PCSC - AGM Information 2020 | FinancialReports.eu

Stock Code:2912

PRESIDENT CHAIN STORE CORPORATION 2020 ANNUAL GENERAL SHAREHOLDERS’ MEETING MANUAL (Translation)

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June 17, 2020

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PRESIDENT CHAIN STORE CORPORATION 2020 Annual General Shareholders’ Meeting

I. Agenda

Time: 10:00 a.m. on June 17, 2020 (Wednesday)

Place: No.301, Zhongzheng Rd., Yongkang Dist., Tainan City 710, Taiwan (R.O.C.) (1F, Training Center of Uni-President Enterprises Corp.) Parliamentary Procedure:

Call the Meeting to Order (Report equity represented by attendance)
Chairman Remarks
Report Items
(1) Business Report for 2019.
(2) Audit Committee’s Review Report for 2019.
(3) Status of Investment in Mainland China in 2019.
(4) Compensation for Employees and Directors in 2019.
Ratification Items
(1) Ratification of 2019 Business Report and Financial Statements.
Discussion Items
(1) Adoption of the Proposal for Distribution of 2019 Profits.
(2) Amendments to the Rules of Procedures for Shareholders’ Meeting of the Company.
(3) Adoption of the Proposal for Releasing Directors from Non-competition.
Other Special Motions
Dissolution
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II. Report Items

1. Business Report for 2019.

Explanation:

The business report for 2019 is attached as Appendix I on page 7~9.

2. Audit Committee’s Review Report for 2019.

Explanation:

The Audit Committee Review’s Report for 2019 is attached as Appendix II on page 10.

3. Status of Investment in Mainland China in 2019.

Explanation:

The status of the Company’s investment in Mainland China in 2019 is attached as Appendix III on page 11.

4. Compensation for Employees and Directors in 2019.

Explanation:

President Chain Store Corp. recognized NT$567,096,064 as compensation for employees, and NT$189,464,589 as compensation for directors in 2019, by paying cash.

III. Ratification Items

(Proposed by the Board)

1. Ratification of 2019 Business Report and Financial Statements.

Explanation:

(1) PCSC’s 2019 Financial Statements were audited by PRICEWATERHOUSECOOPERS Taiwan.
(2) 2019 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 2019 are attached as Appendix I on page 7~9 and Appendix IV on page 12~34.
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IV. Discussion Items

(Proposed by the Board)

1. Adoption of the Proposal for Distribution of 2019 Profits.

Explanation:

(1) The 2019 Profit Allocation Proposal is attached as Appendix V on page 35.
(2) The Company’s distributable earnings for 2019 are NT$11,410,545,254. The cash dividend to be distributed is NT$9.0 per share. It is proposed that the Board of Directors be authorized to resolve the ex-dividend date and distribution record date.
(3) The total cash dividends allocated to each shareholder were rounded off to one NT$. The fractional stocks less than NT$1 in the allocation were transferred to other income of the Company.

(Proposed by the Board)

2. Amendments to the Rules of Procedures for Shareholders’ Meeting of the

Company.

Explanation:

(1) To conform the amendments of rules, the Rules of Procedures for Shareholders’ Meeting are proposed to be amended.
(2) The proposed amendments to the Rules of Procedures for Shareholders’ Meeting is attached as Appendix VI on page 36.
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(Proposed by the Board)

3. 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 releasing directors and independent directors from non-competition are attached as Appendix VII on page 37~40.
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V. Other Special Motions

VI. Dissolution

Appendix I

2019 Business Report

Dear Shareholders,

In 2019, the global economy was turbulent, the minimum wage continued to increase, and businesses faced 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 consumers innovative and convenient products and services. PCSC worked with its subsidiaries to achieve consolidated revenue of NT$256.06 billion and net profits of NT$12.11 billion in 2019. PCSC was selected as Don Jones Sustainability World Index and Don Jones Sustainability Emerging Markets Index this year, and was the only Taiwan enterprise invited and selected among global food & staples retailing industry, underscoring the fact that PCSC meets the standards of world-class remarkable corporations around the globe.

7-ELEVEN Taiwan aims to provide customers with an even more comfortable and friendly place to shop. PCSC launched more featured lifestyle stores to satisfy different business areas and needs. For the first time, PCSC worked with international brands to set up co-brand stores to create unique enjoyable settings for shoppers. Also, PCSC introduced a new consumer model and unveiled the first convenience store in Taiwan combining its X-STORE with Big7 lifestyle store, employing state-of-the-art technology to provide customers with a diversified shopping experience. To ensure food safety, PCSC set up an internal monitoring mechanism and a product quality testing lab. Together, these initiatives enable PCSC to create a rigorous food safety net to protect customers. PCSC has worked together in strategic partnerships with well-known restaurants and chefs to launch a diverse selection of delicious food products. PCSC has continued to improve the quality and flavor of CITY CAFÉ, continuing to drive future growth. In addition, PCSC has continued to develop high quality and differentiated products to satisfy customer needs. In 2019, PCSC for the first time introduced “My Ship” to provide C2C vendors a sound, secure transaction platform. We handled pickup and delivery of more than 200 million packages. PCSC has continued to offer a variety of payment options, by which OPENPOINT can be collected through diversified channels, to build a convenient and comprehensive digital platform for customers.

In addition to 7-ELEVEN Taiwan, PCSC has also expanded into domestic and overseas retail businesses. As of the end of 2019, PCSC operated a total of 9,900 stores, including 2,850 7-ELEVEN stores in the Philippines. Uni-Wonder Corp. (Starbucks Taiwan) has continued to infuse new life into the coffee market. President Transnet Corp. has continued to enhance its logistics capabilities. President Drugstore Business Corp. (COSMED) has provided quality products and services to meet customers’ rapidly changing needs. Books.com Co., Ltd. has enhanced e-book services to provide a diversified, quality book-purchasing experience.

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. In the area of corporate governance, PCSC continued to be 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, PCSC held almost 17,000 Good Neighbor Funfest events this year, using OPENPOINT for converting the points earned for donating books. PCSC has developed a senior-friendly network, Good Neighbor meal delivery, and a program in which older Alzheimer’s victims serve as store employees. In the area of environmental protection, PCSC took the initiative to expand its plastic reduction policies, gradually introducing strawless sip lids and environmentally-friendly straws into 7-ELEVEN stores and its subsidiaries around Taiwan. PCSC received Taiwan Corporate Sustainability CSR Report Award from TCSA, the only recipient in the convenience store industry.

Global economic uncertainty will continue in 2020. Nevertheless, PCSC will maintain integrity and honesty in our business operations, while continuing to advance the company’s seven key building elements: people, stores, products, systems, logistics, policies, and culture. PCSC has evolved from a “convenience store that provides basic necessities” to “a service platform that consumers 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 cooperate resources, PCSC’s subsidiaries will also continue to achieve outstanding performance. The total number of 7-ELEVEN stores in the Philippines is expected to exceed 3,000. We will continue to expand our product mix and promote lifestyle stores to meet customer needs. Uni-Wonder Corp. (Starbucks Taiwan) will continue to create innovative products characterized by differentiation, enhance the customer experience, and optimize VIP membership program. President Transnet Corp. will continue to enhance its logistics delivery and warehouses services. President Drugstore Business Corp. (COSMED) will focus on introducing a variety of products as well as professional quality services. By enhancing products and services, 7-ELEVEN Shanghai and 7-ELEVEN Zhejiang will continue to provide customers with a convenient shopping experience.

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 Chairman President

Kuo, Ying-Chih

Chief Accounting Officer

Appendix II

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

The Board of Directors has prepared the Company’s 2019 Business Report, Financial Statements, and Proposal for Allocation of 2019 profits. The independent auditors, Liang, Yi-Chang 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 Corporation. According to Article 219 of the Company Act, we hererby submit this report.

2020 Annual General Shareholders’ Meeting of President Chain Store Corp.

President Chain Store Corp.

Chairman of the Audit Committee Shu, Pei-Gi

Date: May 5th, 2020

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Appendix III

President Chain Store Corporation Status of Investment in Mainland China in 2019

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Unit: USD
Investment Accumulated Indirect
Name of Investee in Mainland China
in 2019 Investment Shareholdings
President Chain Store (Shanghai) Ltd. - 77,337,258 100%
President Chain Store (Zhejiang) Ltd. - 20,784,902 100%
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Shanghai President Chain Store 5,170,585
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 -
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 - 4,680,041 100%
Co.,Ltd.
Total - 183,209,942
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Appendix IV

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To President Chain Store Corp.

Opinion

We have audited the accompanying consolidated balance sheets of President Chain Store Corp. and its subsidiaries (the “Group”) as of December 31, 2019 and 2018, 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, 2019 and 2018, 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 the Group 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, 2019. 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 for the year ended December 31, 2019 are stated as follows:

Completeness and accuracy of retail sales revenue

Description

Please refer to Notes 4(25) and 6(24) 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; and
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
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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; and
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$17,667,481 thousand and NT$10,081,554 thousand, representing 9.1% and 7.9% of total consolidated assets as of December 31, 2019 and 2018, respectively, and total operating revenue of NT$32,407,436 thousand and NT$25,801,037 thousand, representing 12.7% and 10.5% 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, 2019 and 2018.

