PCSC - AGM Information 2019 | FinancialReports.eu

PRESIDENT CHAIN STORE CORPORATION 2019 Annual General Shareholders’ Meeting Minutes

(Translation)

Time：10:00 a.m. on June 12, 2019 (Wednesday)

Place：No.301, Zhongzheng Rd., Yongkang Dist., Tainan City 710, Taiwan (R.O.C.)

(1F, Training Center of Uni-President Enterprises Corp.)

Total outstanding PCSC shares：1,039,622,255 shares

Total shares represented by shareholders present in person or by proxy：978,236,061 shares

Percentage of shares held by shareholders present in person or by proxy：94.10%

Chairman：Lo, Chih-Hsien Recorder：Chou, Hui-Ching

Directors present：Lo, Chih-Hsien；Chen, Jui-Tang；Huang, Jui-Tien；

Wu, Liang-Feng；Su, Tsung-Ming；Wu, Kun-Lin；Hwang, Jau-Kai；

Wu, Tsung-Ping；Wu, Wen-Chi；Shu, Pei-Gi (Independent

Director)；Wang, Wen-Yeu (Independent Director)；Hung,

Yung-Chen (Independent Director)

Sit-in Members：

PRICEWATERHOUSECOOPERS, Taiwan, Hsiao, Chun-Yuan (External auditor) PRICEWATERHOUSECOOPERS Legal, Taiwan, Yang, Chin-Hsing (Attorney)

Parliamentary Procedure：

I. Call the Meeting to Order (Report equity represented by attendance)
II. Chairman Remarks
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III. Report Items

1. Business Report for 2018.

Explanation:

The business report for 2018 is attached as Appendix I.

2. Audit Committee’s Review Report for 2018.

Explanation:

The Audit Committee Review’s Report for 2018 is attached as Appendix II.

3. Status of Investment in Mainland China in 2018.

Explanation:

The status of the Company’s investment in Mainland China in 2018 is attached as Appendix III.

4. Compensation for Employees and Directors in 2018.

Explanation:

Based on the Articles of Incorporation NO.29, President Chain Store Corp. recognized NT$576,995,489 as compensation for employees, and NT$192,771,948 as compensation for directors in 2018, by paying cash.

IV. Ratification Items

(Proposed by the Board)

1. Ratification of 2018 Business Report and Financial Statements.

Explanation:

(1) PCSC’s 2018 Financial Statements were audited by PRICEWATERHOUSECOOPERS Taiwan.
(2) 2018 Business Report, Financial Statements, and Profit Distribution Proposal have been approved by the Board and examined by the Audit Committee.
(3) The Business Report and Financial Statements for 2018 are attached as Appendix I and Appendix IV.
(4) RESOLVED, that 2018 Business Report and Financial Statements be and hereby were accepted as submitted.

Voting Result:

Shares represented at the time of voting are 978,236,061 votes, wherein the votes in favor are 911,807,573.

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% of the total represented
Voting results
share present
Votes in favor ： 911,807,573
(including 880,758,018 exercised 93.20%
via electronic voting)
Votes against ： 688,918 (including
688,918 exercised via electronic 0.07%
voting)
Votes abstained ： 65,739,570
(including 65,735,843 exercised 6.73%
via electronic voting)
Votes invalid ： 0 0.00%
----- End of picture text -----

V. Discussion Items

(Proposed by the Board)

1. Adoption of the Proposal for Distribution of 2018 Profits.

Explanation:

(1) The 2018 Profit Allocation Proposal is attached as Appendix V.
(2) The Company’s distributable earnings for 2018 are NT$11,443,082,412. The cash dividend to be distributed is NT$8.8 per share. It is proposed that the Board of PCSC is authorized to resolve the ex-dividend date and distribution record date.
(3) The total cash dividends allocated to each shareholder were rounded off to one NT$. The fractional stocks less than NT$1 in the allocation were transferred to other income of the Company.
(4) RESOLVED, that the above proposal be and hereby was approved as proposed.

Voting Result:

Shares represented at the time of voting are 978,236,061 votes, wherein the votes in favor are 912,667,780.

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% of the total represented
Voting results
share present
Votes in favor ： 912,667,780
(including 881,618,225 exercised 93.29%
via electronic voting)
Votes against ： 56,975
0.00%
(including 56,975 exercised via
electronic voting)
Votes abstained ： 65,511,306
(including 65,507,579 exercised 6.71%
via electronic voting)
Votes invalid ： 0 0.00%
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(Proposed by the Board)

2. Amendment to the Articles of Incorporation of the Company.

Explanation:

(1) To conform the amendment of laws and meet the operational needs, the Articles of Incorporation are proposed to be amended.
(2) The proposed amendments to the Articles of Incorporation is attached as Appendix VI.
(3) RESOLVED, that the above proposal be and hereby was approved as proposed.

Voting Result:

Shares represented at the time of voting are 978,236,061 votes, wherein the votes in favor are 911,329,163.

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% of the total represented
Voting results
share present
Votes in favor ： 911,329,163
(including 880,279,608 exercised 93.16%
via electronic voting)
Votes against ： 1,369,342
(including 1,369,342 exercised 0.13%
via electronic voting)
Votes abstained ： 65,537,556
(including 65,533,829 exercised 6.71%
via electronic voting)
Votes invalid ： 0 0.00%
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(Proposed by the Board)

3. Amendment to the Procedures for Acquisition and Disposal of Assets of the

Company.

Explanation:

(1) To conform the amendment of laws, the Procedures for Acquisition and Disposal of Assets are proposed to be amended.
(2) The proposed amendments to the Procedures for Acquisition and Disposal of Assets is attached as Appendix VII.
(3) RESOLVED, that the above proposal be and hereby was approved as proposed.

Voting Result:

Shares represented at the time of voting are 978,236,061 votes, wherein the votes in favor are 912,640,467.

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% of the total represented
Voting results
share present
Votes in favor ： 912,640,467
(including 881,590,912 exercised 93.29%
via electronic voting)
Votes against ： 56,188 (including
56,188 exercised via electronic 0.00%
voting)
Votes abstained ： 65,539,406
(including 65,535,679 exercised 6.71%
via electronic voting)
Votes invalid ： 0 0.00%
----- End of picture text -----

(Proposed by the Board)

4. Amendment to the Procedures for Loaning of Funds of the Company.

Explanation:

(1) To conform the amendment of laws and meet the operational needs, the Procedures for Loaning of Funds are proposed to be amended.
(2) The proposed amendments to the Procedures for Loaning of Funds is attached as Appendix VIII.
(3) RESOLVED, that the above proposal be and hereby was approved as proposed.

Voting Result:

Shares represented at the time of voting are 978,236,061 votes, wherein the votes in favor are 912,632,957.

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% of the total represented
Voting results
share present
Votes in favor ： 912,632,957
(including 881,583,402 exercised 93.29%
via electronic voting)
Votes against ： 59,338 (including
59,338 exercised via electronic 0.00%
voting)
Votes abstained ： 65,543,766
(including 65,540,039 exercised 6.71%
via electronic voting)
Votes invalid ： 0 0.00%
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(Proposed by the Board)

5. Amendment to the Procedures for Guarantee and Endorsement of the Company.

Explanation:

(1) To conform the operational needs, the Procedures for Guarantee and Endorsement are proposed to be amended.
(2) The proposed amendments to the Procedures for Guarantee and Endorsement is attached as Appendix IX.
(3) RESOLVED, that the above proposal be and hereby was approved as proposed.

Voting Result:

Shares represented at the time of voting are 978,236,061 votes, wherein the votes in favor are 912,635,086.

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% of the total represented
Voting results
share present
Votes in favor ： 912,635,086
(including 881,585,531 exercised 93.29%
via electronic voting)
Votes against ： 58,386 (including
58,386 exercised via electronic 0.00%
voting)
Votes abstained ： 65,542,589
(including 65,538,862 exercised 6.71%
via electronic voting)
Votes invalid ： 0 0.00%
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(Proposed by the Board)

6. Adoption of the Proposal for Releasing Directors from Non-competition.

Explanation:

(1) In accordance with Article 209 of the Company Act, the directors of the Company have simultaneously undertaken directors or managerial positions in other companies that engage in similar business activities as the Company do. Their involvements are not considered to constitute any conflicts to the Company. For this reason, the Company agrees to remove restrictive clauses on directors’ and independent directors’ involvements in other companies to conform to regulations.
(2) Details of the duties subject to directors and independent directors from non-competition are attached as Appendix X.
(3) RESOLVED, that the above proposal be and hereby was approved as proposed.

Voting Result:

Shares represented at the time of voting are 978,236,061 votes, wherein the votes in favor are 876,210,958.

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% of the total represented
Voting results
share present
Votes in favor ： 876,210,958
(including 845,161,403 exercised 89.57%
via electronic voting)
Votes against ： 83,687 (including
83,687 exercised via electronic 0.00%
voting)
Votes abstained ： 101,941,416
(including 101,937,689 exercised 10.43%
via electronic voting)
Votes invalid ： 0 0.00%
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VI. Other Special Motions：None.

VII. Dissolution

Appendix I

2018 Business Report

Dear Shareholders,

In 2018, the global economy was turbulent, the minimum wage in Taiwan continued to increase, and businesses continued to face significant challenges. Despite an unstable external operating environment, President Chain Store Corporation (PCSC) continued to serve as a creative, convenient, safe, welcoming community center, offering customers innovative and convenient products and services. Together with the great efforts of our domestic and overseas subsidiaries, PCSC achieved consolidated revenue of NT$244.89 billion and net profits of NT$11.74 billion in 2018, was again listed in the Forbes Global 2000, and was selected as one of the top 250 global retailers by Deloitte for years in a row.

7-ELEVEN Taiwan aims to provide customers with an even more comfortable and friendly place to shop. In addition to providing larger, more featured stores, PCSC also integrated resources, including beauty, fitness, bakery, and fast foods etc. to launch lifestyle stores to satisfy the needs of the business area and provide customers with a diversified shopping experience. Besides, PCSC introduced a new consumer model and unveiled the future of convenience stores when it opened the doors to “X-Store”, the first unmanned store in Taiwan employing state-of-the-art technology to serve customers. To ensure food safety, PCSC formed a product safety committee, set up an internal monitoring mechanism and upgraded the testing capabilities of our product quality testing lab. Together, these initiatives enable PCSC to control the supply chain and create a rigorous food safety net to protect customers. PCSC has worked together in strategic partnerships with famous restaurants and chefs to launch a diverse selection of delicious food products. PCSC has continued to improve CITY CAFE coffee quality and flavor. We introduced premium coffee and bubble tea and continued to drive turnover growth. PCSC provides customers with high quality food products and daily necessities with our owned brand products and the best products from nations around the world. In 2018, we handled pickup and delivery of more than 200 million packages. By offering a variety of payment tools and our OPEN Wallet, a point-accumulation payment system in which points can be collected and redeemed cross different channels, PCSC built a convenient digital lifestyle platform for customers.

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In addition to 7-ELEVEN Taiwan, PCSC has also expanded into other retail businesses both locally and overseas. As of the end of 2018, PCSC operates a total of 9,300 stores. 7-ELEVEN Philippines has reached 2,500 stores and actively strengthened digital services. Uni-Wonder Corporation (Starbucks Taiwan) continues to infuse new life into the coffee market with innovative services, diversified stores, and brand experiences. Books.com offers e-book services, a diversified, quality book-purchasing experience. Wisdom Distribution Service Corp. continued to improve efficiency through warehouse integration and concurrent software and hardware upgrades.

For many years, PCSC has worked tirelessly to achieve sustainable operations and fulfill our responsibilities in the areas of corporate governance, social engagement, and environmental protection. For the fourth year running, PCSC ranked among the top 5% of all TWSE-/TPEx-listed companies in the annual Corporate Governance Evaluation. PCSC was also selected as a constituent stock of the MSCI Global Sustainability Indices, FTSE4Good Emerging Index, and Taiwan Sustainability Index. In the area of social participation, the Good Neighbor Foundation helped almost 3,000 children from disadvantaged homes and assisted in promoting local industries and create employment opportunities. We also worked with the YongLin Healthcare Foundation to offer a more variety of tests. In the area of environmental protection, we introduced the ISO 50001 Energy Management System and received ISO 14064-1 GHG Certification. PCSC was given the CSR Corporate Citizen Award for Large Corporation Group by CommonWealth Magazine and was the only convenience store on the list.

Economic uncertainty, at home and abroad, will continue in 2019. Nevertheless, PCSC will maintain integrity and honesty in our business operations, while continuing to advance the seven key building elements of our company: people, store, product, system, logistics, policy, and culture. PCSC has evolved from a “convenience store that provides basic necessities” to “a store that customers depend on and that surpasses their expectations” and which offers customers an environment characterized by experience, entertainment, and education. By focusing on operations and consolidating resources, PCSC's affiliates will also continue to achieve outstanding performance. The total number of 7-ELEVEN Philippines stores is expected to exceed 2,800 this year. They will continue to offer a variety of fresh food products and services that meet customer needs. Uni-Wonder Corp. (Starbucks Taiwan) will continue to upgrade its product structure, enhance the customer experience, and optimize VIP members management. President Transnet Corp. will provide even better logistics and delivery services. COSMED will introduce an even wider variety of innovative products and high quality services to ensure a rich and novel shopping experience. With exceptional products and services, 7-ELEVEN Shanghai and 7-ELEVEN Zhejiang will provide customers with a convenient shopping experience.

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PCSC is “determined to become the most outstanding retailer by offering convenient services and being a good corporate citizen”. To achieve this vision, PCSC focuses on three core goals, creating a happy company, positively impacting society, and achieving environmental sustainability. We strive to make life more convenient for our customers, ensure steady profitability for our franchisees, create a fair and friendly working environment for our employees, and increase shareholder value for our shareholders.

Lo, Chih-Hsien Huang, Jui-Tien Kuo, Ying-Chih Chairman President Chief Accounting Officer

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Appendix II

President Chain Store Corporation Audit Committee’s Review Report (Translation)

The Board of Directors has prepared the Company’s 2018 Business Report, Financial Statements, and Proposal for Allocation of 2018 profits.

The independent auditors, Hsiao, Chun-Yuan and Chou, Chien-Hung, of PRICEWATERHOUSECOOPERS, audited PCSC’s Financial Statements and issued an audit report relating to the Financial Statements. The Business Report, Financial Statements, and Profit Allocation Proposal have been reviewed and determined to be correct and accurate by the Audit Committee members of President Chain Store Corp.. According to Article 219 of the Company Act, we hererby submit this report.

2019 Annual General Shareholders’ Meeting of President Chain Store Corp.

President Chain Store Corp.

Chairman of the Audit Committee Shu, Pei-Gi

Date: April 26th, 2019

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Appendix III

President Chain Store Corporation Status of Investment in Mainland China in 2018

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Unit: USD
Investment Accumulated Indirect
Name of Investee in Mainland China
in 2018 Investment Shareholdings
President Chain Store (Shanghai) Ltd. - 77,337,258 100%
President Chain Store (Zhejiang) Ltd. 11,967,986 20,784,902 100%
Shanghai President Chain Store - 5,170,585 100%
Corporation Trade Co.,Ltd.
President Cosmed Chain Store (Shen - 9,417,282 100%
Zhen) Co., Ltd.
Shan Dong President Yinzuo Commercial - 4,078,354 55%
Limited
PCSC (Chengdu) Hypermarket Limited - 17,826,340 100%
Shanghai Cold Stone Ice Cream - 32,739,030 100%
Corporation
Shanghai President Logistic Co., Ltd. - 2,000,000 100%
President Chain Store (Taizhou) Ltd. - 9,176,150 100%
Beauty Wonder (Zhejiang) Trading 4,680,041 4,680,041 100%
Co.,Ltd.
Total 16,648,027 183,209,942
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Note: In 2018, Beauty Wonder (Zhejiang) Trading Co., Ltd. was established, and the new capital for President Chain Store (Zhejiang) Ltd. was injected.

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Appendix IV

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Stockholders of President Chain Store Corp.

Opinion

We have audited the accompanying consolidated balance sheets of President Chain Store Corp. and its subsidiaries as of December 31, 2018 and 2017, and the related consolidated statements of comprehensive income, of changes in equity, and of cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other independent accountants (which are described in the Other matters section of our report), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of President Chain Store Corp. and its subsidiaries as of December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for the years then ended, in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of President Chain Store Corp. and its subsidiaries in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with this Code. Based on our audits and the reports of other independent accountants, we believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s consolidated financial statements of the year ended December 31, 2018 are stated as follows:

Completeness and accuracy of retail sales revenue

Description

Please refer to Notes 4(24) and 6(22) to the consolidated financial statements for the accounting policy and the details of accounting relating to this key audit matter.

Retail sales revenue is generated by point-of-sale (POS) terminals, which record the merchandise name,

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quantity, sales price and total sales amount of each transaction using pre-established merchandise master file data (including merchandise name, cost of inventory, retail price, sales promotions, etc.). After the daily closing process, each store manager uploads their sales information to the ERP (enterprise resource planning) system, which summarizes all sales and automatically generates sales revenue journal entries. Each store manager also prepares a daily cash report to record the sales information and payment methods (including cash, gift certificates, credit cards and electronic payment devices, etc.) and the cash deposited to the bank.

As retail sales revenue comprises numerous small amount transactions and highly relies on the POS and ERP systems, the process of summarizing and recording sales revenue by these systems is important with regard to the completeness and accuracy of the retail sales revenue, and thus has been identified as a key audit matter.

How our audit addressed the matter

Our key audit procedures performed in respect of the above included the following:

Inspected whether additions and changes to the merchandise master file data had been properly approved and supported by relevant documents;
Inspected whether approved additions and changes to the merchandise master file data had been correctly entered in the merchandise master file;
Inspected whether merchandise master file data had been periodically transferred to POS terminals in stores;
Inspected whether sales information in POS terminals was periodically and completely transferred to the ERP system and automatically generated sales revenue journal entries;
Inspected manual sales revenue journal entries and relevant documents;
Inspected daily cash reports and relevant documents;
Inspected whether cash deposit amounts recorded in daily cash reports were in agreement with bank remittance amounts.

Cost-to-retail ratio of retail inventory method

Description

Please refer to Notes 4(12) and 6(4) to the consolidated financial statements for the accounting policy and the details of accounting relating to this key audit matter.

As there are various kinds of merchandise, the retail inventory method is used to estimate the cost of inventory and the cost of goods sold. The retail inventory method uses the ratio of the cost of goods purchased to the retail value of goods purchased (known as cost-to-retail ratio) to calculate the cost of inventory and the cost of goods sold. The calculation of the cost-to-retail ratio highly relies on the goods purchased both at cost and retail price, and thus has been identified as a key audit matter.

How our audit addressed the matter

Our key audit procedures performed in respect of the above included the following:

Interviewed management to understand the calculation of the cost-to-retail ratio under the retail inventory method, and inspected whether it had been consistently applied in the comparative periods of the financial statements;
Inspected whether additions and changes to the merchandise master file data (including merchandise name, cost of inventory, retail price, sales promotions, etc.) had been properly
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approved and the data correctly entered in the merchandise master file;

Inspected whether the cost and retail price of inventory purchased as per delivery receipts were in agreement with POS purchase records after acceptance of the inventory;
Inspected whether the POS records for the cost and retail price of inventory purchased were periodically and completely transferred to the ERP system and ascertain whether the records could not be changed manually;
Calculated the cost-to-retail ratio to verify its accuracy.

