PCSC - Annual Report 2019 | FinancialReports.eu

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2019 AND 2018

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND AUDIT REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2019 AND 2018 CONTENTS

Items 1. Cover 2. Contents 3. Declaration of Consolidated Financial Statements of Affiliated Enterprises 4. Report of independent accountants 5. Consolidated balance sheets 6. Consolidated statements of comprehensive income 7. Consolidated statements of changes in equity 8. Consolidated statements of cash flows 9. Notes to the consolidated financial statements (1) History and organisation (2) Date of authorisation for issuance of the consolidated financial statements and procedures for authorisation (3) Application of new standards, amendments and interpretations (4) Summary of significant accounting policies (5) Critical accounting judgements, estimates and key sources of assumption uncertainty (6) Details of significant accounts (7) Related party transactions (8) Pledged assets (9) Significant contingent liabilities and unrecognized contract commitments (10) Significant disaster loss (11) Significant events after the balance sheet date (12) Others (13) Supplementary disclosures (14) Segment information	Page/Reference
	1 2 3 4~9 10~11 12~13 14 15~16 17~74 17 17 17~19 19~32 32 32~59 59~62 62 62 62 63 63~70 70~71 72~74

Items
1. Cover
2. Contents
3. Declaration of Consolidated Financial Statements of Affiliated Enterprises
4. Report of independent accountants
5. Consolidated balance sheets
6. Consolidated statements of comprehensive income
7. Consolidated statements of changes in equity
8. Consolidated statements of cash flows
9. Notes to the consolidated financial statements
(1) History and organisation
(2) Date of authorisation for issuance of the consolidated
financial statements and procedures for authorisation
(3) Application of new standards, amendments and interpretations
(4) Summary of significant accounting policies
(5) Critical accounting judgements, estimates and key sources of
assumption uncertainty
(6) Details of significant accounts
(7) Related party transactions
(8) Pledged assets
(9) Significant contingent liabilities and unrecognized contract
commitments
(10) Significant disaster loss
(11) Significant events after the balance sheet date
(12) Others
(13) Supplementary disclosures
(14) Segment information

Page/Reference

1
2
3
4~9
10~11
12~13
14
15~16
17~74
17
17
17~19
19~32
32
32~59
59~62
62
62
62
63
63~70
70~71
72~74

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PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2019, pursuant to “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises,” the company that is required to be included in the consolidated financial statements of affiliates, is the same as the company required to be included in the consolidated financial statements under International Financial Reporting Standards 10. And if relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies, it shall not be required to prepare consolidated financial statements of affiliates.

Hereby declare,

PRESIDENT CHAIN STORE CORP. February 27, 2020

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REPORT OF INDEPENDENT ACCOUNTANTS

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

Opinion

We have audited the accompanying consolidated balance sheets of President Chain Store Corp. and its subsidiaries (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.

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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, 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.

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Cost-to-retail ratio of retail inventory method

Description

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

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

How our audit addressed the matter

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

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

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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.

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.

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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.

5.

6.

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.

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

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

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For the years ended December 31
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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PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

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For the years ended December 31
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 6(31)
dollars) $ 10.12 $ 9.79
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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 ~13~

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

				Equity attr	ib	utable to owners o	he parent						Non-controlling Interest	Totalequity
Share capital - common stock	Capital surplus		R	etained earnings				O	ther equityinterest			Total
		Legal reserve		Special reserve	r	Unappropriated etained earnings	Financial statements translation differences of foreign operations	l	Unrealized gain or oss on valuation of financial assets at fair value through other comprehensive Income	c	Equity directly related to non- urrent assets held forsale
$ 10,396,223 - 10,396,223 - - - - - - - - - $ 10,396,223	$ 43,875 - 43,875 - - - - - - - 536 648 $ 45,059	$ 9,191,733 - 9,191,733 - - - 3,101,709 - - - - - $ 12,293,442		$ - - - - - - - 398,859 - - - - $ 398,859		$ 31,381,290 25,463 31,406,753 10,206,388 ( 57,155) 10,149,233 ( 3,101,709) ( 398,859) ( 25,990,556) - - - $ 12,064,862	($ 906,308) - ( 906,308) - 626,479 626,479 - - - - - - ($ 279,829)		$ - 477,996 477,996 - ( 144,562) ( 144,562) - - - - - - $ 333,434		$ 507,449 ( 507,449) - - - - - - - - - - $ -	$ 50,614,262 ( 3,990) 50,610,272 10,206,388 424,762 10,631,150 - - ( 25,990,556) - 536 648 $ 35,252,050	$ 8,892,148 ( 5,203) 8,886,945 1,537,890 ( 122,251) 1,415,639 - - - ( 1,529,607) - - $ 8,772,977	$ 59,506,410 ( 9,193) 59,497,217 11,744,278 302,511 12,046,789 - - ( 25,990,556) ( 1,529,607) 536 648 $ 44,025,027 $ 44,025,027 12,112,109 ( 359,692) 11,752,417 - - ( 9,148,676) ( 1,404,193) 1,235 590 918 $ 45,227,318
$ 10,396,223 - - - - - - - - - - $ 10,396,223	$ 45,059 - - - - - - - 1,235 590 - $ 46,884	$ 12,293,442 - - - 1,020,639 - - - - - - $ 13,314,081		$ 398,859 - - - - ( 398,859) - - - - - $ -		$ 12,064,862 10,542,860 7,696 10,550,556 ( 1,020,639) 398,859 ( 9,148,676) - - - 918 $ 12,845,880	($ 279,829) - ( 590,079) ( 590,079) - - - - - - - ($ 869,908)		$ 333,434 - 156,287 156,287 - - - - - - - $ 489,721		$ - - - - - - - - - - - $ -	$ 35,252,050 10,542,860 ( 426,096) 10,116,764 - - ( 9,148,676) - 1,235 590 918 $ 36,222,881	$ 8,772,977 1,569,249 66,404 1,635,653 - - - ( 1,404,193) - - - $ 9,004,437

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

Chairman: Lo, Chih-Hsien

Accounting Manager: Kuo, Ying-Chih

President: Huang, Jui-Tien ~14~

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

(Expressed in thousands of New Taiwan dollars)

				For theyears ended	For theyears ended	December 31	December 31
	Notes			2019			2018
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated profit before income tax for the year			$	15,164,187		$	15,402,347
Adjustments to reconcile profit before income tax to net
cash provided by operating activities
Income and expenses having no effect on cash flows
Gain on valuation of financial assets at fair value through	6(2)
profit or loss		(		10,108 )	(		12,411 )
Expected credit losses	12(2)			8,640			17,080
Depreciation on property, plant and equipment	6(7)(8)			18,177,202			5,993,847
Amortization				574,709			584,009
Depreciation on investment property	6(10)			17,031			16,956
Finance costs	6(29)			1,216,000			144,662
Share of profit of associates and joint ventures	6(6)
accounted for using equity method		(		480,998 )	(		424,098 )
Gain on disposal of investments accounted for using the	7
equity method				-	(		59 )
Loss on disposal of property, plant and equipment, net	6(28)			11,428			33,275
Gain from lease modification	6(28)	(		58,910 )			-
Interest income	6(27)	(		793,898 )	(		699,385 )
Dividend income	6(27)	(		49,542 )	(		65,124 )
Impairment loss on intangible assets	6(11)			-			819
Impairment loss on property, plant and equipment	6(7)	(		13,618 )			9,969
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		(		841,967 )			728,211
Accounts receivable		(		552,547 )	(		326,504 )
Other receivables				63,609			122,931
Inventories		(		537,455 )	(		1,734,535 )
Prepayments		(		125,934 )			76,950
Other current assets				36,544			24,955
Net changes in liabilities relating to operating activities
Contract liabilities - current				600,194	(		1,092,169 )
Accounts payable				439,012			1,977,720
Notes payable		(		651,908 )	(		199,901 )
Other payables		(		60,331 )			18,646
Advance receipts				3,025			1,678,593
Contract liabilities - non-current				213,827	(		111,590 )
Net defined benefit liabilities - non-current				8,998			157,749
Cash generated from operations				32,357,190			22,322,943
Interest received				805,390			697,286
Income tax paid		(		3,380,452 )	(		6,194,372 )
Interest paid		(		1,216,183 )	(		144,711 )
Dividends received				270,286			1,236,783
Net cash provided by operating activities				28,836,231		$	17,917,929
(Continued)

~15~

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED 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

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

~16~

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2018

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANISATION

(1) President Chain Store Corporation (the “Company”) was established on June 10, 1987. The main businesses of the Company and its subsidiaries (collectively referred herein as the “Group”) are managing convenience stores, restaurants, drugstores, department stores, supermarkets and online shopping stores. Business areas include Taiwan, Mainland China, Philippines and Japan. The common shares of the Company have been listed on the Taiwan Stock Exchange since August 22, 1997. Details of the Group’s main operating activities and segment information are provided in Notes 4 and 14.
(2) The Group’s ultimate parent company is Uni-President Enterprises Corp., which holds 45.4% equity interest in the Company.
DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL
STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were authorized for issuance by the Board of Directors on February 27, 2020.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

New standards, interpretations and amendments endorsed by FSC effective from 2019 are as follows:

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Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
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New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 9, ‘Prepayment features with negative	January 1, 2019
compensation’
IFRS 16, ‘Leases’	January 1, 2019
Amendments to IAS 19, ‘Plan amendment, curtailment or	January 1, 2019
settlement’
Amendments to IAS 28, ‘Long-term interests in associates and joint	January 1, 2019
ventures’
IFRIC 23, ‘Uncertainty over income tax treatments’	January 1, 2019
Annual improvements to IFRSs 2015-2017 cycle	January 1, 2019

Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. IFRS 16, ‘Leases’

(a) IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard requires lessees to recognize a ‘right-of-use asset’ and a lease liability (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.
(b) The Group has elected to apply IFRS 16 by not restating the comparative information (referred herein as the ‘modified retrospective approach’) when applying “IFRSs” effective in 2019 as endorsed by

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the FSC. Accordingly, the Group increased ‘right-of-use asset’ by $52,750,102, increased ‘lease liability’ by $52,938,613, decreased ‘prepayments’ by $270,440, decreased ‘property, plant and equipment’ by $396,233, decreased ‘long-term prepaid rent’ by $84,482 (recognized as ‘other non-current assets’), and decreased ‘other payables’ by $939,666 with respect to the lease contracts of lessees on January 1, 2019.

(c) The Group has used the following practical expedients permitted by the standard at the date of initial application of IFRS 16:
i. The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.
ii. The accounting for operating leases whose period will end before December 31, 2019 as short-term leases and accordingly, rent expense of $299,079 was recognized for the year ended December 31, 2019.
iii. The exclusion of initial direct costs for the measurement of ‘right-of-use asset’.
(d) The Group calculated the present value of lease liabilities by using the weighted average incremental borrowing interest rate range from 0.88% to 8.54%.
(e) The Group recognized lease liabilities which had previously been classified as ‘operating leases’ under the principles of IAS 17, ‘Leases’. The reconciliation between operating lease commitments under IAS 17 measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate and lease liabilities recognized as of January 1, 2019 is as follows:

Operating lease commitments disclosed by applying IAS 17 as at
December 31, 2018
Add: Lease payable recognized under finance lease by applying IAS
17 as at December 31, 2018
Adjustments relating to changes in the index or rate affecting
variable lease payments
Less:Short-term leases
Contracts reassessed as service agreements
Leases not yet commenced to which the lessee is committed
Total lease contracts amount recognized as lease liabilities by
applying IFRS 16 on January 1, 2019
Incremental borrowing interest rate at the date of
initial application
Lease liabilities recognized as at January 1, 2019 by applying IFRS 16

$ 69,815,079
6,962
496,223
(
109,383)
(
132,797)
(
14,328,676)
$ 55,747,408
0.88%~8.54%
$ 52,938,613

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

New standards, interpretations and amendments endorsed by the FSC effective from 2020 are as follows:

New Standards, Interpretations and Amendments Amendments to IAS 1 and IAS 8, ‘Disclosure Initiative- Definition of Material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 9, IAS 39 and IFRS 7, ‘Interset rate benchmark reform’	Effective date by International Accounting Standards Board
	January 1, 2020 January 1, 2020 January 1, 2020

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

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(3) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group

New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of To be determined by assets between an investor and its associate or joint venture’ International Accounting Standards Board IFRS 17 ‘Insurance contracts’ January 1, 2021 Amendments to IAS 1, ‘Classification of liabilities as current January 1, 2022 or non-current’

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting polices applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
(a) Financial assets and financial liabilities at fair value through profit or loss.
(b) Financial assets and liabilities at fair value through other comprehensive income.
(c) Defined benefit liabilities recognized based on the net amount of pension fund assets less the present value of defined benefit obligations.
B. The preparation of financial statements, in conformity with IFRSs, requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. The basis for preparation of consolidated financial statements is as follows:
(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

~19~

(b)Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
(c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.
(d)Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
(e)When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.
B. The subsidiaries included in the consolidated financial statements are as follows:

Name of investor The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company	Name of subsidiary President Chain Store (BVI) Holdings Ltd. PCSC (China) Drugstore Limited Wisdom Distribution Service Corp. President Drugstore Business Corp. Ren-Hui Investment Corp. Capital Marketing Consultant Corp. President Lanyang Art Corporation Cold Stone Creamery Taiwan Ltd. President Chain Store Corporation Insurance Brokers Co., Ltd. 21 Century Co., Ltd. President Being Corp. Uni-President Oven Bakery Corp. President Chain Store Tokyo Marketing Corp. ICASH Corp. Uni-President Superior Commissary Corp. Q-ware Systems & Services Corp.	Main business activities Professional investment Professional investment Logistics and warehousing of publication Sales of cosmetics, medicine and daily items Professional investment Enterprise management consultancy Art and cultural exhibition		Ownership (%) December 31, 2019 December 31, 2018 100.00 100.00 92.20 92.20 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 90.00 90.00 86.76 86.76	Description
				December 31, 2019 100.00 92.20 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 90.00 86.76

		Sales of ice cream
		Life and property insurance Operation of chain restaurants Sports and beauty business Bread and pastry retailer Enterprise management consultancy Electronic ticketing Food manufacturing Information software service