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 Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the financial reporting process of the Group.

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

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 the Group.
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 Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our 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 the Group to cease to continue as a going concern.
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 the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

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, 2019 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.

Yi-Chang, Liang

Chien-Hung, Chou

For and on behalf of PricewaterhouseCoopers, Taiwan 27 February, 2020

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

C ONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

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December 31, 2019 December 31, 2018
Assets Notes AMOUNT % AMOUNT %
Current assets
1100 Cash and cash equivalents 6(1) $ 45,445,395 23 $ 48,530,648 38
1110 Financial assets at fair value 6(2)
through profit or loss - current 1,696,300 1 844,225 1
1170 Accounts receivable, net 6(3) and 7 5,808,480 3 5,264,573 4
1200 Other receivables 1,460,354 1 1,535,507 1
1220 Current income tax assets 6(30) 95 - 1,139 -
130X Inventories, net 6(4) 15,659,112 8 15,121,657 12
1410 Prepayments 1,195,719 1 1,340,225 1
1470 Other current assets 2,968,350 1 3,004,894 2
11XX Total current assets 74,233,805 38 75,642,868 59
Non-current assets
1510 Financial assets at fair value through 6(2)
profit or loss - non-current 85,565 - 85,683 -
1517 Financial assets at fair value through 6(5)
other comprehensive income
- non-current 807,115 - 845,345 1
1550 Investments accounted for using 6(6)
equity method 9,255,939 5 9,000,580 7
1600 Property, plant and equipment, net 6(7)(28) and 8 26,018,322 13 25,292,763 20
1755 Right of use assets 6(8) and 7 67,489,612 35 - -
1760 Investment property, net 6(10)(32) 1,506,798 1 1,502,159 1
1780 Intangible assets 6(11) 10,171,442 5 10,393,880 8
1840 Deferred income tax assets 6(30) 1,860,217 1 1,727,043 1
1900 Other non-current assets 6(12) and 8 3,699,819 2 3,204,759 3
15XX Total non-current assets 120,894,829 62 52,052,212 41
1XXX Total assets $ 195,128,634 100 $ 127,695,080 100
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P RESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

C ONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

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December 31, 2019 December 31, 2018
Liabilities and Equity Notes AMOUNT % AMOUNT %
Current Liabilities
2100 Short-term borrowings 6(14) and 8 $ 6,014,658 3 $ 7,237,785 6
2130 Contract liabilities - current 6(24) 3,443,383 2 2,843,189 2
2150 Notes payable 7 1,214,702 1 1,866,610 2
2170 Accounts payable 20,897,055 11 20,673,579 16
2180 Accounts payable - related parties 7 2,690,640 1 2,475,104 2
2200 Other payables 6(15) 26,596,505 14 27,954,181 22
2230 Current income tax liabilities 6(30) 1,410,428 1 1,801,229 1
2280 Lease Liabilities - current 7 11,932,751 6 - -
2300 Other current liabilities 6(16) 3,149,591 1 3,260,538 3
21XX Total current liabilities 77,349,713 40 68,112,215 54
Non-current liabilities
2527 Contract liabilities - non-current 6(24) 448,248 - 234,421 -
2540 Long-term borrowings 6(17) and 8 508,112 - 847,040 1
2570 Deferred income tax liabilities 6(30) 5,580,529 3 5,386,839 4
2580 Lease Liabilities – non-current 7 56,894,287 29 - -
2640 Net defined benefit liability 6(18)
- non-current 4,751,607 3 4,732,549 4
2670 Other non-current liabilities 6(19) 4,368,820 2 4,356,989 3
25XX Total non-current liabilities 72,551,603 37 15,557,838 12
2XXX Total liabilities 149,901,316 77 83,670,053 66
Equity attributable to owners of
the parent
Share capital 6(20)
3110 Share capital - common stock 10,396,223 5 10,396,223 8
Capital surplus 6(21)
3200 Capital surplus 46,884 - 45,059 -
Retained earnings 6(22)
3310 Legal reserve 13,314,081 7 12,293,442 10
3320 Special reserve - - 398,859 -
3350 Unappropriated retained earnings 12,845,880 7 12,064,862 9
Other equity 6(23)
3400 Other equity interest ( 380,187) - 53,605 -
31XX Equity attributable to owners
of the parent 36,222,881 19 35,252,050 27
36XX Non-controlling interest 9,004,437 4 8,772,977 7
3XXX Total equity 45,227,318 23 44,025,027 34
3X2X Total liabilities and equity $ 195,128,634 100 $ 127,695,080 100
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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

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P RESIDENT CHAIN STORE CORP. AND SUBSIDIARIES C ONSOLIDATED 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
2019 2018
Items Notes AMOUNT % AMOUNT %
4000 Operating revenue 6(24) and 7 $ 256,058,888 100 $ 244,887,853 100
5000 Operating costs 6(4)(25) and 7 ( 168,210,468) ( 66) ( 160,811,161) ( 66)
5900 Gross profit 87,848,420 34 84,076,692 34
Operating expenses 6(25)(26)
6100 Selling expenses ( 65,434,377) ( 25) ( 62,536,030) ( 25)
6200 General and administrative expenses ( 9,355,509) ( 4) ( 8,688,758) ( 4)
6450 Expected credit losses ( 8,640) - ( 17,080) -
6000 Total operating expenses ( 74,798,526) ( 29) ( 71,241,868) ( 29)
6900 Operating profit 13,049,894 5 12,834,824 5
Non-operating income and expenses
7010 Other income 6(27) 2,878,332 1 2,425,273 1
7020 Other gains and losses 6(28) ( 29,037) - ( 137,186) -
7050 Finance costs 6(29) ( 1,216,000) - ( 144,662) -
7060 Share of profit of associates and joint 6(6)
ventures accounted for using equity
method 480,998 - 424,098 -
7000 Total non-operating income and
expenses 2,114,293 1 2,567,523 1
7900 Profit before income tax 15,164,187 6 15,402,347 6
7950 Income tax expense 6(30) ( 3,052,078) ( 1) ( 3,658,069) ( 1)
8000 Profit for the year from continuing
operations 12,112,109 5 11,744,278 5
8200 Profit for the year $ 12,112,109 5 $ 11,744,278 5
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P RESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

C ONSOLIDATED 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
2019 2018
Items Notes AMOUNT % AMOUNT %
Other comprehensive income (loss)
8311 Loss on remeasurement of defined 6(18)
- -
benefit plan ($ 10,060) ($ 156,420)
8316 Unrealized gain on valuation of equity 6(5)
instruments at fair value through
- -
other comprehensive income 162,501 ( 143,849)
8320 Share of other comprehensive loss of 6(23)
associates and joint ventures
accounted for using equity method,
components of other comprehensive
income that will not be reclassified to
- -
profit or loss ( 1,965) ( 5,526)
8349 Income tax related to the components 6(30)
of other comprehensive income that will
not be reclassified to profit or loss 867 - 79,842 -
8310 Components of other
comprehensive income (loss)
that will not be reclassified
to profit or loss 151,343 - ( 225,953) -
8361 Financial statements translation
differences of foreign operations ( 505,816) - 526,768 -
8367 Unrealized loss on valuation of bond 6(5)
instruments at fair value through
- -
other comprehensive income ( 783) ( 1,537)
8370 Share of other comprehensive (loss) 6(23)
Income of associates and joint
ventures accounted for using equity
method, components of other
comprehensive loss that will be
reclassified to profit or loss ( 4,436) - 3,233 -
8360 Components of other
comprehensive income (loss)
that will be reclassified to profit or
loss ( 511,035) - 528,464 -
8300 Total other comprehensive income (loss)
for the year ($ 359,692) - $ 302,511 -
8500 Total comprehensive income for the
year $ 11,752,417 5 $ 12,046,789 5
Profit attributable to:
8610 Owners of the parent $ 10,542,860 4 $ 10,206,388 4
8620 Non-controlling interests 1,569,249 1 1,537,890 1
$ 12,112,109 5 $ 11,744,278 5
Comprehensive income attributable
to:
8710 Owners of the parent $ 10,116,764 4 $ 10,631,150 4
8720 Non-controlling interests 1,635,653 1 1,415,639 1
$ 11,752,417 5 $ 12,046,789 5
9750 Basic earnings per share (in dollars) 6(31) $ 10.14 $ 9.82
9850 Diluted earnings per share (in dollars) 6(31) $ 10.12 $ 9.79
----- End of picture text -----