Other matter – Using the work of other auditors

We did not audit the financial statements of certain consolidated subsidiaries, which reflect total assets of NT$10,081,554 thousand and NT$8,495,128 thousand, representing 7.9% and 6.1% of total consolidated assets as of December 31, 2018 and 2017, respectively, and total operating revenue of NT$25,801,037 thousand and NT$22,105,951 thousand, representing 10.5% and 10.0% of total consolidated operating revenue for the years then ended, respectively. Those financial statements were audited by other independent accountants whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the financial statements and the information on investees disclosed in Note 13 were based solely on the reports of other independent accountants.

Other matters – Parent company-only financial reports

We have audited and expressed an unmodified opinion with an explanatory paragraph on the parent company only financial statements of President Chain Store Corp. as of and for the years ended December 31, 2018 and 2017.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal controls as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the ability of President Chain Store Corp. and its subsidiaries to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate President Chain Store Corp. and its subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the financial reporting process of President Chain Store Corp. and its subsidiaries.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements

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as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with ROC GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement in the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls of President Chain Store Corp. and its subsidiaries.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of President Chain Store Corp. and its subsidiaries to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause President Chain Store Corp. and its subsidiaries to cease to continue as a going concern.

5.

Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within President Chain Store Corp. and its subsidiaries to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of President Chain Store Corp. and its subsidiaries audit. We remain solely responsible for our audit opinion.

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

We also provide those charged with governance with a statement that we have complied with relevant

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ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2018 and are, therefore, considered to be the key audit matters. We describe these matters in our auditor’s report unless the law or regulations preclude public disclosure about the matter, or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Chun-Yuan, Hsiao Chien-Hung, Chou

for and on behalf of PricewaterhouseCoopers, Taiwan 27 February, 2019

The accompanying consolidated financial statements are not intended to present the financial position and results of operations 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 report of independent accountants 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, Taiwan 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 CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

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December 31, 2018 December 31, 2017
Assets Notes AMOUNT % AMOUNT %
Current assets
1100 Cash and cash equivalents 6(1) $ 48,530,648 38 $ 35,783,291 26
1110 Financial assets at fair value 6(2) and 12(4)
through profit or loss - current 844,225 1 1,560,025 1
1170 Accounts receivable, net 6(3) and 7 5,264,573 4 4,868,902 3
1200 Other receivables 6(6) 1,535,507 1 28,412,101 20
1220 Current income tax assets 6(28) 1,139 - 2,097 -
130X Inventories, net 6(4) 15,121,657 12 13,387,122 10
1410 Prepayments 1,340,225 1 1,417,175 1
1470 Other current assets 3,004,894 2 2,973,547 2
11XX Total current assets 75,642,868 59 88,404,260 63
Non-current assets
1510 Financial assets at fair value through 6(2)
profit or loss - non-current 85,683 - - -
1517 Financial assets at fair value through 6(5)
other comprehensive income
- non-current 845,345 1 - -
Available-for-sale financial assets
1523 12(4)
- non-current - - 1,050,734 1
Financial assets measured at cost
1543 12(4)
- non-current - - 25,721 -
1550 Investments accounted for using 6(6)
equity method 9,000,580 7 8,655,722 6
1600 Property, plant and equipment, net 6(7)(23), 7 and 8 25,292,763 20 24,982,342 18
1760 Investment property, net 6(8)(31) and 7 1,502,159 1 1,519,115 1
1780 Intangible assets 6(9) 10,393,880 8 10,656,713 8
1840 Deferred income tax assets 6(28) 1,727,043 1 1,409,184 1
1900 Other non-current assets 6(10) and 8 3,204,759 3 3,177,469 2
15XX Total non-current assets 52,052,212 41 51,477,000 37
1XXX Total assets $ 127,695,080 100 $ 139,881,260 100
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(Continued)

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PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

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December 31, 2018 December 31, 2017
Liabilities and Equity Notes AMOUNT % AMOUNT %
Current Liabilities
2100 Short-term borrowings 6(12) and 8 $ 7,237,785 6 $ 965,180 1
2110 Short-term notes and bills payable - - 250,000 -
2130 Contract liabilities - current 6(22) 2,843,189 2 - -
2150 Notes payable 7 1,866,610 2 2,066,511 2
2170 Accounts payable 20,673,579 16 18,849,947 13
2180 Accounts payable - related parties 7 2,475,104 2 2,321,016 2
2200 Other payables 6(13) 27,954,181 22 30,980,251 22
2230 Current income tax liabilities 6(28) 1,801,229 1 4,834,364 3
2300 Other current liabilities 6(14) 3,260,538 3 5,352,651 4
21XX Total current liabilities 68,112,215 54 65,619,920 47
Non-current liabilities
2527 Contract liabilities - non-current 6(22) 234,421 - - -
2540 Long-term borrowings 6(15) and 8 847,040 1 1,105,451 1
2570 Deferred income tax liabilities 6(28) 5,386,839 4 4,652,948 3
2640 Net defined benefit liability 6(16)
- non-current 4,732,549 4 4,574,800 3
2670 Other non-current liabilities 6(17) 4,356,989 3 4,421,731 3
25XX Total non-current liabilities 15,557,838 12 14,754,930 10
2XXX Total liabilities 83,670,053 66 80,374,850 57
Equity attributable to owners of
the parent
Share capital 6(18)
3110 Share capital - common stock 10,396,223 8 10,396,223 8
Capital surplus 6(19)
3200 Capital surplus 45,059 - 43,875 -
Retained earnings 6(20)
3310 Legal reserve 12,293,442 10 9,191,733 7
3320 Special reserve 398,859 - - -
3350 Unappropriated retained earnings 12,064,862 9 31,381,290 22
Other equity 6(21)
3400 Other equity interest 53,605 - ( 398,859) ( 1)
31XX Equity attributable to owners
of the parent 35,252,050 27 50,614,262 36
36XX Non-controlling interest 8,772,977 7 8,892,148 7
3XXX Total equity 44,025,027 34 59,506,410 43
3X2X Total liabilities and equity $ 127,695,080 100 $ 139,881,260 100
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The accompanying notes are an integral part of these consolidated financial statements.

Chairman: Lo, Chih-Hsien President: Huang, Jui-Tien Accounting Manager: Kuo, Ying-Chih - 21 -

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

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For the years ended December 31
2018 2017
Items Notes AMOUNT % AMOUNT %
4000 Operating revenue 6(22) and 7 $ 244,887,853 100 $ 221,132,082 100
5000 Operating costs 6(4)(23) and 7 ( 160,811,161) ( 66) ( 147,698,072) ( 67)
5900 Gross profit 84,076,692 34 73,434,010 33
Operating expenses 6(23)(24)
6100 Selling expenses ( 62,536,030) ( 25) ( 53,630,951) ( 24)
6200 General and administrative expenses ( 8,688,758) ( 4) ( 9,380,899) ( 4)
6450 Expected credit losses 12(2) ( 17,080) - - -
6000 Total operating expenses ( 71,241,868) ( 29) ( 63,011,850) ( 28)
6900 Operating profit 12,834,824 5 10,422,160 5
Non-operating income and expenses
7010 Other income 6(25) 2,425,273 1 2,946,735 1
7020 Other gains and losses 6(26) ( 137,186) - 26,313,566 12
7050 Finance costs 6(27) ( 144,662) - ( 94,511) -
7060 Share of profit of associates and joint 6(6)
ventures accounted for using equity
method 424,098 - 1,793,738 1
7000 Total non-operating income and
expenses 2,567,523 1 30,959,528 14
7900 Profit before income tax 15,402,347 6 41,381,688 19
7950 Income tax expense 6(28) ( 3,658,069) ( 1) ( 9,063,616) ( 4)
8000 Profit for the year from continuing
operations 11,744,278 5 32,318,072 15
8200 Profit for the year $ 11,744,278 5 $ 32,318,072 15
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PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

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For the years ended December 31
2018 2017
Items Notes AMOUNT % AMOUNT %
Other comprehensive income (loss)
8311 Remeasurements of net actuarial loss
on defined benefit plan ($ 156,420) - ($ 175,995) -
8316 Unrealized gain on valuation of equity 6(5)
instruments at fair value through
other comprehensive income ( 143,849) - - -
8320 Share of other comprehensive loss of
associates and joint ventures
accounted for using equity method,
components of other comprehensive
income that will not be reclassified to
profit or loss ( 5,526) - ( 24,107) -
8349 Income tax related to the components 6(28)
of other comprehensive income that
will not be reclassified to profit or loss 79,842 - 30,087 -
8310 Components of other
comprehensive loss that will
not be reclassified to profit
or loss ( 225,953) - ( 170,015) -
8361 Exchange differences from
translation of foreign operations 526,768 - ( 837,027) ( 1)
8362 Unrealized gain on valuation of 6(21)
available-for-sale financial assets - - 151,253 -
8367 Unrealized loss on valuation of bond 6(5)
instruments at fair value through
other comprehensive income ( 1,537) - - -
8370 Share of other comprehensive income 6(21)
(loss) of associates and joint ventures
accounted for using equity method,
components of other comprehensive
loss that will be reclassified to profit
or loss 3,233 - ( 15,720) -
8399 Income tax relating to the 6(21)(28)
components of other comprehensive
loss that will be reclassified to profit
or loss - - ( 6,283) -
8360 Components of other
comprehensive income (loss)
that will be reclassified to profit
or loss 528,464 - ( 707,777) ( 1)
8300 Total other comprehensive income
(loss) for the year $ 302,511 - ($ 877,792) ( 1)
8500 Total comprehensive income for the
year $ 12,046,789 5 $ 31,440,280 14
Profit attributable to:
8610 Owners of the parent $ 10,206,388 4 $ 31,017,094 14
8620 Non-controlling interests 1,537,890 1 1,300,978 1
$ 11,744,278 5 $ 32,318,072 15
Comprehensive income attributable
to:
8710 Owners of the parent $ 10,631,150 4 $ 30,272,245 13
8720 Non-controlling interests 1,415,639 1 1,168,035 1
$ 12,046,789 5 $ 31,440,280 14
9750 Basic earnings per share (in dollars) 6(29) $ 9.82 $ 29.83
9850 Diluted earnings per share (in dollars) 6(29) $ 9.79 $ 29.72
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The accompanying notes are an integral part of these consolidated financial statements.

Chairman: Lo, Chih-Hsien President: Huang, Jui-Tien Accounting Manager: Kuo, Ying-Chih - 23 -

								Non-controlling	Total Interest Total equity		$ 28,616,278 $ 4,644,652 $ 33,260,930	31,017,094 1,300,978 32,318,072		( 744,849 ) ( 132,943) ( 877,792)	30,272,245 1,168,035 31,440,280		- - -	( 8,316,978 ) - ( 8,316,978)		( 164 ) - ( 164)	42,881 - 42,881	- 3,079,461 3,079,461	$ 50,614,262 $ 8,892,148 $ 59,506,410		$ 50,614,262 $ 8,892,148 $ 59,506,410	( 3,990 ) ( 5,203) ( 9,193)	50,610,272 8,886,945 59,497,217	10,206,388 1,537,890 11,744,278		424,762 ( 122,251) 302,511	10,631,150 1,415,639 12,046,789		- - -	- - -	( 25,990,556 ) - ( 25,990,556)	- ( 1,529,607) ( 1,529,607)	536 - 536		648 - 648	$ 35,252,050 $ 8,772,977 $ 44,025,027		Accounting Manager: Kuo, Ying-Chih
				Equity directly		related to	non-current assets	held	for sale		$ 357,817	-		149,632	149,632		-	-		-	-	-	$ 507,449		$ 507,449	( 507,449)	-	-		-	-		-	-	-	-	-		-	$ -
Equity attributable to owners of the parent	Retained earnings Other equity interest	Unrealized gain or	loss on valuation of	financial assets at	Exchange differences from fair value through other			Legal reserve Special reserve Unappropriated retained earnings translation of foreign operations comprehensive Income			$ 8,208,064 $ - $ 9,839,244 ($ 186,228) $ -	- - 31,017,094 - -		- - ( 174,401) ( 720,080) -	- - 30,842,693 ( 720,080) -		983,669 - ( 983,669) - -	- - ( 8,316,978) - -		- - - - -	- - - - -	- - - - -	$ 9,191,733 $ - $ 31,381,290 ($ 906,308) $ -		$ 9,191,733 $ - $ 31,381,290 ($ 906,308) $ -	- - 25,463 - 477,996	9,191,733 - 31,406,753 ( 906,308) 477,996	- - 10,206,388 - -		- - ( 57,155) 626,479 ( 144,562)	- - 10,149,233 626,479 ( 144,562)		3,101,709 - ( 3,101,709) - -	- 398,859 ( 398,859) - -	- - ( 25,990,556) - -	- - - - -	- - - - -		- - - - -	$ 12,293,442 $ 398,859 $ 12,064,862 ($ 279,829) $ 333,434	The accompanying notes are an integral part of these consolidated financial statements.	President: Huang, Jui-Tien	- 24 -
									Capital surplus		$ 1,158	-		-	-		-	-		( 164 )	42,881	-	$ 43,875		$ 43,875	-	43,875	-		-	-		-	-	-	-	536		648	$ 45,059
								Share capital - common stock			$ 10,396,223	-		-	-		-	-		-	-	-	$ 10,396,223		$ 10,396,223	-	10,396,223	-		-	-		-	-	-	-	-		-	$ 10,396,223
									Notes				6(21)													3(1)			6(21)
										For the year ended December 31, 2017	Balance at January 1, 2017	Profit for the year	Other comprehensive income (loss) for the year		Total comprehensive income (loss) for the year	Distribution of 2016 earnings	Legal reserve	Cash dividends	Adjustment of capital surplus due to	associates’ adjustment of capital surplus	Adjustment of capital surplus due to change in interests in associates	Non-controlling interest	Balance at December 31, 2017	For the year ended December 31, 2018	Balance at January 1, 2018	Adjustments under new standards	Adjusted beginning balance	Profit for the year	Other comprehensive income (loss) for the year		Total comprehensive income (loss) for the year	Distribution of 2017 earnings:	Legal reserve	Special reserve	Cash dividends	Non-controlling interest	Overdue unclaimed cash dividend transferred to capital surplus	Adjustment of capital surplus due to	associates’ adjustment of capital surplus	Balance at December 31, 2018		Chairman: Lo, Chih-Hsien

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

				For theyears ended	For theyears ended	December 31	December 31
	Notes			2018			2017
(Expressed in thousands	of New Taiwan	dollars)
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated profit before income tax for the year			$	15,402,347		$	41,381,688
Adjustments to reconcile profit before income tax to net
cash provided by operating activities
Income and expenses having no effect on cash flows
Gain on valuation of financial assets at fair value through	6(2) and 12(4)
profit or loss		(		12,411 )	(		1,490 )
Provision for doubtful accounts	12(4)			-			18,141
Expected credit losses	12(2)			17,080			-
Depreciation on property, plant and equipment	6(7)			5,993,847			5,135,228
Amortization				584,009			356,507
Depreciation on investment property	6(8)			16,956			16,916
Finance costs	6(27)			144,662			94,511
Share of profit of associates and joint ventures	6(6)
accounted for using equity method		(		424,098 )	(		1,793,738 )
Gain on disposal of investments accounted for using the	6(26)and 7
equity method		(		59 )	(		26,637,450 )
Loss on disposal of property, plant and equipment, net	6(26)			33,275			53,095
Interest income	6(25)	(		699,385 )	(		172,023 )
Dividend income	6(25)	(		65,124 )	(		1,135,332 )
Impairment loss on intangible assets	6(9)			819			-
Impairment loss on property, plant and equipment	6(7)			9,969			11,853
Impairment loss on investment property				-			3,813
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				728,211			39,419
Accounts receivable		(		326,504 )	(		578,251 )
Other receivables				122,931	(		164,774 )
Inventories		(		1,734,535 )	(		1,009,533 )
Prepayments				76,950	(		29,716 )
Other current assets				24,955	(		381,243 )
Net changes in liabilities relating to operating
activities
Contract liabilities - current		(		1,092,169 )			-
Accounts payable				1,977,720			810,619
Notes payable		(		199,901 )	(		141,754 )
Other payables				18,646			3,569,675
Advance receipts				1,678,593			921,293
Contract liabilities - non-current		(		111,590 )			-
Net defined benefit liabilities - non-current				157,749			132,178
Cash generated from operations				22,322,943			20,499,632
Interest received				697,286			177,703
Income tax paid		(		6,194,372 )	(		2,106,774 )
Interest paid		(		144,711 )	(		94,836 )
Dividends received				1,236,783			2,155,134
Net cash provided by operating activities				17,917,929			20,630,859

(Continued)

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PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31 Notes 2018 2017

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of investments accounted for using	6(6)and7
the equity method			$	25,644,556		$	-
Acquisition of subsidiary	6(6)	(		3,226,806 )			-
Proceeds from disposal of financial assets measured at cost -
non-current				-			1,773
Acquisition of property, plant and equipment	6(32)	(		6,671,500 )	(		6,727,782 )
Acquisition of investment property	6(8)			-	(		149,305 )
Proceeds from disposal of property, plant and equipment				81,397			139,989
Return of capital from available-for-sale financial assets -
non-current				-			116
Proceeds from business combinations	6(30)			-			700,961
Increase in guarantee deposits paid		(		110,493 )	(		279,932 )
Acquisition of intangible assets	6(9)	(		196,984 )	(		313,175 )
Decrease (increase) in other non-current assets				83,203	(		7,055 )
Net cash provided by (used in) investing activities				15,603,373	(		6,634,410 )
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in short-term borrowings	6(33)			6,272,605	(		695,645 )
Decrease in short-term notes and bills payable	6(33)	(		250,000 )	(		24,000 )
Increase in long-term borrowings	6(33)			289,511			569,856
Repayment of long-term borrowings	6(33)	(		473,646 )	(		237,687 )
Increase in guarantee deposits received	6(33)			58,093			115,984
Increase (decrease) in other non-current liabilities	6(33)			223,176	(		114,846 )
Change in non-controlling interests		(		23,138 )			48,109
Payment of cash dividends - the Company	6(20)	(		25,990,556 )	(		8,316,978 )
Payment of cash dividends - subsidiaries		(		1,506,469 )	(		841,504 )
Net cash used in financing activities		(		21,400,424 )	(		9,496,711 )
Effect of foreign exchange rate changes on cash and cash
equivalents				626,479	(		720,080 )
Increase in cash and cash equivalents				12,747,357			3,779,658
Cash and cash equivalents at beginning of year				35,783,291			32,003,633
Cash and cash equivalents at end of year			$	48,530,648		$	35,783,291

The accompanying notes are an integral part of these consolidated financial statements.

Chairman: Lo, Chih-Hsien President : Huang, Jui-Tien Accounting Manager: Kuo, Ying-Chih

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REPORT OF INDEPENDENT ACCOUNTANTS

TRANSLATED FROM CHINESE

To the Board of Directors and Stockholders of President Chain Store Corp.