~20~

Name of investor The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company President Chain Store (BVI) Holdings Ltd. President Chain Store (BVI) Holdings Ltd. PCSC (China) Drugstore Limited Wisdom Distribution Service Corp. Wisdom Distribution Service Corp. Uni-President Cold-Chain Corp. Uni-President Cold-Chain Corp. Retail Support International Corp. Retail Support International Corp. Retail Support Taiwan Corp. President Logistics International Corp. Books.com. Co., Ltd. Books.com. (BVI) Ltd. Mech-President Corp. President Pharmaceutical Corp. President Pharmaceutical (Hong Kong) Holdings Limited	Name of subsidiary President Information Corp. Mech-President Corp. President Pharmaceutical Corp. President Collect Service Corp. Uni-President Department Store Corp. President Transnet Corp. Uni-President Cold-Chain Corp. Uni-Wonder Corp. (Formerly known as “President Starbucks Coffee Corp.”) Duskin Serve Taiwan Co., Ltd. Afternoon Tea Taiwan Co., Ltd. Books.com. Co., Ltd. Retail Support International Corp. President Chain Store (Labuan) Holdings Ltd. President Chain Store (Hong Kong) Holdings Limited President Cosmed Chain Store (Shen Zhen) Co., Ltd. President Logistics International Corp. Vision Distribution Service Corp. President Logistics International Corp. Uni-President Logistics (BVI) Holdings Limited Retail Support Taiwan Corp. President Logistics International Corp. President Logistics International Corp. Chieh Shun Logistics International Corp. Books.com. (BVI) Ltd. Bejing Bokelai Customer Co. Tong Ching Corporation President Pharmaceutical (Hong Kong) Holdings Limited President (Shanghai) Health Product Trading Company Ltd.	Main business activities Enterprise information management and consultancy Gas station and elevator installation Sales of various health care products, cosmetics, and pharmaceuticals Collection agent Department stores Delivery service Low-temperature logistics and warehousing Coffee chain store Cleaning instruments leasing and selling Operation of restaurants Retail business without shop Room-temperature logistics and warehousing Professional investment Professional investment Wholesale of merchandise Trucking Publishing Trucking Professional investment Room-temperature logistics and warehousing Trucking Trucking Trucking Professional investment Enterprise information consulting, network technology development and services Gas station Sales of various health care products, cosmetics, and pharmaceuticals Sales of various health care products, cosmetics, and pharmaceuticals		Ownership (%) December 31, 2019 December 31, 2018 86.00 86.00 80.87 80.87 73.74 73.74 70.00 70.00 70.00 70.00 70.00 70.00 60.00 60.00 60.00 60.00 51.00 51.00 - 51.00 50.03 50.03 25.00 25.00 100.00 100.00 100.00 100.00 100.00 100.00 20.00 20.00 - 60.00 25.00 25.00 100.00 100.00 51.00 51.00 49.00 49.00 6.00 6.00 100.00 100.00 100.00 100.00 100.00 100.00 60.00 60.00 100.00 100.00 100.00 100.00	Description
				December 31, 2019 86.00 80.87 73.74 70.00 70.00 70.00 60.00 60.00 51.00 - 50.03 25.00 100.00 100.00 100.00 20.00 - 25.00 100.00 51.00 49.00 6.00 100.00 100.00 100.00 60.00 100.00 100.00
					(a) (b) (c)

~21~

Name of investor President Chain Store (Labuan) Holdings Ltd. Philippine Seven Corporation Philippine Seven Corporation President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited Shanghai President Logistics Co., Ltd. Shanghai President Logistics Co., Ltd. PCSC Restaurant (Cayman) Holdings Limited Uni-President Logistics (BVI) Holdings Limited Ren-Hui Investment Corp. Ren-Hui Holdings Co., Ltd.	Name of subsidiary Philippine Seven Corporation Convenience Distribution Inc. Store Sites Holding, Inc. PCSC (China) Drugstore Limited President Chain Store (Shanghai) Ltd. Shanghai President Logistics Co., Ltd. PCSC Restaurant (Cayman) Holdings Limited Shan Dong President Yinzuo Commercial Limited PCSC (Chengdu) Hypermarket Limited Shanghai Cold Stone Ice Cream Corporation President Chain Store (Taizhou) Ltd. President Chain Store (Zhejiang) Ltd. Beauty Wonder (Zhejiang) Trading Co., Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd. President Logistics Shan Dong Co., Ltd. Shanghai President Chain Store Corporation Trade Co., Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd. Ren Hui Holding Co., Ltd. Shan Dong President Yinzuo Commercial Limited .	Main business activities Operation of chain store Logistics and warehousing Professional investment Professional investment Operation of chain store Logistics and warehousing Professional investment Supermarkets Retail hypermarket Sales of ice cream Logistics and warehousing Operation of chain store Sales of cosmetics and medicine Logistics and warehousing Logistics and warehousing Trade of food and commodities Logistics and warehousing Professional investment Supermarkets		Ownership (%) December 31, 2019 December 31, 2018 52.22 52.22 100.00 100.00 100.00 100.00 7.80 7.80 100.00 100.00 100.00 100.00 - 100.00 40.00 40.00 - 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 50.00 50.00 100.00 100.00 - 100.00 50.00 50.00 100.00 100.00 15.00 15.00	Description
				December 31, 2019 52.22 100.00 100.00 7.80 100.00 100.00 - 40.00 - 100.00 100.00 100.00 100.00 50.00 100.00 - 50.00 100.00 15.00
					(d) (e) (f)

(a) The Company liquidated the subsidiary, Afternoon Tea Taiwan Corp., Limited, and the process of cancellation of registration has been completed in February 2019.
(b) As the Company controls the financial and operating policies of Retail Support International Corp., the latter is included as a subsidiary in the consolidated financial statements.
(c) The Company liquidated the subsidiary, Vision Distribution Service Corp., and the process of cancellation of registration has been completed in February 2019.
(d) The Company liquidated the subsidiary, PCSC Restaurant (Cayman) Holdings Limited, and the process of cancellation of registration has been completed in September 2019
(e) The Company liquidated the subsidiary, PCSC (Chengdu) Hypermarket Limited, and the process of cancellation of registration has been completed in March 2019.
(f) The Company liquidated the subsidiary, Shanghai President Chain Store Corporation Trade Co., Ltd., and the process of cancellation of registration has been completed in May 2019.
C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.

~22~

(4) Foreign currency translation

Items included in the financial statements of the Group are measured using the currency of the primary economic environment in which the Group operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company’s functional currency.

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within other gains and losses.
B. Translation of foreign operations
(a) The operating results and financial position of all the subsidiaries, associates and jointly arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- i.. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
- ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

iii. All resulting exchange differences are recognized in other comprehensive income.

(b) When the foreign operation partially disposed of or sold is an associate or jointly arrangements exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, if the Group retains partial interest in the former foreign associate or jointly arrangements after losing significant influence over the former foreign associate, or losing joint control of the former jointly arrangements, such transactions should be accounted for as disposal of all interest in these foreign operations.
(c) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

~23~

(d) Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at the balance sheet date.

(5) Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realized within 12 months from the balance sheet date;
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than 12 months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
(a) Liabilities that are expected to be paid off within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be paid off within 12 months from the balance sheet date;
(d) Liabilities for which the repayment date cannot be extended unconditionally to more than 12 months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations (including time deposits with contract period less than 12 months) are classified as cash equivalents.

(7) Financial assets at fair value through profit or loss

A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using settlement date accounting.
C. At initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.
D. The Group recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

(8) Financial assets at fair value through other comprehensive income

A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:
(a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and
(b) The assets’ contractual cash flows represent solely payments of principal and interest.

~24~

B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using settlement date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:
- (a) The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
- (b) Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognized in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.
(9) Accounts and notes receivable
A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(10) Impairment of financial assets

For debt instruments measured at fair value through other comprehensive income and financial assets at amortized cost, at each reporting date, the Group recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognizes the impairment provision for lifetime ECLs.

- (11) Leasing arrangements (Lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognized in profit or loss on a straight-line basis over the lease term.

(12) Inventories

A. Inventories are initially recorded at cost. Cost of consolidated entities which manage convenience stores is determined using the retail inventory method while cost of other subsidiaries is determined in accordance with the type of business.
B. Ending inventories are stated at the lower of cost and net realizable value. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

(13) Investments accounted for using equity method - associates

A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.

~25~

B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes the Group’s share of change in equity of the associate in “capital surplus” in proportion to its ownership.
D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then “capital surplus” and “investments accounted for using the equity method” shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.
F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss.
G. When the Group disposes its investment in an associate and loses significant influence over this associate, the amount previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.
H. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss proportionately.
(14) Investment accounted for using the equity method joint ventures
The Group accounts for its investment interests in joint ventures using the equity method. Unrealized profits and losses arising from transactions between the Group and joint ventures are eliminated to the extent of the Group’s interest in the joint venture. However, when the transaction provides evidence of a reduction in the net realizable value of current assets or an impairment loss, all such losses shall be recognized immediately. When the Group’s share of losses in a joint venture

~26~

equals or exceeds its interest in the joint venture together with any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the joint venture.

(15) Property, plant and equipment
A. Property, plant and equipment are initially recorded at cost.
B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are audited, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, “Accounting Policies, Changes in Accounting Estimates and Errors”, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings 3~50 years Transportation equipment 2~15 years Operating equipment 2~16 years Leasehold assets 1~20 years

(16) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities ( Effective from 2019 )

A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognized as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:
(a) Fixed payments, less any lease incentives receivable;
(b) Variable lease payments that depend on an index or a rate; and
(c) Amounts expected to be payable by the lessee under residual value guarantees.

The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

~27~

C. At the commencement date, the right-of-use asset is stated at cost comprising the following:
(a) The amount of the initial measurement of lease liability;
(b) Any lease payments made at or before the commencement date;
(c) Any initial direct costs incurred by the lessee; and
(d) An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

(17) Leases (lessee) (Prior to 2019 )

Payments made under an operating lease ( net of any incentives received from lessor ) are recognised in profit or loss on a straight-line basis over the lease term.

(18) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 10 to 50 years.

(19) Intangible assets

A. Computer software

Computer software is stated at cost and amortized on a straight-line basis over its estimated useful life of 1 to 15 years.

B. Goodwill

Goodwill arises in a business combination accounted for by applying the acquisition method.

C. License agreement and customer list and other intangible assets

License agreement and customer list acquired in business combination are recognized at fair value at the acquisition date. Other intangible assets are separately acquired trademarks and licenses which are stated at historical cost. The latter has a finite useful life and is amortized on a straight-line basis over it’s estimated useful life.

(20) Impairment of non-financial assets

A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.
B. The recoverable amounts of goodwill are evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss shall not be reversed in the following years.

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C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

(21) Notes and accounts payable

A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.
B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(22) Provisions

The Group’s provisions are presented in “Other non-current liabilities”. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognized as interest expense. Provisions are not recognized for future operating losses.

(23) Employee benefits

A. Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expense in that period when the employees render service.

B. Pensions
(a) Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expense when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plans
i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.
ii. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.
iii. Past service costs are recognized immediately in profit or loss.

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C. Termination benefits
- Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognizes expense when it can no longer withdraw an offer of termination benefits or it recognizes related restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.
D. Employees’, directors’ and supervisors’ remuneration
- Employees’ remuneration and directors’ and supervisors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is distributed by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.
(24) Income tax
A. The tax expense for the year comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.
D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.
E. A deferred tax asset shall be recognised for the carry forward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

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(25) Revenue recognition

A. Sales of goods

(a) The Group operates a chain of retail stores. Revenue from the sale of goods is recognized when the Group sells a product to the customer.
(b)Payment of the transaction price is due immediately when the customer purchases the product. It is the Group’s policy to sell its products to the end customer with a right of return. Therefore, a refund liability and a right to the returned goods (included in other current assets) are recognized for the products expected to be returned. Accumulated experience is used to estimate such returns using the expected value method. Because the number of products returned has been steady for years, it is highly probable that a significant reversal in the cumulative revenue recognized will not occur. The validity of this assumption and the estimated amount of returns are reassessed at each reporting date.
(c)The Group operates a loyalty program where retail customers accumulate points for purchases made which entitle them to discount on future purchases. The points provide a material right to customers that they would not receive without entering into a contract. Therefore, the promise to provide points to the customer is a separate performance obligation. The transaction price is allocated to the product and the points on a relative stand-alone selling price basis. The stand-alone selling price per point is estimated on the basis of the discount granted when the points are redeemed and on the basis of the likelihood of redemption, based on past experience. The stand-alone selling price of the product sold is estimated on the basis of the retail price. A contract liability is recognized for the transaction price which is allocated to the points and revenue is recognized when the points are redeemed or expire.
B. Sales of services
The Group provides delivery services. Revenue from delivering services is recognized when the services have been provided.
C. Financing components
The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

(26) Business Combination

A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognized amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.
B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree

~31~

recognized and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognized directly in profit or loss on the acquisition date.

(27) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. The Group has no such assumptions and estimates which may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

carrying amounts of assets and liabilities within the next TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents	financial year.
Cash on hand and petty cash Checking accounts and demand deposits Cash equivalents Time deposits Short-term financial instruments	December 31, 2019 $ 1,680,411 9,606,131 26,620,058 7,538,795 $ 45,445,395	December 31, 2018
		$ 1,958,556 12,560,158 25,867,905 8,144,029
		$ 48,530,648

A. The Group transacts with a variety of financial institutions, all with high credit quality, to disperse credit risk, so it considers the probability of counterparty default as remote.
B. Information on time deposits provided as security for performance guarantees and reclassified as “Other non-current assets – guarantee deposits paid” is provided in Note 8.

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(2) Financial assets at fair value through profit or loss

December 31, 2019 December 31, 2018

Financial assets mandatorily measured at fair value through profit or loss

Current items: Beneficiary certificates Valuation adjustment Non-current items: Unlisted stocks Valuation adjustment (	$ 1,696,276 24 $ 1,696,300 $ 275,285 189,720) $ 85,565	$ 844,170 55 $ 844,225 $ 275,403 ( 189,720) $ 85,683

A. The Group recognized net profit of $10,108 and $12,411 in relation to financial assets at fair value through profit or loss for the years ended December 31, 2019 and 2018, respectively.
B. No financial assets at fair value through profit or loss of the Group were pledged to others.
C. Information relating to credit risk is provided in Note 12(2).

(3) Accounts receivable

Accounts receivable Less : Allowance for doubtful accounts ( A. The ageing analysis of accounts receivable that were Not past due Up to 90 days 91 to 180 days 181 to 365 days Over 365 days	December 31, 2019 December 31, 2018 $ 5,864,309 $ 5,320,037 55,829) ( 55,464) $ 5,808,480 $ 5,264,573 past due but not impaired is as follows: December 31, 2019 December 31, 2018 $ 5,508,376 $ 5,144,165 335,189 149,698 18,625 18,175 63 2,917 2,056 5,082 $ 5,864,309 $ 5,320,037

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

The above aging analysis was based on past due date.