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

20 -

									Non-controlling	Interest Total equity		$ 8,892,148 $ 59,506,410	( 5,203) ( 9,193)	8,886,945 59,497,217	1,537,890 11,744,278		( 122,251) 302,511	1,415,639 12,046,789		- -	- -	- ( 25,990,556)	( 1,529,607) ( 1,529,607)	- 536	- 648	$ 8,772,977 $ 44,025,027		$ 8,772,977 $ 44,025,027	1,569,249 12,112,109		66,404 ( 359,692)	1,635,653 11,752,417		- -	- -	- ( 9,148,676)	( 1,404,193) ( 1,404,193)	- 1,235		- 590			- 918	$ 9,004,437 $ 45,227,318		Accounting Manager: Kuo, Ying-Chih
										Total		$ 50,614,262	( 3,990)	50,610,272	10,206,388		424,762	10,631,150		-	-	( 25,990,556)	-	536	648	$ 35,252,050		$ 35,252,050	10,542,860		( 426,096)	10,116,764		-	-	( 9,148,676)	-	1,235		590			918	$ 36,222,881
						Equity directly	related to	non-current assets	held	for sale		$ 507,449	( 507,449)	-	-		-	-		-	-	-	-	-	-	$ -		$ -	-		-	-		-	-	-	-	-		-			-	$ -
`P`RESIDENT CHAIN STORE CORP. AND SUBSIDIARIES	CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY	(Expressed in thousands of New Taiwan dollars)	Equity attributable to owners of the parent	Retained earnings Other equity interest	Financial Unrealized gain or loss on valuation of	statements financial assets at	translation fair value through	differences of other	Legal reserve Special reserve Unappropriated retained earnings foreign operations comprehensive Income			$ 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		$ 12,293,442 $ 398,859 $ 12,064,862 ($ 279,829) $ 333,434	- - 10,542,860 - -		- - 7,696 ( 590,079) 156,287	- - 10,550,556 ( 590,079) 156,287		1,020,639 - ( 1,020,639) - -	- ( 398,859) 398,859 - -	- - ( 9,148,676) - -	- - - - -	- - - - -		- - - - -			- - 918 - -	$ 13,314,081 $ - $ 12,845,880 ($ 869,908) $ 489,721	The accompanying notes are an integral part of these consolidated financial statements.	President: Huang, Jui-Tien	- 21 -
										Capital surplus		$ 43,875	-	43,875	-		-	-		-	-	-	-	536	648	$ 45,059		$ 45,059	-		-	-		-	-	-	-	1,235		590			-	$ 46,884
									Share capital - common stock			$ 10,396,223	-	10,396,223	-		-	-		-	-	-	-	-	-	$ 10,396,223		$ 10,396,223	-		-	-		-	-	-	-	-		-			-	$ 10,396,223
										Notes	For the year ended December 31, 2018	Balance at January 1, 2018	Adjustments under new standards 6(23)	Adjustment beginning balance	Profit for the year	Other comprehensive income (loss) for the year 6(23)		Total comprehensive income (loss) for the year	Distribution of 2017 earnings 6(22)	Legal reserve	Special reserve	Cash dividends	Non-controlling interest	Overdue unclaimed cash dividend transferred to capital surplus	Adjustment of capital surplus due to change in interests in associates	Balance at December 31, 2018	For the year ended December 31, 2019	Balance at January 1, 2019	Profit for the year	Other comprehensive income (loss) for the year 6(23)		Total comprehensive income (loss) for the year	Distribution of 2018 earnings: 6(22)	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	Disposal of financial instruments	designated at fair value through other	comprehensive income of associates	Balance at December 31, 2019		Chairman: Lo, Chih-Hsien

P RESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

C ONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated 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
Gain on valuation of financial assets at fair value through
profit or loss
Expected credit losses
Depreciation on property, plant and equipment
Amortization
Depreciation on investment property
Finance costs
Share of profit of associates and joint ventures
accounted for using equity method
Gain on disposal of investments accounted for using the
equity method
Loss on disposal of property, plant and equipment, net
Gain from lease modification
Interest income
Dividend income
Impairment loss on intangible assets
Impairment loss on property, plant and equipment
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
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Net changes in liabilities relating to operating activities
Contract liabilities - current
Accounts payable
Notes payable
Other payables
Advance receipts
Contract liabilities - non-current
Net defined benefit liabilities - non-current
Cash generated from operations
Interest received
Income tax paid
Interest paid
Dividends received
Net cash provided by operating activities

For theyears ended December 31
Notes
2019
2018
$ 15,164,187
$ 15,402,347
6(2)
(
10,108 ) (
12,411 )
12(2)
8,640
17,080
6(7)(8)
18,177,202
5,993,847
574,709
584,009
6(10)
17,031
16,956
6(29)
1,216,000
144,662
6(6)
(
480,998 ) (
424,098 )
7
-
(
59 )
6(28)
11,428
33,275
6(28)
(
58,910 )
-
6(27)
(
793,898 ) (
699,385 )
6(27)
(
49,542 ) (
65,124 )
6(11)
-
819
6(7)
(
13,618 )
9,969
(
841,967 )
728,211
(
552,547 ) (
326,504 )
63,609
122,931
(
537,455 ) (
1,734,535 )
(
125,934 )
76,950
36,544
24,955
600,194
(
1,092,169 )
439,012
1,977,720
(
651,908 ) (
199,901 )
(
60,331 )
18,646
3,025
1,678,593
213,827
(
111,590 )
8,998
157,749
32,357,190
22,322,943
805,390
697,286
(
3,380,452 ) (
6,194,372 )
(
1,216,183 ) (
144,711 )
270,286
1,236,783
28,836,231
$ 17,917,929

(Continued)

22 -

P RESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

C ONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of investments accounted for using the equity method Acquisition of subsidiary Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Return of capital from financial assets at fair value through profit or loss Return of capital from financial assets at fair value through other comprehensive income Guarantee deposits paid Acquisition of intangible assets Other non-current assets Net cash (used in) provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES (Decrease) increase in short-term borrowings Decrease in short-term notes and bills payable Proceeds from long-term borrowings Repayment of long-term borrowings Payments of lease liabilities Guarantee deposits received (Decrease) increase in other non-current liabilities Change in non-controlling interests Payment of cash dividends - the Company Payment of cash dividends - subsidiaries Net cash used in financing activities Effect of foreign exchange rate changes on cash and cash equivalents (Decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year	For theyears ended December 31 Notes 2019 2018 6(6) and 7 $ - $ 25,644,556 6(6) - ( 3,226,806 ) 6(33) ( 7,249,215 ) ( 6,671,500 ) 245,532 81,397 118 - 200,000 - ( 144,974 ) ( 110,493 ) 6(11) ( 209,602 ) ( 196,984 ) ( 533,389 ) 83,203 ( 7,691,530 ) 15,603,373 6(34) ( 1,223,127 ) 6,272,605 6(34) - ( 250,000 ) 6(34) 165,030 289,511 6(34) ( 624,174 ) ( 473,646 ) 6(8)(34) ( 11,329,825 ) - 6(34) 147,220 58,093 6(34) ( 222,130 ) 223,176 ( 94,763 ) ( 23,138 ) 6(22) ( 9,148,676 ) ( 25,990,556 ) ( 1,309,430 ) ( 1,506,469 ) ( 23,639,875 ) ( 21,400,424 ) ( 590,079 ) 626,479 ( 3,085,253 ) 12,747,357 48,530,648 35,783,291 $ 45,445,395 $ 48,530,648	For theyears ended December 31	For theyears ended December 31
			2018

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 -

REPORT OF INDEPENDENT ACCOUNTANTS

TRANSLATED FROM CHINESE

To President Chain Store Corp.

Opinion

We have audited the accompanying parent company only balance sheets of President Chain Store Corp. as of December 31, 2019 and 2018, 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, 2019 and 2018, 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 the Company 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, 2019. 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 for the year ended December 31, 2019 are stated as follows:

24 -

Completeness and accuracy of retail sales revenue

Description

Please refer to Notes 4(23) and 6(21) 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; and
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.

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 their retail value (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

25 -

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; and
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$2,528,945 thousand and NT$2,210,541 thousand, representing 1.9% and 2.5% of total assets as of December 31, 2019 and 2018, respectively, and the related total comprehensive net income (including share of profit of subsidiaries, associates and joint ventures accounted for using equity method and share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method) amounted to NT$ 412,872 thousand and NT$415,363 thousand, representing 4.1% and 3.9% 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 Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company 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 the Company.

26 -

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 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 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 the Company.
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 Company’s ability 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 the Company 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 the Company 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.

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

27 -

internal controls that we identify during our audit.

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2019 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.

Yi-Chang, Liang Chien-Hung, Chou For and on behalf of PricewaterhouseCoopers, Taiwan 27 February, 2020

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.