Opinion

We have audited the accompanying parent company only balance sheets of President Chain Store Corp. as of December 31, 2018 and 2017, and the related parent company only statements of comprehensive income, of changes in equity, and of cash flows for the years then ended, and the notes to the parent company only financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other independent accountants (which are described in the Other matters section of our report), the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of President Chain Store Corp. as of December 31, 2018 and 2017, and its parent company only financial performance and its parent company only cash flows for the years then ended, in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

Basis for opinion

We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of President Chain Store Corp. in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with this Code. Based on our audits and the reports of other independent accountants, we believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2018. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these matters. Key audit matters for the Company’s parent company only financial statements of the year ended December 31, 2018 are stated as follows:

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Completeness and accuracy of retail sales revenue

Description

Please refer to Notes 4(22) and 6(19) to the parent company only financial statements for the accounting policy and the details of accounting relating to this key audit matter.

Retail sales revenue is generated by point-of-sale (POS) terminals, which record the merchandise name, quantity, sales price and total sales amount of each transaction using pre-established merchandise master file data (including merchandise name, cost of inventory, retail price, sales promotions, etc.). After the daily closing process, each store manager uploads the sales information to the ERP (enterprise resource planning) system, which summarizes all sales and automatically generates sales revenue journal entries. Each store manager also prepares a daily cash report to record the sales information and payment methods (including cash, gift certificates, credit cards and electronic payment devices, etc.) and the cash deposited to the bank.

How our audit addressed the matter

Our key audit procedures performed in respect of the above included the following:

Inspected whether additions and changes to the merchandise master file data had been properly approved and supported by relevant documents;
Inspected whether approved additions and changes to the merchandise master file data had been correctly entered in the merchandise master file;
Inspected whether merchandise master file data had been periodically transferred to POS terminals in stores;
Inspected whether sales information in POS terminals was periodically and completely transferred to the ERP system and automatically generated sales revenue journal entries;
Inspected manual sales revenue journal entries and relevant documents;
Inspected daily cash reports and relevant documents;
Inspected whether cash deposit amounts recorded in daily cash reports were in agreement with bank remittance amounts.

Cost-to-retail ratio of retail inventory method

Description

Please refer to Notes 4(11) and 6(3) to the parent company only financial statements for the accounting policy and the details of accounting relating to this key audit matter.

28 -

How our audit addressed the matter

Our key audit procedures performed in respect of the above included the following:

Interviewed management to understand the calculation of the cost-to-retail ratio under the retail inventory method, and inspected whether it had been consistently applied in the comparative periods of the financial statements;
Inspected whether additions and changes to the merchandise master file data (including merchandise name, cost of inventory, retail price, sales promotions, etc.) had been properly approved and the data correctly entered in the merchandise master file;
Inspected whether the cost and retail price of inventory purchased as per delivery receipts were in agreement with POS purchase records after acceptance of the inventory;
Inspected whether the POS records for the cost and retail price of inventory purchased were periodically and completely transferred to the ERP system and ascertain whether the records could not be changed manually;
Calculated the cost-to-retail ratio to verify its accuracy.

Other matter –Using the work of other auditors

We did not audit the financial statements of certain investee companies. The balance of these investments accounted for using equity method amounted to NT$2,210,541 thousand and NT$1,920,960 thousand, representing 2.5% and 1.9% of total assets as of December 31, 2018 and 2017, respectively, and the related total comprehensive net income (including share of profit of subsidiaries, associates and joint ventures accounted for using equity method and share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method) amounted to NT$ 415,363 thousand and NT$401,705 thousand, representing 3.9% and 1.3% of total comprehensive net income for the years then ended, respectively. Those financial statements were audited by other independent accountants whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the financial statements and the information on investees disclosed in Note 13 were based solely on the reports of other independent accountants.

Responsibilities of management and those charged with governance for the parent

company only financial statements

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

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

29 -

Those charged with governance, including the audit committee, are responsible for overseeing the financial reporting process of President Chain Store Corp.

Auditor’s responsibilities for the audit of the parent company only financial statements

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

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement in the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls.
Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls of President Chain Store Corp.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of President Chain Store Corp. to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause President Chain Store Corp. to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within President Chain Store Corp. to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
30 -

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2018 and are, therefore, considered to be the key audit matters. We describe these matters in our auditor’s report unless the law or regulations preclude public disclosure about the matter, or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Chun-Yuan, Hsiao Chien-Hung, Chou for and on behalf of PricewaterhouseCoopers, Taiwan 27 February, 2019

The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and report of independent accountants 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.

31 -

PRESIDENT CHAIN STORE CORP. PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

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

December 31, 2018 December 31, 2017
Assets Notes AMOUNT % AMOUNT %
Current assets
1100 Cash and cash equivalents 6(1) $ 14,070,715 16 $ 22,422,981 22
1170 Accounts receivable, net 6(2) 603,890 - 600,671 1
1200 Other receivables 7(3) 2,515,131 3 7,556,281 7
130X Inventories, net 6(3) 8,020,368 9 7,194,707 7
1410 Prepayments 196,990 - 267,738 -
1470 Other current assets 1,560,262 2 1,646,623 2
11XX Total current assets 26,967,356 30 39,689,001 39
Non-current assets
1510 Financial assets at fair value through 6(4)
- - -
profit or loss - non-current 85,683
1517 Financial assets at fair value through 6(5)
other comprehensive income -non-current 644,614 1 - -
1523 Available-for-sale financial assets 12(4)
- non-current - - 848,575 1
1543 Financial assets measured at cost 12(4)
- non-current - - 25,721 -
1550 Investments accounted for using equity 6(6)
method 49,094,402 55 47,983,892 48
1600 Property, plant and equipment, net 6(7) 9,114,219 10 8,946,459 9
1760 Investment property, net 6(8) 1,189,454 1 1,196,819 1
1780 Intangible assets 6(9) 119,019 - 211,865 -
1840 Deferred income tax assets 6(25) 800,458 1 673,959 1
1900 Other non-current assets 6(10) 1,231,311 2 1,176,722 1
15XX Total non-current assets 62,279,160 70 61,064,012 61
1XXX Total assets $ 89,246,516 100 $ 100,753,013 100
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(Continued)

32 -

PRESIDENT CHAIN STORE CORP. PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

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December 31, 2018 December 31, 2017
Liabilities and Equity Notes AMOUNT % AMOUNT %
Current liabilities
2100 Short-term borrowings 6(11) and 8 $ 6,000,000 7 $ - -
2130 Contract liabilities - current 6(19) 1,293,149 1 - -
2150 Notes payable 1,331,853 1 1,488,293 2
2160 Notes payable - related parties 7(3) 4,705,638 5 4,251,017 4
2170 Accounts payable 1,437,022 2 1,662,063 2
2180 Accounts payable - related parties 7(3) 8,028,624 9 7,099,859 7
2200 Other payables 6(12) 18,827,308 21 22,286,764 22
2230 Current income tax liabilities 6(25) 1,049,737 1 1,713,191 2
2300 Other current liabilities 6(13) 1,463,092 2 2,459,527 2
21XX Total current liabilities 44,136,423 49 40,960,714 41
Non-current liabilities
2527 Contract liabilities - non-current 6(19) 151,550 - - -
2570 Deferred income tax liabilities 6(25) 3,916,979 4 3,373,090 3
2640 Net defined benefit liability 6(14) 2,860,605 3 2,842,380 3
2645 Guarantee deposit received 2,533,958 3 2,435,662 2
2670 Other non-current liabilities 394,951 1 526,905 1
25XX Total non-current liabilities 9,858,043 11 9,178,037 9
2XXX Total liabilities 53,994,466 60 50,138,751 50
Equity
Share capital 6(15)
3110 Share capital - common stock 10,396,223 12 10,396,223 10
Capital surplus 6(16)
3200 Capital surplus 45,059 - 43,875 -
Retained earnings 6(17)
3310 Legal reserve 12,293,442 14 9,191,733 9
3320 Special reserve 398,859 - - -
3350 Unappropriated retained earnings 12,064,862 14 31,381,290 31
Other equity 6(18)
3400 Other equity interest 53,605 - ( 398,859) -
3XXX Total equity 35,252,050 40 50,614,262 50
3X2X Total liabilities and equity $ 89,246,516 100 $ 100,753,013 100
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The accompanying notes are an integral part of these parent company only financial statements.

Chairman: Lo, Chih-Hsien President: Huang, Jui-Tien Accounting Manager: Kuo, Ying-Chih

33 -

PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

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

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For the years ended December 31
2018 2017
Items Notes AMOUNT % AMOUNT %
4000 Operating revenue 6(19) and 7(3) $ 154,074,731 100 $ 144,479,880 100
5000 Operating costs 6(3)(23) and 7(3) ( 101,062,364) ( 66) ( 93,840,583) ( 65)
5900 Gross profit 53,012,367 34 50,639,297 35
Operating expenses 6(23)(24)
6100 Selling expenses ( 41,041,167) ( 26) ( 39,193,337) ( 27)
6200 General and administrative expenses ( 4,314,519) ( 3) ( 5,199,235) ( 4)
6450 Expected credit losses 12(2) ( 2,100) - - -
6000 Total operating expenses ( 45,357,786) ( 29) ( 44,392,572) ( 31)
6900 Operating profit 7,654,581 5 6,246,725 4
Non-operating income and expenses 7(3)
7010 Other income 6(20) 1,417,538 1 1,374,192 1
7020 Other gains and losses 6(21) ( 68,816) - 1,979,764 1
7050 Finance costs 6(22) ( 42,971) - ( 30,491) -
7070 Share of profit of subsidiaries, associates and 6(6)
joint ventures accounted for using equity
method 3,473,458 2 26,930,861 19
7000 Total non-operating income and
expenses 4,779,209 3 30,254,326 21
7900 Profit before income tax 12,433,790 8 36,501,051 25
7950 Income tax expense 6(25) ( 2,227,402) ( 1) ( 5,483,957) ( 4)
8200 Profit for the year $ 10,206,388 7 $ 31,017,094 21
Other comprehensive loss 6(18)
8311 Remeasurements of net actuarial loss 6(14)
on defined benefit plan ($ 29,219) - ($ 180,212) -
8316 Unrealized gain on valuation of equity 6(5)(18)
instruments at fair value through
other comprehensive income ( 143,849) - -
8330 Share of other comprehensive loss of
subsidiaries, associates and joint ventures
accounted for using equity method, components
of other comprehensive income that will not be
reclassified to profit or loss ( 73,714) - ( 24,825) -
8349 Income tax related to components of other 6(25)
comprehensive income that will not be
reclassified to profit or loss 49,725 - 30,636 -
8310 Components of other
comprehensive loss that will not
be reclassified to profit or loss ( 197,057) - ( 174,401) -
8361 Exchange differences from translation of foreign 6(18)
operations 619,530 - ( 697,337) -
8362 Unrealized gain (loss) on valuation of 6(18)
available-for-sale financial assets - - 152,186 -
8380 Share of other comprehensive loss of
subsidiaries, associates and joint ventures
accounted for using equity method, components
of other comprehensive income that will be
reclassified to profit or loss 2,289 - ( 19,014) -
8399 Income tax relating to the components of other 6(25)
comprehensive income that will be reclassified
to profit or loss - - ( 6,283) -
8360 Components of other
comprehensive loss that will be
reclassified to profit or loss 621,819 - ( 570,448) -
8300 Total other comprehensive income (loss) for the
year $ 424,762 - ($ 744,849) -
8500 Total comprehensive income for the
year $ 10,631,150 7 $ 30,272,245 21
9750 Basic earnings per share (in dollars) 6(26) $ 9.82 $ 29.83
9850 Diluted earnings per share (in dollars) 6(26) $ 9.79 $ 29.72
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The accompanying notes are an integral part of these parent company only financial statements.

Chairman: Lo, Chih-Hsien President: Huang, Jui-Tien Accounting Manager: Kuo, Ying-Chih

34 -

PRESIDENT CHAIN STORE CORP.	PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY	(Expressed in thousands of New Taiwan dollars)	Retained Earnings Other Equity Interest	Unrealized	gain or loss on	Exchange financial assets	differences from at fair value Unrealized	Notes Share capital – common stock Capital surplus Legal reserve Special reserve Unappropriated retained earnings translation of foreign operations through other comprehensive income gain or loss on available-for-sale financial assets Total equity	For the year ended December 31, 2017	Balance at January 1, 2017 $	$ 10,396,223 $ 1,158 $ 8,208,064 $ - $ 9,839,244 ( 186,228 ) $ - $ 357,817 $ 28,616,278	Profit for the year - - - - 31,017,094 - - - 31,017,094	Other comprehensive income (loss) for the year 6(18) - - - - ( 174,401 ) ( 720,080 ) - 149,632 ( 744,849)	Total comprehensive income(loss)for the year - - - - 30,842,693 ( 720,080 ) - 149,632 30,272,245	Distribution of 2016 earnings: 6(17)	Legal reserve 6(17) - - 983,669 - ( 983,669 ) - - - -	Cash dividends 6(17) - - - - ( 8,316,978 ) - - - ( 8,316,978)	Adjustment of capital surplus due to associates’ adjustment of capital surplus - ( 164 ) - - - - - - ( 164)	Adjustment of capital surplus due to change	in interests in associates - 42,881 - - - - - - 42,881	Balance at December 31, 2017 $	$ 10,396,223 $ 43,875 $ 9,191,733 $ - $ 31,381,290 ( 906,308 ) $ - $ 507,449 $ 50,614,262	For the year ended December 31, 2018	Balance at January 1, 2018 $	$ 10,396,223 $ 43,875 $ 9,191,733 $ - $ 31,381,290 ( 906,308 ) $ - $ 507,449 $ 50,614,262	Adjustments under new standards 3(1) - - - - 25,463 - 477,996 ( 507,449 ) ( 3,990)	Adjusted beginning balance 10,396,223 43,875 9,191,733 - 31,406,753 ( 906,308 ) 477,996 - 50,610,272	Profit for the year - - - - 10,206,388 - - - 10,206,388	Other comprehensive income (loss) for the year 6(18) - - - - ( 57,155 ) 626,479 ( 144,562 ) - 424,762	Total comprehensive income(loss)for the year - - - - 10,149,233 626,479 ( 144,562 ) - 10,631,150	Distribution of 2017 earnings:	Legal reserve - - 3,101,709 - ( 3,101,709 ) - - - -	Special reserve - - - 398,859 ( 398,859 ) - - - -	Cash dividends - - - - ( 25,990,556 ) - - - ( 25,990,556)	Overdue unclaimed cash dividend transferred to capital surplus - 536 - - - - - - 536	Adjustment of capital surplus due to associates’ adjustment of capital surplus - 648 - - - - - - 648	Balance at December 31, 2018 $ 10,396,223 $ 45,059 $ 12,293,442 $ 398,859 $ 12,064,862 ($ 279,829 ) $ 333,434 $ - $ 35,252,050	The accompanying notes are an integral part of these parent company only financial statements.	Chairman: Lo, Chih-Hsien President: Huang, Jui-Tien Accounting Manager: Kuo, Ying-Chih	- 35 -

PRESIDENT CHAIN STORE CORP. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax for the year
Adjustments to reconcile profit before income tax to net cash
provided by operating activities
Income and expenses having no effect on cash flows
Provision for doubtful accounts
Expected credit losses
Depreciation on property, plant and equipment
Amortization
Finance costs
Share of profit of subsidiaries, associates and joint
ventures accounted for using equity method
Depreciation on investment property
Gain on disposal of investments accounted for using
equity
Interest income
Dividend income
Impairment loss (reversal gain) on property, plant and
equipment
Impairment loss on investment property
Loss on disposal of property, plant and equipment, net
Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Other non-current assets
Net changes in liabilities relating to operating activities
Contract liabilities - current
Notes payable
Accounts payable
Other payables
Advance receipts
Contract liabilities – non-current
Net defined benefit liability - non-current
Other non-current liabilities
Cash generated from operations
Interest received
Income tax paid
Interest paid
Dividends received
Net cash provided by operating activities

For the years ended December 31
Notes
2018
2017
$ 12,433,790
$ 36,501,051
12(4)
-
422
12(2)
2,100
-
6(7)(23)
2,096,300
1,936,919
6(9)(23)
92,846
99,475
6(22)
42,971
30,491
6(6)
(
3,473,458 )
(
26,930,861 )
6(8)
7,365
7,414
6(6)(21)
(
59 )
(
2,099,503 )
6(20)
(
83,534 )
(
104,826 )
6(20)
(
65,124 )
(
17,311 )
6(7)(21)
(
2,401 )
10,110
6(8)
-
3,813
6(21)
9,632
14,868
(
4,992 )
(
87,903 )
76,934
(
834,668 )
(
825,661 )
(
1,190,980 )
70,748
(
71,222 )
86,361
(
24,690 )
(
54,589 )
75,819
140,135
-
298,181
106,249
703,724
(
446,872 )
(
234,672 )
3,824,312
156,252
38,009
939
-
(
10,994 )
(
11,581 )
16,900
(
147,704 )
11,479,694
10,680,831
107,590
104,826
6(25)
(
2,423,741 )
(
1,109,634 )
(
32,687 )
(
20,645 )
7,731,235
2,003,782
16,862,091
11,659,160

(Continued)

36 -

PRESIDENT CHAIN STORE CORP. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Return of capital from financial assets at fair value
through profit or loss – non-current
Acquisition of investments accounted for using
equity method
Proceeds from disposal of investments accounted for
using equity method
Return of capital from investments accounted for
using equity method
Return of capital from available-for-sale financial
assets - non-current
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and
equipment
Acquisition of intangible assets
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of cash dividends
Increase in short term borrowings
Increase in guarantee deposit received
Net cash flows used in financing activities
(Decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

For the years ended December 31
Notes
2018
2017
$ 151
$ -
6(6)
(
3,226,806 )
(
1,065,434 )
6(6)and7(3)
1,828
-
180,000
-
-
116
6(28)
(
2,303,297 )
(
2,279,236 )
26,027
44,579
6(9)
-
(
33,020 )
(
5,322,097 )
(
3,332,995 )
6(17)
(
25,990,556 )
(
8,316,978 )
6(29)
6,000,000
-
6(29)
98,296
121,625
(
19,892,260 )
(
8,195,353 )
(
8,352,266 )
130,812
22,422,981
22,292,169
$ 14,070,715
$ 22,422,981

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

Chairman: Lo, Chih-Hsien President: Huang, Jui-Tien Accounting Manager: Kuo, Ying-Chih

37 -

Appendix V

Profit Allocation Proposal for 2018

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Unit: NTD
Item Amount
Retained earnings-unappropriated in $ 1,890,164,588
previous year
Add: Adjustments under new standards 25,461,753
Adjusted retained earnings-unappropriated 1,915,626,341
in previous year
Less: Remeasurements of net actuarial loss (57,152,393)
on defined benefit plan
Adjusted retained earnings-unappropriated 1,858,473,948
Add: Net income in 2018 10,206,388,355
Subtotal 12,064,862,303
Less: Legal reserve (1,020,638,836)
Add: Special reserve 398,858,945
Distributable earnings in 2018 11,443,082,412
Less: Cash dividends to common (9,148,675,844)
shareholders (NT$8.8 per shares)
Retained earnings-unappropriated, at the end of $ 2,294,406,568
2018
----- End of picture text -----

Note ： 1.The earnings of 2018 were allocated as the first priority in the current year, and the deficit was made up by the earnings unappropriated at the end of 2017. 2.The total cash dividends allocated to each shareholder were rounded off to one NT$. 3.The fractional stocks less than NT$1 in the allocation were transferred to other income of the Company.