B. As of December 31, 2019 and 2018, accounts receivable was all from contracts with customers. And as of January 1, 2018, the balance of receivables from contracts with customers amounted to $4,938,071.
C. Accounts receivable of the Group pledged to others is provided in Note 8
D. As at December 31, 2019, and 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable were $5,808,480, and $5,264,573, respectively.
E. Information relating to credit risk is provided in Note 12(2).

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(4) Inventories

Inventories
	December 31, 2019
		Allowance for
	Cost	valuation loss	Book value
Raw materials and work in process	$ 71,106	$ -	$ 71,106
Merchandise and finished goods	15,712,547 (	124,541)	15,588,006
	$ 15,783,653 (	$ 124,541)	$ 15,659,112
Raw materials and work in process Merchandise and finished goods	December 31, 2018 Cost Allowance for valuation loss Book value $ 65,446 $ - $ 65,446 15,151,897 ( 95,686) 15,056,211 $ 15,217,343 ($ 95,686) $ 15,121,657
	Cost $ 65,446 15,151,897 ( $ 15,217,343	Allowance for valuation loss $ - 95,686) $ 95,686)

The cost of inventories recognized as expense for the year:

Cost of goods sold and service costs Loss on valuation (Gain on reversal) of inventories Spoilage Others	For the year ended December 31, 2019 For the year ended December 31, 2018 $ 166,061,981 $ 158,799,134 28,855 ( 40,105 ) 1,848,520 1,775,150 271,112 276,982 $ 168,210,468 $ 160,811,161

The Group reversed a previous inventory write-down because the Group sold and scrapped certain inventories which were previously provided with allowance during the year ended December 31, 2018.

(5) Financial assets at fair value through other comprehensive income - non-current

Debt instruments Government bonds Valuation adjustment Equity instruments Listed stocks Unlisted stocks Valuation adjustment	December 31, 2019 $ - - - 265,606 4,348 269,954 537,161 807,115 $ 807,115	December 31, 2018 $ 199,948 783 200,731 265,606 4,348 269,954 374,660 644,614 $ 845,345

A. The Group has elected to classify the listed and unlisted stocks that are considered to be strategic investments and steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $807,115, and $644,614 as at December 31, 2019 and 2018, respectively.

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B. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other comprehensive income Fair value change recognized in other comprehensive income Debt instruments at fair value through other comprehensive income Fair value change recognized in other comprehensive income Interest income recognized in profit or loss	For the year ended December 31, 2019 $ 162,501 ($ 783 ) $ 1,180	For the year ended December 31, 2018 ($ 143,849 ) ($ 1,537 ) $ 2,359

C. As at December 31, 2019 and 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group was $807,115 and $845,345, respectively.
D. No financial assets at fair value through other comprehensive income of the Group were pledged to others.
E. Information relating to credit risk is provided in Note 12(2).
(6) Investments accounted for using the equity method

Investments accounted for using the equity method
Associates PresiCarre Corp. President Fair Development Corp. Uni-President Development Corp. President International Development Corp. Tung Ho Development Corp. Uni-President Organics Corp. President Technology Corp. Joint ventures Mister Donut Taiwan Co., Ltd.	December 31, 2019 $ 5,723,198 2,039,406 764,191 459,696 106,384 41,430 20,866 9,155,171 $ 100,768 $ 9,255,939	December 31, 2018
		$ 5,518,380 1,984,125 753,904 461,328 114,755 38,862 21,347
		8,892,701
		$ 107,879
		$ 9,000,580

~35~

A. The investments in associates or joint ventures are not significant to the Group. The details of the Group’s share of the operating results in the aforementioned investments are as follows:
(a) The Group’s share of the operating results in all individually immaterial associates is summarized below:

Profit for the year from continuing operations Other comprehensive loss-net of tax ( Total comprehensive income	For the year ended December 31, 2019 $ 466,385 5,632 ) ( $ 460,753	For the year ended December 31, 2018 $ 401,980 3,646) $ 398,334

(b) The Group’s share of the operating results in all individually immaterial joint ventures is summarized below:

ummarized below:
Profit for the year from continuing operations Other comprehensive (loss) income-net of tax( Total comprehensive income	For the year ended December 31, 2019 $ 14,613 769 ) $ 13,844	For the year ended December 31, 2018
		$ 22,118 1,353
		$ 23,471

B. In December 2017, the Group disposed 30% shares of its joint venture – President Coffee (Cayman) Holdings Ltd. for a cash consideration of $25,642,728 to Starbucks EMEA Holdings Ltd., which was collected in February, 2018.
－
C. The Group originally held 30% shares of its joint venture using the equity method UniWonder Corp. (formerly known as “President Starbucks Coffee Corp.”). In December 2017, the Group acquired an additional 30% shares of Uni-Wonder Corp. for a cash consideration of $3,226,806 and obtained control over Uni-Wonder Corp. Relevant cash consideration was fully paid in February, 2018.
D. In August 2018, the Group disposed 0.02% shares of its investments accounted for using －
equity method Grand Bills Finance Corp. to Kai Yu Investment Co., Ltd. Information about disposal proceeds and disposal gain or loss are provided in Note 7(3) f.

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(7) Property, plant and equipment

A. The details of property, plant and equipment are as follows:

At January 1 Cost Accumulated depreciation and impairment Opening net book amount as of January 1 Effect of adoption of IFRS 16 Adjusted beginning balance Additions Disposals Transfer Depreciation charge Reversal of impairment loss Net exchange differences Closing net book amount as of December 31 At December 31 Cost Accumulated depreciation and impairment						2019
	Land Buildings Transportation equipment $ 2,273,117 $ 4,723,111 $ 6,612,878 (16,367) ( 1,980,005 ) ( 4,345,461 ) $ 2,256,750 $ 2,743,106 $ 2,267,417 $ 2,256,750 $ 2,743,106 $ 2,267,417 - - - $ 2,256,750 $ 2,743,106 $ 2,267,417 - 33,282 276,044 - - ( 30,554 ) ( 18,757) 38,387 104,600 - ( 204,422 ) ( 521,706 ) - - - 296 ( 4,623 ) ( 1,930 ) $ 2,238,289 $ 2,605,730 $ 2,093,871 $ 2,254,656 $ 4,788,540 $ 6,648,230 ( 16,367) ( 2,182,810 ) ( 4,554,359 ) $ 2,238,289 $ 2,605,730 $ 2,093,871				Operating equipment Leasehold improvements $ 21,159,733 $ 18,345,784 ( 14,386,751) ( 11,375,011 ) $ 6,772,982 $ 6,970,773 $ 6,772,982 $ 6,970,773 - ( 387,770 ) $ 6,772,982 $ 6,583,003 3,251,911 2,184,888 ( 110,153 ) ( 110,612 ) 147,177 109,995 ( 2,242,940 ) ( 1,977,765 ) 2,653 10,965 ( 20,470 ) 14,045 $ 7,801,160 $ 6,814,519 $ 22,280,204 $ 19,092,068 ( 14,479,044 ) ( 12,277,549 ) $ 7,801,160 $ 6,814,519			Others Total $ 9,627,520 $ 62,742,143 (5,345,785) ( 37,449,380) $ 4,281,735 $ 25,292,763 $ 4,281,735 $ 25,292,763 ( 8,463) ( 396,233) $ 4,273,272 $ 24,896,530 1,952,903 7,699,028 ( 5,641) ( 256,960) ( 423,497) ( 42,095) ( 1,352,854) ( 6,299,687) - 13,618 20,570 7,888 $ 4,464,753 $ 26,018,322 $ 10,972,281 $ 66,035,979 ( 6,507,528) ( 40,017,657) $ 4,464,753 $ 26,018,322
										$ 26,018,322

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2018

At January 1
Cost
Accumulated depreciation and
impairment
(
Opening net book amount as of
January 1
Additions
Transfer
Reclassifications
Depreciation charge
(Impairment loss) reversal of
impairment loss
Net exchange differences
(
Closing net book amount as of
December 31
At December 31
Cost
Accumulated depreciation and
impairment
(

Land
Buildings
Transportation
equipment
Operating
equipment
Leasehold
improvements
Others
Total
$ 2,273,584
$ 4,296,089
$ 6,343,845
$ 20,180,016
$ 17,259,683
$ 9,456,005
$ 59,809,222
16,366)
(
1,800,537 )
(
4,046,383 )
(
13,384,193)
(
10,568,380 )
(5,011,021)
(
34,826,880)
$ 2,257,218
$ 2,495,552
$ 2,297,462
$ 6,795,823
$ 6,691,303
$ 4,444,984
$ 24,982,342
$ 2,257,218
$ 2,495,552
$ 2,297,462
$ 6,795,823
$ 6,691,303
$ 4,444,984
$ 24,982,342
-
213,509
419,098
2,054,370
2,081,912
1,745,644
6,514,533
- (
38) (
21,894 ) (
36,914 ) (
42,875) (
12,951) (
114,672)
-
228,361
134,272
242,063
25,430
(
621,446)
8,680
- (
190,100) (
558,428 ) (
2,266,631 ) (
1,746,149) (
1,232,539) (
5,993,847)
-
-
- (
1,359 ) (
10,406)
1,796
(
9,969)

468)
(
4,178)
(
3,093 )
(
14,370)
(
28,442)
(
43,753)
(
94,304)
$ 2,256,750
$ 2,743,106
$ 2,267,417
$ 6,772,982
$ 6,970,773
$ 4,281,735
$ 25,292,763
$ 2,273,117
$ 4,723,111
$ 6,612,878
$ 21,159,733
$ 18,345,784
$ 9,627,520
$ 62,742,143
16,367)
(
1,980,005 )
(
4,345,461 )
(
14,386,751)
(
11,375,011 )
(5,345,785)
(
37,449,380)
$ 2,256,750
$ 2,743,106
$ 2,267,417
$ 6,772,982
$ 6,970,773
$ 4,281,735
$ 25,292,763

B. Information on (impairment loss) reversal of impairment loss on property, plant and equipment is provided in Note 6(13).

C. Information on property, plant and equipment pledged to others as collateral is provided in Note 8.

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`－` (8) Leasing arrangements lessee

Effective from 2019

A. The Group leases various assets including land, buildings, transportation equipment, etc. Rental contracts are typically made for periods of 1 to 41 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings Machinery and equipment Other equipment	December 31, 2019 Carrying amount $ 677,359 66,682,465 72,211 57,577 $ 67,489,612	For the year ended December 31 2019
		Depreciation charge
		$ 137,324 11,679,988 39,389 20,814 $ 11,877,515

C. For the year ended December 31, 2019, the additions to right-of-use assets was $28,665,757.
D. The information on income and expense accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets Expense on variable lease payments Gain on sublease of right-of-use assets	For the year ended December 31, 2019
	$ 1,090,750 344,600 64,297 620,688 544,513

E. For the year ended December 31, 2019, the Group’s total cash outflow for leases was $13,450,160.
F. Variable lease payments
(a) Some of the Group’s lease contracts contain variable lease payment terms that are linked to sales generated from a store or department store counter. For the above-mentioned stores, up to 4.43% of lease payments are on the basis of variable payment terms and are accrued based on the sales amount. Variable payment terms are used for a variety of reasons. Various lease payments that depend on sales are recognized in profit or loss in the period in which the event or condition that triggers those payments occurs.
(b) A 1% increase in the aggregate sales amount of all stores with such variable lease contracts would increase total lease payments by approximately $6,207.
G. The Group’s leases not yet commenced to which the lessee is committed are business premises for the lessees, and the lease liabilities undiscounted amount at December 31, 2019 is $2,597,780.

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(9) Leasing arrangements – lessor

Effective from 2019

A. The Group leases various assets including land, buildings, machinery and equipment, etc. Rental contracts are typically made for periods of 1 and 35 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
B. Information on profit or loss in relation to lease contracts is as follows:

Rental revenue Rental revenue from variable lease payments	For the year ended December 31, 2019 $ 1,568,808 $ 1,201,823	For theyear ended December 31, 2018 $ 1,552,490 $ 1,212,481

C. The maturity analysis of the undiscounted lease payments in the operating leases is as follows:

2020 2021 2022 2023 2024 After 2025 Total	December 31, 2019
	$ 256,072 206,455 148,086 90,464 60,519 158,193 $ 919,789

(10)Investment property

nvestment property
At January 1 Depreciation charge Transfer At December 31 At January 1 Depreciation charge At December 31		2019
	Land $ 1,059,538 - ( $ 1,059,538	Buildings $ 459,577 16,956) ( $ 442,621

The fair value of the investment property held by the Group as at December 31, 2019 and 2018 ranged from $4,026,775 to $4,027,091, which was assessed based on recent settlement prices of similar and comparable properties, as well as the reports of independent appraisers.

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(11)Intangible assets

ntangible assets
Software At January 1 Cost $ 1,648,652 Accumulated amortization and impairment ( 1,164,405) $ 484,247 Opening net book amount as of January 1 $ 484,247 Additions 184,912 Transfer 46,246 Amortization charge ( 236,331) Net exchange differences ( 1,788) Closing net book amount as of December 31 $ 477,286 At December 31 Cost $ 1,853,119 Accumulated amortization and impairment ( 1,375,833) $ 477,286 Software At January 1 Cost $ 1,568,017 Accumulated amortization and impairment ( 975,791) $ 592,226 Opening net book amount as of January 1 $ 592,226 Additions 126,471 Transfer ( 303) Amortization charge ( 248,620) Impairment loss ( 819) Net exchange differences 15,292 Closing net book amount as of December 31 $ 484,247 At December 31 Cost $ 1,648,652 Accumulated amortization and impairment ( 1,164,405) $ 484,247			2019
	(	Goodwill License agreement and customer list Others Total $ 2,204,284 $ 7,524,890 $ 469,957 $11,847,783 - ( 194,160) ( 95,338) ( 1,453,903) $ 2,204,284 $ 7,330,730 $ 374,619 $ 10,393,880 $ 2,204,284 $ 7,330,730 $ 374,619 $10,393,880 - - 24,690 209,602 - - 584 46,830 - ( 194,159) ( 45,398) ( 475,888) 1,359) - 165 ( 2,982) $ 2,202,925 $ 7,136,571 $ 354,660 $ 10,171,442 $ 2,202,925 $ 7,524,890 $ 493,171 $12,074,105 - ( 388,319) ( 138,511) (1 ,902,663) $ 2,202,925 $ 7,136,571 $ 354,660 $ 10,171,442 2018

		Goodwill License agreement and customer list Others Total $ 2,202,519 $ 7,524,890 $ 405,998 $11,701,424 - - ( 68,920) ( 1,044,711) $ 2,202,519 $ 7,524,890 $ 337,078 $ 10,656,713 $ 2,202,519 $ 7,524,890 $ 337,078 $10,656,713 - - 70,513 196,984 - - ( 1,117) ( 1,420) - ( 194,160) ( 31,901) ( 474,681) - - - ( 819) 1,765 - 46 17,103 $ 2,204,284 $ 7,330,730 $ 374,619 $ 10,393,880 $ 2,204,284 $ 7,524,890 $ 469,957 $11,847,783 - ( 194,160) ( 95,338) ( 1,453,903) $ 2,204,284 $ 7,330,730 $ 374,619 $ 10,393,880

Amortization charge on intangible assets are recognized as operating expenses.