28 -

PRESIDENT CHAIN STORE CORP. PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

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December 31, 2019 December 31, 2018
Assets Notes AMOUNT % AMOUNT %
Current assets
1100 Cash and cash equivalents 6(1) $ 10,697,878 8 $ 14,070,715 16
1170 Accounts receivable, net 6(2) 591,655 - 603,890 -
1200 Other receivables 7(3) 2,274,167 2 2,515,131 3
130X Inventories, net 6(3) 8,036,366 6 8,020,368 9
1410 Prepayments 126,974 - 196,990 -
1470 Other current assets 1,393,703 1 1,560,262 2
11XX Total current assets 23,120,743 17 26,967,356 30
Non-current assets
1510 Financial assets at fair value through 6(4)
- -
profit or loss – non-current 85,565 85,683
1517 Financial assets at fair value through 6(5)
other comprehensive income
– non-current 807,115 1 644,614 1
1550 Investments accounted for using equity 6(6) and 7(3)
method 50,117,541 38 49,094,402 55
1600 Property, plant and equipment, net 6(7) 10,477,703 8 9,114,219 10
1755 Right of use assets 6(8) and 7(3) 44,373,492 33 - -
1760 Investment property, net 6(10) 1,203,684 1 1,189,454 1
1780 Intangible assets 6(11) 84,728 - 119,019 -
1840 Deferred income tax assets 6(27) 800,250 1 800,458 1
1900 Other non-current assets 6(12) 1,393,227 1 1,231,311 2
15XX Total non-current assets 109,343,305 83 62,279,160 70
1XXX Total assets $ 132,464,048 100 $ 89,246,516 100
----- End of picture text -----

(Continued)

29 -

PRESIDENT CHAIN STORE CORP. PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

==> picture [500 x 589] intentionally omitted <==

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

December 31, 2019 December 31, 2018
Liabilities and Equity Notes AMOUNT % AMOUNT %
Current liabilities
2100 Short-term borrowings 6(13) $ 5,000,000 4 $ 6,000,000 7
2130 Contract liabilities – current 6(21) 1,607,970 1 1,293,149 1
2150 Notes payable 1,017,922 1 1,331,853 1
2160 Notes payable – related parties 7(3) 4,431,931 4 4,705,638 5
2170 Accounts payable 1,378,550 1 1,437,022 2
2180 Accounts payable – related parties 7(3) 8,373,924 6 8,028,624 9
2200 Other payables 6(14) 17,134,279 13 18,827,308 21
2230 Current income tax liabilities 6(27) 781,142 1 1,049,737 1
2280 Lease liabilities – current 7(3) 6,950,425 5 - -
2300 Other current liabilities 6(15) 1,492,567 1 1,463,092 2
21XX Total current liabilities 48,168,710 37 44,136,423 49
Non-current liabilities
2527 Contract liabilities – non-current 6(21) 216,284 - 151,550 -
2570 Deferred income tax liabilities 6(27) 4,149,357 3 3,916,979 4
2580 Lease liabilities – non-current 7(3) 37,780,192 29 - -
2640 Net defined benefit liability 6(16)
– Non-current 2,769,674 2 2,860,605 3
2645 Guarantee deposit received 2,730,126 2 2,533,958 3
2670 Other non-current liabilities 426,824 - 394,951 1
25XX Total non-current liabilities 48,072,457 36 9,858,043 11
2XXX Total liabilities 96,241,167 73 53,994,466 60
Equity
Share capital 6(17)
3110 Share capital – common stock 10,396,223 8 10,396,223 12
Capital surplus 6(18)
3200 Capital surplus 46,884 - 45,059 -
Retained earnings 6(19)
3310 Legal reserve 13,314,081 10 12,293,442 14
3320 Special reserve - - 398,859 -
3350 Unappropriated retained earnings 12,845,880 10 12,064,862 14
Other equity 6(20)
3400 Other equity interest ( 380,187) ( 1) 53,605 -
3XXX Total equity 36,222,881 27 35,252,050 40
3X2X Total liabilities and equity $ 132,464,048 100 $ 89,246,516 100
----- End of picture text -----

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

30 -

PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

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

==> picture [516 x 562] intentionally omitted <==

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

For the years ended December 31
2019 2018
Items Notes AMOUNT % AMOUNT %
4000 Operating revenue 6(21) and 7(3) $ 158,031,567 100 $ 154,074,731 100
5000 Operating costs 6(3)(25) and 7(3) ( 103,854,132) ( 66 ) ( 101,062,364) ( 66)
5900 Gross profit 54,177,435 34 53,012,367 34
Operating expenses 6(25)(26)
6100 Selling expenses ( 42,662,266) ( 27 ) ( 41,041,167) ( 26)
6200 General and administrative expenses ( 4,469,102) ( 3 ) ( 4,314,519) ( 3)
6450 Expected credit losses 12(2) - - ( 2,100) -
6000 Total operating expenses ( 47,131,368) ( 30 ) ( 45,357,786) ( 29)
6900 Operating profit 7,046,067 4 7,654,581 5
Non-operating income and expenses 7(3)
7010 Other income 6(22) 1,325,894 1 1,417,538 1
7020 Other gains and losses 6(23) 22,788 - ( 68,816) -
7050 Finance costs 6(24) ( 359,593) - ( 42,971) -
7070 Share of profit of subsidiaries, associates and 6(6)
joint ventures accounted for using equity
method 4,185,310 2 3,473,458 2
7000 Total non-operating income and
expenses 5,174,399 3 4,779,209 3
7900 Profit before income tax 12,220,466 7 12,433,790 8
7950 Income tax expense 6(27) ( 1,677,606) ( 1 ) ( 2,227,402) ( 1)
8200 Profit for the year $ 10,542,860 6 $ 10,206,388 7
Other comprehensive (loss) income
8311 Gain (loss) on remeasurement of defined benefit 6(16)
plan $ 71,511 - ( $ 29,219) -
8316 Unrealized gain (loss) on valuation of equity 6(5)(20)
instruments at fair value through
other comprehensive income 162,501 - ( 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 ( 46,547) - ( 73,714) -
8349 Income tax related to components of other 6(27)
comprehensive income that will not be
reclassified to profit or loss ( 24,252) - 49,725 -
8310 Components of other
comprehensive income (loss) that will not
be reclassified to profit or loss 163,213 - ( 197,057) -
8361 Financial statements translation differences of 6(20)
foreign operations ( 578,743) - 619,530 -
8380 Share of other comprehensive (loss) income of
subsidiaries, associates and joint ventures
accounted for using equity method, components
of other comprehensive income that will be
reclassified to profit or loss ( 10,566) - 2,289 -
8360 Components of other comprehensive (loss)
income that will be reclassified to profit or
loss ( 589,309) - 621,819 -
8300 Total other comprehensive (loss) income for the
year ($ 426,096) - $ 424,762 -
8500 Total comprehensive income for the
year $ 10,116,764 6 $ 10,631,150 7
9750 Basic earnings per share (in dollars) 6(28) $ 10.14 $ 9.82
9850 Diluted earnings per share (in dollars) 6(28) $ 10.12 $ 9.79
----- End of picture text -----

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

31 -

								Total equity			50,614,262	3,990)	50,610,272	10,206,388	424,762	10,631,150		-	-	25,990,556)	536	648	35,252,050			35,252,050	10,542,860	426,096)	10,116,764		-	-	9,148,676)	1,235	590		918	36,222,881
											$												$			$												$
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	Financial gain or loss on	statements financial assets	translation at fair value Unrealized	Notes Share capital – common stock Capital surplus Legal reserve Special reserve Unappropriated retained earnings differences of foreign operations through other comprehensive income gain or loss on available-for-sale financial assets	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	Adjustments under new standards - - - - 25,463 - 477,996 ( 507,449) (	Adjusted beginning balance 10,396,223 43,875 9,191,733 - 31,406,753 ( 906,308) 477,996 -	Profit for the year - - - - 10,206,388 - - -	Other comprehensive income (loss) for the year 6(20) - - - - ( 57,155 ) 626,479 ( 144,562) -	Total comprehensive income (loss) for the year - - - - 10,149,233 626,479 ( 144,562) -	Distribution of 2017 earnings: 6(19)	Legal reserve - - 3,101,709 - ( 3,101,709 ) - - -	Special reserve - - - 398,859 ( 398,859 ) - - -	Cash dividends - - - - ( 25,990,556 ) - - - (	Overdue unclaimed cash dividend transferred to capital surplus - 536 - - - - - -	Adjustment of capital surplus due to associates’ adjustment of capital surplus - 648 - - - - - -	Balance at December 31, 2018 $ 10,396,223 $ 45,059 $ 12,293,442 $ 398,859 $ 12,064,862 ($ 279,829) $ 333,434 $ -	For the year ended December 31, 2019		Balance at January 1, 2019 $ 10,396,223 $ 45,059 $ 12,293,442 $ 398,859 $ 12,064,862 ($ 279,829) $ 333,434 $ -	Profit for the year - - - - 10,542,860 - - -	Other comprehensive income (loss) for the year 6(20) - - - - 7,696 ( 590,079) 156,287 - (	Total comprehensive income (loss) for the year - - - - 10,550,556 ( 590,079) 156,287 -	Distribution of 2018 earnings: 6(19)	Legal reserve - - 1,020,639 - ( 1,020,639 ) - - -	Special reserve - - - ( 398,859 ) 398,859 - - -	Cash dividends - - - - ( 9,148,676 ) - - - (	Overdue unclaimed cash dividend transferred to capital surplus - 1,235 - - - - - -	Adjustment of capital surplus due to associates’ adjustment of capital surplus - 590 - - - - - -	Disposal of equity instruments designated at fair value through other	comprehensive income of associates - - - - 918 - - -	Balance at December 31, 2019 $ 10,396,223 $ 46,884 $ 13,314,081 $ - $ 12,845,880 ($ 869,908 ) $ 489,721 $ -	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	- 32 -