Chairman: Lo, Chih-Hsieh

President: Huang, Jui-Tien

Chief Accounting Officer: Kuo, Ying-Chih

38 -

Appendix VI

Contrast Table for Amendment to the “Articles of Incorporation of President Chain Store Corporation”

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After Amendment Before Amendment Remark
Article 1 Article 1 To conform the
The Company is incorporated as a The Company is incorporated as a amendment of laws.
company limited by shares under the company limited by shares under
Company Act of the Republic of the Company Act of the Republic
China and named “President Chain of China and named “President
Store Corp.” The English name of Chain Store Corp.”
the Company is named “President
Chain Store Corporation.”
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After Amendment Before Amendment Remark	After Amendment Before Amendment Remark	After Amendment Before Amendment Remark
Article 1 The Company is incorporated as a company limited by shares under the Company Act of the Republic of China and named “President Chain Store Corp.”The English name of the Company is named“President Chain Store Corporation.” Article 1 The Company is incorporated as a company limited by shares under the Company Act of the Republic of China and named “President Chain Store Corp.” To conform the amendment of laws.
Article 2 The Company’s business lines include: 1. F203020 Tobacco and alcohol retail 2. F206020 Daily supplies retail 3. F203010 Foods, groceries and beverage retail 4. F208040 Cosmetics retail 5. F399990 Other retails 6. IZ01010 Photocopy 7. F201070 Flowers and plants retail 8. F209060 Education, musical instruments and entertainment appliances retail 9. JE01010 Lease 10. IE01010 Agent of telecommunication subscribers’ numbers 11. I401010 General advertising service 12. F207050 Fertilizer retail 13. F210010 Timepiece retail 14. F210020 Eyeglasses retail 15. F216010 Photographic equipment retail 16. JZ99030 Photographing 17. F204110 Clothe, dresses, shoes, hats, umbrellas and apparels retail 18. A102060 Food supply 19. F213010 Electric appliances retail 20. F208031 Medical facilities retail	Article 2 The Company’s business lines include: 1. F203020 Tobacco and alcohol retail 2. F206020 Daily supplies retail 3. F203010 Foods, groceries and beverage retail 4. F208040 Cosmetics retail 5. F399990 Other retails 6. IZ01010 Photocopy 7. F201070 Flowers and plants retail 8. F209060 Education, musical instruments and entertainment appliances retail 9. JE01010 Lease 10. IE01010 Agent of telecommunication subscribers’ numbers 11. I401010 General advertising service 12. F207050 Fertilizer retail 13. F210010 Timepiece retail 14. F210020 Eyeglasses retail 15. F216010 Photographic equipment retail 16. JZ99030 Photographing 17. F204110 Clothe, dresses, shoes, hats, umbrellas and apparels retail 18. A102060 Food supply 19. F213010 Electric appliances retail 20. F208031 Medical facilities retail	To meet the operational needs.

39 -
After Amendment Before Amendment Remark
1. F205040 Furniture, bedding 21. F205040 Furniture, bedding 22. F207030 Daily supplies retail. 22. F207030 Daily supplies retail. 23. F401010 International trade 23. F401010 International trade 24. JA01010 Motor repair service 24. JA01010 Motor repair service 25. F214030 Auto and motorcycle 25. F214030 Auto and motorcycle spare parts and outfit retail spare parts and outfit retail
1. G202010 Parking lot 26. G202010 Parking lot management management
1. IZ14011 Public welfare lottery 27. IZ14011 Public welfare lottery agency agency
1. JZ99050 Intermediary service 28. JZ99050 Intermediary service 29. IZ99990 Other industrial and 29. IZ99990 Other industrial and commercial service commercial service
1. F401161 Cigarette products 30. F401161 Cigarette products importer importer
1. F401171 Alcohol products 31. F401171 Alcohol products importer importer
1. ZZ99999 Any business not 32. ZZ99999 Any business not prohibited or restricted by laws prohibited or restricted by laws and regulations other than the and regulations other than the business requiring special business requiring special approval approval

32. ZZ99999 Any business not prohibited or restricted by laws and regulations other than the business requiring special approval	32. ZZ99999 Any business not prohibited or restricted by laws and regulations other than the business requiring special approval
33. F301010 Department stores	33. F301010 Department stores
34. F301020 Supermarket	34. F301020 Supermarket
35. F399010 Convenience stores	35. F399010 Convenience stores
36. F501030 Beverage shop	36. F501030 Beverage shop
37. F501060 Restaurant	37. F501060 Restaurant
38. G902011 2nd class	38. G902011 2nd class
telecommunication business	telecommunication business
39. I301010 Information software	39. I301010 Information software
service	service
40. I301030 Electronic	40. I301030 Electronic
information supply service	information supply service
41. F206010 Ironware retail	41. F206010 Ironware retail
42. F212011 Gas station	42. F212011 Gas station
43. F212050 Petrolem product	43. F212050 Petrolem product
retail	retail
44. JA01990 Other automobile	44. JA01990 Other automobile
services	services
45. I101090 Food consultation	45. I101090 Food consultation
service	service
46. IZ09010 Management system	46. IZ09010 Management system
certification	certification
47. J701020 Theme park	47. J701020 Theme park
48. F102040 Beverage wholesale	48. F102040 Beverage wholesale
49. F102170 Foods and groceries	49. F102170 Foods and groceries
wholesale	wholesale
50. F106020 Daily supplies	50. F106020 Daily supplies
wholesale	wholesale
51. I103060Management advisor	51. I103060Management advisor

40 -

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

After Amendment Before Amendment Remark
52. J304010 Book publisher 52. J304010 Book publisher
53. J303010 Magazine (journal) 53. J303010 Magazine (journal)
publisher publisher
54. IZ12010 Staffing 54. IZ12010 Staffing
55. JA03010 Laundry service 55. JA03010 Laundry service
56. F201010 Retail sale of 56. F201010 Retail sale of
agricultural products agricultural products
57. F501990 Other eating and 57. F501990 Other eating and
drinking places not elsewhere drinking places not elsewhere
classified classified
58. F208050 Retail Sale of the 58. F208050 Retail Sale of the
Second Type Patent Medicine Second Type Patent Medicine
59. F201061 Retail sale of 59. F201061 Retail sale of
Seedling Seedling
60. I301040 Third party payment
61. C104020 Bakery food
manufacturing
(Deleted) Article 4 1. To delete the article
Deleted without contents.
2. To adjust the no. of
article.
Article 4 Article 5 To adjust the no. of
The Company may make The Company may make article.
endorsement/guarantee externally endorsement/guarantee externally
due to the business. In order to meet due to the business. In order to
the need for business, the Company meet the need for business, the
may reinvest in other enterprises and Company may reinvest in other
be free from the restriction referred enterprises and be free from the
to in Article 13 of the Company Act restriction referred to in Article 13
for no more than 40% of the of the Company Act for no more
Company’s paid-in capital. than 40% of the Company’s paid-in
capital.
Article 5 Article 6 To adjust the no. of
The total capital stock of the The total capital stock of the article.
Company shall be in the amount of Company shall be in the amount of
NT$10.5 billion, divided into 1.05 NT$10.5 billion, divided into 1.05
billion shares, at a par value of billion shares, at a par value of
NT$10, and the unissued shares of NT$10, and the unissued shares of
them are authorized to be issued by them are authorized to be issued by
the Board of Directors in the Board of Directors in
installments. installments.
Article 6 Article 7 1. To adjust the no. of
The stock certificates of the The stock certificates of the article.
Company shall be registered and Company shall be registered and
2. To conform the
issued after being signed or sealed issued after being signed or sealed
amendment of laws.
by Directors representing the by no less than three Directors of
Company and after being the Company and after being
authenticated by the bank which is authenticated by the government
competent to certify shares under the authority or by the agency
laws. It is not necessary for the authorized by such authority to deal
Company to print the stock with the registration of issuance of
----- End of picture text -----

41 -

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

After Amendment Before Amendment Remark
certificates, provided that it shall be stock certificates. It is not necessary
registered at a central custody of for the Company to print the stock
securities. certificates, provided that it shall be
registered at a central custody of
securities.
Article 7 Article 8 1. To adjust the no. of
All transfer of stocks, pledge of If a shareholder transfers his or her article.
rights, loss, succession, gift, loss of stock certificate, the shareholder
2. To amend the article
seal, amendment of seal, change of shall fill in the stock certificate
to avoid the frequent
address or similar stock transaction transfer application form signed
amendment to the
conducted by shareholders of the and sealed by the transferor and
Articles of
Company shall follow the transferee, and apply to the
“Regulations Governing the Company for alternation of the Incorporation, given
Administration of Shareholder entries in the shareholders’ roster. that the shareholder
Services of Public Companies” Transfer of the stock certificate services follow the
“Regulations
unless specified otherwise by law shall not be set up as a defense
Governing the
and securities regulations. against the Company, unless name
Administration of
or title and residence or domicile of
Shareholder Services
the transferee has been recorded in
the shareholders’ roster. of Public
Companies.”
Article 8 Article 9 1. To adjust the no. of
Unless otherwise provided in laws, Unless otherwise provided in laws, article.
the procedure for application for the procedure for application for
2. To conform to the
reissue of stock certificates, if stock reissue of stock certificates, if stock
current practice in
certificates are lost: certificates are lost:
view of non-physical
(1) The shareholder or the legal (1) The shareholder or the legal issuance of
owner shall report the event to owner shall report the event to registered stocks.
police authorities for handling police authorities for handling
or recording, complete the loss or recording, complete the loss
of stock application, and send of stock application, and send
such to the Company; such to the Company;
(2) The applicant shall, within five (2) The applicant shall, within
days, apply to the courts under five days, apply to the courts
the Code of Civil Procedure for under the Code of Civil
public announcement of the Procedure for public
event, and a copy of the court announcement of the event,
application and the court and a copy of the court
acceptance voucher shall be application and the court
sent to the Company, or the acceptance voucher shall be
application will be revoked; sent to the Company, or the
application will be revoked;
(3) Upon expiration of the period (3) Upon expiration of the period
of public summon, the of public summon, the
applicant may apply to the applicant may apply to the
Company for registration by Company for issue of
attaching the court’s judgment replacement stocks by
declaring the lost stock attaching the court’s judgment
certificates void. declaring the lost stock
certificates void.
Article 9 Article 10 To adjust the no. of
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42 -

After Amendment	Before Amendment	Remark
Unless otherwise provided by laws, registration for the transfer of stocks shall be suspended sixty days before any regular shareholders’ meeting, thirty days before any temporary shareholders’ meeting, or five days before the record date for determination of the shareholders entitled to dividends, bonus or any other profits distribution by the Company.	Unless otherwise provided by laws, registration for the transfer of stocks shall be suspended sixty days before any regular shareholders’ meeting, thirty days before any temporary shareholders’ meeting, or five days before the record date for determination of the shareholders entitled to dividends, bonus or any other profits distributionbythe Company.	article.
Article 10 Shareholders’ meetings of the Company are of two kinds: (1) Regular shareholders’ meetings shall be convened once a year by the Board of Directors within six months after the close of each fiscal year. (2) Temporary shareholders’ meetings shall be convened according to laws whenever necessary.	Article 11 Shareholders’ meetings of the Company are of two kinds: (1) Regular shareholders’ meetings shall be convened once a year by the Board of Directors within six months after the close of each fiscal year. (2) Temporary shareholders’ meetings shall be convened according to laws whenever necessary.	To adjust the no. of article.
Article 11 During the session of a shareholders’ meeting, the Chairman of the Board of Directors shall be the chairperson of the meeting. Where the Chairman of the Board of Directors is on leave or absent or cannot exercise his/her power and authority for any cause, he shall designate one managing director to act on his/her behalf. Where the Chairman of the Board of Directors is on leave or absent or cannot exercise his/her power and authority for any cause, he shall designate one director to act on his/her behalf. Where the Chairman fails to designate a proxy, the Directors shall elect among themselves an acting chairperson of the meeting.Where as for a shareholders'meeting convened by any other person having the convening right, he/she shall act as the Chairman of that meeting provided, however, that if there are two or more persons having the	Article 12 During the session of a shareholders’ meeting, the Chairman of the Board of Directors shall be the chairperson of the meeting. Where the Chairman of the Board of Directors is on leave or absent or cannot exercise his/her power and authority for any cause, he shall designate one managing director to act on his/her behalf. Where the Chairman of the Board of Directors is on leave or absent or cannot exercise his/her power and authority for any cause, he shall designate one director to act on his/her behalf. Where the Chairman fails to designate a proxy, the Directors shall elect among themselves an acting chairperson of the meeting.	1. To adjust the no. of article. 2. To conform the amendment of laws.

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After Amendment Before Amendment Remark
convening right, the Chairman of the
meeting shall be elected from among
themselves.
Article 12 Article 13 To adjust the no. of
Unless otherwise provided in laws, Unless otherwise provided in laws, article.
written notice shall be sent to all written notice shall be sent to all
shareholders, thirty days in advance shareholders, thirty days in advance
in the case of a regular shareholders’ in the case of a regular
meeting and fifteen days in advance shareholders’ meeting and fifteen
in the case of a temporary days in advance in the case of a
shareholders’ meetings, and be temporary shareholders’ meetings,
publicly announced within forty five and be publicly announced within
days before a general shareholders’ forty five days before a general
meeting, in the case of bearer stock shareholders’ meeting, in the case
holders, and within thirty days of bearer stock holders, and within
before a temporary shareholders’ thirty days before a temporary
meeting, in the case of bearer stock shareholders’ meeting, in the case
holders. of bearer stock holders.
Article 13 Article 14 To adjust the no. of
If a shareholder is unable to attend a If a shareholder is unable to attend article.
shareholders’ meeting for any cause, a shareholders’ meeting for any
he/she may execute and issue a cause, he/she may execute and
proxy pursuant to Article 177 of the issue a proxy pursuant to Article
Company Act and the competent 177 of the Company Act and the
authority’s requirements and specify competent authority’s requirements
the scope of the proxy. This proxy and specify the scope of the proxy.
can also be issued in electronic form This proxy can also be issued in
instead. electronic form instead.
Article 14 Article 15 To adjust the no. of
Unless otherwise provided in laws, a Unless otherwise provided in laws, article.
shareholder shall be entitled to one a shareholder shall be entitled to
voting right for each share held by one voting right for each share held
him/her. The vote can be exercised by him/her. The vote can be
in written or electronic forms. exercised in written or electronic
forms.
Article 15 Article 16 To adjust the no. of
Resolutions at a shareholders’ Resolutions at a shareholders’ article.
meeting shall, unless otherwise meeting shall, unless otherwise
provided for in Company Act, be provided for in Company Act, be
adopted by a majority of voting adopted by a majority of voting
rights of the present shareholders rights of the present shareholders
who represent a majority of the total who represent a majority of the
issued and outstanding shares. total issued and outstanding shares.
Article 16 Article 16-1 To adjust the no. of
The shareholders’ meeting shall The shareholders’ meeting shall article.
resolve the following: resolve the following:
(1) Amendments to these Articles; (1) Amendments to these
Articles;
(2) Election and discharge of (2) Election and discharge of
directors. directors.
(3) Permitted activities engaged in (3) Permitted activities engaged
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After Amendment	Before Amendment	Remark
by directors for their own or others within the scope of the Company’s business; (4) Conclusion, alteration or termination of the contract related to lease of business, consignment of business or permanent joint venture; (5) Assignment of all or substantial business or property; (6) Succeeding to another persons’ whole business or property which affects the Company’s operation materially; (7) Other motions to be resolved by the shareholders’ meeting pursuant tolaws.	in by directors for their own or others within the scope of the Company’s business; (4) Conclusion, alteration or termination of the contract related to lease of business, consignment of business or permanent joint venture; (5) Assignment of all or substantial business or property; (6) Succeeding to another persons’ whole business or property which affects the Company’s operation materially; (7) Other motions to be resolved by the shareholders’ meeting pursuant tolaws.
Article 17 The Company shall have 12-13 directors. The term of their service is three years. Candidates shall be selected by way of nomination. During the shareholders meeting, directors will be elected from the list of director candidates in accordance withthe cumulative voting methods specified in Article 198 of the Company Act. The total shares of registered stock held by the directors shall not be less than a prescribed percentage of the issued and outstanding shares of the Company. The percentage and audit implementation rules thereof are determined pursuant to the regulations of government authority in regardto stocks.	Article 17 The Company shall have 12-13 directors. The term of their service is three years. Candidates shall be selected by way of nomination. During the shareholders meeting, directors will be elected from the list of director candidates in accordance withthe methods specified in Article 198 of the Company Act. The total shares of registered stock held by the directors shall not be less than a prescribed percentage of the issued and outstanding shares of the Company. The percentage and audit implementation rules thereof are determined pursuant to the regulations of government authority in regardto stocks.	To amend the wording.
Article 18 3 independent directors shall be elected from the directors referred to in the preceding Article in accordance with Article 14-2 and Article 14-3 of the Securities and Exchange Act. The independent directors shall be nominated and elected in accordance with Article 192-1 of the Company Act. The shareholders shall elect independentdirectorsfrom thelistof	Article 17-1 3 independent directors shall be elected from the directors referred to in the preceding Article in accordance with Article 14-2 and Article 14-3 of the Securities and Exchange Act. The independent directors shall be nominated and elected in accordance with Article 192-1 of the Company Act. The shareholders shallelect independentdirectors	To adjust the no. of article.