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(12) Other non-current assets

Other non-current assets
Guarantee deposits paid Others	December 31, 2019 $ 2,911,887 787,932 $ 3,699,819	December 31, 2018 $ 2,766,913 437,846
		$ 3,204,759

(13) Impairment of non-financial assets
A. The Group recognized gain on reversal (impairment loss) for the years ended December 31, 2019 and 2018 was $13,618 and $10,788, respectively. Details of such gain (loss) are as follows:

For the year ended December 31, 2019 Recognized in other Recognized in comprehensive profit or loss income $ 13,618 $ - - - $ 13,618 $ -	For the year ended December 31, 2018	For the year ended December 31, 2018
Recognized in profit or loss $ 13,618 - $ 13,618	Recognized in profit or loss ($ 9,969) ( 819) ($ 10,788)	Recognized in other comprehensive income
		$ - -
		$ -

B. The Group performs impairment testing annually. The recoverable amount has been determined based on value-in-use calculations. These calculations use pre-tax cash flow projections based on financial budgets approved by the management covering a five-year period. The recoverable amount calculated using the value-in-use exceeded their carrying amount,so goodwill was not impaires. The key assumptions used for value-in-use calculations are as follows:
(a) Discount rate: Estimated based on weighted average cost of funds. The discount rate for the years ended December 31, 2019 and 2018 were 7.43% to 12.68%.
(b) Future value growth rate: Refer to the past long-term average economic growth rate of mature economies and long-term price index growth rate and market competition. The future value growth rate for the years ended December 31, 2019 and 2018 were 0.5% to 1.0%.

Management determined budgeted gross margin and operating profit margin based on past performance and its expectations of market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pre-tax and reflected specific risks relating to the relevant operating segments.

(14) Short-term borrowings

Type of borrowings December 31, 2019 Interest rate range Collateral Bank borrowings Credit loan $ 6,014,658 0.65%~5.75% None

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Type of borrowings Bank borrowings Credit loan	December 31, 2018 $ 7,237,785	Interest rate range 0.65%~7.00%	Collateral
			None

There was no capitalisation of borrowing costs for the years ended December 31, 2019 and 2018. Relevant interest expense on borrowings is recognized as “finance costs”.

(15) Other payables

(15)	Other payables	Other payables
(16) (17)	Store collections Wages, salaries and bonus payable Sales receipt on behalf of others Incentive bonus payable to franchisees Payables for acquisition of property, plant and equipment Employees’ compensation and remuneration for directors and supervisors Payables for labor and health insurance Rent payable Others Other current liabilities Advance receipts for gift certificates Advance receipts of deposits in icash cards Current portion of long-term liabilities Others Long-term borrowings Type of borrowings Interest rate range Long-term bank borrowings Credit loan 4.88%~5.32% Secured borrowings 1.67%~1.96% Less: Current portion		December 31, 2019 $ 11,453,224 5,206,353 1,345,877 1,158,473 1,364,370 872,361 248,584 66,133 4,881,130 $ 26,596,505 December 31, 2019 $ 1,351,370 1,298,919 221,888 277,414 $ 3,149,591 Collateral None Property, plant and equipment	December 31, 2018 $ 12,750,758 5,033,232 1,176,154 1,047,674 914,557 879,671 238,255 848,049 5,065,831 $ 27,954,181 December 31, 2018 $ 1,338,984 1,199,455 335,860 386,239 $ 3,260,538 December 31, 2019 $ 292,288 437,712

		4.88%~5.32% 1.67%~1.96%
				730,000 ( 221,888)
				$ 508,112

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Type of borrowings Long-term bank borrowings Credit loan Secured borrowings Less: Current portion	Interest rate range 0.80%~6.298% 1.75%~1.96%	Collateral None Property, plant and equipment (	December 31, 2018 $ 741,157 441,743 1,182,900 335,860) $ 847,040

There was no capitalization of borrowing costs for the years ended December 31, 2019 and 2018. Relevant interest expense on borrowings is recognized as “finance costs”.

(18) Pensions
A. The Company and its domestic subsidiaries operate a defined benefit pension plan, in accordance with the Labor Standards Law, which covers all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Labor Standards Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last six months prior to retirement. The Company and its domestic subsidiaries contributes monthly an amount equal to 2%-8% of employees’ monthly salaries and wages to a retirement fund at the Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contributions for the deficit by next March. Also, the subsidiary, Philippine Seven Corporation has defined benefit pension plan.
- (a) The amounts recognized in the balance sheet are as follows

	December 31, 2019	December 31, 2019	December 31, 2018	December 31, 2018
Present value of defined benefit obligations	($	7,647,265 )	($	7,616,936 )
Fair value of plan assets		2,895,658		2,884,387
Net defined benefit liability	($	4,751,607 )	($	4,732,549 )

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(b) Movements in net defined benefit liabilities are as follows:

Present value of
defined benefit	Fair value of	Net defined
obligations	plan assets	benefit liability

	$ 2,884,387 ($ 4,732,549 ) - ( 78,190 ) 33,872 ( 54,727 ) - ( 24,700) 2,918,259 ( 4,890,166) 94,853 94,853 - ( 6,760 ) - ( 280,928 ) - 182,775 94,853 ( 10,060) 130,510 130,510 247,964) 18,109 117,454) 148,619 $ 2,895,658 ($ 4,751,607 ) Fair value of Net defined plan assets benefit liability $ 2,744,358 ($ 4,574,800 ) - ( 91,136 ) 36,958 ( 60,670 ) - ( 70) 2,781,316 ( 4,726,676) 69,722 69,722 - ( 6,614 ) - ( 181,662 ) - ( 37,866 ) 69,722 ( 156,420) 148,001 148,001 114,652) 2,546 33,349 150,547 $ 2,884,387 ($ 4,732,549 )

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(c) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan asset fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2019 and 2018 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.
(d)The principal actuarial assumptions used were as follows:

	For the year ended	For the year ended
	December 31, 2019	December 31, 2018
Discount rate	0.75%~5.16 %	1.00%~7.53 %
Future salary increases	2.00%~5.50 %	2.00%~5.50 %

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics and experience in each territory.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

December 31, 2019 Effect on present value of defined benefit obligation ( December 31, 2018 Effect on present value of defined benefit obligation	Discount rate Increase Decrease 0.25% 0.25% $ 231,284 ) $ 241,943 $ 234,734 ) $ 245,789	Future salary increases Increase Decrease 0.25% 0.25% $ 236,311 ($ 226,289 ) $ 240,476 ($ 230,362 )	Future salary increases	Future salary increases
	Increase 0.25% $ 231,284 ) $ 234,734 )			Decrease 0.25% $ 226,289 ) $ 230,362 )
	$ 234,734

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

~46~

(e)Expected contributions to the defined benefit pension plans of the Group for the year ending December 31, 2020 amounts to $136,250.

December 31, 2020 amounts to $136,250.
(f)As of December 31, 2019, the weighted average duration of the retirement	plan is 9 to 24 years.
The analysis of timing of the future pension payment was as follows:
Within 1 year	$	174,007
1-2 year(s)		191,810
2-5 years		742,720
Over 5 years		14,161,200
	$	15,269,737

B. Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
(a) The Company’s mainland China subsidiaries have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC.) are based on certain percentage of employees’ monthly salaries and wages. The contribution percentage for the years ended December 31, 2019 and 2018 was 14%~20% and 14%~22%, respectively. Other than the monthly contributions, the Group has no further obligations.
(b)The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2019 and 2018 were $954,914 and $929,308, respectively.

(19) Other non-current liabilities

Other non-current liabilities
Guarantee deposit received Provision for decommissioning liability Deferred income Others	December 31, 2019 $ 3,560,485 508,707 17,285 282,343 $ 4,368,820	December 31, 2018
		$ 3,413,265 421,966 71,060 450,698
		$ 4,356,989

(20) Share capital

As of December 31, 2019, the Company’s authorized capital was $10,500,000, consisting of 1,050,000,000 shares of ordinary stock, and the paid-in capital was $10,396,223 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected. The number of the Company’s outstanding ordinary shares was both 1,039,622,255 shares as of December 31, 2019 and 2018.

(21) Capital surplus

In accordance with the Company Act of the Republic of China, any capital surplus arising from paidin capital in excess of the par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the Securities and Exchange Law of the Republic of China requires that the amount of capital surplus to be capitalized, as above, should not exceed 10% of paid-in capital each year. Capital surpluses should not be used to

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cover accumulated deficit unless the legal reserve is insufficient.

(22) Retained earnings
A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, must first be used to pay all taxes and offset prior years’ operating losses, then 10% of the remaining amount is to be set aside as a legal reserve. After setting aside or reversing a special reserve, in accordance with related laws, the remaining amount is distributable for the given period. The appropriation of the total distributable amount (that is, the distributable amount for the period along with accumulated unappropriated earnings from prior years) should be proposed by the Board of Directors and voted on by the shareholders at the shareholders’ meeting. The dividends and bonus to be distributed to shareholders may be 50%-100% of the total distributable amount, and 50%100% of dividends are to be distributed as cash dividends, and the remaining undistributed amount to set aside as unappropriated retained earnings.
B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of the legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
C. In accordance with the regulations, the Company shall set aside a special reserve for the debit balance on other equity items at the balance sheet date before distributing earnings. When the debit balance on other equity items is reversed subsequently, the reversed amount should be included in the distributable earnings.
D. The appropriations for 2018 and 2017 as resolved by the shareholders on June 12, 2019 and June 12, 2018, respectively, are as follows:

12, 2018, respectively, are as follows:
2018 Dividends per share Amount (in dollars) Legal reserve $ 1,020,639 Special reserve ( 398,859) Cash dividends 9,148,676 $ 8.80	2017 Dividends per share Amount (in dollars) $ 3,101,709 398,859 25,990,556 $ 25.00
	Amount $ 3,101,709 398,859 25,990,556
		$ 25.00

E. The appropriations for 2019 as resolved by the Board of Directors on February 27, 2020 are as follows:

follows:
Legal reserve Special reserve Cash dividends	2019 Dividends per share Amount (in dollars) $ 1,055,147 380,187 9,356,600 $ 9.00
	Amount $ 1,055,147 380,187 9,356,600
		$ 9.00

F. See Note 6(26) for information on employees’ compensation and directors’ and supervisors’ remuneration.

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(23) Other equity items

er equity items
At January 1 Revaluation: –Group –Associates Revaluation-tax Currency translation differences: –Group –Associates At December 31 At January 1 Adjustments under new standards Adjusted beginning balance Revaluation: –Group –Associates Revaluation-tax Currency translation differences: –Group –Associates At December 31				2019
		Financial statements translation differences of foreign operations ($ 279,829) - - - ( 584,090) ( 5,989) ($ 869,908)		Unrealized gains/(losses) on valuation of financial assets at fair value through other comprehensive income $ 333,434 161,718 4,518 ( 9,949) - - $ 489,721 2018				Total 53,605 161,718 4,518 9,949) 584,090) 5,989) 380,187)
				$ (		$ ( ( ( ($
				$			$
				2018
	Financial statements translation differences of foreign operations ($ 906,308) - ( 906,308) - ( - ( - 620,123 6,356 ($ 279,829)		Unrealized gains/(losses) on valuation of financial assets at fair value through other comprehensive income $ - 477,996 477,996 145,386 ) 2,842 ) 3,666 - - $ 333,434		Unrealized gains/(losses) on available- for-sale financial assets $ 507,449 ( 507,449) - - - - - - $ -			Total ($ 398,859 ) ( 29,453) ( 428,312 ) ( 145,386 ) ( 2,842 ) 3,666 620,123 6,356 $ 53,605

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(24) Operating revenue

ts with customers	For the year ended December 31, 2019 $ 256,058,888	For the year ended December 31, 2018 $ 244,887,853

Revenue from contracts with customers

A. Disaggregation of revenue from contracts with customers

The Group operates a chain of retail stores and derives revenue from the transfer of goods and services overtime and at a point in time. The operating revenue is categorized based on operating departments provided in Note 14(3) and goods or services recognition timing as follows:

For the year ended December 31, 2019 Timing of revenue recognition –At a point in time –Over time For the year ended December 31, 2018 Timing of revenue recognition –At a point in time –Over time	Convenience stores $ 156,893,846 522,698 $ 157,416,544 Convenience stores $ 152,882,351 530,400 $ 153,412,751	Retail business group $ 62,610,361 13,399,123 $ 76,009,484 Retail business group $ 58,123,410 11,335,903 $ 69,459,313	Logistics business group $ 1,164,306 936,045 $ 2,100,351 Logistics business group $ 1,791,172 230,899 $ 2,022,071	Others $ 19,622,849 909,660 $ 20,532,509 Others $ 19,146,737 846,981 $ 19,993,718	Total
					$ 240,291,362 15,767,526
					$ 256,058,888
					Total
					$ 231,943,670 12,944,183
					$ 244,887,853

B. Contract liabilities
(a) The Group has recognized the following revenue-related contract liabilities:

Contract liabilities – advance receipts of gift certificates and gift cards Contract liabilities – members’ deposits Contract liabilities – franchise fee Contract liabilities – customer loyalty programs Contract liabilities –others Contract liabilities –current Contract liabilities –non-current	December 31, 2019 $ 1,786,894 793,115 444,470 503,861 363,291 $ 3,891,631 December 31, 2019 $ 3,443,383 448,248 $ 3,891,631	December 31, 2018 $ 1,392,390 764,782 230,812 344,970 344,656 $ 3,077,610 December 31, 2018 $ 2,843,189 234,421 $ 3,077,610	January 1, 2018
			$ 2,104,769 1,246,600 231,312 346,011 352,677
			$ 4,281,369
			January 1, 2018
			$ 3,935,358 346,011
			$ 4,281,369

(b) Revenues recognized that were included in the contract liabilities balance at the beginning were $2,598,521 and $1,969,390 for the years ended December 31, 2019 and 2018, respectively.

