 ) 36,518 820 97 169,281 ( 17,123 ) - - ( 357,044 ) 15,087 326,656 ( 1,627 ) ( 65,656 ) 14,033 ( 43,558 ) ( 983 ) 30,923	2014 Year ended Dec. 31 (Retrospective restatement)
		$ 3,084,418 2,951,638 28,907 ( 3,321 ) ( 46,651 ) 465,191 ( 101,762 ) ( 268,122 ) ( 133,207 ) 18,330 - ( 316 ) 2,055 13,041 495,605 4,637 21,931 14,145 321,773 - ( 101,136 ) ( 11,617 ) ( 4,270 ) 25,709 276,947

（ Continued）

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（Continued）
Code A31160 Notes and accounts receivable due from related parties A31180 Other receivable A31200 Inventories A31230 Prepayments A31240 Other current assets A31990 Prepaid pension costs A32130 Notes payable A32150 Accounts payable A32160 Notes and accounts payable to related parties A32180 Other payables A32210 Deferred revenue A32210 Advance receipts A32230 Other current liabilities A32240 Accrued pension liabilities A33000 Cash inflow (outflow) generated from operations A33300 Interests paid A33100 Interests received A33500 Income tax returned A33500 Income taxes paid AAAA Net cash flows from (used in) operating activities CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES B00600 Decrease (increase) in bond investments without active market B01800 Acquisition of investments accounted for using equity method B02100 Decrease in prepayments for long-term investment B02600 Proceeds from disposal of non-current assets classified as held for sale B02700 Acquisition of property, plant and equipment B02800 Proceeds from disposal of property, plant and equipment B04100 Decrease (increase) in other receivable B04500 Acquisition of intangible assets B05400 Acquisition of investment properties B06700 Decrease (increase) in other non-current assets B07300 Increase in prepayments for lease B07600 Dividends received BBBB Net cash flows from (used in) investing activities	2015 Year ended Dec. 31 8,961 ( 174,547 ) ( 123,423 ) 84,092 12,158 8,351 ( 11,079 ) ( 995,088 ) ( 33,484 ) ( 420,542 ) 98,552 544,737 44,607 62,552 5,377,077 ( 440,838 ) 71,918 19,246 ( 883,682) 4,143,721 325,470 ( 106,000 ) 78,346 16 ( 1,970,634 ) 1,173 - ( 45,745 ) ( 11,878 ) 82,382 ( 15,388 ) 432,666 (1,229,592)	2014 Year ended Dec. 31 (Retrospective restatement)
		( 134,629 ) 35,073 104,093 115,264 ( 18,273 ) 7,975 ( 95,891 ) ( 92,347 ) 1,329 ( 448,737 ) 65,656 383,519 12,266 29,166 7,018,389 ( 481,901 ) 116,462 210,212 ( 819,264) 6,043,898 ( 369,923 ) ( 360,000 ) 78,456 582 ( 1,984,796 ) 24,190 212,388 ( 34,958 ) - ( 52,667 ) ( 372,940 ) 406,809 (2,452,859)

（ Continued）

（ Continued）

Code Cash flows from (used in) financing activities C00100 Increase in short-term loans C00200 Decrease in short-term loans C00500 Increase in short-term notes and bills payable C00600 Decrease in short-term notes and bills payable C01300 Repayments of bonds C01600 Proceeds from long-term debt C01700 Repayment of long-term debt C04300 Increase in other non-current liabilities C04500 Dividends paid by parent company C04900 Payments to acquire treasury shares C05800 Dividends paid to non-controlling interests CCCC Net cash flows from (used in) financing activities DDDD Effect of exchange rate changes on cash and cash equivalents EEEE Net increase (decrease) in cash and cash equivalents E00100 Cash and cash equivalents at beginning of period E00200 Cash and cash equivalents at end of period	2015 Year ended Dec. 31 63,475,366 ( 60,614,337 ) 25,892,479 ( 26,533,142 ) ( 1,000,000 ) 47,315,604 ( 49,840,000 ) ( 19,375 ) ( 1,439,211 ) ( 405,304 ) ( 617,669) (3,785,589) ( 54,828) ( 926,288 ) 10,952,918 $10,026,630	2014 Year ended Dec. 31 (Retrospective restatement)
		68,280,489 ( 69,231,410 ) 23,851,586 ( 23,907,209 ) ( 2,500,000 ) 48,618,177 ( 48,592,000 ) 26,571 ( 1,622,612 ) - ( 720,319) (5,796,727) ( 62,799) ( 2,268,487 ) 13,221,405 $10,952,918

(Concluded)