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After Amendment Before Amendment Remark
candidates for independent directors. from the list of candidates for
independent directors.
Acceptance and publication of Acceptance and publication of
nomination of candidates for nomination of candidates for
independent directors shall be independent directors shall be
handled in accordance with the handled in accordance with the
Company Act and Securities and Company Act and Securities and
Exchange Act, et al.. Independent Exchange Act, et al.. Independent
and non-independent directors shall and non-independent directors shall
be elected concurrently and the be elected concurrently and the
number of the elected shall be number of the elected shall be
calculated separately. calculated separately.
Article 19 Article 17-2 To adjust the no. of
The Company may install an Audit The Company may install an Audit article.
Committee in accordance with Committee in accordance with
Article 14-4 and Article 181-2 of Article 14-4 and Article 181-2 of
Securities and Exchange Act. The Securities and Exchange Act. The
functions to be assumed by functions to be assumed by
supervisors under the Company Act supervisors under the Company Act
and Securities and Exchange Act and Securities and Exchange Act
shall be transferred to the Audit shall be transferred to the Audit
Committee. Committee.
The Audit Committee shall consist The Audit Committee shall consist
of the whole independent directors, of the whole independent directors,
which shall be no less than three which shall be no less than three
members. One of them shall be the members. One of them shall be the
convener, and at least one of them convener, and at least one of them
shall be specialized in accounting or shall be specialized in accounting
finance. or finance.
The Company’s Board of Directors The Company’s Board of Directors
may install other functional may install other functional
committees, and the organizational committees, and the organizational
charts shall be defined by the Board charts shall be defined by the Board
of Directors. of Directors.
Article 20 Article 18 To adjust the no. of
The Directors constitute the Board The Directors constitute the Board article.
of Directors. Unless laws or these of Directors. Unless laws or these
Articles provide that the business Articles provide that the business
shall be subject to resolution of the shall be subject to resolution of the
shareholders’ meeting, the Company shareholders’ meeting, the
shall carry out its business subject to Company shall carry out its
the resolution made by the Board of business subject to the resolution
Directors. made by the Board of Directors.
Article 21 Article 19 To adjust the no. of
The board of directors shall elect a The board of directors shall elect a article.
chairman of the board directors from chairman of the board directors
among the directors by a majority from among the directors by a
vote at a meeting attended by over majority vote at a meeting attended
two-thirds of the directors. The by over two-thirds of the directors.
Chairman of the Board of Directors The Chairman of the Board of
shall externally represent the Directors shall externally represent
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After Amendment	Before Amendment	Remark
Company and internally execute the Company’s business pursuant to laws, these Articles and resolutions of shareholders’ meetings and directors’ meetings.	the Company and internally execute the Company’s business pursuant to laws, these Articles and resolutions of shareholders’ meetings and directors’ meetings.
Article 22 The Board of Directors shall hold a meeting at least once per quarter. In the case of emergency or upon request of a majority of directors, a temporary meeting may be convened at any time,Meetings of the Board of Directors shall be convened by the Chairman of the Board of Directors unless specified otherwise by the Company Act. The first meeting of each term of the Board of Directors shall be called by the director winning the ballots representing the most votes pursuant to laws. In calling a meeting of the Board of Directors, a notice may be effected by means of electronic transmission.	Article 20 The Board of Directors shall hold a meeting at least once per quarter. In the case of emergency or upon request of a majority of directors, a temporary meeting may be convened at any time,provided that the first meeting of each term of the Board of Directors shall be called by the director winning the ballots representing the most votes pursuant to laws.	1. To adjust the no. of article. 2. To conform to the amendment of laws.
Article 23 Where the Chairman fails to exercise his/her authority with cause, the Chairman shall appoint a director to be his/her proxy. Where any director fails to attend the meeting and appoints a proxy to attend the meeting on behalf of him/her, he/she shall issue a letter of proxy and specify the scope of authorization with respect to the grounds for calling the meeting, provided that a proxy shall act on behalf of no more thanone director.	Article 21 Where the Chairman fails to exercise his/her authority with cause, the Chairman shall appoint a director to be his/her proxy. Where any director fails to attend the meeting and appoints a proxy to attend the meeting on behalf of him/her, he/she shall issue a letter of proxy and specify the scope of authorization with respect to the grounds for calling the meeting, provided that a proxy shall act on behalfof nomorethanone director.	To adjust the no. of article.
Article 24 The motions shall be recorded in the director’s meeting minutes. The meeting minutes shall specify the date and location of the meeting, names of present directors and chairperson, in addition to the gist and result of the parliamentary procedures, and be signed by the chairperson and record taker. Said meeting minute shall be maintained permanently in the Company together with the directors’	Article 21-1 The motions shall be recorded in the director’s meeting minutes. The meeting minutes shall specify the date and location of the meeting, names of present directors and chairperson, in addition to the gist and result of the parliamentary procedures, and be signed by the chairperson and record taker. Said meeting minute shall be maintained permanently in the Company together with the directors’	To adjust the no. of article.

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After Amendment Before Amendment Remark
attendance book and proxies. attendance book and proxies.
(Deleted) Article 22 To delete the article
Deleted without contents.
Article 25 Article 23 To adjust the no. of
The remuneration to directors shall The remuneration to directors shall article.
be paid subject to the normal be paid subject to the normal
standards. standards.
Article 26 Article 23-1 To adjust the no. of
The Company may purchase liability The Company may purchase article.
insurance for directors and important liability insurance for directors and
officers during their tenure against important officers during their
the indemnity to be borne by them in tenure against the indemnity to be
the scope of business carried out by borne by them in the scope of
them. The insurance policy shall be business carried out by them. The
taken out by the Board of Directors insurance policy shall be taken out
with full power. by the Board of Directors with full
power.
Article 27 Article 24 To adjust the no. of
The Company may have several The Company may have several article.
manager(s). The appointment, manager(s). The appointment,
removal and remuneration of the removal and remuneration of the
manager(s) shall be subject to manager(s) shall be subject to
Article 29 of Company Act. The Article 29 of Company Act. The
Company’s managers have the right Company’s managers have the right
to enter their signatures on behalf of to enter their signatures on behalf
the Company pursuant to the of the Company pursuant to the
relevant requirements defined by the relevant requirements defined by
Company and insofar as they are the Company and insofar as they
authorized to do it. are authorized to do it.
Article 28 Article 24-1 To adjust the no. of
The Company may retain several The Company may retain several article.
advisors subject to the need for advisors subject to the need for
business. The appointment, removal business. The appointment, removal
and remuneration of the advisors and remuneration of the advisors
shall be subject to agreement of a shall be subject to agreement of a
majority of the whole directors. majority of the whole directors.
(Deleted) Article 25 To delete the article
Deleted. without contents.
Article 29 Article 26 To adjust the no. of
The Company identifies that each The Company identifies that each article.
year from January 1 to December 31 year from January 1 to December
is one fiscal year. It will settle the 31 is one fiscal year. It will settle
accounts at the end of each fiscal the accounts at the end of each
year. fiscal year.
Article 30 Article 27 To adjust the no. of
At the end of each fiscal year, the At the end of each fiscal year, the article.
Board of Directors shall prepare the Board of Directors shall prepare the
following reports and, send them to following reports and, send them to
the meeting of shareholders for their the meeting of shareholders for
recognition pursuant to Article 228 their recognition pursuant to Article
of the Company Act and any 228 of the Company Act and any
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After Amendment Before Amendment Remark
relevant regulations. relevant regulations.
(1) Business report; (1) Business report;
(2) Financial statements; (2) Financial statements;
(3) Motion for allocation of (3) Motion for allocation of
earnings or covering of loss. earnings or covering of loss.
Article 31 Article 28 To adjust the no. of
The dividends and bonuses shall be The dividends and bonuses shall be article.
allocated subject to the various allocated subject to the various
shareholders’ shareholding shareholders’ shareholding
percentage. No dividends or bonuses percentage. No dividends or
will be allocated where the bonuses will be allocated where the
Company has no retained earnings. Company has no retained earnings.
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After Amendment Before Amendment Remark	After Amendment Before Amendment Remark	After Amendment Before Amendment Remark	After Amendment Before Amendment Remark
relevant regulations. (1) Business report; (2) Financial statements; (3) Motion for allocation of earnings or covering of loss. relevant regulations. (1) Business report; (2) Financial statements; (3) Motion for allocation of earnings or covering of loss.
Article 31 The dividends and bonuses shall be allocated subject to the various shareholders’ shareholding percentage. No dividends or bonuses will be allocated where the Companyhasnoretained earnings. Article 28 The dividends and bonuses shall be allocated subject to the various shareholders’ shareholding percentage. No dividends or bonuses will be allocated where the Companyhasnoretained earnings. To adjust the no. of article.

	Article 32 If the Company has earnings according to its annual final account, the Company may, after paying all taxes, and making up all past losses, set aside a 10% legal reserve, and set aside or reverse special reserves in accordance with relevant laws and regulations. The balance stated above and unallocated accumulated earnings together make distributable accumulated earnings. The profit allocation proposal shall be made by the Board based on the industry environment, business and subsidiaries development in the future. The Company’s distributable accumulated earnings shall be allocated and resolved by the shareholders’ meeting. Shareholders’ dividend and bonus are 50%-100% of the distributable accumulated earnings, and 50%-100% of such dividend and bonus shall be granted in the form of cash dividends, and the remainder shall be unallocated earnings. The Company shall reserve sufficient amount to offset its accumulated losses based on its profits before setting aside employees’ and directors’ compensations. If there is remainder, then the Company shall set aside not less than 2% of its annual profits as compensation toits employees,and	Article 29 If the Company has earnings according to its annual final account, the Company may, after paying all taxes, and making up all past losses, set aside a 10% legal reserve, and set aside or reverse special reserves in accordance with relevant laws and regulations. The balance stated above and unallocated accumulated earnings together make distributable accumulated earnings. The profit allocation proposal shall be made by the Board based on the industry environment, business and subsidiaries development in the future. The Company’s distributable accumulated earnings shall be allocated and resolved by the shareholders’ meeting. Shareholders’ dividend and bonus are 50%-100% of the distributable accumulated earnings, and 50%-100% of such dividend and bonus shall be granted in the form of cash dividends, and the remainder shall be unallocated earnings. The Company shall reserve sufficient amount to offset its accumulated losses based on its profits before setting aside employees’ and directors’ compensations. If there is remainder, then the Company shall set aside not less than 2% of its annualprofitsas compensation to	To adjust the no. of article.

49 -

After Amendment	Before Amendment	Remark
not more than 2% as compensation to its directors. The Company shall issue compensation in the form of stock or cash to employees who meet the requirements set by the Company. The employees of affiliated companies are also included.	its employees, and not more than 2% as compensation to its directors. The Company shall issue compensation in the form of stock or cash to employees who meet the requirements set by the Company. The employees of affiliated companiesarealsoincluded.
Article 33 The dividends shall be allocated to the shareholders recorded in the roster of shareholders five days before the record date of allocation of the dividendand bonus.	Article 30 The dividends shall be allocated to the shareholders recorded in the roster of shareholders five days before the record date of allocation of the dividendand bonus.	To adjust the no. of article.
Article 34 The Company’s articles of organization and enforcement rules thereofshallbe defined separately.	Article 31 The Company’s articles of organization and enforcement rules thereofshallbe defined separately.	To adjust the no. of article.
Article 35 Any matters not provided herein shall be subject to the Company Act andtherelevant laws.	Article 32 Any matters not provided herein shall be subject to the Company Act andtherelevant laws.	To adjust the no. of article.
Article 36 These Articles of Incorporation were made upon agreement of all incorporators on June 4, 1987 and …. 28thamendment was made on June 12, 2018.29thamendment was made on June 12, 2019.	Article 33 These Articles of Incorporation were made upon agreement of all incorporators on June 4, 1987 and …. 28thamendment was made on June 12, 2018.	1. To adjust the no. of article. 2. Newly added.

50 -

Appendix VII

Contrast Table for Amendment to the “Procedures for Acquisition and Disposal of Assets of President Chain Store Corporation”

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After Amendment Before Amendment Remark
Chapter I General Provisions Chapter I General Provisions To conform the
II. Assets include the following: II. Assets include the following: amendment of laws.
1. Investments in stocks, 1. Investments in stocks,
government bonds, corporate government bonds, corporate
bonds, financial bonds, bonds, financial bonds,
securities representing interest securities representing interest
in a fund, depositary receipts, in a fund, depositary receipts,
call (put) warrants, beneficial call (put) warrants, beneficial
interest securities, and interest securities, and
asset-backed securities. asset-backed securities.
2. Real property (including land, 2. Real property (including land,
houses and buildings, houses and buildings,
investment property) and investment property, rights to
equipment. use land) and equipment.
3. Memberships. 3. Memberships.
4. Patents, copyrights, trademarks, 4. Patents, copyrights, trademarks,
franchise rights, and other franchise rights, and other
intangible assets. intangible assets.
5. Right-of-use assets.
6. Derivatives. 5. Derivatives.
7. Assets acquired or disposed of 6. Assets acquired or disposed of
in connection with mergers, in connection with mergers,
demergers, acquisitions, or demergers, acquisitions, or
transfer of shares in accordance transfer of shares in accordance
with law. with law.
8. Other major assets. 7. Other major assets.
Chapter I General Provisions Chapter I General Provisions 1. To conform the
III. Terms used in these III. Terms used in these amendment of laws.
Regulations are defined as Regulations are defined as 2. To make
follows: follows: amendments in
1. Derivatives: Forward contracts, 1. Derivatives: Forward contracts, accordance with
options contracts, futures options contracts, futures “Taiwan Stock
contracts, leverage contracts, contracts, leverage contracts, Exchange
and swap contracts, whose and swap contracts, and Corporation
value is derived from specified compound contracts combining Procedures for
interest rates, financial the above products, whose Verification and
instrument prices, commodity value is derived from assets, Disclosure of
prices, foreign exchange rates, interest rates, foreign exchange Material Information
indexes of prices or rates, credit rates, indexes or other interests. of Companies with
rating or credit indexes, or other The term "forward contracts" Listed Securities,”
variables; or hybrid contracts does not include insurance which stipulates the
combining the above contracts; contracts, performance date of occurrence of
or hybrid contracts or structured contracts, after-sales service the event (regarding
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51 -
After Amendment Before Amendment
products containing embedded contracts, long-term leasing derivatives. The term "forward contracts, or long-term contracts" does not include purchase (sales) agreements. insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) agreements.

Remark the committees established by boards of directors) and the practice (regarding the date of bid acceptance).

	performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) agreements.
2.	Assets acquired or disposed	2. Assets acquired or disposed
	through mergers, demergers,	through mergers, demergers,
	acquisitions, or transfer of	acquisitions, or transfer of
	shares in accordance with law:	shares in accordance with law:
	Refers to assets acquired or	Refers to assets acquired or
	disposed through mergers,	disposed through mergers,
	demergers, or acquisitions	demergers, or acquisitions
	conducted under the Business	conducted under the Business
	Mergers and Acquisitions Act,	Mergers and Acquisitions Act,
	Financial Holding Company	Financial Holding Company
	Act, Financial Institution	Act, Financial Institution
	Merger Act and other acts, or to	Merger Act and other acts, or to
	transfer of shares from another	transfer of shares from another
	company through issuance of	company through issuance of
	new shares of its own as the	new shares of its own as the
	consideration therefore	consideration therefore
	(hereinafter "transfer of	(hereinafter "transfer of
	shares") under Article 156-3of	shares") under Article 156,
	the Company Act.	paragraph 8of the Company
		Act.
5.	Date of occurrence: Refers to	5. Date of occurrence: Refers to
	the date of contract signing,	the date of contract signing,
	date of payment, date of	date of payment, date of
	consignment trade, date of	consignment trade, date of
	transfer, dates of boards of	transfer, dates of boards of
	directors resolutions or dates of	directors resolutions, or other
	resolutions of committees	date that can confirm the
	established by boards of	counterpart and monetary
	directors, date of bid	amount of the transaction,
	acceptance, or other date that	whichever date is earlier;
	can confirm the counterpart and	provided, for investment for
	monetary amount of the	which approval of the
	transaction, whichever date is	competent authority is
	earlier; provided, for investment	required, the earlier of the
	for which approval of the	above date or the date of
	competent authority is required,	receipt of approval by the
	the earlier of the above date or	competent authority shall
	the date of receipt of approval	apply.
	by the competent authority shall
	apply.
6.	Mainland China area	6. Mainland China area

52 -

After Amendment

investment: Refers to investments in the mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area.

Chapter I General Provisions

IV. Evaluating and operating procedures:
Acquiring and disposing fixed assets: apart from the valuations required in IV-8 of this procedure, the developer and the Administrative Department will engage in bidding, price comparisons, or price negotiations for real estate deals, and the President's approval is needed before execution. For other fixed assets, the respective administrators are authorized to arrange transactions within their given boundaries, subject to proper approval. Acquiring and disposing the non-retail used properties are subject to acknowledgment by the board of directors. Transactions amounting to more than NTD 500 million need to be reported during the shareholders meeting.
For securities that are not traded over a centralized exchange market or a securities firm's place of business (except those with open quotes), the Finance

Before Amendment Remark

To make amendments considering that the transactions between the Company and related parties follow the procedures of Chapter II.
To adjust the no. of article.
IV. Evaluating and operating procedures:
Acquiring and disposing fixed assets: apart from the valuations required in IV-9 of this procedure, the developer and the Administrative Department will engage in bidding, price comparisons, or price negotiations for real estate deals, and the President's approval is needed before execution. For other fixed assets, the respective administrators are authorized to arrange transactions within their given boundaries, subject to proper approval. Acquiring and disposing the non-retail used properties are subject to acknowledgment by the board of directors. Transactions amounting to more than NTD 500 million need to be reported during the shareholders meeting.
To conform the amendment of laws.
other fixed assets, the respective 4. Due to operational administrators are authorized to needs, there is a arrange transactions within their possibility that the given boundaries, subject to Company may proper approval. Acquiring and acquire the real disposing the non-retail used property right-of-use properties are subject to assets with its parent acknowledgment by the board of or subsidiaries, or directors. Transactions with its subsidiaries amounting to more than NTD in which it directly 500 million need to be reported or indirectly holds during the shareholders meeting. 100 percent of the
1. The Company acquires fixed issued shares or asset from related parties in authorized capital. accordance with IV-9 and Given that the risk Chapter II of this procedure. The of this kind of transaction shall be made after transactions is low, the necessary evaluation and the exclusive of documentation completed, agreed evaluation of the by the Audit Committee and reasonableness of approved by the board of the transaction costs directors. is newly added.
For securities that are not traded over a centralized exchange market or a securities firm's place of business (except those with open quotes), the Finance
53 -

After Amendment

Department will engage in price negotiations according to IV-8 of this procedure and submit for the President's approval. The transaction will later be acknowledged by the board of directors.

Trading of securities over a centralized exchange market or a securities firm's place of business are subject to compliance with IV-8 of this procedure, and requires written permission from the Head of Finance.
Derivative transactions are initiated by the Finance Department after considering the Company's needs and market condition, confirming the instrument and position, analyzing the market information and determining the proper hedging strategy. Finance Department shall submit the evaluation reports to the board of directors for approval before executing.
Merger, demerger, acquisition, or transfer of shares shall be evaluated in terms of net worth per share, asset value, technological capabilities, profitability, production capacity, and growth prospects. These deals also need to undergo the procedures, preparations, and documentation outlined in Chapter Four. Unless otherwise permitted by law, all mergers, divestments, and acquisitions must be resolved during the shareholders' meeting. Transfer of shares shall be executed after the approval from the board of directors.
For acquisitions and disposals of memberships, the President may authorize an executor to arrange a transaction based on the latest price and IV-8 of this procedure. For acquisitions and disposals of

Before Amendment

Department will engage in price negotiations according to IV-9 of this procedure and submit for the President's approval. The transaction will later be acknowledged by the board of directors.

Trading of securities over a centralized exchange market or a securities firm's place of business are subject to compliance with IV-9 of this procedure, and requires written permission from the Head of Finance.
Derivative transactions are initiated by the Finance Department after considering the Company's needs and market condition, confirming the instrument and position, analyzing the market information and determining the proper hedging strategy. Finance Department shall submit the evaluation reports to the board of directors for approval before executing.
Merger, demerger, acquisition, or transfer of shares shall be evaluated in terms of net worth per share, asset value, technological capabilities, profitability, production capacity, and growth prospects. These deals also need to undergo the procedures, preparations, and documentation outlined in Chapter Four. Unless otherwise permitted by law, all mergers, divestments, and acquisitions must be resolved during the shareholders' meeting. Transfer of shares shall be executed after the approval from the board of directors.
For acquisitions and disposals of memberships, the President may authorize an executor to arrange a transaction based on the latest price and IV-9 of this procedure. For acquisitions and disposals of

Remark

54 -

After Amendment

patents, copyrights, trademarks, licenses and other intangible assets and right-of-use assets thereof, the President may authorize an executor to arrange transactions based on the usual market practice, remaining useful years, effects on existing technology and business, and IV-8 of this procedure.