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
Expected credit losses
Depreciation expense
Amortization expense
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
Reversal of impairment loss on property, plant and
equipment
(Gain) loss on disposal of property, plant and equipment
Gain from lease modification
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
Other current liabilities
Contract liabilities – non-current
Net defined benefit liability
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
2019
2018
$ 12,220,466
$ 12,433,790
12(2)
-
2,100
6(7)(8)(25)
8,986,348
2,096,300
6(11)(25)
55,700
92,846
6(24)
359,593
42,971
6(6)
(
4,185,310 )
(
3,473,458 )
6(10)
7,440
7,365
6(6)(23)
-
(
59 )
6(22)
(
38,037 )
(
83,534 )
6(22)
(
49,542 )
(
65,124 )
6(7)(23)
-
(
2,401 )
6(23)
(
11,253 )
9,632
6(23)
(
33,255 )
-
12,235
(
4,992 )
239,949
76,934
(
15,998 )
(
825,661 )
(
36,821 )
70,748
166,559
86,361
(
161,916 )
(
54,589 )
314,821
140,135
(
587,638 )
298,181
286,828
703,724
(
1,714,521 )
(
234,672 )
29,475
156,252
64,734
939
(
19,420 )
(
10,994 )
(
4,657 )
16,900
15,885,780
11,479,694
39,052
107,590
6(27)
(
1,737,867 )
(
2,423,741 )
(
348,890 )
(
32,687 )
2,735,708
7,731,235
16,573,783
16,862,091

(Continued)

33 -

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
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
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
Payments of lease liabilities
Payment of cash dividends
(Decrease) increase in short term borrowings
Increase in guarantee deposit received
Net cash used in financing activities
Decrease 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
2019
2018
$ 118
$ 151
6(6) and 7(3)
(
200,000 )
(
3,226,806 )
6(6) and 7(3)
41,657
1,828
6(6)
-
180,000
6(30)
(
3,359,789 )
(
2,303,297 )
149,016
26,027
6(11)
(
21,409 )
-
(
3,390,407 )
(
5,322,097 )
6(31)
(
6,603,705 )
-
6(19)
(
9,148,676 )
(
25,990,556 )
6(31)
(
1,000,000 )
6,000,000
6(31)
196,168
98,296
(
16,556,213 )
(
19,892,260 )
(
3,372,837 )
(
8,352,266 )
14,070,715
22,422,981
$ 10,697,878
$ 14,070,715

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 -

Appendix V

Profit Allocation Proposal for 2019

==> picture [458 x 254] intentionally omitted <==

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

Unit: NTD
Item Amount
Retained earnings-unappropriated in
previous year $ 2,294,406,568
Net profit after tax for 2019 10,542,860,344
Add: Remeasurements of liabilities on net
defined benefit plan 7,696,733
Add: Disposal of financial instruments
designated at fair value through other
comprehensive income of associates 916,375
Subtotal 10,551,473,452
Less: Legal earnings reserve (1,055,147,345)
Less: Special earnings reserve (380,187,421)
Distributable earnings in 2019 11,410,545,254
Less: Cash dividends to common
shareholders (NT$9.0 per share) (9,356,600,295)
Retained earnings-unappropriated, end of 2019 $ 2,053,944,959
----- End of picture text -----

Note ： 1. The earnings of 2019 were allocated as the first priority in the current year, and the deficit was made up by the earnings unappropriated at the end of 2018.
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.

Chairman: Lo, Chih-Hsieh

President: Huang, Jui-Tien

Chief Accounting Officer: Kuo, Ying-Chih

35 -

Appendix VI

Comparison Table for Amendments to the “Rules of Procedures for Shareholders’ Meeting of President Chain Store Corporation”

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

No. After amendment Before amendment Remark
----- End of picture text -----

No.	After amendment	After amendment	Before amendment	Remark

16		XVI. Where the chairperson holds that the discussion on an issue is up to the extent for resolution by voting, the chairperson may announce discontinuance from the discussion and bring that issue into the process of resolution through votingand arrange enough time for voting.	XVI. Where the chairperson holds that the discussion on an issue is up to the extent for resolution by voting, the chairperson may announce discontinuance from the discussion and bring that issue into the process of resolution through voting.	To conform the amendment of regulations.

36 -

Appendix VII

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

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

As of May 5 [th] , 2020
Name Current Position in Other Companies
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Details of the Duties Subject to Releasing Directors and Independent Directors from Non-competition As of May 5th, 2020	Details of the Duties Subject to Releasing Directors and Independent Directors from Non-competition As of May 5th, 2020
Name Current Position in Other Companies

Representative of Uni-President Enterprises Corp., Lo, Chih-Hsien	Chairman: Uni-President Enterprises Corp., President Natural Industrial Corporation, Ton Yi Industrial Corp., TTET Union Corporation, Prince Housing & Development Corp., President Packaging Industrial Corp., Woongjin Foods Co., Ltd., Daeyoung Foods Co., Ltd., President International Development Corp., Uni-President China Holdings Ltd., Changjiagang President Nisshin Food Co., Ltd., ScinoPharm Taiwan, Ltd., Uni-President (Philippines) Corp., Uni-President (Thailand) Ltd., Uni-President (Vietnam) Co., Ltd., Uni-President Enterprises (China) Investment Co., Ltd., Uni-President Cold-Chain Corp., Presco Netmarketing Inc., Uni-President Dream Parks Co., President Century Corp., President Property Corporation, Cheng-Shi Investment Holding Co., Uni-OAO Travel Service Corp., Prince Real Estate Co., Times Square International Holding Co., Times Square International Stays Corporation, Time Square International Hotel Corporation Vice Chairman: President Nisshin Corp. Director: Presicarre Corporation, Cayman President Holdings Ltd., Kai Yu (BVI) Investment Co., Ltd., President Fair Development Corp., Uni-President Southeast Asia Holdings Ltd., Uni-President Asia Holdings Ltd., Uni-President Hong Kong Holdings Limited, Champ Green Capital Limited, Champ Green (Shanghai) Consulting Co., Ltd., Guangzhou President Enterprises Co., Ltd., Fuzhou 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., Shenyang President Enterprises Co., Ltd., Harbin President Enterprises Co., Ltd., Hefei President Enterprises Co., Ltd., Zhenzhou President Enterprises Co., Ltd., Beijing President Enterprises Drinks Co., Ltd., Uni-President Enterprise (Kunshan) Food Technology Co., Ltd., Nanchang President Enterprises Co., Ltd., Uni-President Organics Corp., Uni-President Trading (Hubei) Co., Ltd., President (Shanghai) Trading Co., Ltd., Kunming President Enterprises Food Co., Ltd., Yantai Tongli Beverage Industries Co., Ltd., Changsha President Enterprises Co., Ltd., Bama President Mineral Water Co., Ltd., Nanning President Enterprises Co., Ltd., Zhanjiang President Enterprises Co., Ltd., Chongqing President Enterprises Co., Ltd., Taizhou President Enterprises Co., Ltd., Akesu President Enterprises Co., Ltd., Changchun President Enterprises Co., Ltd., Uni-President (Shanghai) Pearly Century 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., Wuxue President Mineral Water Co., Ltd., Shijiazhuang President Enterprises Co., Ltd., Xuzhou President Enterprises Co., Ltd., Henan President Enterprises Co., Ltd., President (Kunshan) Trading Co., Ltd., Shaanxi President Enterprises Co.,Ltd., JiangsuPresident Enterprises Co.,Ltd.,