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(25) Expenses by nature

Expenses by nature
Net cost of goods sold Employee benefit expense Incentive bonuses for franchisees Depreciation and amortization Utilities expense Operating lease payments Other costs and expenses Total operating costs and operating expenses	For the year ended December 31, 2019 $ 150,081,406 26,225,115 21,822,920 18,751,911 4,559,080 1,029,585 20,538,977 $ 243,008,994	For the year ended December 31, 2018
		$ 143,437,684 25,533,260 20,904,939 6,577,856 4,230,128 12,433,194 18,935,968
		$ 232,053,029

(26) Employee benefit expense

Employee benefit expense
Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses	For the year ended December 31, 2019 $ 21,598,372 2,010,371 1,112,531 1,503,841 $ 26,225,115	For the year ended December 31, 2018 $ 21,058,795 1,952,864 1,081,184 1,440,417
		$ 25,533,260

A. According to the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall not be lower than 2% for employees’ compensation and shall not be higher than 2% for directors’ and supervisors’ remuneration.
B. For the years ended December 31, 2019 and 2018, employees’ compensation was accrued at $567,096 and $576,995, respectively; while directors’ and supervisors’ remuneration was accrued at $189,465 and $192,772, respectively.

The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 4.37% and 1.46% of profit of the current year distributable for the year ended December 31, 2019. The employees’ compensation and directors’ and supervisors’ remuneration resolved by the Board of Directors were $567,096 and $189,465 and the employees’ compensation will be distributed in the form of cash.

Employees’ compensation and directors’ and supervisors’ remuneration for 2018 as resolved at the meeting of Board of Directors were in agreement with those amounts recognized in the 2018 financial statements.

Information about employees’ compensation and directors’ and supervisors’ remuneration of the Company as resolved by the Board of Directors and shareholders will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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(27) Other income

Other income
		For the year ended			For the year ended
		December 31, 2019			December 31, 2018
Interest income		$	793,898		$	699,385
Grants income			649,919			606,034
Rental revenue			306,257			136,430
Dividend income			49,542			65,124
Others			1,078,716			918,300
		$	2,878,332		$	2,425,273
Other gains and losses
		For the year ended			For the year ended
		December 31, 2019			December 31, 2018
Gains from lease modification		$	58,910		$	-
Loss on disposal of property, plant and equipment	(		11,428)	(		33,275)
(Loss) gain on disposal of investments	(		3,402)			59
Gain on reversal (impairment loss)			13,618	(		10,788 )
Other	(		86,735)	(		93,182)
	($		29,037 )	($		137,186 )
Finance cost
		For the year ended			For the year ended
		December 31, 2019		December 31, 2018
Interest expense	$		1,216,000	$		144,662

(28) Other gains and losses

(29) Finance cost

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(30) Income tax

A. Income tax expense

(a)Components of income tax expense:

e tax ome tax expense Components of income tax expense:
		For the year ended				For the year ended
		December 31, 2019				December 31, 2018
Current tax:
Current tax on profits for the year		$	3,132,151			$	3,013,928
Tax on undistributed surplus earnings			20,212				135,159
(Over) under provision of prior year's income tax	(		161,668	)			13,108
Total current tax	$		2,990,695				3,162,195
Deferred tax:
Origination and reversal of temporary
differences			61,383		(		144,430 )
Impact of change in tax rate			-				640,304
Total deferred tax			61,383				495,874
Income tax expense		$	3,052,078			$	3,658,069
The income tax (charge)/credit relating to the components of other comprehensive income is
as follows:
		For the year ended				For the year ended
		December 31, 2019				December 31, 2018
Remeasurement of defined benefit obligations	($		10,816	)	($		25,881 )
Changes in fair value of financial assets at fair
value through other comprehensive income			9,949		(		6,984 )
Impact of change in tax rate			-		(		46,977)
	($		867	)	($		79,842 )

(b)The income tax (charge)/credit relating to the components of other comprehensive income is as follows:

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B. Reconciliation between income tax expense and accounting profit

		For the year ended	For the year ended	For the year ended	For the year ended
		December 31, 2019		December 31, 2018
Tax calculated based on profit before tax and
statutory tax rate		$	3,843,762	$	3,727,941
Expenses disallowed by tax regulation	(		647,195 ) (		800,533 )
Capital reduction plan to offset accumulated
deficit by domestic subsidiaries			- (		8,302 )
Tax on undistributed surplus earnings			20,212		135,159
(Over) under provision of prior year’s income tax	(		161,668 )		13,108
Effect from investment tax credits			311		-
Effect from tax losses	(		3,344 ) (		49,608 )
Effect from changes in tax regulation			-		640,304
Income tax expense		$	3,052,078	$	3,658,069

The difference between the Group’s accounting income and taxable income in 2019 and 2018 was mainly due to the dividend income, investment tax credits and the operating loss of subsidiaries.

C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows:

are as follows:
Deferred tax assets Allowance for doubtful accounts Unrealized sales allowance Loss on inventory market value decline Unrealized expenses Book-tax difference of pension Remeasurements of the defined benefit plan Tax losses Others Deferred tax liabilities Unrealized gain Foreign investment income		2019
	January 1 Recognized in profit or loss $ 14,739 ($ 637) 10,229 ( 1,760 ) 25,448 6,088 511,276 204,766 154,720 ( 6,111 ) 794,401 - 93,681 ( 57,404 ) 122,549 ( 22,584) 1,727,043 122,358 ( 1,496,065) 38,688 (3,890,774) ( 222,429) (5,386,839) ( 183,741) ($ 3,659,796) ($ 61,383)		Recognized in other comprehensive income December 31 $ - $ 14,102 - 8,469 - 31,536 - 716,042 - 148,609 10,816 805,217 - 36,277 - 99,965 10,816 1,860,217 ( 9,949) ( 1,467,326) - ( 4,113,203) (9,949) ( 5,580,529) $ 867 ($ 3,720,312)	December 31 $ 14,102 8,469 31,536 716,042 148,609 805,217 36,277 99,965
				1,860,217

~54~

January 1 Recognized in profit or loss Deferred tax assets Allowance for doubtful accounts $ 13,261 ($ 975) Unrealized sales allowance 14,828 ( 7,382 ) Loss on inventory market value decline 27,106 ( 4,454) Unrealized expenses 403,819 62,319 Book-tax difference of pension 82,532 ( 238 ) Remeasurements of the defined benefit plan 718,129 - Tax losses 86,867 ( 8,515 ) Others 62,642 23,461 1,409,184 64,216 Deferred tax liabilities Unrealized gain ( 1,308,068) 35,835 Foreign investment income(3,344,880) 44,379 (4,652,948) 80,214 ($ 3,243,764 ) $ 144,430			2018
			Recognized in other comprehensive income Effect from changes in tax regulation December 31 $ - $ 2,453 $ 14,739 - 2,783 10,229 - 2,796 25,448 - 45,138 511,276 - 72,426 154,720 25,881 50,391 794,401 - 15,329 93,681 - 36,446 122,549 25,881 227,762 1,727,043 6,984 ( 230,816) ( 1,496,065) - ( 590,273) ( 3,890,774) 6,984 ( 821,089) ( 5,386,839) $ 32,865 ($ 593,327) ($ 3,659,796)		December 31 $ 14,739 10,229 25,448 511,276 154,720 794,401 93,681 122,549
					1,727,043

D. Expiration dates of unused taxable loss and amounts of unrecognized deferred tax assets are as follows:

December 31, 2019

	December 31,2019	December 31,2019
Year incurred	Unrecognized Amount filed/assessed Unused amount deferred tax assets $ 1,912,586 $ 1,912,586 $ 1,731,204 December 31,2018		Usable until 2020~2029 Usable until 2019~2028
2010~2019
Year incurred	Amount filed/assessed $ 2,620,037	Unrecognized Unused amount deferred tax assets $ 2,620,037 $ 2,151,633
2009~2018

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E. The amounts of deductible temporary differences that were not recognized as deferred tax assets are as follows:

are as follows:
	For the year ended	For the year ended
	December 31, 2019	December 31, 2018
Deductible temporary differences	$ 109,999	$ 116,691

F. The Company’s income tax returns through 2017 have been assessed and approved by the Tax Authority.
G. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China on February 7, 2018, the Company’s applicable income tax rate was raised from 17% to 20% effective from January 1, 2018. The Group has assessed the impact of the change in income tax rate.

(31) Earnings per share

change in income tax rate. Earnings per share
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ bonus Shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	For the year ended December 31, 2019 Amount Weighted average number of ordinary shares outstanding Earnings per share after tax (shares in thousands) (in dollars) $ 10,542,860 1,039,622 $ 10.14 $ 10,542,860 1,039,622 - 2,169 $ 10,542,860 1,041,791 $ 10.12
	Amount after tax $ 10,542,860 $ 10,542,860 - $ 10,542,860	Weighted average number of ordinary shares outstanding (shares in thousands) 1,039,622 1,039,622 2,169 1,041,791

~56~

Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ bonus Shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	For the year ended December 31, 2018 Amount Weighted average number of ordinary shares outstanding Earnings per share after tax (shares in thousands) (in dollars) $ 10,206,388 1,039,622 $ 9.82 $ 10,206,388 1,039,622 - 2,437 $ 10,206,388 1,042,059 $ 9.79	For the year ended December 31, 2018 Amount Weighted average number of ordinary shares outstanding Earnings per share after tax (shares in thousands) (in dollars) $ 10,206,388 1,039,622 $ 9.82 $ 10,206,388 1,039,622 - 2,437 $ 10,206,388 1,042,059 $ 9.79
	Amount after tax $ 10,206,388 $ 10,206,388 - $ 10,206,388	Weighted average number of ordinary shares outstanding (shares in thousands) 1,039,622 1,039,622 2,437 1,042,059

(32) Operating leases

Lessor

Prior to 2019

The Group leases its investment property and shopping centres to others under operating lease agreements on terms between two and ten years. The future aggregate minimum lease payments receivable under non-cancellable operating leases are as follows:

Less than one year Over one year but less than five years Over five years	December 31, 2018 $ 90,898 224,263 6,195 $ 321,356

Lessee

A. The Group leases business premises for its stores. The lease terms are between one and twenty years, and certain lease agreements are renewable at the end of the lease period. Rents are paid in accordance with the agreements. Some leases incur additional rent expenses based on the operating revenue of stores or changes in local price indices. Rental expense recognized in profit and loss for the years ended December 31, 2018 are as follows:

and loss for the years ended December 31, 2018 are as follows:
Rental expense Contingent rents	For the year ended December 31, 2018 $ 11,594,263
	$ 838,931

~57~

The future aggregate minimum lease payments under non-cancellable operating leases are as follows:

Less than one year Over one year but less than five years Over five years	December 31, 2018 $ 10,955,633 36,200,668 22,658,778 $ 69,815,079

B. The Group has sub-leased certain business premises to others. Sublease revenues recognized in profit and loss for the year ended December 31, 2018 are as follows:

profit and loss for the year ended December 31, 2018 are as follows:
	For the year ended
	December 31, 2018
Sublease revenues	$ 272,051
Contingent rents	$ 1,212,481

In accordance with non-cancellable sub-lease agreements as of December 31, 2018, sub-lease payments totalling $387,765 are expected to be collected between 2019 and 2028.

(33) Supplemental cash flow information

Investing activities with partial cash payments

Purchase of property, plant and equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment ( Cash paid during the year	December 31, 2019 $ 7,699,028 914,557 1,364,370) ( $ 7,249,215	December 31, 2018 $ 6,514,533 1,071,524 914,557) $ 6,671,500

(34) Changes in liabilities from financing activities

2019

At January 1 Changes in cash flow from financing activities ( Interest paid (Note) Impact of changes in foreign exchange rate Changes in other non-cash items At December 31	Short-term borrowings $ 7,237,785 1,223,127) ( - - - $ 6,014,658	Long-term borrowing Lease liabilities $ 847,040 $52,938,613 459,144) ( 11,329,825) - ( 1,090,750) 6,244 ( 15,592) 113,972 28,324,592 $ 508,112 $ 68,827,038	Guarantee deposits received Other non- current liabilities Liabilities from financing activities- gross $ 3,413,265 $ 943,724 $ 65,380,427 147,220 ( 222,130) ( 13,087,006) - - ( 1,090,750) - - ( 9,348) - 86,741 28,525,305 $ 3,560,485 $ 808,335 $ 79,718,628

Note: Presented in cash flows from operating activities.

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2018

At January 1 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items At December 31	Short-term borrowings $ 965,180 6,272,605 ( - - $ 7,237,785	Short-term notes and bills payable Long-term borrowings $ 250,000 $ 1,105,451 250,000) ( 184,135) - ( 12,170) - ( 62,106) $ - $ 847,040	Guarantee deposits received $ 3,355,172 58,093 - - ( $ 3,413,265	Other non- current l liabilities $ 1,066,559 223,176 - ( 346,011) ( $ 943,724	Liabilities from financing activities- gross $ 6,742,362 6,119,739 12,170) 408,117) $ 12,441,814

7. RELATED PARTY TRANSACTIONS

(1) Parent and ultimate controlling party

The Company’s parent company and the Group’s ultimate parent company is Uni-President Enterprises Corp. which holds a 45.4% equity interest in the Company as of December 31, 2019.

(2) Names of related parties and relationship

Names of related parties Relationship with the Group Uni-President Enterprises Corp. Ultimate parent company Mister Donut Taiwan Co., Ltd. Investees of the Company accounted for using the equity method Presicarre Corp. 〃 Uni-President Organics Corp. 〃 President Technology Corp. 〃 President Fair Development Corp. 〃 Uni-President Development Corp. 〃 Presco Netmarketing Inc. Subsidiaries of ultimate parent company Uni-President (Kunshan) Trading Co., Ltd. 〃 Tait Marketing & Distribution Co., Ltd. 〃 Tung Ang Enterprises Corp. 〃 Lien-Bo Enterprises Corp 〃 President Packaging Corp. 〃 President Tokyo Corp. 〃 Shanghai Songjiang President Enterprises Co., 〃 Ltd. Kai Ya Food Co., Ltd. Sub-subsidiary of ultimate parent company Zhenzhou President Enterprises Co., Ltd. Subsidiary of ultimate parent company’s subsubsidiary Kuang Chuan Dairy Corp. Investees of ultimate parent company accounted for using the equity method Wei Lih Food Industrial Co., Ltd. 〃 Prince Housing & Development Corp. Investees of ultimate parent company accounted for

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Names of related parties Relationship with the Group using the equity method Wei Kuon Co., Ltd. Subsidiaries of investee of ultimate parent company accounted for using the equity method Tung Chan Enterprises Corp. Investees of subsidiaries of ultimate parent company accounted for using the equity method Kang Na Hsiung Enterprises Co., Ltd. 〃 Koasa Yamako Corp. The Company is a director of Koasa Yamako Corp.