Acquisitions and disposals of other assets are subject to compliance with the Company's internal control policies and levels of approval and reporting authorities.
Other matters:

(1) The Company acquiring or disposing of securities shall obtain financial statements of the issuing company for the most recent period, certified or reviewed by a certified public accountant prior to the transaction, for reference in appraising the transaction price. If the dollar amount of the transaction is 20 percent of the Company's paid-in capital or NT$300 million or more, the Company shall additionally engage a certified public accountant to provide an opinion regarding the reasonableness of the transaction price prior to the transaction. If the CPA requires an expert's opinion, it must be sought in accordance with the Statement on Auditing Standards No. 20 announced by the Accounting Research and Development Foundation. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the Financial Supervisory Commission (FSC). (2) In acquiring or disposing of real property, equipment or

Before Amendment

patents, copyrights, trademarks, licenses and other intangible assets, the President may authorize an executor to arrange transactions based on the usual market practice, remaining useful years, effects on existing technology and business, and IV-9 of this procedure.

Acquisitions and disposals of other assets are subject to compliance with the Company's internal control policies and levels of approval and reporting authorities.
Other matters:
(1) The Company acquiring or disposing of securities shall obtain financial statements of the issuing company for the most recent period, certified or reviewed by a certified public accountant prior to the transaction, for reference in appraising the transaction price. If the dollar amount of the transaction is 20 percent of the Company's paid-in capital or NT$300 million or more, the Company shall additionally engage a certified public accountant to provide an opinion regarding the reasonableness of the transaction price prior to the transaction. If the CPA requires an expert's opinion, it must be sought in accordance with the Statement on Auditing Standards No. 20 announced by the Accounting Research and Development Foundation. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the Financial Supervisory Commission (FSC).
(2) In acquiring or disposing of real property or equipment where the

Remark

55 -

After Amendment

right-of-use assets thereof where the transaction amount reaches 20 percent of the Company's paid-in capital or NT$300 million or more, the Company, unless transacting with a domestic government institution, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment or right-of-use assets thereof for business use, shall obtain an appraisal report from a professional appraiser and shall further comply with the following provisions:

Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors, and the same procedure shall also be followed whenever there is any subsequent changes to the terms and conditions of the transaction.
Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained.
Except the circumstances where the valuation is higher than the price acquired, or lower than the price disposed, any one of the following circumstances applies with respect to the professional appraiser's appraisal results, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction

Before Amendment

transaction amount reaches 20 percent of the Company's paid-in capital or NT$300 million or more, the Company, unless transacting with a government institution, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of machinery and equipment for business use, shall obtain an appraisal report from a professional appraiser and shall further comply with the following provisions:

Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the board of directors, and the same procedure shall be followed for any future changes to the terms and conditions of the transaction.
Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained.
Except the circumstances where the valuation is higher than the price acquired, or lower than the price disposed, any one of the following circumstances applies with respect to the professional appraiser's appraisal results, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction

Remark

56 -

After Amendment

price:

(1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount.
(2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount.
No more than 3 months may elapse between the date of the appraisal report issued and the contract execution date if appraising before the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.

(3) With respect to the acquisition of real property or right-of-use assets thereof from a related party, except the related party acquired the real property or right-of-use assets thereof through inheritance or as a gift, more than 5 years will have elapsed from the time the related party signed the contract to obtain the real property or right-of-use assets thereof to the signing date for the current transaction, the real property is acquired through signing of a joint development contract with the related party or through engaging a related party to build real property, either on the Company's own land or on rented land, and the real property right-of-use assets for business use are acquired by the company with its parent or subsidiaries, or by its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, the Company

Before Amendment Remark

price:

(1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount.
(2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount.
No more than 3 months may elapse between the date of the appraisal report issued and the contract execution date if appraising before the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.
(3) With respect to the acquisition of real property from a related party, except the related party acquired the real property through inheritance or as a gift, more than 5 years will have elapsed from the time the related party signed the contract to obtain the real property to the signing date for the current transaction, and the real property is acquired through signing of a joint development contract with the related party or through engaging a related party to build real property, either on the Company's own land or on rented land, the Company shall evaluate the reasonableness of the transaction costs and also engage a CPA to check the appraisal and render a specific opinion by the following means:
57 -

After Amendment

shall evaluate the reasonableness of the transaction costs and also engage a CPA to check the appraisal and render a specific opinion by the following means: 1. Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the Company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance.

Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties. 3. Where land and structures thereupon are combined as a single property purchased or leased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding two paragraphs. (4) Where a public company acquires or disposes of intangible assets or right-of-use assets thereof or memberships and the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transactions with a

Before Amendment

Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the Company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance.
Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties. 3. Where land and structures thereupon are combined as a single property purchased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding two paragraphs. (4) Where a public company acquires or disposes of memberships or intangible assets and the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, except in transactions with a government agency, the

Remark

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

After Amendment Before Amendment Remark
domestic government agency, the Company shall engage a certified
Company shall engage a certified public accountant prior to the
public accountant prior to the date of occurrence of the event to
date of occurrence of the event to render an opinion on the
render an opinion on the reasonableness of the transaction
reasonableness of the transaction price; the CPA shall comply with
price; the CPA shall comply with the provisions of Statement of
the provisions of Statement of Auditing Standards No. 20
Auditing Standards No. 20 published by the ARDF.
published by the ARDF.
----- End of picture text -----

After Amendment Before Amendment Remark	After Amendment Before Amendment Remark	After Amendment Before Amendment Remark
domesticgovernment agency, the Company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published bytheARDF. Company shall engage a certified public accountant prior to the date of occurrence of the event to render an opinion on the reasonableness of the transaction price; the CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.

Chapter I General Provisions V. Publicly announce standard: 1. Under any of the following circumstances, the Company acquiring or disposing of assets and the transaction amount reaches V-2 of this procedure shall publicly announce and report the relevant information on the FSC's designated website in the appropriate format as prescribed by regulations within 2 days commencing immediately from the date of occurrence of the event: (1) The amount of any individual transaction. (2) The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year. (3) The cumulative transaction amount of real propertyor right-of-use assets thereof acquisitions and disposals respectively within the same development project within the preceding year. (4) The cumulative transaction amount of acquisitions and disposals respectively of the same security within the preceding year. "Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced neednotbe countedtowardthe	Chapter I General Provisions V. Publicly announce standard: 1. Under any of the following circumstances, the Company acquiring or disposing of assets and the transaction amount reaches V-2 of this procedure shall publicly announce and report the relevant information on the FSC's designated website in the appropriate format as prescribed by regulations within 2 days commencing immediately from the date of occurrence of the event: (1) The amount of any individual transaction. (2) The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year. (3) The cumulative transaction amount of real property acquisitions and disposals respectively within the same development project within the preceding year. (4) The cumulative transaction amount of acquisitions and disposals respectively of the same security within the preceding year. "Within the preceding year" as used in the preceding paragraph refers to the year preceding the date of occurrence of the current transaction. Items duly announced neednotbe countedtowardthe	To conform the amendment of laws.

59 -

After Amendment

transaction amount.

Publicly announce standard for acquiring or disposing of assets:

(1)Acquisition or disposal of real property or right-of-use assets thereof from or to a related party, or acquisition or disposal of assets other than real property or right-of-use assets thereof from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more; provided, this shall not apply to trading of domestic government bonds or bonds under repurchase and resale agreements, or subscription or repurchase of domestic money market funds issued by Securities Investment Trust Enterprises.

Before Amendment

transaction amount. 2. Publicly announce standard for acquiring or disposing of assets:
(1) Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more; provided, this shall not apply to trading of government bonds or bonds under repurchase and resale agreements, or subscription or repurchase of domestic money market funds issued by Securities Investment Trust Enterprises.

Remark

(3)Losses from derivatives trading (3) Losses from derivatives trading reaching the limits on aggregate reaching the limits on aggregate losses or losses on individual losses or losses on individual contracts set out in the contracts set out in the procedures adopted by the procedures adopted by the Company. Company.
(4)Where the type of asset acquired (4) Where the type of asset acquired or disposed is equipment or or disposed is equipment for right-of-use assets thereof for business use, the trading business use, the trading counterparty is not a related counterparty is not a related party, and the transaction party, and the transaction amount amount reaches NT$1 billion or reaches NT$1 billion or more. more.
(5)Where land is acquired under an (5) Where land is acquired under an arrangement on engaging others arrangement on engaging others to build on the Company's own to build on the Company's own land, engaging others to build on land, engaging others to build on rented land, joint construction rented land, joint construction and allocation of housing units, and allocation of housing units, joint construction and allocation joint construction and allocation of ownership percentages, or of ownership percentages, or joint construction and separate joint construction and separate sale, the trading counterparty is sale, and the amount the not a related party, and the Company expects to invest in amount the Company expects to the transaction reaches NT$500 invest in the transaction reaches million or more. NT$500 million or more.
60 -

==> picture [508 x 731] intentionally omitted <==

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

After Amendment Before Amendment Remark
(6)Where an asset transaction other (6) Where an asset transaction other
than any of those referred to in than any of those referred to in
the preceding five subparagraphs, the preceding five
a disposal of receivables by a subparagraphs, a disposal of
financial institution, or an receivables by a financial
investment in the mainland China institution, or an investment in
area reaches 20 percent or more the mainland China area reaches
of paid-in capital or NT$300 20 percent or more of paid-in
million; provided, this shall not capital or NT$300 million;
apply to the following provided, this shall not apply to
circumstances: the following circumstances:
1. Trading of domestic 1.Trading of government bonds.
government bonds. 2. Securities trading by
2. Securities trading by investment professionals on
investment professionals on foreign or domestic securities
securities exchanges or exchanges or over-the-counter
over-the-counter markets or markets or subscription of
subscription of ordinary corporate bonds or financial
corporate bonds or financial bonds without equity in the
bonds without equity domestic primary market or
characteristics (excluding subscription of securities by a
subordinated debt), that are securities firm for
offered and issued in the underwriting business or
primary market, or counseling at stock market in
subscription or redemption of accordance with Taipei
securities investment trust Exchange regulations.
funds or futures trust funds, or
subscription by a securities
firm of securities as
necessitated by its undertaking
business or as an advisory
recommending securities firm
for an emerging stock
company, in accordance with
the rules of the Taipei
Exchange.
3. Trading of bonds under 3. Trading of bonds under
repurchase/resale agreements repurchase/resale agreements
or subscription or repurchase or subscription or repurchase
of domestic money market of domestic money market
funds issued by Securities funds issued by Securities
Investment Trust Enterprises. Investment Trust Enterprises.
The amount of transactions The amount of transactions above
above shall be calculated shall be calculated according to
according to V-1 of this V-1 of this procedure.
procedure.
Chapter I General Provisions Chapter I General Provisions To conform the
VI. Total amounts of real property VI. Total amounts of real property amendment of laws.
and right-of-use assets thereof and and securities acquired by the
securities acquired by the Company Company and each subsidiary for
----- End of picture text -----

61 -

After Amendment

and each subsidiary for non-business use, and limits on individual securities:

Total amounts of real property and right-of-use assets thereof acquired by the Company shall not excess 50 percent of paid-in capital or shareholders’ equity (whichever the higher); total amounts of securities acquired by the Company shall not excess 200 percent of paid-in capital or shareholders’ equity (whichever the higher); each amount of a security invested by the Company shall not excess 50 percent of paid-in capital or shareholders’ equity (whichever the higher). Provided, where the proposal have been approved by the board of directors and recognized by the parent company’s board of directors shall not apply.
Total amounts of real property and right-of-use assets thereof and securities acquired by each subsidiary for non-business use, and limits on individual securities are required to abide by the following restriction:
(1) For the subsidiary which is not a professional investment company, total amounts of real property and right-of-use assets thereof acquired by the subsidiary shall not excess 50 percent of paid-in capital or shareholders’ equity (whichever the higher); total amounts of securities acquired by the subsidiary shall not excess 150 percent of paid-in capital or shareholders’ equity (whichever the higher); each amount of a security invested by the subsidiary shall not excess 50 percent of paid-in capital or shareholders’ equity (whichever the higher).

(2) For the subsidiary which is a

Before Amendment

non-business use, and limits on individual securities:

Total amounts of real property acquired by the Company shall not excess 50 percent of paid-in capital or shareholders’ equity (whichever the higher); total amounts of securities acquired by the Company shall not excess 200 percent of paid-in capital or shareholders’ equity (whichever the higher); each amount of a security invested by the Company shall not excess 50 percent of paid-in capital or shareholders’ equity (whichever the higher). Provided, where the proposal have been approved by the board of directors and recognized by the parent company’s board of directors shall not apply.
Total amounts of real property and securities acquired by each subsidiary for non-business use, and limits on individual securities are required to abide by the following restriction:
(1) For the subsidiary which is not a professional investment company, total amounts of real property acquired by the subsidiary shall not excess 50 percent of paid-in capital or shareholders’ equity (whichever the higher); total amounts of securities acquired by the subsidiary shall not excess 150 percent of paid-in capital or shareholders’ equity (whichever the higher); each amount of a security invested by the subsidiary shall not excess 50 percent of paid-in capital or shareholders’ equity (whichever the higher).

(2) For the subsidiary which is a

Remark

62 -

	After Amendment	Before Amendment	Remark
(3)	professional investment company, total amounts of real propertyand right-of-use assets thereofacquired by the subsidiary shall not excess 50 percent of total assets; total amounts of securities acquired by the subsidiary shall not excess 100 percent of total assets; each amount of a security invested by the subsidiary shall not excess 100 percent of total assets. Where each subsidiary excesses the limits on individual securities but has approved by the board of directors and recognized by the parent company’s board of directors, shall not apply.	professional investment company, total amounts of real property acquired by the subsidiary shall not excess 50 percent of total assets; total amounts of securities acquired by the subsidiary shall not excess 100 percent of total assets; each amount of a security invested by the subsidiary shall not excess 100 percent of total assets. (3) Where each subsidiary excesses the limits on individual securities but has approved by the board of directors and recognized by the parent company’s board of directors, shall not apply.
Chapter I General Provisions VII. Control procedures for the acquisition and disposal of assets by subsidiaries: 1. The Company’s subsidiaries shall establish their respective "Operational Procedures for Acquisition and Disposal of Assets" in accordance with the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies", promulgated by the Financial Supervisory Commission. These procedures are subject to approval by their respective boards of directors (and Audit Committee, if applicable), review by their respective Supervisors, and consent of their respective shareholders before taking effect. The same applies to all subsequent revisions. 2. Subsidiaries are required to report to the Company all derivative transactions and assets acquired/disposed up till the end of the previous month. 3. If the subsidiaryisnon-public		Chapter I General Provisions VII. Control procedures for the acquisition and disposal of assets by subsidiaries: 1. The Company’s subsidiaries shall establish their respective "Operational Procedures for Acquisition and Disposal of Assets" in accordance with the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies", promulgated by the Financial Supervisory Commission. These procedures are subject to approval by their respective boards of directors (and Audit Committee, if applicable), review by their respective Supervisors, and consent of their respective shareholders before taking effect. The same applies to all subsequent revisions. 2. Subsidiaries are required to report to the Company all derivative transactions and assets acquired/disposed up till the end of the previous month. 3. If the subsidiaryisnon-public	To conform the amendment of laws and adjust the wording.

63 -

After Amendment Before Amendment Remark listed, any assets acquired or listed, any assets acquired or disposed by which that are disposed by which that are subject to reporting must be subject to reporting must be notified to the Company prior notified to the Company on the to the date of occurrence. The date of occurrence. The Company will then publish Company will then publish these transactions onto the these transactions onto the designated website. For designated website. For subsidiaries, whether subsidiaries, whether transactions of paid-up capital transactions exceed 20% of or total assets shall be based on paid-up capital or 10% of total the Company's paid-up capital assets shall be based on the or total assets. Company's paid-up capital or total assets. Chapter II Related Party Chapter II Related Party To adjust the no. of Transactions article. IX. Scope and definition: IX. Scope and definition: When the Company engages in any When the Company engages in any acquisition or disposal of assets acquisition or disposal of assets from or to a related party, in from or to a related party, in addition to ensuring that the addition to ensuring that the necessary resolutions are adopted necessary resolutions are adopted and the reasonableness of the and the reasonableness of the transaction terms is appraised, if the transaction terms is appraised, if the transaction amount reaches 10 transaction amount reaches 10 percent or more of the Company's percent or more of the Company's total assets, the Company shall also total assets, the Company shall also obtain an appraisal report from a obtain an appraisal report from a professional appraiser or a CPA's professional appraiser or a CPA's opinion in compliance with this opinion in compliance with this procedure. The calculation of the transaction The calculation of the transaction amount referred to in the preceding amount referred to in the preceding paragraph shall be made in paragraph shall be made in 8-(6) herein. -(6) herein. accordance with IV-9-(6) herein. When judging whether a trading When judging whether a trading counterparty is a related party, in counterparty is a related party, in addition to legal formalities, the addition to legal formalities, the substance of the relationship shall substance of the relationship shall be considered.nsidered.sidered.idered.dered.red.ed. also be considered. Chapter II Related Party Chapter II Related Party 1. To conform the Transactions amendment of laws. X. Resolution procedure: X. Resolution procedure: 2. Due to optional When the Company intends to When the Company intends to needs, there is a acquire or dispose of real property acquire or dispose of real property possibility that the -of-use assets thereof from of-use assets thereof from -use assets thereof from use assets thereof from from from or to a related party, or when it Company may or to a related party, or when it intends to acquire or dispose of acquire business-use intends to acquire or dispose of assets other than real property from equipment or assets other than real property or or or to a related party and the right-of-use assets -of-use assets thereof from or to of-use assets thereof from or to -use assets thereof from or to use assets thereof from or to from or to transaction amount reaches 20 thereof, or acquire ed party and the transaction arty and the transaction y and the transaction and the transaction d the transaction the transaction e transaction transaction saction action ction tion on n percent or more of paid-in capital, real property

Chapter II Related Party Transactions IX. Scope and definition: When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised, if the transaction amount reaches 10 percent or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with this procedure.

The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with IV-8-(6) herein. -(6) herein. When judging whether a trading counterparty is a related party, in addition to legal formalities, the substance of the relationship shall also be considered.nsidered.sidered.idered.dered.red.ed. Chapter II Related Party Transactions X. Resolution procedure: When the Company intends to acquire or dispose of real property or right-of-use assets thereof from of-use assets thereof from -use assets thereof from use assets thereof from from or to a related party, or when it intends to acquire or dispose of assets other than real property or or right-of-use assets thereof from or to of-use assets thereof from or to -use assets thereof from or to use assets thereof from or to from or to a related party and the transaction arty and the transaction y and the transaction and the transaction d the transaction the transaction e transaction transaction saction action ction tion on n

64 -

After Amendment

amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more, except in trading of domestic government bonds or bonds under repurchase and resale agreements, or subscription or repurchase of domestic money market funds issued by Securities Investment Trust Enterprises, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been agreed by the Audit Committee and approved by the board of directors:

The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.