37 -

==> picture [518 x 730] intentionally omitted <==

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

Name Current Position in Other Companies
Changbaishan Mountain President Enterprises (Jilin) Mineral Water
Co., Ltd., Ningxia President Enterprises Co., Ltd., President Enterprises
(Shanghai) Co., Ltd., President Enterprises (Inner Mongolia) Co., Ltd.,
Shanxi President Enterprises Co., Ltd., Uni-President Enterprise
(Hutubi) Tomato Products Technology Co., Ltd., Uni-President
Enterprises (Shanghai) Drink & Food Co., Ltd., Uni-President
Enterprises (Tianjin) Co., Ltd., Hunan President Enterprises Co., Ltd.,
Uni-President Glass Industrial Co., Ltd., President Packaging Holdings
Ltd., Kuang Chuan Dairy Co., Ltd., Kuang Chuan Foods Ltd., President
Energy Development (Cayman Islands) Ltd., Uni-President
Development Corp., Uni-Wonder Corporation, President Professional
Baseball Team Corp., Tait Marketing & Distribution Co., Ltd., Wei Lih
Food Industrial Co., Ltd., Howard Beach Resort Kenting Co., Ltd.,
Nanlien International Corporation, President Chain Store (BVI)
Holdings Ltd., President Chain Store (Labuan) Holdings Ltd., Tone
Sang Construction Corp., Retail Support International Corp.,
Uni-President Assets Holdings Ltd., Prince Property Management
Consulting Co., Kao Chyuan Inv. Co., Ltd.
President: Presco Netmarketing Inc.
Representative of Kao Chairman: President Fair Development Corp., Uni-President Department Store
Chyuan Investment Corp., President Being Corp., President Pharmaceutical Corp.,
Co., Ltd., President Drugstore Business Corp., Kao Chyuan Inv. Co., Ltd.
Kao, Shiow-Ling Director: Uni-President Enterprises Corp., Ton Yi Industrial Corp., Prince Housing
& Development Corp., President International Development Corp.,
ScinoPharm Taiwan Ltd., President Century Corp., Uni-President
Development Corp., Uni-Wonder Corporation, President (Shanghai)
Health Product Trading Co., Ltd., Beauty Wonder (Zhejiang) Trading
Co., Ltd. Times Square International Holding Co., Time Square
International Hotel Corporation
President: President Fair Development Corp., Kao Chyuan Inv. Co., Ltd.
Representative of Chairman: Uni-Wonder Corporation, President Lanyang Art Corporation, Ren-Hui
Uni-President Investment Corp., Uni-President Superior Commissary Corp.,
Enterprises Corp., President Transnet Corp., President Collect Service Corp., Retail
Chen, Jui-Tang Support International Corp., Kai Ya Food Co., Ltd.
Vice Chairman: Philippine Seven Corp.
Director: Uni-President Enterprises Corp., Uni-President Department Store Corp.,
Uni-President Cold-Chain Corp., Uni-President Development Corp.,
President Fair Development Corp., President International Development
Corp., Nanlien International Corporation, 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) Holdings Limited.
President: Ren-Hui Investment Corp.
Representative of Chairman: iCASH Corp., President Chain Store Tokyo Marketing Corporation,
Uni-President Capital Marketing Consultant Corp., Tait Marketing & Distribution
Enterprises Corp., Co., Ltd., President (Shanghai) Health Product Trading Company Ltd.,
Huang, Jui-Tien Beauty Wonder (Zhejiang) Trading Co., Ltd.
Director: Uni-Wonder Corporation, President Pharmaceutical Corp., President
Drugstore Business Corp., President Information Corp., Retail Support
International Corp., Uni-President Cold-Chain Corp., Books.com. Co.,
Ltd., Philippine Seven Corp., President International Development
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38 -

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

Name Current Position in Other Companies
Corp., President Nisshin Corp., President Fair Development Corp.,
Ren-Hui Investment Corp., President Chain Store (Hong Kong)
Holdings Limited, PCSC (China) Drugstore Limited, President Chain
Store (Zhejiang) Ltd., President Chain Store (Shanghai) Ltd., Ren Hui
Holding Co., Ltd., Shan Dong President Yinzuo Commercial Limited,
President Pharmaceutical (Hong Kong) Holdings Limited,
Uni-President Foodstuff (BVI) Holdings Ltd., 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 (Hong Kong) Holdings Limited, Tung-Ren
Pharmaceutical Corp.
Representative of Chairman: Zhongshan President Enterprises Co., Ltd., Tianjiang President
Uni-President Enterprises Food Co., Ltd., Qingdao President Feed & Livestock Co.,
Enterprises Corp., Ltd., Tung Lo Development Co., Ltd., Master Channels Corporation
Wu, Liang-Feng Director: TTET Union Corporation, Changjiagang President Nisshin Food Co.,
Ltd., President Nisshin Corp.
President: Tung Lo Development Co., Ltd., Changjiagang President Nisshin Food
Co., Ltd.
Representative of Chairman: President Life Sciences Co., Ltd., Tong Yu Investment Corp.,
Uni-President Uni-President Development Corp., AndroScience Corp.
Enterprises Corp., Director: Grand Bills Finance Corporation, President International Development
Su, Tsung-Ming Corp., Uni-President China Holdings Ltd., ScinoPharm Taiwan, Ltd.,
President Tokyo Corporation, Uni-President Hong Kong Holdings
Limited, President Tokyo Auto Leasing Corporation, Tong-Sheng
Finance Leasing Co., Ltd., Tong-Sheng (Suzhou) Car Rental Co., Ltd.,
CDIB & Partners Investment Holding Corporation, 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.
Supervisor: Presicarre Corporation, Uni-President Enterprises (China) Investment
Co., Ltd., Presco Netmarketing, Inc.
President: President International Development Corp., ScinoPharm Taiwan, Ltd.,
President Property Corporation
Representative of Chairman: Tung Ang Enterprises Corp., Uni-President Vender Corp.
Uni-President Director: Ton Yi Industrial Corp., Mech-President Corp., Woongjin Foods
Enterprises Corp., Co.,Ltd., Daeyoung Foods Co., Ltd., Uni-president Marketing Co., Ltd.,
Hwang, Jau-Kai Uni-President (Vietnam) Co., Ltd., Uni-President Cold-Chain Corp.
Supervisor: Uni-President (Korea) Co., Ltd.
President: Uni-President Enterprises Corp.
Representative of Chairman: Chang-Tong Enterprise Corp., PT.Uni President Indonesia.
Uni-President Director: Changjiagang President Nisshin Food Co., Ltd., Uni-President Oven
Enterprises Corp., Bakery Corp., President Nisshin Corp.
Wu, Kun-Lin
Representative of Chairman: Tung-Ren Pharmaceutical Corp., Kai Nan Investment Co., Ltd.
Uni-President Director: Prince Housing & Development Corp., President Fair Development
Enterprises Corp., Corp., President International Trade & Investment Corp., ScinoPharm
Wu, Tsung-Pin Taiwan, Ltd., Uni-President (Vietnam) Co., Ltd., Uni-President Hong
Kong Holdings Limited, Kuang Chuan Dairy Co., Ltd., Kuang Chuan
Foods Ltd., Cheng-Shi Investment Holding Co., Tung Lo Developmnt
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39 -

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

Name Current Position in Other Companies
Co., Ltd., Tone Sang Construction Corp., Prince Real Estate Co., Ltd.,
Times Square International Holding Co., Time Square International
Hotel Corporation
Supervisor: President Kikkoman Inc., Kunshan President Kikkoman
Biotechnology Co., Ltd., President International Development
Corp., President Kikkoman Zhenji Foods Co., Ltd., President
Century Corp., President Professional Baseball Team Corp., Ming
Da Enterprises Co., Ltd., Nanlien International Corporation, Times
Square International Stays Corporation, Woongjin Foods Co., Ltd.,
Daeyoung Foods Co., Ltd.
Representative of Director : Philippine Seven Corp., Uni-President (Singapore) Pte. Ltd.
Uni-President Supervisor : Uni-Wonder Corporation, President Transnet Corp., President Collect
Enterprises Corp.,
Service Corp., Books.com. Co., Ltd., President Chain Store
Wu, Wen-Chi (Shanghai) Ltd., President Chain Store (Zhejiang) Ltd.
Wang, Wen-Yeu Independent Director: Global Unichip Corp., KGI Securities Co. Ltd., Xintec Inc.
Hung, Yung-Chen Director: Hua Vi Venture Capital Corporation
----- End of picture text -----

40 -

Appendix VIII

The Minimum Numbers of Shares required to be held by the Entire Directors and the Numbers of Shares held by the Individual Director and by the Entire Directors

I. In accordance with Article 26 of the Securities and Exchange Act and Article 2, Paragraph 1, Subparagraph 6 and Paragraph 2 of the Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies, the total amount of registered shares held by all directors shall be no less than 3% of the Company’s total issued shares. The number of independent directors is three. The percentage of shareholding of all directors other than independent directors is 80% of the abovementioned level, which is no less than 24,950,934 shares.
II. The shares held by all directors as of book closure period (April 19, 2020~June 17, 2020) are as follows ：

==> picture [478 x 395] intentionally omitted <==

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

Job title Name Shareholdings
Chairman Representative of Uni-President 471,996,430
Enterprises Corp. Lo, Chih-Hsien
Director Representative of Kao Chyuan 5,176,775
Investment Co., Ltd. Kao, Shiow-Ling
Director Representative of Uni-President 471,996,430
Enterprises Corp. Chen, Jui-Tang
Director Representative of Uni-President 471,996,430
Enterprises Corp. Huang, Jui-Tien
Director Representative of Uni-President 471,996,430
Enterprises Corp. Wu, Liang-Feng
Director Representative of Uni-President 471,996,430
Enterprises Corp. Su, Tsung-Ming
Director Representative of Uni-President 471,996,430
Enterprises Corp. Hwang, Jau-Kai
Director Representative of Uni-President 471,996,430
Enterprises Corp. Wu, Kun-Lin
Director Representative of Uni-President 471,996,430
Enterprises Corp. Wu, Chung-Pin
Director Representative of Uni-President 471,996,430
Enterprises Corp. Wu, Wen-Chi
Independent 0
director Wang, Wen-Yeu
Independent 0
director Shu, Pei-Gi
Independent 0
director Hung,Yung-Chen
Total 477,173,205
----- End of picture text -----