(3) Significant related party transactions and balances

A. Operating revenue

Sales of goods Ultimate parent company Associates Sister companies Other related parties Sales of services Ultimate parent company Associates Sister companies Other related parties	For the year ended December 31, 2019 $ 580,342 140,979 278,874 74,030 12,417 55,905 14,376 5,265 $ 1,162,188	For the year ended December 31, 2018 $ 578,394 146,634 302,624 71,926 11,421 39,491 12,048 4,909 $ 1,167,447

Goods are sold based on the price lists in force and terms that would be available to third parties. B. Purchases

Ultimate parent company Associates Sister companies Other related parties	For the year ended December 31, 2019 $ 16,338,812 252,638 4,433,169 2,427,687 $ 23,452,306	For the year ended December 31, 2018 $ 15,352,392 286,086 3,927,299 2,139,641 $ 21,705,418

Goods are purchased from related parties on normal commercial terms and conditions.

C. Receivables from related parties

Ultimate parent company Associates Sister companies Other related parties	December 31, 2019 $ 245,123 64,598 81,774 4,289 $ 395,784	December 31, 2018 $ 201,321 73,101 85,384 4,722 $ 364,528

~60~

Receivables from related parties mainly arise from sales transactions. Receivables are unsecured in nature and bear no interest. There are no provisions for receivables from related parties.

D. Payables to related parties

Ultimate parentcompany Associates Sister companies Other related parties	December 31, 2019 $ 1,765,350 65,907 583,883 348,524 $ 2,763,664	December 31, 2018 $ 1,631,289 63,739 442,907 370,822 $ 2,508,757

Payables to related parties mainly arise from purchase transactions. Payables bear no interest.

`－` E. Leasing arrangements lessee

(a) The Group holds various lease agreements with related parties based on the market price. The leases were paid on a monthly basis.

(b) Acquisition of right of use assets

The leases were paid on a monthly basis. Acquisition of right of use assets
Ultimate parentcompany Associates Sister companies Other related parties	For the year ended December 31, 2019
	$ 112,002 12,157 12,398 513,952 $ 650,509

On January 1, 2019 (the date of initial application of IFRS 16), the Group increased rightof-use assets by $1,401,225.

(c) Rent expense

of-use assets by $1,401,225. Rent expense
Ultimate parentcompany Associates Sister companies Other related parties Lease liabilities Ultimate parentcompany Associates Sister companies Other related parties	For the year ended December 31, 2019
	$ 13,434 70,200 15,203 1,488 $ 100,325 December 31, 2019 $ 128,016 546,049 294,591 524,690 $ 1,493,346

(d) Lease liabilities

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F. Property transactions

(a) Acquisition of property, plant and equipment:

roperty transactions a) Acquisition of property, plant and equipment:	y, plant and equipment:
Accounts Associates Property, plant and equipment Accounts Associates Property, plant and equipment (b) Disposal of financial assets: Accounts No. of shares Sister company Investments accounted for using equity method 108160	Accounts	Objects Grand Bills Finance Corp.		$	For the year ended December 31, 2019 67,113
	Property, plant and equipment Accounts
				$	For the year ended December 31, 2018 38,384
				For the year ended December 31, 2018
			Proceeds $ 1,828			Gain
						$ 59

(4) Key management compensation

Other short-term employee benefits

For the year ended For the year ended December 31, 2019 December 31, 2018 $ 705,741 $ 675,400

8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

9.	Book value Pledged asset December 31, 2019 December 31, 2018 Purpose Accounts receivable $ - $ 20,000 Performance guarantee Land 128,643 128,643 Long-term and short-term borrowings and guarantee facilities Buildings 42,130 50,230 Long-term and short-term borrowings and guarantee facilities Transportation equipment 591,493 586,353 Long-term borrowings and long-term installment payable Pledged time deposits (Recognized as “Other 61,925 56,495 Performance guarantee non-current assets - guarantee deposits paid ”) $ 824,191 $ 841,721 SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS	Purpose

None.

10. SIGNIFICANT DISASTER LOSS

None.

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11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

The Group’s objectives in this area are to retain the confidence of investors and the market, to fund future capital expenditures and stable dividend flows for ordinary shares, and to maintain the most appropriate capital structure to maximize the equity interest of shareholders.

(2) Financial instruments

A. Financial instruments by category

ncial instruments Financial instruments by category
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Qualifying equity instrument Financial assets at amortized cost Cash and cash equivalents Accounts receivable, net Other receivables Other current assets (Note) Guarantee deposits paid Other non-current assets (Note) Financial liabilities Financial liabilities at amortized cost Short-term borrowings Notes payable Accounts payable Other payables Long-term borrowings (including current portion) Guarantee deposits received Lease liabilities	December 31, 2019 $ 1,781,865 $ 807,115 - 807,115 $ 45,445,395 5,808,480 1,460,354 2,172,863 2,911,887 40,351 57,839,330 $ 60,428,310 $ 6,014,658 1,214,702 23,587,695 26,596,505 730,000 3,560,485 61,704,045 $ 68,827,038 $ 130,531,083	December 31, 2018 $ 929,908
		$ 644,614 200,731
		845,345
		$ 48,530,648 5,264,573 1,535,507 1,954,776 2,766,913 36,086
		60,088,503
		$ 61,863,756
		$ 7,237,785 1,866,610 23,148,683 27,954,181 1,182,900 3,413,265
		64,803,424
		$ -
		$ 64,803,424

Note:The Group’s trust account for advance receipts of gift certificates and deposits.

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B. Risk management policies
(a) The Group’s risk management and hedging policies mainly focus on hedging business risk. The Group also establishes hedge positions when trading derivative financial instruments. The choice of instruments should hedge risks relating to interest expense, assets or liabilities arising from business operations.
(b) For managing derivative instruments, the treasury department is responsible for managing trading positions of derivative instruments and assesses market values periodically. If transactions and gains (losses) are abnormal, the treasury will respond accordingly and report to the Board of Directors immediately.
(c) There is no related transaction about derivative financial instruments that are used to hedge certain exchange rate risk.

C. Significant financial risks and degrees of financial risks

(a) Market risk

Foreign exchange risk

I. The Group operates internationally and is exposed to foreign exchange risk arising from of the Company and its subsidiaries used in various functional currency, the transactions primarily with respect to the USD and RMB. Exchange risk arises from future commercial transactions and recognized assets and liabilities.
II. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currencies.
III. The Company’s and certain subsidiaries’ functional currency is New Taiwan dollar (NTD), and for other certain subsidiaries, the functional currency is Renminbi (RMB). The details of assets and liabilities denominated in foreign currencies whose values would be materially affected by exchange rate fluctuations are as follows:

December 31, 2019 Foreign currency amount Exchange Book value (In thousands) rate (NTD) $ 792 29.9800 $ 23,744 900 4.3055 3,875 43,340 0.2760 11,962 766 3.8478 2,947 273 33.5900 9,170 $ 907,500 0.2760 $ 250,470 $ 3,610 29.9800 $ 108,228 52,532 0.2760 14,499 996 4.3055 4,288	December 31, 2019 Foreign currency amount Exchange Book value (In thousands) rate (NTD) $ 792 29.9800 $ 23,744 900 4.3055 3,875 43,340 0.2760 11,962 766 3.8478 2,947 273 33.5900 9,170 $ 907,500 0.2760 $ 250,470 $ 3,610 29.9800 $ 108,228 52,532 0.2760 14,499 996 4.3055 4,288	December 31, 2018	December 31, 2018	December 31, 2018
Foreign currency amount (In thousands) $ 792 900 43,340 766 273 $ 907,500 $ 3,610 52,532 996	Exchange rate 29.9800 4.3055 0.2760 3.8478 33.5900 0.2760 29.9800 0.2760 4.3055	Foreign currency amount (In thousands) $ 739 1,742 8,522 - - $ 721,500 $ 3,745 80,786 1,152	Exchange rate 30.7150 4.4654 0.2782 - - 0.2782 30.7150 0.2782 4.4654	Book value (NTD)
				$ 22,698 7,779 2,371 - - $ 200,721 $ 115,028 22,475 5,144

IV. Total exchange gain, including realized and unrealized arising from significant foreign exchange variations on monetary items held by the Group amounted to $5,005 and $57,437 for the years ended December 31, 2019 and 2018, respectively.

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V. Analysis of foreign currency market risk arising from significant foreign exchange variation. Foreign exchange risk with respect to USD primarily arises from the exchange gain or loss resulting from foreign currency translation of cash and cash equivalents, accounts receivable and accounts payable denominated in USD. As of December 31, 2019 and 2018, if the NTD:USD exchange rate appreciates/depreciates by 5% with all other factors remaining constant, the Group’s profit for the years ended December 31, 2019 and 2018 would increase/decrease by $4,224 and $4,616, respectively. Foreign exchange risk with respect to JPY primarily arises from the exchange gain or loss resulting from foreign currency translation of cash and cash equivalents, accounts receivable, financial assets at fair value through other comprehensive income - noncurrent and accounts payable denominated in JPY. If the NTD:JPY exchange rate appreciates/depreciates by 5%, with all other factors remaining constant, the Group’s comprehensive income for the years ended December 31, 2019 and 2018 would increase/decrease by $12,397 and $9,031, respectively.

Price risk

I. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.
II. The Group’s investments in equity securities comprise shares and open-ended funds issued by the domestic companies. The prices of equity securities would change due to change of the future value of investee companies. If the prices of these equity securities increase / decrease by 5%, and open-ended funds increase / decrease by 0.25%, with all other variables held constant, the post-tax profit for the years ended December 31, 2019 and 2018 would have increased/decreased by $8,519 and $6,395, respectively, as a result of gains/losses on equity securities and open-ended funds classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $40,356 and $32,231, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

I. The Group’s interest rate risk arises from short-term borrowings and long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk, which are partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. For the years ended December 31, 2019 and 2018, the Group’s borrowings at variable rate were mainly denominated in New Taiwan dollars and Philippine Peso.
II. If the borrowing interest rate had increased/decreased by 0.25% with all other variables held constant, profit, net of tax for the years ended December 31, 2019 and 2018 would have increased/decreased by $1,825 and $2,332, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

(b) Credit risk

I. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at fair value through other comprehensive income.

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II. The Group manages their credit risk taking into consideration the entire group’s concern. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted.
III. The Group adopts management of credit risk, whereby the default occurs when the contract payments are past due over a certain number of days.
IV. The Group assess whether there has been a significant increase in credit risk on that instrument since initial recognition if the contract payments were past due over certain number of days based on the terms.
V. The Group operates a chain of retail stores, thus the ratio of accounts receivable to total asset is low and the probability that accounts receivable cannot be received is low. The Group classifies customers’ accounts receivable in accordance with credit rating of customer. The Group applies the simplified approach to estimate expected credit loss to assess the default possibility of accounts receivable. Movements in relation to the group applying the simplified approach to provide loss allowance for accounts receivable are as follows:

			2019
	Accounts receivable
At January 1		$	55,464
Provision for impairment			8,640
Reversal of impairment	(		3,978)
Write-offs	(		1,974)
Effect of foreign exchange	(		2,323)
At December 31		$	55,829
			2018
	Accounts receivable
At January 1_IAS 39		$	48,471
Adjustments under new standards			10,889
At January 1_IFRS 9			59,360
Provision for impairment			17,080
Reversal of impairment			3,873
Write-offs	(		21,509)
Effect of foreign exchange	(		3,340)
At December 31		$	55,464

VI. The Group’s investment in debt instrument is the government bond, which was issued by R.O.C, the risk of expected credit loss is low. The Group has no unrecognized allowance for investment in debt instrument at fair value through other comprehensive income for the years ended December 31, 2019 and 2018.
VII. The Group has no written-off financial assets that are still under recourse procedures on December 31, 2019 and 2018.

(c) Liquidity risk

I. Cash flow forecasting is performed by the operating entities of the Group and aggregated by the Group’s finance department. It monitors rolling forecasts of liquidity requirements to ensure the Group has sufficient cash to meet operational needs, while maintaining sufficient headroom on its undrawn committed borrowing facilities, at all times, so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, and compliance with internal balance sheet ratio targets.
II. The Group invests surplus cash in interest bearing current accounts, time deposits, money market fund and marketable securities, and chooses instruments with appropriate maturities

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or sufficient liquidity to provide sufficient headroom as determined by the aforementioned forecasting. The Group held money market funds of $1,696,300 and $844,225 as at December 31, 2019 and 2018, respectively, which are expected to readily generate cash inflows for the purpose of managing liquidity risk.

III. The Group has undrawn borrowing facilities of $12,597,913 and $14,006,462 as of December 31, 2019 and 2018, respectively.
IV. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. Except for notes payable, accounts payable and other payables, whose contractual undiscounted cash flows are about book value, maturing within one-year, the amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

December 31, 2019 Short-term borrowings Lease liabilities Long-term borrowings (including current portion)	Less than Between Between 1 year 1 and 2 years 2 and 3 years Over 3 years $ 6,020,015 $ - $ - $ - 12,331,925 12,256,464 10,678,168 37,312,481 244,733 122,071 99,136 316,524	Over 3 years

Non-derivative financial liabilities:

December 31, 2018 Short-term borrowings Long-term borrowings	Less than Between Between 1 year 1 and 2 years 2 and 3 years Over 3 years $ 7,286,725 $ - $ - $ - 372,094 264,270 189,983 407,867	Over 3 years

(including current portion)

V. The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different.

(3) Fair value information

A. The different levels of the inputs used in valuation techniques to measure the fair value of financial and non-financial instruments are defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks, beneficiary certificates and on-the-run Taiwan central government bonds is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

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Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investments without an active market is included in Level 3.
B. Fair value information of the Group’s investment property at cost is provided in Note 6(10).
C. Financial instruments not measured at fair value
(a) Except for those listed in the table below, the carrying amounts of cash and cash equivalents, accounts receivable, other receivables, short-term borrowings, notes payable, accounts payable, other payables and long-term borrowings are approximate to their fair values.