Before Amendment

10 percent or more of the Company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements, or subscription or repurchase of domestic money market funds issued by Securities Investment Trust Enterprises, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been agreed by the Audit Committee and approved by the board of directors:

The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.

Remark

right-of-use assets with its parent or subsidiaries, or with its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital. Given that the risk of this kind of transactions is low, the Company’s board of directors may delegate the board chairman to decide such matters. Also, the wording is adjusted.

The reason for choosing the 2. The reason for choosing the related party as a trading related party as a trading counterparty. counterparty.

2.	acquisition or disposal of assets. The reason for choosing the related party as a trading counterparty.	2.	acquisition or disposal of assets. The reason for choosing the related party as a trading counterparty.
3.	With respect to the acquisition	3.	With respect to the acquisition
	of real propertyor right-of-use		of real property from a related
	assets thereoffrom a related		party, information regarding
	party, information regarding		appraisal of the reasonableness
	appraisal of the reasonableness		of the preliminary transaction
	of the preliminary transaction		terms.
	terms.
4.	The date and price at which the	4.	The date and price at which the
	related party originally acquired		related party originally acquired
	the real property, the original		the real property, the original
	trading counterparty, and that		trading counterparty, and that
	trading counterparty's		trading counterparty's
	relationship to the Company		relationship to the Company
	and the related party.		and the related party.
5.	Monthly cash flow forecasts for	5.	Monthly cash flow forecasts for
	the year commencing from the		the year commencing from the
	anticipated month of signing of		anticipated month of signing of
	the contract, and evaluation of		the contract, and evaluation of
	the necessity of the transaction,		the necessity of the transaction,
	and reasonableness of the funds		and reasonableness of the funds
	utilization.		utilization.
6.	An appraisal report from a	6.	An appraisal report from a
	professional appraiser or a		professional appraiser or a
	CPA's opinion obtained in		CPA's opinion obtained in
	compliance with IX of this		compliance with IX of this
	procedure.		procedure.
7.	Restrictive covenantsand other	7.	Restrictive covenantsand other

65 -

	After Amendment		Before Amendment	Remark
	important stipulations associated with the transaction. The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with V-1 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been agreed by the Audit Committee and approved by the board of directors need not be counted toward the transaction amount. With respect to thefollowing transactionsbetween the Company and its parent or subsidiaries,or between its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital,the Company's board of directors may pursuant to this procedure delegate the board chairman to decide such matters when the transaction is withinNT$ 1 billionand have the decisions subsequently submitted to and ratified by the next board of directors meeting. 1. the acquisition or disposal of business-use equipmentor right-of-use assets thereof. 2. the acquisition or disposal of business-use real property right-of-use assets.		important stipulations associated with the transaction. The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with V-1 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been agreed by the Audit Committee and approved by the board of directors need not be counted toward the transaction amount. With respect to theacquisition or disposal of business-use machinery and equipmentbetween the Company and its parent or subsidiaries, the Company's board of directors may pursuant to this procedure delegate the board chairman to decide such matters when the transaction is withina certain amountand have the decisions subsequently submitted to and ratified by the next board of directors meeting.
Chapter II Related Party Transactions XI. Appraised the reasonableness of the transaction terms: 1. When the Company acquires real propertyor right-of-use assets thereoffrom a related party, the results of the transaction costs that the Company's appraisal conducted in accordance with IV-8-(3) of this procedure are uniformly lower than the transaction price, the matter shall handle the matter incompliance with II-2			Chapter II Related Party Transactions XI. Appraised the reasonableness of the transaction terms: 1. When the Company acquires real property from a related party, the results of the transaction costs that the Company's appraisal conducted in accordance with IV-9-(3) of this procedure are uniformly lower than the transaction price, the matter shall be handled in compliance with II-2 of this procedure.However, wherethe	1. To conform the amendment of laws. 2. To adjust the no. of article.

66 -

After Amendment

of this procedure. However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply:

(1) Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions:
Where undeveloped land is appraised in accordance with the means in IV-8-(3) of this procedure, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.
Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property or

Before Amendment

following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA have been obtained, this restriction shall not apply:

(1) Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions:
1. Where undeveloped land is appraised in accordance with the means in the preceding Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.
Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market practices.

Remark

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leasingmarket practices. (2) Where the Company acquiring real propertyor obtaining real property right-of-use assets through leasing from a related party provides evidence that the terms of the transaction are similar to the terms of transactions completed for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year. Completed transactions for neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transaction for similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real propertyor right-of-use assets thereof. 2. When the Company acquires real propertyor right-of-use assets thereoffrom a related party, the results of the transaction costs that the Company's appraisal conducted in accordance with IV-8-(3) of this procedureare uniformly	3. Completed leasing transactions by unrelated parties for other floors of the same property from within the preceding year, where the transaction terms are similar after calculation of reasonable price discrepancies among floors in accordance with standard property leasing market practices. (2) Where the Company acquiring real property from a related party provides evidence that the terms of the transaction are similar to the terms of transactions completed for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year. Completed transactions for neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transaction for similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real property. 2. When the Company acquires real property from a related party, the results of the transaction costs that the Company's appraisal conducted in accordance with IV-9-(3) of this procedure are uniformly lower than thetransactionprice,

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After Amendment

lower than the transaction price, the following steps shall be taken:

(1) A special reserve shall be set aside in accordance with Article 41, paragraph 1 of the Act against the difference between the real property or right-of-use assets thereof transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41, paragraph 1 of the Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company.
(2) The independent directors of the Audit Committee shall comply with Article 218 of the Company Act.

(3) Actions taken pursuant to subparagraph 1 and subparagraph 2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. The Company that has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased or leased at a premium, or they have been disposed of, or the leasing contract has been terminated, or adequate compensation has been made, or the status quo ante has been restored, or there is other

Before Amendment Remark
the following steps shall be taken: (1) A special reserve shall be set aside in accordance with Article 41, paragraph 1 of the Act against the difference between the real property transaction price and the appraised cost, and may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41, paragraph 1 of the Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company.

the following steps shall be taken:

(2) The Audit Committee shall comply with Article 218 of the Company Act.

(3) Actions taken pursuant to subparagraph 1 and subparagraph 2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus. The Company that has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about

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After Amendment	Before Amendment	Remark
evidence confirming that there was nothing unreasonable about the transaction, and the FSC has given its consent.	the transaction, and the FSC has given its consent.
Chapter III Controls over derivative transactions XII. Trading principles and strategies: 1. Types of derivatives be traded: Forward contracts, options contracts, futures contracts, leverage contracts, and swap contracts, whose value is derived fromspecifiedinterest rates, financial instrument prices, commodity prices,foreign exchange rates, indexesof prices or rates, credit rating or credit indexes, or other variables; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) agreements. 2. Operating or hedging strategies: The Company's derivative transactions are divided into hedging and trading (non-hedging) purposes. Transactions should be primarily engaged to avoid business risks. The types of derivatives should be selected in the way that mitigates risks on foreign currency income, expenses, assets, or liabilities which arise as a result of business activities. Additionally, derivatives can be traded for "non-hedging purposes" at the proper timing as means of increasing non-operating revenues or reducing non-operating losses. As a priority, the Company should transactwith financial	Chapter III Controls over derivative transactions XII. Trading principles and strategies: 1. Types of derivatives be traded: Forward contracts, options contracts, futures contracts, leverage contracts, and swap contracts,and compound contracts combining the above products, whose value is derived fromassets,interest rates, foreign exchange rates, indexes or other interests. The term "forward contracts" does not include insurance contracts, performance contracts, after-sales service contracts, long-term leasing contracts, or long-term purchase (sales) agreements. 2. Operating or hedging strategies: The Company's derivative transactions are divided into hedging and trading (non-hedging) purposes. Transactions should be primarily engaged to avoid business risks. The types of derivatives should be selected in the way that mitigates risks on foreign currency income, expenses, assets, or liabilities which arise as a result of business activities. Additionally, derivatives can be traded for "non-hedging purposes" at the proper timing as means of increasing non-operating revenues or reducing non-operating losses. As a priority, the Company should transactwith financial	To conform the amendment of laws and adjust the wording.

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After Amendment

Before Amendment

Remark

After Amendment Before Amendment Remark	After Amendment Before Amendment Remark	After Amendment Before Amendment Remark	After Amendment Before Amendment Remark
	institutions it has banking relationships with, in order to avoid credit risks. Each transaction must be determined either for hedging or for trading before taking place. This is to facilitate proper bookkeeping. 3. Segregation of duties (1) Finance Department Responsible for learning the regulatory implications of each derivative, outlining trading practices, establishing supervisory policies, gathering market information, executing transactions, evaluating positions held on hand, producing assessment reports, and making the necessary announcements and reporting. The bookkeeping, report generation, and record-filing relevant to derivative transactions shall be handled by Finance Department staffs who are not involved in the trading activity. (2) Audit Department Periodically assesses whether the current risk management policy is appropriate and carried out in accordance with this procedure. (3) Legal Department: Responsible for reviewing derivative contracts and any relatedregulations.	institutions it has banking relationships with, in order to avoid credit risks. Each transaction must be determined either for hedging or for trading before taking place. This is to facilitate proper bookkeeping. 3. Segregation of duties (1) Finance Department Responsible for learning the regulatory implications of each derivative, outlining trading practices, establishing supervisory policies, gathering market information, executing transactions, evaluating positions held on hand, producing assessment reports, and making the necessary announcements and reporting. The bookkeeping, report generation, and record-filing relevant to derivative transactions shall be handled by Finance Department staffs who are not involved in the trading activity. (2) Audit Department Periodically assesses whether the current risk management policy is appropriate and carried out in accordance with this procedure. (3) Legal Department: Responsible for reviewing derivative contracts and any relatedregulations.
Chapter V Other material issues XXIII. Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide public companies with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shallmeet the following requirements: 1. May not have previously received a final and unappealable sentence to imprisonment for 1 year or longer for a violation of		Chapter V Other material issues XXIII. Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide public companies with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions shall not be a related party of any party to the transaction.	To conform the amendment of laws.

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	After Amendment	Before Amendment	Remark
2. 3.	the Securities and Exchange Act, the Company Act, the Banking Act, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime. However, this provision does not apply if 3 years have already passed since completion of service of the sentence, since expiration of the period of a suspended sentence, or since a pardon was received. May not be a related partyor de facto related partyof any party to the transaction. If the company is required to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal officers may not be related parties or de facto related parties of each other.
Chapter V Other material issues XXVII. Revisions: The initial version was revoked in June 1990. The revised version was revoked in June 1991. The revised version was revoked in June 1992. The revised version was revoked in June 1995. The revised version was revoked in June 1996. The revised version was revoked in June 1997. The revised version was revoked in June 1999. The revised version was revoked in June 2003. The revised version was revoked in June 2007. The revised version was revoked in June 2010. The revised version was revoked in June 2011. The revised version was		Chapter V Other material issues XXVII. Revisions: The initial version was revoked in June 1990. The revised version was revoked in June 1991. The revised version was revoked in June 1992. The revised version was revoked in June 1995. The revised version was revoked in June 1996. The revised version was revoked in June 1997. The revised version was revoked in June 1999. The revised version was revoked in June 2003. The revised version was revoked in June 2007. The revised version was revoked in June 2010. The revised version was revoked in June 2011. The revised version was	Newly added.

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	revoked in June 2012. The revised version was revoked in June 2014. The revised version was revoked in June 2017. The revised version dated June 2019.		revoked in June 2012. The revised version was revoked in June 2014. The revised version dated June 2017.

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Appendix VIII

Contrast Table for Amendment to the “Procedures for Loaning of Funds of Presidnet China Store Corporation”

After amendment	Before amendment	Remark
Article I. The entities to which the Company may loan funds: 1. The entities which have business relationship of franchise business operation with the Company. 2. The entities which require short-term loanof funds.	Article I. The entities to which the Company may loan funds: The entities which require short-term loan of funds,and a majority of shares of which are held by the Company directly or indirectly.	To conform the amendment of regulation and meet the operational needs.
Article II. Criteria for evaluating granting of fund: 1. Where funds are loaned for business relationship, the Company shall examine whether the loan amount and business transaction amount are equivalent. 2.Where the entities which meet the requirement for granting loan need the short-term loan of funds to repay loan, purchase equipment and circulate funds, the Company shall evaluate the validity and essentiality of the loan.	Article II. Criteria for evaluating granting of fund: Where the entities which meet the requirement for granting loan need the short-term loan of funds to repay loan, purchase equipment and circulate funds, the Company shall evaluate the validity and essentiality of the loan.	1. To conform the amendment of regulation and meet the operational needs. 2. Paragraph renumbering.
Article III. Total of granted loan and limit on single counterpart: 2. Limit on single counterpart: (1) Where funds are loaned for business relationship, the total amount shall not exceed the total transaction amount between the parties during the period of 12 months prior to the time of lending. The so-called" transaction amount”shall mean the amount of profit shared based on the franchise agreement between the parties and shall not exceed NT$10,000,000. (2)Where short-term financing is needed,the lower of NT$50,000,000 perentitybelow or 10% of the net worth of the most recent financial statement certified or reviewed by a certified public accountant.	Article III. Total of granted loan and limit on single counterpart: 2. Limit on single counterpart: the lower of NT$50,000,000 per companybelow or 10% of the net worth of the most recent financial statement	To conform the amendment of regulation and meet the operational needs.

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Article IV. Deadline of loan and Article IV. Deadline of loan and To conform the
method to accrue interest: method to accrue interest: amendment of regulation
1. The fund loaning shall be effective 1. The fund loaning shall be and meet the operational
for one year and may be repaid in effective for one year and may be needs.
installments. Where funds are loaned repaid in installments.
for business relationship, the
duration of loans shall not exceed the
remaining duration of the franchise
agreement.
Article V. Operational Procedures for Article V. Operational Procedures To conform the
Loaning Funds: for Loaning Funds: amendment of regulation
1. The borrower shall apply for the 1. The borrower shall apply for the and meet the operational
funds with the Company by funds with the Company by needs.
submitting the relevant information. submitting the relevant information.
Upon examining the application, the Upon examining the application,
Company’s finance unit will submit the Company’s finance unit will
it to the President for approval and submit it to the President for
have it resolved by the Board of approval and have it resolved by
Directors. Only loans of funds the Board of Directors. Meanwhile,
between the Company and its parent the Chairman of Board may be
company or subsidiaries, or between authorized, for a specific borrowing
its subsidiaries, shall be submitted counterparty, within a certain
for a resolution by the Board of monetary limit resolved by the
directors, and the Chairman of Board board of directors, and within a
may be authorized, for a specific period not to exceed one year, to
borrowing counterparty, within a give loans in installments or to
certain monetary limit resolved by make a revolving credit line
the board of directors, and within a available for the counterparty to
period not to exceed one year, to give draw down.
loans in installments or to make a
revolving credit line available for the
counterparty to draw down. The
certain monetary limit on
authorization for loans extended by
the Company or any of its
subsidiaries to any single entity shall
not exceed 10% of the net worth on
the most recent financial statements
certified or reviewed by a certified
public accountant of the lending
company, except in cases of
companies in compliance with
Article 10, paragraph 4.
Article V. Operational Procedures for Article V. Operational Procedures 1. To conform the
Loaning Funds: for Loaning Funds: amendment of regulation.
2. (Deleted) 2. Upon resolution of the Board of 2. The related operational
Directors, the borrower shall sign regulations for granting
the “Agreement for Fund Loaning” loans have been
with the Company and issue the established in
corresponding note to secure the “Examination Policy on
repayment. Guarantee and
Endorsement / Granting
Loans” of the Company.
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Article V. Operational Procedures for Article V. Operational Procedures 1. To conform the
Loaning Funds: for Loaning Funds: amendment of regulation.
3. (Deleted) 3. To disburse the fund under the 2. The related operational
Agreement, the borrower shall regulations for granting
complete the “application form for loans have been
disbursement” and submit it to the established in
Company. “Examination Policy on
Guarantee and
Endorsement / Granting
Loans” of the Company.
Article V. Operational Procedures Article V. Operational Procedures Paragraph renumbering.
for Loaning Funds: for Loaning Funds:
2. The Company’s financial unit 4. The Company’s financial unit
shall prepare the memorandum book shall prepare the memorandum
to control the said fund loaning book to control the said fund
activities. loaning activities.
Article V. Operational Procedures Article V. Operational Procedures Paragraph renumbering.
for Loaning Funds: for Loaning Funds:
3. Where the balance of the loan 5. Where the balance of the loan
exceeds the limit due to change in exceeds the limit due to change in
circumstances, it is necessary to circumstances, it is necessary to
define the corrective action plan and define the corrective action plan
submit the relevant plan to the Audit and submit the relevant plan to
Committee. Meanwhile, it is Audit Committee. Meanwhile, it is
necessary to complete the correction necessary to complete the
as scheduled under the plan. correction as scheduled under the
plan.
Article V. Operational Procedures Article V. Operational Procedures Paragraph renumbering.
for Loaning Funds: for Loaning Funds:
4. The Company’s internal auditors 6. The Company’s internal auditors
shall audit the Operational shall audit the Operational
Procedures for Granting Loans and Procedures for Granting Loans and
execution thereof on a quarterly basis execution thereof on a quarterly
and record the audit in writing. basis and record the audit in
Where they find any material writing. Where they find any
violation of rules, they shall inform material violation of rules, they
the Audit Committee in writing shall inform Audit Committee in
immediately. writing immediately.
Article VI. Examination on granting (Newly Added) To conform the
of fund: amendment of regulation.
3. Impact on the company's business
operations, financial condition, and
shareholders' equity;
Article VI. Examination on granting Article VI. Examination on 1. To conform the
of fund: granting of fund: amendment of regulation.
4. Analyze the financial statements 3. Analyze the financial statements 2. Paragraph
of borrowers granted the loan; of companies granted the loan; renumbering.
Article VI. Examination on granting Article VI. Examination on 1. To conform the
of fund: granting of fund: amendment of regulation.
5. Evaluate the necessity to acquire 4. Notes to secure repayment; 2. Paragraph
collateral and appraisal of collateral; renumbering.
Article VI. Examination on granting Article VI. Examination on 1. To conform the
of fund: granting of fund: amendment of regulation.
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6.Submit the application to Board of Directorsfor resolution.	5.Submit the application to Board of Directorsfor resolution.	2. Paragraph renumbering.
Article VIII. Follow-up control over granted loan and procedure for processing NPA: 1. Analyze the solvency of the borrowergranted the loan on a periodicalbasis;	Article VIII. Follow-up control over granted loan and procedure for processing NPA: 1. Analyze the solvency of the enterprisegranted the loan on a periodicalbasis;	To conform the amendment of regulation.
Article X. Procedure for controlling subsidiaries’ granting of loan: 4.The loans between overseas subsidiaries which are 100%-owned directly or indirectly by the Company, or the loans from overseas 100%-owned subsidiaries to the Company arefree from the limit on 40% of the Company’s net worth, and the funding period is also free from the limit of one year or one business cycle; however, theentities still need to state the maximum amount and duration of the loan in the Operational Procedures.	Article X. Procedure for controlling subsidiaries’ granting of loan: 4.The granting of loans between the Company and any foreign company in which the Company holds 100% voting right directly or indirectly isfree from the limit on 40% of the Company’s net worth, and the funding period is also free from the limit of one year or one business cycle; however, the Companystill needs to state the maximum amount and duration of the loan in the Operational Procedures.	To conform the amendment of regulation.
Article XIV. The initial version was revoked in June 1990. The revised version was revoked in June 1996. The revised version was revoked in June 1997. The revised version was revoked in June 1998. The revised version was revoked in June 1999. The revised version was revoked in June 2003. The revised version was revoked in June 2006. The revised version was revoked in June 2009. The revised version was revoked in June 2011. The revised version dated June 2012. The revised version was revoked in June 2013. The revised version dated June 2019.	Article XIV. The initial version was revoked in June 1990. The revised version was revoked in June 1996. The revised version was revoked in June 1997. The revised version was revoked in June 1998. The revised version was revoked in June 1999. The revised version was revoked in June 2003. The revised version was revoked in June 2006. The revised version was revoked in June 2009. The revised version was revoked in June 2011. The revised version dated June 2012. The revised version dated June 2013.	Newly added.