41 -

Appendix IX

Articles of Incorporation of President Chain Store Corporation

Amended in June 2019

Chapter I General Provisions

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 2 The Company’s business lines include:

F203020 Tobacco and alcohol retail
F206020 Daily supplies retail
F203010 Foods, groceries and beverage retail
F208040 Cosmetics retail
F399990 Other retails
IZ01010 Photocopy
F201070 Flowers and plants retail
F209060 Education, musical instruments and entertainment appliances retail
JE01010 Lease
IE01010 Agent of telecommunication subscribers’ numbers
I401010 General advertising service
F207050 Fertilizer retail
F210010 Timepiece retail
F210020 Eyeglasses retail
F216010 Photographic equipment retail
JZ99030 Photographing
F204110 Clothe, dresses, shoes, hats, umbrellas and apparels retail
A102060 Food supply
F213010 Electric appliances retail
F208031 Medical facilities retail
F205040 Furniture, bedding
F207030 Daily supplies retail
F401010 International trade
JA01010 Motor repair service
42 -
F214030 Auto and motorcycle spare parts and outfit retail
G202010 Parking lot management
IZ14011 Public welfare lottery agency
JZ99050 Intermediary service
IZ99990 Other industrial and commercial service
F401161 Cigarette products importer
F401171 Alcohol products importer
ZZ99999 Any business not prohibited or restricted by laws and regulations other than the business requiring special approval
F301010 Department stores
F301020 Supermarket
F399010 Convenience stores
F501030 Beverage shop
F501060 Restaurant
G902011 2nd class telecommunication business
I301010 Information software service
I301030 Electronic information supply service
F206010 Ironware retail
F212011 Gas station
F212050 Petrolem product retail
JA01990 Other automobile services
I101090 Food consultation service
IZ09010 Management system certification
J701020 Theme park
F102040 Beverage wholesale
F102170 Foods and groceries wholesale
F106020 Daily supplies wholesale
I103060 Management advisor
J304010 Book publisher
J303010 Magazine (journal) publisher
IZ12010 Staffing
JA03010 Laundry service
F201010 Retail sale of agricultural products
F501990 Other eating and drinking places not elsewhere classified
F208050 Retail Sale of the Second Type Patent Medicine
43 -
F201061 Retail sale of Seedling
I301040 Third party payment
C104020 Bakery food manufacturing
Article 3 The Company’s head office is based in Taipei City and may, when necessary, set up branch offices within and outside of the territory of the Republic of China according to the resolution adopted at the meeting of directors.
Article 4 The Company may make endorsement/guarantee externally due to the business. In order to meet the need for business, the Company may reinvest in other enterprises and be free from the restriction referred to in Article 13 of the Company Act for no more than 40% of the Company’s paid-in capital.

Chapter II Shares

Article 5 The total capital stock of the Company shall be in the amount of NT$10.5 billion, divided into 1.05 billion shares, at a par value of NT$10, and the unissued shares of them are authorized to be issued by the Board of Directors in installments.
Article 6 The stock certificates of the Company shall be registered and issued after being signed or sealed by Directors representing the Company and after being authenticated by the bank which is competent to certify shares under the laws. It is not necessary for the Company to print the stock certificates, provided that it shall be registered at a central custody of securities.
Article 7 All transfer of stocks, pledge of rights, loss, succession, gift, loss of seal, amendment of seal, change of address or similar stock transaction conducted by shareholders of the Company shall follow the “Regulations Governing the Administration of Shareholder Services of Public Companies” unless specified otherwise by law and securities regulations.
Article 8 Unless otherwise provided in laws, the procedure for application for reissue of stock certificates, if stock certificates are lost:
(1) The shareholder or the legal owner shall report the event to police authorities for handling or recording, complete the loss of stock application, and send such to the Company;
(2) The applicant shall, within five days, apply to the courts under the Code of Civil Procedure for public announcement of the event, and a copy of the court
44 -

application and the court acceptance voucher shall be sent to the Company, or the application will be revoked;

(3) Upon expiration of the period of public summon, the applicant may apply to the Company for registration by attaching the court’s judgment declaring the lost stock certificates void.
Article 9 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.

Chapter III Shareholders’ Meeting

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 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 convening right, the Chairman of the meeting shall be elected from among themselves.
Article 12 Unless otherwise provided in laws, written notice shall be sent to all shareholders, thirty days in advance in the case of a regular shareholders’ meeting and fifteen days in advance in the case of a temporary shareholders’ meetings, and be publicly announced within forty five days before a general shareholders’ meeting, in the case of bearer stock holders, and within thirty days before a temporary shareholders’ meeting, in the case of bearer stock holders.
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Article 13 If a shareholder is unable to attend a shareholders’ meeting for any cause, he/she may execute and issue a proxy pursuant to Article 177 of the Company Act and the competent authority’s requirements and specify the scope of the proxy. This proxy can also be issued in electronic form instead.
Article 14 Unless otherwise provided in laws, a shareholder shall be entitled to one voting right for each share held by him/her. The vote can be exercised in written or electronic forms.
Article 15 Resolutions at a shareholders’ meeting shall, unless otherwise provided for in Company Act, be adopted by a majority of voting rights of the present shareholders who represent a majority of the total issued and outstanding shares.
Article 16 The shareholders’ meeting shall resolve the following:
(1) Amendments to these Articles;
(2) Election and discharge of directors.
(3) Permitted activities engaged 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 to laws.

Chapter IV Directors, Audit Committee, and Managers

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 with the 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 regard to stocks.
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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 independent directors from the list of candidates for independent directors.

Acceptance and publication of nomination of candidates for independent directors shall be handled in accordance with the Company Act and Securities and Exchange Act, et al.. Independent and non-independent directors shall be elected concurrently and the number of the elected shall be calculated separately.

Article 19 The Company may install an Audit Committee in accordance with Article 14-4 and Article 181-2 of Securities and Exchange Act. The functions to be assumed by supervisors under the Company Act and Securities and Exchange Act shall be transferred to the Audit Committee.

The Audit Committee shall consist of the whole independent directors, which shall be no less than three members. One of them shall be the convener, and at least one of them shall be specialized in accounting or finance.

The Company’s Board of Directors may install other functional committees, and the organizational charts shall be defined by the Board of Directors.

Article 20 The Directors constitute the Board of Directors. Unless laws or these Articles provide that the business shall be subject to resolution of the shareholders’ meeting, the Company shall carry out its business subject to the resolution made by the Board of Directors.
Article 21 The board of directors shall elect a chairman of the board directors from among the directors by a majority vote at a meeting attended by over two-thirds of the directors. The Chairman of the Board of Directors shall externally represent 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
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transmission.

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 than one director.
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’ attendance book and proxies.
Article 25 The remuneration to directors shall be paid subject to the normal standards.
Article 26 The Company may purchase liability insurance for directors and important officers during their tenure against the indemnity to be borne by them in the scope of business carried out by them. The insurance policy shall be taken out by the Board of Directors with full power.
Article 27 The Company may have several manager(s). The appointment, removal and remuneration of the manager(s) shall be subject to Article 29 of Company Act. The Company’s managers have the right to enter their signatures on behalf of the Company pursuant to the relevant requirements defined by the Company and insofar as they are authorized to do it.
Article 28 The Company may retain several advisors subject to the need for business. The appointment, removal and remuneration of the advisors shall be subject to agreement of a majority of the whole directors.

Chapter V Accounting

Article 29 The Company identifies that each year from January 1 to December 31 is one fiscal year. It will settle the accounts at the end of each fiscal year.
Article 30 At the end of each fiscal year, the Board of Directors shall prepare the following
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reports and, send them to the meeting of shareholders for their recognition pursuant to Article 228 of the Company Act and any 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 Company has no retained earnings.

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 to 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 companies are also included.

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 dividend and bonus.
Article 34 The Company’s articles of organization and enforcement rules thereof shall be defined separately.
Article 35 Any matters not provided herein shall be subject to the Company Act and the relevant laws.
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Article 36 These Articles of Incorporation were made upon agreement of all incorporators on June 4, 1987 and enforced as of the date when the competent authority approves registration of these Articles. 1[st] amendment was made on June 26, 1990. 2[nd] amendment was made on June 28, 1991. 3[rd] amendment was made on May 29, 1992. 4[th] amendment was made on August 21, 1992. 5[th] amendment was made on May 26, 1993. 6[th] amendment was made on May 20, 1994. 7[th] amendment was made on December 27, 1994. 8[th] amendment was made on May 16, 1996. 9[th] amendment was made on May 20, 1997. 10[th] amendment was made on May 21, 1998. 11[th] amendment was made on June 10, 1999. 12[th] amendment was made on June 15, 2000. 13[th] amendment was made on June 12, 2001. 14[th] amendment was made on June 25, 2002. 15[th] amendment was made on June 24, 2003. 16[th] amendment was made on June 29, 2004. 17[th] amendment was made on June 14, 2005. 18[th] amendment was made on June 14, 2006. 19[th] amendment was made on June 15, 2007. 20[th] amendment was made on June 13, 2008. 21[st] amendment was made on June 10, 2009. 22[nd] amendment was made on June 15, 2010. 23[rd] amendment was made on June 22, 2011. 24[th] amendment was made on June 21, 2012. 25[th] amendment was made on June 17, 2013. 26[th] amendment was made on June 15, 2016. 27[th] amendment was made on June 13, 2017. 28[th] amendment was made on June 12, 2018. 29[th] amendment was made on June 12, 2019.