	December 31, 2019	December 31, 2019
Book value $ 2,911,887 $ 3,560,485		Fair value
	Level 1 Level 2 $ - $ - $ - $ - December 31, 2018		Level 3
			$ 2,887,439
			$ 3,530,355
			Level 3 $ 2,748,262
Book value $ 2,766,913 $ 3,413,265		Fair value
	Level 1 $ - $ -	Level 2 $ - $ -
			$ 3,384,951

(b) Guarantee deposits paid/received are measured at fair value, which is calculated based on the discounted future cash flow.
D. The related information for financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:
(a) Classification according to the nature of assets and liabilities, relevant information is as follows:

December 31, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Equity securities Financial assets at fair value through other comprehensive income Equity securities	Level 1 $ 1,696,300 - 1,696,300 802,767 802,767 $ 2,499,067	Level 2 $ - - - - - $ -	Level 3 $ - 85,565 85,565 4,348 4,348 $ 89,913	Total
				$ 1,696,300 85,565
				1,781,865
				807,115
				807,115
				$ 2,588,980

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December 31, 2018 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Equity securities Financial assets at fair value through other comprehensive income Equity securities Debt securities	Level 1 $ 844,225 - 844,225 640,266 200,731 840,997 $ 1,685,222	Level 2 $ - - - - - - $ -	Level 3 $ - 85,683 85,683 4,348 - 4,348 $ 90,031	Total
				$ 844,225 85,683
				929,908
				644,614 200,731
				845,345
				$ 1,775,253

(b) The methods and assumptions the Group used to measure fair value are as follows:
I. The instruments the Group uses market quoted prices as their fair values (that is, Level 1) are listed below:

Listed shares Open-ended fund Government bond Market quoted price Closing price Net asset value Closing price

II. Except for financial instruments with active markets, the fair value of other financial instruments is measured using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, by discounted cash flow method or other valuation methods, including calculations by applying models using market information available at the consolidated balance sheet date.
E. For the years ended December 31, 2019 and 2018, there was no transfer between Level 1 and Level 2.
F. For the years ended December 31, 2019 and 2018, there was no significant transfer in or out of Level 3.
G. The Group is in charge of valuation procedures for fair value measurements being categorized within Level 3, which to verify the independent fair value of financial instruments. Such assessments are to ensure the valuation results are reasonable by applying independent information to compare the results to current market conditions, confirming the information resources are independent, reliable and in line with other resources, and represented as the exercisable price, and frequently making any other necessary adjustments to the fair value. Investment property is assessed by independent appraisers or based on recent closing prices of similar property in the neighbouring area.

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H. The qualitative information on significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement are provided below:

Non-derivative equity instrument: Unlisted shares Non-derivative equity instrument: Unlisted shares	Fair value at December 31, 2019 $ 89,913 Fair value at December 31, 2018 $ 90,031	Valuation technique Market comparable companies Net asset value Valuation technique Market comparable companies Net asset value	Significant unobservable input Price to book ratio multiplier Net asset value Significant unobservable input Price to book ratio multiplier Net asset value	Range (weighted average) 2.94 - Range (weighted average) 2.61 -	Relationship of inputs to fair value
					The higher the multiplier, the higher the fair value The higher the net asset value, the higher the fair value Relationship of inputs to fair value
					The higher the multiplier, the higher the fair value The higher the net asset value, the higher the fair value

I. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, the use of different valuation models or assumptions may result in different measurements. If net assets from financial assets and liabilities categorized within Level 3 had increased or decreased by 1%, other comprehensive income would not have been significantly impacted as of December 31, 2019 and 2018.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: None.
B. Provision of endorsements and guarantees to others: None.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to Table 1.
D. Acquisition or sale of the same security with the accumulated cost reaching $300 million or 20% of the Company’s paid-in capital: Please refer to Table 2.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to Table 3.

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H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please
- refer to Table 4.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Please refer to Table 5.
(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to Table 6.

(3) Information on investments in Mainland China

A. Basic information: Please refer to Table 7.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

~71~

14. SEGMENT INFORMATION

(1) General information

Management has determined the reportable operating segments based on reports reviewed by the chief operating decision-maker and used to make strategic decisions.

There was no material change in the basis for formation of entities and division of segments in the Group or in the measurement basis for segment information during the year.

The Chief Operating Decision-Maker considers the business from industry and geographic perspectives. By industry, the Group focuses on convenience stores, retail business groups, logistics business groups and others. Geographically, the Group focuses on Taiwan and Mainland China where most of its business premises are located. As the operation of convenience stores in Taiwan is the focus of the Group, it is classified as a single operating segment. The whole of Mainland China is considered the same operating segment.

The revenue of the Group’s reportable segments is derived from the operations of convenience stores, retail business group and logistics business group. Other operating segments include a restaurant-related business group, supporting business group and China business. The supporting business group mainly provides services relating to the Group’s business, such as system maintenance and development and food manufacturing and supply.

(2) Measurement of segment information

The Chief Operating Decision-Maker evaluates the performance of the operating segments based on operating revenue and profit before income tax, which are the basis for measuring performance.

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(3) Segment information

The segment information provided to the Chief Operating Decision-Maker for the reportable segments is as follows:

External revenue (net) Internal department revenue Total segment revenue Segment income Depreciation and amortization ( Gain (loss) on investments accounted for using equity method Income tax expense ( Interest income Interest expense ( External revenue (net) Internal department revenue Total segment revenue Segment income Depreciation and amortization ( Gain (loss) on investments accounted for using equity method Income tax expense ( Interest income Interest expense		For the year ended December 31, 2019	For the year ended December 31, 2019	For the year ended December 31, 2019	For the year ended December 31, 2019	Total $ 256,058,888 - $ 256,058,888 $ 15,164,187 $ 18,751,911 ) $ 480,998 $ 3,052,078 ) $ 793,898 $ 1,216,000 ) Total $ 244,887,853 - $ 244,887,853 $ 15,402,347 $ 6,577,856 ) $ 424,098 $ 3,658,069 ) $ 699,385 $ 144,662 )
	Convenience stores $ 157,416,544 615,023 $ 158,031,567 $ 12,220,466 $ 9,042,048 ) ( $ 4,185,310 ( $ 1,677,606 ) ( $ 38,037 $ 359,593 ) (	Retail Logistics Other operating Adjustment and business group business group segments elimination $ 76,009,484 $ 2,100,351 $ 20,532,509 $ - 2,235,363 13,367,407 7,194,186 ( 23,411,979) $ 78,244,847 $ 15,467,758 $ 27,726,695 ($ 23,411,979 ) $ 3,866,585 $ 1,237,098 $ 2,853,051 ($ 5,013,013 ) $ 5,384,084 ) ($ 1,281,129 ) ($ 2,937,381 ) ($ 107,269 ) ( $ 13,562 ) $ 149,382 $ 1,024,423 ($ 4,864,555 ) $ 904,776 ) ($ 221,432 ) ($ 287,096 ) $ 38,832 ( $ 43,583 $ 9,128 $ 703,151 ($ 1 ) $ 634,522 ) ($ 50,629 ) ($ 175,457 ) $ 4,201 ( For the year ended December 31, 2018
	Convenience stores $ 153,412,751 661,980 $ 154,074,731 $ 12,433,791 $ 1,994,987 ) ( $ 3,473,458 ( $ 2,227,402 ) ( $ 83,534 $ 42,971 )	Retail business group $ 69,459,313 2,229,011 $ 71,688,324 $ 3,718,428 $ 2,241,246 ) ( $ 47,676) $ 771,310 ) ( $ 29,573 $ 44,110 )	Logistics business group $ 2,022,071 13,091,717 $ 15,113,788 $ 1,164,775 $ 781,950 ) ( $ 113,275 $ 199,521 ) ( $ 8,896 $ 10,158 )	Other operating segments $ 19,993,718 6,680,078 ( $ 26,673,796 ( $ 2,159,858 ( $ 1,365,513 ) ( $ 706,423 ( $ 272,922 ) ( $ 577,382 $ 47,423 )	Adjustment and elimination $ - 22,662,786) $ 22,662,786 ) $ 4,074,505 ) $ 194,160 ) ( $ 3,821,382 ) $ 186,914 ) ( $ - $ -

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(4) Reconciliation of segment income (loss)

Revenue from external customers and segment income (loss) reported to the Chief Operating Decision-Maker are measured using the same method as for revenue and profit before tax in the financial statements. Thus, no reconciliation is needed.

(5) Information on products and services

Revenue from external customers is mainly from retail services and services provided. Details of revenue is as follows:

inancial statements. Thus, no reconciliation is needed. Information on products and services Revenue from external customers is mainly from retail revenue is as follows:	services and services	provided. Details of
Convenience stores(including foreign subsidiary) Sales of daily items Gas station Delivery service Logistics service Restaurants Others	For the year ended December 31, 2019 $ 192,059,882 24,183,746 10,272,603 10,781,896 2,100,351 12,659,972 4,000,438 $ 256,058,888	For the year ended December 31, 2018
		$ 181,384,121 24,200,568 10,801,643 10,640,153 2,022,071 12,040,722 3,798,575
		$ 244,887,853

(6) Geographical information

As of and for the years ended December 31, 2019 and 2018, the information on geographic area is as follows:

s follows:
Taiwan Others	2019 Non-current Revenue assets $ 216,098,825 $ 95,664,520 39,960,063 13,221,473 $ 256,058,888 $ 108,885,993	2018 Non-current Revenue assets $ 211,270,304 $ 34,681,923 33,617,549 5,711,638 $ 244,887,853 $ 40,393,561
	Revenue $ 216,098,825 39,960,063 $ 256,058,888	Revenue $ 211,270,304 33,617,549 $ 244,887,853

(7) Major customer information

No customers constituted more than 10% of the Group’s total revenue for the years ended December 31, 2019 and 2018.

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Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2019

Securities held by	Type and name of securities	Relationship with the securities issuer	General ledger account		As of Decemb	er 31,2019		Footnote
				Number of shares	Book value	Ownership (%)	Fair value
President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. Mech-President Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. Books.com. Co., Ltd. Chieh Shun Logistics International Corp. Chieh Shun Logistics International Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. President Drugstore Business Corp. President Information Corp. President Information Corp. President Information Corp. President Logistics International Corp. President Logistics International Corp. President Pharmaceutical Corp. President Pharmaceutical Corp. Q-ware Systems & Services Corp.	Stock: President Investment Trust Corp. Career Consulting Co. Ltd. Kaohsiung Rapid Transit Corp. PK Venture Capital Corp. Yamay International Development Corp. President Securities Corp. Duskin Co., Ltd. Koasa Yamako Corp. Beneficiary certificates: Jih Sun Money Market Fund Taishin 1699 Money Market Fund UPAMC James Bond Money Market Fund FSITC Taiwan Money Market Fund Prudential Financial Money Market Fund Allianz Global Investors Taiwan Money Market Fund Taishin 1699 Money Market Fund Jih Sun Money Market Fund Prudential Financial Money Market Fund Jih Sun Money Market Fund UPAMC James Bond Money Market Fund Taishin 1699 Money Market Fund UPAMC James Bond Money Market Fund Jih Sun Money Market Fund Taishin 1699 Money Market Fund Eastspring Investments Well Pool Money Market Fund	Director of President Investment Trust Corp. None `〃` Director of PK Venture Capital Corp. None Investees of Uni-President Enterprises Corp. under the equity method None Director of Koasa Yamako Corp. None `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Financial assets at fair value through profit or loss`－` non-current `〃` `〃` `〃` `〃` Financial assets at fair value through other comprehensive income`－`non-current `〃` `〃` Financial assets at fair value through profit or loss`－`current `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	2,667,600 837,753 2,572,127 321,300 9 38,221,259 300,000 650,000 1,344,764 6,846,847 1,698,941 19,527,436 18,260,010 15,898,378 12,514,539 1,680,379 4,187,088 10,559,658 2,802,490 736,692 864,391 109,545 1,464 19,990,627	45,298 $ 14,546 25,721 - - 552,297 250,470 4,348 20,005 $ 93,009 28,505 300,000 290,000 200,000 170,000 25,000 66,498 157,102 47,021 10,007 14,503 1,630 20 273,000	7.60 5.37 0.92 6.67 - 2.79 0.56 10.00 - - - - - - - - - - - - - - - -	45,298 $ 14,546 25,721 - - 552,297 250,470 4,348 20,005 $ 93,009 28,505 300,000 290,000 200,000 170,000 25,000 66,498 157,102 47,021 10,007 14,503 1,630 20 273,000

Table 1  Page 1

Table 2

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Acquisition or sale of the same security with the accumulated cost reaching $300 million or 20% of the Company's paid-in capital For the year ended December 31, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Type and name of securities	General ledger account	Counterparty	Relationship with the investor	Balance January1	as at ,2019	Add	ition		Disposal	Disposal		Other increa	se(decrease)	Balance as at Dec	ember 31,2019
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount	Number of shares	Amount
Books.com. Co., Ltd. Books.com. Co., Ltd. Chieh Shun Logistics International Corp. Chieh Shun Logistics International Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. President Drugstore Business Corp. President Drugstore Business Corp. President Information Corp. President Information Corp. President Logistics International Corp. President Logistics International Corp. President Pharmaceutical Corp. Q-ware Systems & Services Corp.	Beneficiary certificates: Yuanta De-Li Money Market Fund Jih Sun Money Market Fund Taishin 1699 Money Market Fund UPAMC James Bond Money Market Fund FSITC Taiwan Money Market Fund Prudential Financial Money Market Fund Allianz Global Investors Taiwan Money Market Fund Taishin 1699 Money Market Fund Union Money Market Fund Nomura Taiwan Money Market Fund Taishin 1699 Money Market Fund FSITC Taiwan Money Market Fund Prudential Financial Money Market Fund Jih Sun Money Market Fund Taishin 1699 Money Market Fund UPAMC James Bond Money Market Fund Taishin 1699 Money Market Fund Eastspring Investments Well Pool Money Market Fund	Note `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Not applicable `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Not applicable `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	1,843,148 - - 2,037,832 - - 3,996,323 2,220,998 15,170,478 - - - 7,643,267 - - 3,266,653 3,036,177 16,121,671	30,008 $ - - 34,002 - - 50,000 30,000 200,000 - - - 120,716 - - 54,506 41,011 219,000	43,579,059 83,519,497 54,050,840 28,216,997 114,193,080 64,323,276 119,513,956 126,211,087 43,882,697 26,959,349 146,883,213 67,110,185 25,505,438 37,554,324 31,949,778 21,967,980 54,369,056 224,644,440	710,000 $ 1,240,000 732,500 472,001 1,750,000 1,020,000 1,500,000 1,710,000 580,000 440,000 1,991,000 1,028,000 404,098 557,602 432,999 367,500 736,301 3,060,000	45,422,207 82,174,733 47,203,993 28,555,888 94,665,644 46,063,266 107,611,901 115,917,536 59,053,175 26,959,349 146,883,213 67,110,185 28,961,617 26,994,666 31,213,086 24,370,242 57,403,769 220,775,484	740,300 $ 1,220,675 639,697 477,640 1,451,189 730,730 1,350,857 1,570,766 780,458 440,130 1,991,361 1,028,158 458,595 400,902 423,079 407,578 777,510 3,007,145	740,000 $ 1,220,000 639,500 477,500 1,450,000 730,000 1,350,000 1,570,000 780,000 440,000 1,991,000 1,028,000 458,316 400,500 422,994 407,500 777,283 3,006,000	300 $ 675 197 140 1,189 730 857 766 458 130 361 158 279 402 85 78 227 1,145	- - - - - - - - - - - - - - - - - -	8) ($ 5 9 2 - - - - - - - - - - 2 3) ( 9) ( -	- 1,344,764 6,846,847 1,698,941 19,527,436 18,260,010 15,898,378 12,514,539 - - - - 4,187,088 10,559,658 736,692 864,391 1,464 19,990,627	- $ 20,005 93,009 28,505 300,000 290,000 200,000 170,000 - - - - 66,498 157,102 10,007 14,503 20 273,000

Note: The security was recognized as "Financial assets at fair value through profit or loss–current".