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Appendix IX

Contrast Table for Amendment to the “Procedures for Guarantee and Endorsement of Presidnet China Store Corporation”

	After amendment		Before amendment	Remark
	Article IV. Limit of endorsements/guarantees: 2. The limit of the endorsement/ guarantee to be made by the Company and its subsidiaries for any single entity shall be no more than 20% of the Company’s net worth. Notwithstanding, the amount endorsed/guaranteed by the Company for business transactions shall be equivalent to the higher of the purchase or sale amount of the endorsed/guaranteed enterprise during the period of 12 months, and the amount endorsed/guaranteed by the Company for franchisees shall not exceed the amount of profit shared based on the franchise agreement between the parties during the period of 12 months prior to the time of endorsement/ guarantee.		Article IV. Limit of endorsements/guarantees: 2. The limit of the endorsement/ guarantee to be made by the Company and its subsidiaries for any single entity shall be no more than 20% of the Company’s net worth. Notwithstanding, the amount endorsed/guaranteed by the Company for business transactions shall be equivalent to the higher of the purchase or sale amount of the endorsed/guaranteed enterprise.	To conform the amendment of regulation and meet the operational needs.
	Article XV. Revisions: The initial version was revoked in June 1990. The revised version was revoked in June 1996. The revised version was revoked in June 1997. The revised version was revoked in June 1998. The revised version was revoked in June 1999. The revised version was revoked in June 2003. The revised version was revoked in June 2006. The revised version was revoked in June 2009. The revised version was revoked in June 2011. The revised version was revoked in June 2012. The revised version dated June 2019.		Article XV. Revisions: The initial version was revoked in June 1990. The revised version was revoked in June 1996. The revised version was revoked in June 1997. The revised version was revoked in June 1998. The revised version was revoked in June 1999. The revised version was revoked in June 2003. The revised version was revoked in June 2006. The revised version was revoked in June 2009. The revised version was revoked in June 2011. The revised version dated June 2012.	Newly added.

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Appendix X

Details of the Duties Subject to Releasing Directors and Independent Directors from Non-competition

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As of April 28 [th] , 2019
Name Current Position in Other Companies
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As of April 28th, 2019	As of April 28th, 2019
Name Current Position in Other Companies

Representative of Uni-President Enterprises Corp., Lo, Chih-Hsien	Chairman`：`Uni-President Enterprises Corp., President Natural Industrial Corp., Ton Yi Industrial Corp, TTET Union Corp, Prince Housing & Development Corp., Prince Corp., Prince Real Estate Co., Ltd., Cheng-Shi Investment Holding Co., Times Square International Holding Co., Times Square International Hotel Corp., Times Square International Stays Corp., Kai Yu Investment Co., Ltd., President Packaging Corp., President International Development Corp., President Property Corp., ScinoPharm Taiwan Ltd., Uni-President Cold-Chain Corp., Presco Netmarketing Inc., Uni-President Dream Parks Corp., Uni-OAO Travel Service Corp., Kai Nan Investment Co., Ltd., President Century Corp., Tone Ren Enterprise Co., Ltd., Changjiagang President Nisshin Food Co., Ltd., Uni-President (Philippines) Corp., Uni-President (Thailand) Ltd., Uni-President (Vietnam) Co., Ltd., Uni-President China Holdings Ltd., Uni-President Enterprises (China) Investment Co., Ltd., Woongjin Foods Co., Ltd., Daeyoung Foods Co., Ltd. Vice Chairman`：`President Nisshin Corp. Director`：`President Baseball Team Corp., Nanlien International Corp., Tone Sang Construction Corp., Retail Support International Corp., Presicarre Corp., President Fair Development Corp., Uni-Wonder Corp., Uni-President Organics Corp., PK Venture Capital Corp., Uni-President Glass Industrial Co., Ltd., Kuang Chuan Dairy Co., Ltd., Kuang Chuan Foods Co., Ltd., Uni-President Development Corp., Tait Marketing & Distribution Co., Ltd., Weilih Food Corp., Keng Ting Enterprises Co., Ltd., Prince Property Management, Kao Chyuan Investment Co., Ltd., President Chain Store (BVI) Holdings Ltd., President Chain Store (Labuan) Holdings Ltd., Cayman President Holdings Ltd., Kai Yu (BVI) Investment Co., Ltd., Uni-President Southeast Asia Holdings Ltd., President Packing Holdings Ltd., President Energy Development (Cayman Islands) Ltd., Uni-President Asia Holdings Ltd., Uni-President Hong Kong Holdings Limited, Hefei President Enterprises Co., Ltd., Zhenzhou President Enterprises Co., Ltd., Nanchang President Enterprises Co., Ltd., Guangzhou President Enterprises Co., Ltd., Fuzhou President Enterprises Co., Ltd., Shenyang President Enterprises Co., Ltd., Changsha President Enterprises Co., Ltd., Nanning President Enterprises Co., Ltd., Zhanjiang President Enterprises Co., Ltd., Chongqing President Enterprises Co., Ltd., Taizhou President Enterprises Co., Ltd., Changchun President Enterprises Co., Ltd., Baiyin President Enterprises Co., Ltd., Hainan President Enterprises Co., Ltd., Guiyang President Enterprises Co., Ltd., Jinan President Enterprises Co., Ltd., Hangzhou President Enterprises Co., Ltd., Xuzhou President Enterprises Co., Ltd., Henan President Enterprises Co., Ltd., Shaanxi President Enterprises Co.,Ltd., JiangsuPresident Enterprises Co.,Ltd.,

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Name	Current Position in Other Companies
	Ningxia President Enterprises Co., Ltd., President Enterprises (Shanghai) Co., Ltd., Shanxi President Enterprises Co., Ltd., Uni-President Enterprises (Tianjin) Co., Ltd., Uni-President Enterprises (Hunan) Co., Ltd., Harbin President Enterprises Co., Ltd., Akesu President Enterprises Co., Ltd., President Enterprises (Inner Mongolia) Co., Ltd., Shijiazhuang President Enterprises Co., Ltd., Xinjiang President Enterprises Food Co., Ltd., Wuhan President Enterprises Food Co., Ltd., Kunshan President Enterprises Food Co., Ltd., Chengdu President Enterprises Food Co., Ltd., Kunming President Enterprises Food Co., Ltd., Beijing President Enterprises Drinks Co., Ltd., Uni-President Enterprises (Shanghai) Drink & Food Co., Ltd., President Enterprise (Kunshan) Food Technology Co., Ltd., Uni-President Trading (Hubei) Co., Ltd., President (Kunshan) Trading Co., Ltd., President (Shanghai) Trading Co., Ltd., Yantai Tongli Beverage Industries Co., Ltd., Bama President Mineral Water Co., Ltd., Wuxue President Mineral Water Co., Ltd., Changbaishan Mountain President Enterprises (Jilin) Mineral Water Co., Ltd., Champ Green Capital Co., Limited, Champ Green (Shanghai) Consulting Co., Ltd., Uni-President (Shanghai) Pearly Century Co., Ltd., Uni-President Enterprise (Hutubi) Tomato Products Technology Co., Ltd. President`：`Presco NetmarketingInc.
Representative of Kao Chyuan Investment Co., Ltd., Kao, Shiow-Ling	Chairman`：`Kao Chyuan Investment Co., Ltd., President Being Corp., President Fair Development Corp., Uni-President Department Store Corp, President Pharmaceutical Corp., President Drugstore Business Corp. Director`：`Uni-President Enterprises Corp., Ton Yi Industrial Corp., ScinoPharm Taiwan Ltd., President International Development Corp., Uni-President Development Corp., Prince Housing & Development Corp., Times Square International Hotel Corp., Times Square International Holding Co., President (Shanghai) Health Product Trading Co., Ltd., Uni-Wonder Corp., President Century Corp., Beauty Wonder (Zhejiang) Trading Co.,Ltd. President`：`Kao Chyuan Investment Co.,Ltd.
Representative of Uni-President Enterprises Corp., Chen, Jui-Tang	Chairman`：`Uni-Wonder Corp., President Yilan Art and Culture Corp., President Transnet Corp., President Collect Services Co., Ltd., Retail Support International Corp., Uni-President Superior Commissary Corp., Ren-Hui Investment Corp., President Chain Store (Shanghai) Ltd., President Chain Store (Zhejiang) Ltd., President (Shanghai) Health Product Trading Company Ltd., Beauty Wonder (Zhejiang) Trading Co.,Ltd. Vice Chairman`：`Philippine Seven Corp. Director`：`Uni-President Enterprises Corp., President Drugstore Business Corp., President Being Corp., President Pharmaceutical Corp., Uni-President Department Store Corp., 21 Century Enterprise Co., Ltd., Uni-President Cold-Chain Corp., Uni-President Development Corp., President Fair Development Corp., President International Development Corp., Shan Dong President Yinzuo Commercial Limited, President Chain Store (BVI) Holdings Ltd., PCSC (China) Drugstore Limited, President Chain Store (Labuan) Holdings Ltd., President Chain Store (Hong Kong) Holdings Limited, Uni-President Logistics (BVI)HoldingsLimited., Nanlien InternationalCorp.

80 -

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Name Current Position in Other Companies
President ： Ren-Hui Investment Corp.
Representative of Chairman ： Capital Inventory Services Corp., iCASH Corp., Tait Marketing &
Uni-President Distribution Co., Ltd., President Chain Store Tokyo Marketing Corp.
Enterprises Corp., Director ： Uni-Wonder Corp., President Pharmaceutical Corp., Uni-President
Huang, Jui-Tien
Cold-Chain Corp., Retail Support International Corp., President
Information Corp., Books.com Co., Ltd., President International
Development Corp., PCSC (China) Drugstore Limited, Philippine
Seven Corp., Shan Dong President Yinzuo Commercial Limited,
President Chain Store (Shanghai) Ltd., President Chain Store
(Zhejiang) Ltd., President Chain Store (Hong Kong) Holdings Limited,
President Pharmaceutical (Hong Kong) Holdings Limited, Ren Hui
Investment Corp., Ren Hui Holding Co., Ltd., Uni-President Foodstuff
(BVI) Holdings Ltd., President Nisshin Corp., Changjiagang President
Nisshin Food Co., Ltd., Shanghai Songjiang President Enterprises Co.,
Ltd., Zhongshan President Enterprises Co., Ltd., Taiwan Millennium
Health Foundation, Dr. C. Y. Kao's Non-Profit Foundation of Culture
& Education (In Memory of His Mother).
President ： President Pharmaceutical Corp., President Pharmaceutical (Hong Kong)
Holdings Limited, Tung-Ren Pharmaceutical Corp.
Representative of Chairman ： President Entertainment Corp., Master channels corporation,
Uni-President Zhongshan President Enterprises Co., Ltd., Tianjiang President
Enterprises Corp., Enterprises Food Co., Ltd., Qingdao President Feed & Livestock
Wu, Liang-Feng Co., Ltd.,
Director ： President Nisshin Corp., TTET Union Corp., Changjiagang President
Nisshin Food Co., Ltd., Uni-President (Vietnam) Co.,Ltd.
President ： President Entertainment Corp., Changjiagang President Nisshin Food
Co., Ltd.
Representative of Chairman ： Uni-President Development Corp., Tong Yu Investment Corp.,
Uni-President President Life Sciences Co., Ltd., AndroSciences Corp.
Enterprises Corp., Director ： Kai Yu Investment Co., Ltd., Grand Bills Finance Corporation,
Su, Tsung-Ming President Fair Development Corp., President International
Development Corp., ScinoPharm Taiwan Ltd., President Tokyo Corp.,
President Tokyo Auto Leasing Corp., Tong-Sheng Finance Leasing
Co., Ltd., Tong-Sheng (Suzhou) Car Rental Co., Ltd., CDIM &
Partners Investment Holding Corp., Kai Nan Investment Co., Ltd.,
Uni-President China Holdings Ltd. Uni-President Hong Kong
Holdings Limited, Xiang Lu Industrial Ltd., President (BVI)
International Investment Holdings Ltd., President Energy
Development (Cayman Islands) Ltd., President Life Sciences Cayman
Co., Ltd., SPT International, Ltd., Tanvex Biologics, Inc.
Independent Director ： Senao International Co., Ltd.
Supervisor ： Presicarre Corp., Presco Netmarketing Inc., Uni-President Enterprises
(China) Investment Co., Ltd.
President ： President International Development Corp., ScinoPharm Taiwan Ltd.,
President Property Corporation.
Representative of Chairman ： Chang-Tong Enterprise Corp., PT. Uni President Indonesia
Uni-President Director ： President Nisshin Corp., Uni-President Oven Bakery Corp.,
Enterprises Corp.,
Changjiagang President Nisshin Food Co., Ltd.
Wu, Kun-Lin
Representative of Chairman ： Uni-President Vender Corp., Tung Ang Enterprises Corp.
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Name Current Position in Other Companies
Uni-President Director ： Ton Yi Industrial Corp., Mech-President Corp., Uni-President
Enterprises Corp., Cold-Chain Corp., President Pharmaceutical Corp., Uni-president
Hwang, Jau-Kai Marketing Co., Ltd., Uni-President (Vietnam) Co., Ltd., Woongjin
Foods Co. Ltd., Daeyoung Foods Co., Ltd.
Representative of Chairman ： Ton Yi Pharmaceutical Corp., Uni-President Assets Management Co.,
Uni-President Ltd.
Enterprises Corp., Director ： President International Trade & Investment Corp., Prince Housing &
Wu, Tsung-Pin
Development Corp., Prince Real Estate Co., Ltd., Cheng-Shi
Investment Holding Co., Times Square International Holding Co.,
Times Square International Hotel Corp., Tone Sang Construction
Corp., ScinoPharm Taiwan Ltd., Kai Nan Investment Co., Ltd., Kuang
Chuan Dairy Co., Ltd., Kuang Chuan Foods Co., Uni-President Hong
Kong Holdings Limited, Uni-President (Vietnam) Co., Ltd.
Supervisor ： President Baseball Team Corp., Nanlien International Corp., President
Entertainment Corp., President Kikkoman Inc., Kai Yu Investment
Co., Ltd., President International Development Corp., President
Century Corp., Times Square International Stays Corp., Mean Time
Enterprise Co., Ltd., Kunshan President Kikkoman Biotechnology
Co., Ltd., President Kikkoman Zhenji Foods Co., Ltd., Woongjin
Foods Co., Ltd., Daeyoung Foods Co., Ltd.
Representative of Director ： PCSC Restaurant (Cayman) Holdings Limited, Philippine Seven Corp.
Uni-President Supervisor ： President Transnet Corp., President Collect Services Co., Ltd.,
Enterprises Corp.,
Books.com Co., Ltd., Uni-Wonder Corp., Ren-Hui Investment
Wu, Wen-Chi Corp.
Wang, Wen-Yeu Independent Director ： Global Unichip Corp., KGI Bank, Xintec Inc.
Hung, Yung-Chen Director ： Vincera Capital Company
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AI assistant

PCSC — AGM Information 2019

52232_rns_2019-06-26_337f96da-a543-4411-ac68-6332c731b316.pdf

PRESIDENT CHAIN STORE CORPORATION 2019 Annual General Shareholders’ Meeting Minutes

(Translation)

1. Business Report for 2018.

2. Audit Committee’s Review Report for 2018.

3. Status of Investment in Mainland China in 2018.

4. Compensation for Employees and Directors in 2018.

IV. Ratification Items

(Proposed by the Board)

1. Ratification of 2018 Business Report and Financial Statements.

V. Discussion Items

(Proposed by the Board)

1. Adoption of the Proposal for Distribution of 2018 Profits.

(Proposed by the Board)

2. Amendment to the Articles of Incorporation of the Company.

(Proposed by the Board)

3. Amendment to the Procedures for Acquisition and Disposal of Assets of the

Company.

(Proposed by the Board)

4. Amendment to the Procedures for Loaning of Funds of the Company.

(Proposed by the Board)

5. Amendment to the Procedures for Guarantee and Endorsement of the Company.

(Proposed by the Board)

6. Adoption of the Proposal for Releasing Directors from Non-competition.

Appendix I

2018 Business Report

Dear Shareholders,

Appendix II

President Chain Store Corporation Audit Committee’s Review Report (Translation)

President Chain Store Corporation Status of Investment in Mainland China in 2018

Appendix IV

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

Opinion

Basis for opinion

Key audit matters

Completeness and accuracy of retail sales revenue

Description

Cost-to-retail ratio of retail inventory method

Description

How our audit addressed the matter

Other matter – Using the work of other auditors

Other matters – Parent company-only financial reports

Responsibilities of management and those charged with governance for the consolidated financial statements

Auditor’s responsibilities for the audit of the consolidated financial statements

5.

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

REPORT OF INDEPENDENT ACCOUNTANTS

TRANSLATED FROM CHINESE

Opinion

Basis for opinion

Key audit matters

Completeness and accuracy of retail sales revenue

Description

How our audit addressed the matter

Cost-to-retail ratio of retail inventory method

Description

How our audit addressed the matter

Other matter –Using the work of other auditors

Responsibilities of management and those charged with governance for the parent

company only financial statements

Auditor’s responsibilities for the audit of the parent company only financial statements

PRESIDENT CHAIN STORE CORP. PARENT COMPANY ONLY BALANCE SHEETS

PRESIDENT CHAIN STORE CORP. PARENT COMPANY ONLY BALANCE SHEETS

PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

PRESIDENT CHAIN STORE CORP. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

PRESIDENT CHAIN STORE CORP. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

Appendix V

Profit Allocation Proposal for 2018

Appendix VI

Contrast Table for Amendment to the “Articles of Incorporation of President Chain Store Corporation”

Appendix VII

Contrast Table for Amendment to the “Procedures for Acquisition and Disposal of Assets of President Chain Store Corporation”

PCSC AGM Information 2019