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Appendix X

Rules of Procedures for Shareholders’ Meeting of President Chain Store Corporation (Before Amendments) (Translation)

Amended in June 2017

I. Unless otherwise prescribed in laws and ordinances concerned, the shareholders’ meeting of the Company shall be duly convened in accordance with these Rules.
II. The term “shareholders” as set forth herein denotes the shareholders themselves and the proxies authorized by shareholders.
III. A shareholder who participates in the shareholders’ meeting shall submit the sign-in card instead of signing in person. The sign-in card shall be taken as the grounds to calculate the number of shares represented by the participating shareholders. The aggregate number of shares represented by participating shareholders shall be calculated based on the voting powers exercised in writing or in electronic means.
IV. The numbers of participating shareholders and the number of voting powers in the shareholders’ meeting shall be calculated based on the number of shares.
V. A shareholders’ meeting shall be convened in the place where the Company is headquartered or a place convenient to shareholders for participation. A shareholders’ meeting shall be convened not earlier than 9:00 a.m. or later than 3:00 p.m.
VI. Notices for shareholders’ meetings shall expressly bear the timeframe and place where shareholders may report for participation and other important notes. The aforementioned timeframe for shareholders to report for participation shall be a minimum of thirty minutes prior to the time scheduled to start the meeting. The location to report for participation shall be conspicuously remarked and shall be staffed with adequate and competent personnel to entertain the report for participation.
VII. Unless otherwise prescribed in laws and ordinances concerned, a shareholders’ meeting shall be convened by the board of directors and be chaired by the chairperson. In the event that the chairperson is unavailable to exercise his responsibilities and powers by any reason, the chairperson shall appoint a director to act as his substitute. In the event that another person bestowed with the power to convene the meeting convenes a shareholders’ meeting, such convener shall chair the meeting.

In the event that a director is appointed to chair a meeting as the substitute for the chairperson as

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mentioned in the preceding paragraph, such director shall be the one who has served as a director for a minimum of six months and who is well aware of the Company’s financial standing. This same provision is equally mutatis mutandis applicable to an event where the chairperson is the representative of a director.

VIII. The Company may appoint retained Attorneys-at-Law, Certified Public Accountants or relevant people to attend the shareholders’ meeting as non-voting guest participants. The staff in charge of the shareholders’ meeting shall wear the identity certificates.
IX. The Company shall audio and video record the entire process where shareholders report for participation. While the meeting is in progress, ballots are to be cast in an uninterrupted manner. The audio and video records shall be archived for a minimum of one year.
X. The chairperson shall announce the start of the meeting immediately at the scheduled time for the meeting. In the event that the participating shareholders do not represent a majority of the total outstanding shares by then, nevertheless, the chairperson may announce a deferment of the meeting. There must be no more than two deferments. The aggregate period of deferment(s) shall not exceed an hour. In the event that the participating shareholders do not represent one-third of the total outstanding shares even with deferment twice, the Company may make a tentative resolution in accordance with Article 175 of the Company Act. In the event that the present shareholders represent up to a majority of the total number of outstanding shares before the end of the meeting, the chairperson may pose the tentative resolution to the shareholders’ meeting for resolution anew in accordance with Article 174 of the Company Act.
XI. In the event that the board of directors convenes a shareholders’ meeting, the board of directors shall set the agenda and the meeting shall be duly convened based on the scheduled agenda, which shall not be changed unless duly resolved in the shareholders’ meeting. The provision set forth under the preceding paragraph is equally mutatis mutandis applicable to an event where a person beyond the board of directors who is bestowed with the power to convene the meeting convenes the shareholders’ meeting. Until the meeting based on the agenda mentioned in two preceding paragraphs (including occasional (extemporaneous) motions) is completed, the chairperson shall not announce adjournment unless duly resolved. In the event that the chairperson breaches the Procedure Rules for Shareholders’ Meeting by announcing adjournment, nevertheless, one person may be elected by a majority of the present shareholders to act as the chairperson to continue the meeting.
XII. A present shareholder in a shareholders’ meeting shall, before addressing himself or herself to the meeting, fill up the note of speech which shall bear gist of his or her speech, account number of the shareholder (or code of the participation certificate) and name of account holder. The chairperson will then fix the priority order for the floor. A shareholder who submits the note for floor but does not speak up is deemed as having not exercised the floor. In case of a discrepancy
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found between the contents shown on the floor note and contents actually spoken, the contents actually spoken shall prevail. Where a shareholder exercises his or her floor, other shareholders shall not speak up to interfere with the floor unless consented by the chairperson and the shareholder in floor. The chairperson shall stop violation, if any.

XIII.Unless consented by the chairperson, each shareholder shall not speak up on the same issue more than twice. Each floor shall not exceed five minutes. Where a shareholder breaches the requirements mentioned in the preceding paragraph or speaks beyond the scope of the issue, the chairperson may stop his or her floor.
XIV.Where a juristic person is delegated to participate in a shareholders’ meeting, that juristic person may appoint only one representative to participate in the meeting. Where a juristic person shareholder appoints two or more representatives to participate in a shareholders’ meeting, only one among them may be appointed to speak up on a same issue.
XV. After a shareholder completes his or her floor, the chairperson may reply either himself or herself or through a person concerned appointed by him or her.
XVI.Where the chairperson holds that the discussion on an issue is up to the extent for resolution by voting, the chairperson may announce discontinuance from the discussion and bring that issue into the process of resolution through voting.
XVII.In the voting process, the chairperson shall appoint the ballot scrutinizer and ballot counter. A ballot scrutinizer shall, nevertheless, be appointed from among shareholders. The balloting process and ballot counting in a shareholders’ meeting shall be conducted in an open place of the shareholders’ meeting site. Upon completion of the ballot counting process, the outcome shall be announced on the spot, including the number of powers in the statistics for which records shall be duly worked out.
XVIII.During the process of a shareholders’ meeting, the chairperson may fix an intermission as appropriate.
XIX.Unless otherwise provided for in the Company Act and the Articles of Incorporation, decisions in the shareholders' meeting shall be resolved by a majority vote in the meeting, which is attended by shareholders who represent a majority of the total issued shares.
XX. At the time of a vote, each proposal is followed by polls of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be disclosed on the MOPS. Where a same issue is amended or replaced, the chairperson shall bring the amendment, replacement along with the original issue to fix the priority order of balloting. In the event that one issue
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among them is duly resolved, all other issue(s) is (are) deemed as having been vetoed and call for no more balloting process.

XXI.The chairperson may direct the disciplinary personnel (or security guards) to help maintain the order. The disciplinary personnel (or security guards) shall wear the armbands reading “disciplinary personnel” while performing duty in maintaining the order at the meeting site.
XXII. Any matters insufficiently provided for herein shall be subject to handling in accordance with the Company Act, Articles of Incorporation and other laws and ordinances concerned.
XXIII. These Regulations and amendment hereof, shall be put into enforcement after being resolved in the shareholders’ meeting.
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PRESIDENT CHAIN STORE CORPORATION

AI assistant

PCSC — AGM Information 2020

52232_rns_2020-07-06_959e3e34-630b-4b91-92e9-320c50fb4fd1.pdf

PRESIDENT CHAIN STORE CORPORATION 2020 Annual General Shareholders’ Meeting

I. Agenda

II. Report Items

1. Business Report for 2019.

2. Audit Committee’s Review Report for 2019.

3. Status of Investment in Mainland China in 2019.

4. Compensation for Employees and Directors in 2019.

III. Ratification Items

(Proposed by the Board)

1. Ratification of 2019 Business Report and Financial Statements.

IV. Discussion Items

(Proposed by the Board)

1. Adoption of the Proposal for Distribution of 2019 Profits.

(Proposed by the Board)

2. Amendments to the Rules of Procedures for Shareholders’ Meeting of the

Company.

(Proposed by the Board)

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

V. Other Special Motions

VI. Dissolution

Appendix I

2019 Business Report

Dear Shareholders,

Appendix II

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

Chairman of the Audit Committee Shu, Pei-Gi

Appendix III

President Chain Store Corporation Status of Investment in Mainland China in 2019

Appendix IV

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To President Chain Store Corp.

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

Chien-Hung, Chou

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

C ONSOLIDATED BALANCE SHEETS

P RESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

C ONSOLIDATED BALANCE SHEETS

P RESIDENT CHAIN STORE CORP. AND SUBSIDIARIES C ONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

P RESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

C ONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

P RESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

C ONSOLIDATED STATEMENTS OF CASH FLOWS

P RESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

C ONSOLIDATED 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

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 2019

PCSC AGM Information 2020