Table 2  Page 1

Table 3

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more For the year ended December 31, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in t compared t transa	ransaction terms o third party ctions	Notes/accounts	receivable(payable)	Footnote
			Purchases(sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
President Chain Store Corp. Capital Marketing Consultant Corp. Chieh Shun Logistics International Corp. President Transnet Corp. Uni-Wonder Corp. President Information Corp.	Uni-President Enterprises Corp. Uni-President Superior Commissary Corp. Tung Ang Enterprises Corp. Lien-Bo Enterprises Corp. Tait Marketing & Distribution Co., Ltd. President Packaging Corp. President Transnet Corp. Kuang Chuan Dairy Corp. Weilih Food Industrial Co., Ltd. 21 Century Co., Ltd. Mister Donut Taiwan Corp., Ltd. President Pharmaceutical Corp. Kai Ya Food Co., Ltd. Q-ware Systems & Services Corp. President Chain Store Corp. President Transnet Corp. President Logistics International Corp. Chieh Shun Logistics International Corp. President Chain Store Corp. Uni-President Enterprises Corp. Tung Chan Enterprise Corp. Retail Support International Corp. President Chain Store Corp.	Ultimate parent company Subsidiary Sister company `〃` `〃` `〃` Subsidiary Other related party `〃` Subsidiary Associate Subsidiary Sister company Subsidiary Parent company Subsidiary of President Chain Store Corp. Parent company Subsidiary of President Chain Store Corp. Parent company Ultimate parent company Other related party Subsidiary of President Chain Store Corp. Parent company	Purchases `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Service revenue Delivery revenue `〃` Service cost Sales revenue Purchases `〃` `〃` Service revenue	15,787,494 $ 3,863,554 1,954,570 668,520 401,064 412,791 304,485 583,267 284,484 387,986 141,949 204,886 231,672 626,267 197,577) ( 680,779) ( 1,047,554) ( 680,779 304,485) ( 337,389 1,103,134 210,957 859,075) (	15 4 2 1 - - - 1 - - - - - 1 66) ( 38) ( 59) ( 7 56) ( 8 25 5 68) (	Net 30~40 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 10~54 days from the end of the month when invoice is issued Net 20~70 days from the end of the month when invoice is issued Net 15~60 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 30~65 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 55~60 days from the end of the month when invoice is issued Net 60~70 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 45~60 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 25 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` 〃 `〃` 〃〃 `〃` `〃` `〃` `〃`	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` 〃〃〃〃 `〃` `〃` `〃` `〃`	1,291,634) ($ 669,136) ( 152,061) ( 91,889) ( 75,268) ( 71,064) ( 28,007) ( 138,159) ( 35,120) ( 77,274) ( 22,695) ( 66,115) ( 84,501) ( 109,546) ( 36,933 85,068 96,462 85,068) ( 28,007 35,298) ( 107,088) ( 19,079) ( 124,774	8) ( 4) ( 1) ( 1) ( - - - 1) ( - 1) ( - - 1) ( 1) ( 59 46 52 5) ( 2 6) ( 19) ( 3) ( 58

Table 3  Page 1

Expressed in thousands of NTD (Except as otherwise indicated)

Table 3

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more For the year ended December 31, 2019

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in t compared t transa	ransaction terms o third party ctions	Notes/accounts	receivable(payable)	Footnote
			Purchases(sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
President Logistics International Corp. Retail Support International Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. Q-ware Systems & Services Corp. President Drugstore Business Corp. President Pharmaceutical Corp. 21 Century Co., Ltd. Uni-President Superior Commissary Corp. Retail Support Taiwan Corp. Zhejiang Uni-Champion Logistics Development Co., Ltd. Shanghai President Logistic Co., Ltd.	Chieh Shun Logistics International Corp. Retail Support International Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. Retail Support Taiwan Corp. President Logistics International Corp. Uni-Wonder Corp. President Logistics International Corp. President Logistics International Corp. Books.com. Co., Ltd. President Chain Store Corp. President Pharmaceutical Corp. President Drugstore Business Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. Retail Support International Corp. Shanghai President Logistic Co., Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd.	Subsidiary Parent company Subsidiary of President Chain Store Corp. `〃` Subsidiary `〃` Subsidiary of President Chain Store Corp. `〃` `〃` `〃` Parent company Subsidiary of President Chain Store Corp. `〃` Parent company `〃` `〃` 〃〃 Subsidiary	Service cost Delivery revenue `〃` `〃` Service cost `〃` Delivery revenue Service cost `〃` Service revenue `〃` Purchases Sales revenue `〃` `〃` `〃` Delivery revenue 〃 Service cost	1,047,554 $ 788,848) ( 1,084,094) ( 1,076,090) ( 313,865 788,848 210,957) ( 1,084,094 1,076,090 285,125) ( 626,267) ( 622,641 622,641) ( 204,886) ( 387,986) ( 3,863,554) ( 313,865) ( 172,251) ( 172,251	34 25) ( 34) ( 34) ( 20 49 7) ( 37 45 10) ( 67) ( 6 38) ( 13) ( 38) ( 99) ( 83) ( 32) ( 25	Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 15~20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 70 days from the end of the month when invoice is issued Net 70 days from the end of the month when invoice is issued Net 60~70 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 15~20 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	96,462) ($ 74,892 97,129 112,939 25,648) ( 74,892) ( 19,079 97,129) ( 112,939) ( 24,585 109,546 25,490) ( 25,490 66,115 77,274 669,136 25,648 38,473 38,473) (	35) ( 24 31 36 17) ( 50) ( 9 2) ( 39) ( 38 74 1) ( 7 18 53 100 68 50 37) (

Table 3  Page 2

Table 3

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more For the year ended December 31, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in t compared t transa	ransaction terms o third party ctions	Notes/accounts	receivable(payable)	Footnote
			Purchases(sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Duskin Serve Taiwan Co., Ltd. ICASH Corp. President Logistic ShanDong Co., Ltd. Shan Dong President Yinzuo Commercial Limited Shanghai President Logistic Co., Ltd. President Chain Store (Shanghai) Ltd.	President Chain Store Corp. President Chain Store Corp. Shan Dong President Yinzuo Commercial Limited President Logistic ShanDong Co., Ltd. President Chain Store (Shanghai) Ltd. Shanghai President Logistic Co., Ltd.	Parent company 〃 Subsidiary of President Chain Store Corp. 〃〃〃	Service revenue 〃 Delivery revenue Service cost Delivery revenue Service cost	276,434) ($ 138,831) ( 116,221) ( 116,221 108,467) ( 108,467	21) ( 35) ( 99) ( 5 13) ( 10	Net 15~60 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 58 days from the end of the month when invoice is issued Net 58 days from the end of the month when invoice is issued	No significant differences `〃` `〃` `〃` `〃` `〃`	No significant differences `〃` `〃` `〃` `〃` `〃`	38,213 $ 32,379 10,031 10,031) ( 9,218 9,218) (	21 58 97 2) ( 7 7) (

Table 3  Page 3

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES Receivables from related parties reaching $100 million or 20% of paid-in capital or more December 31, 2019

Creditor	Counterparty	Relationship with the counterparty	Balance as of December 31,2019	Turnover rate	Overdue r	eceivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Uni-President Superior Commissary Corp. President Information Corp. President Logistics International Corp. Q-ware Systems & Services Corp.	President Chain Store Corp. President Chain Store Corp. Wisdom Distribution Service Corp. President Chain Store Corp.	Parent company `〃` Subsidiary of President Chain Store Corp. Parent company	669,136 $ 124,774 112,939 109,546	5.98 4.67 9.96 5.78	- $ - - -	none `〃` `〃` `〃`	668,833 $ 68,676 102,410 109,542	- $ - - -

Table 4  Page 1

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Significant inter-company transactions during the reporting periods

For the year ended December 31, 2019

			For the year ended December 31, 2019
Table 5 Number	Companyname	Counterparty	Relationship			Expressed in thousands of NTD (Except as otherwise indicated) Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets
`1` `2` `3` `4` `5` `6` `7` `8` `9` `10` `11` `12` `13` `14` `15` `16` `17` `18` `19` `20` `21` `22` `23` `24` `25`	President Chain Store Corp. President Chain Store Corp. Uni-President Cold-Chain Corp. Capital Marketing Consultant Corp. President Information Corp. President Information Corp. Q-ware Systems & Services Corp. Q-ware Systems & Services Corp. Uni-President Superior Commissary Corp. Uni-President Superior Commissary Corp. President Pharmaceutical Corp. President Pharmaceutical Corp. President Transnet Corp. Chieh Shun Logistics International Corp. Chieh Shun Logistics International Corp. President Logistics International Corp. President Logistics International Corp. President Logistics International Corp. President Logistics International Corp. Duskin Serve Taiwan Co., Ltd. 21 Century Co., Ltd. Wisdom Distribution Service Corp. Retail Support Taiwan Corp. Zhejiang Uni-Champion Logistics Development Co., Ltd. ICASH Corp.	Books.com. Co., Ltd. President Transnet Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Drugstore Business Corp. President Chain Store Corp. President Chain Store Corp. President Logistics International Corp. President Transnet Corp. Retail Support International Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. Wisdom Distribution Service Corp. President Chain Store Corp. President Chain Store Corp. Books.com. Co., Ltd. Retail Support International Corp. Shanghai President Logistic Co., Ltd. President Chain Store Corp.	Parent company to subsidiary Parent company to subsidiary Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to subsidiary Subsidiary to parent company Subsidiary to parent company Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to parent company Subsidiary to parent company Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to parent company	Other operating revenue Other operating revenue Other operating revenue Service revenue Service revenue Accounts receivable Service revenue Accounts receivable Sales revenue Accounts receivable Sales revenue Sales revenue Sales revenue Delivery revenue Delivery revenue Delivery revenue Delivery revenue Delivery revenue Accounts receivable Service revenue Sales revenue Service revenue Delivery revenue Delivery revenue Service revenue	162,669) ($ 161,501) ( 371,757) ( 197,577) ( 859,075) ( 124,774 626,267) ( 109,546 3,863,554) ( 669,136 622,641) ( 204,886) ( 304,485) ( 1,047,554) ( 680,779) ( 788,848) ( 1,084,094) ( 1,076,090) ( 112,939 276,434) ( 387,986) ( 285,125) ( 313,865) ( 172,251) ( 138,831) (	Net 60 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 45~60 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 70 days from the end of the month when invoice is issued Net 60~70 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 15~60 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 15~20 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued	0.06 0.06 0.15 0.08 0.34 0.06 0.24 0.06 1.51 0.34 0.24 0.08 0.12 0.41 0.27 0.31 0.42 0.42 0.06 0.11 0.15 0.11 0.12 0.07 0.05

Table 5  Page 1

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Significant inter-company transactions during the reporting periods

For the year ended December 31, 2019

			For the year ended December 31, 2019
Table 5 Number	Companyname	Counterparty	Relationship			Expressed in thousands of NTD (Except as otherwise indicated) Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets
`26` `27` `28`	Retail Support International Corp. President Logistic ShanDong Co., Ltd. Shanghai President Logistic Co., Ltd.	Uni-Wonder Corp. Shan Dong President Yinzuo Commercial Limited President Chain Store (Shanghai) Ltd.	Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary	Delivery revenue Delivery revenue Delivery revenue	210,957) ( 116,221) ( 108,467) (	Net 30 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 58 days from the end of the month when invoice is issued	0.08 0.05 0.04

Note:Transaction among the company and subsidiaries with amount over NTD$100,000, only one side of the transactions are disclosed.

Table 5  Page 2

Table 6

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Names, locations and other information of investee companies (not including investees in Mainland China) For the year ended December 31, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Mainbusinessactivities	Initial invest	ment amount	Sharesheld	asat Decemb	er 31,2019	Net profit (loss) of the investee for the year ended December 31, 2019	Investment income (loss) recognized by the Company for the year ended December 31, 2019	Footnote
				Balance as at December 31, 2019	Balance as at December 31, 2018	Numberofshares	Ownership (%)	Bookvalue
President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp.	President Chain Store (BVI) Holdings Ltd. President Drugstore Business Corp. President Transnet Corp. Mech-President Corp. President Pharmaceutical Corp. Uni-President Department Store Corp. Uni-President Superior Commissary Corp. Uni-President Cold-Chain Corp. President Information Corp. Q-ware Systems & Services Corp. Wisdom Distribution Service Corp. Books.com. Co., Ltd. President Lanyang Art Corporation Duskin Serve Taiwan Co., Ltd. ICASH Corp. Uni-President Development Corp. Uni-Wonder Corp. Retail Support International Corp. Presicarre Corp. President Fair Development Corp. President International Development Corp. Tung Ho Development Corp. Ren-Hui Investment Corp. Capital Marketing Consultfant Corp. PCSC (China) Drugstore Limited President Chain Store Corporation Insurance Brokers Co., Ltd. Cold Stone Creamery Taiwan Ltd. President Being Corp.	British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Taiwan	Professional investment Sales of cosmetics, medicines and daily items Delivery service Gas station, installment and maintenance of elevators Sales of various health care products, cosmetics, and pharmaceuticals Department stores Fresh food manufacture Low-temperature logistics and warehousing Enterprise information management and consultancy Information software services Logistics and storage of publication and e-commerce Retail business without shop Art and cultural exhibition Cleaning instruments leasing and selling Electronic ticketing services Construction, development and operation of an MRT station Coffee chain store Room-temperature logistics and warehousing Management of retail department store Operation of shopping mall, department store, international trade, etc. Professional investment Management of entertainment business Professional investment Enterprise management consultancy Professional investment Life and property insurance Sales of ice cream Sports and entertainment business	6,712,138 $ 288,559 711,576 904,475 330,216 840,000 520,141 237,437 320,741 332,482 50,000 100,400 20,000 102,000 700,000 720,000 3,286,206 91,414 7,112,028 3,191,700 500,000 861,696 637,231 9,506 277,805 213,000 170,000 170,000	6,712,138 $ 288,559 711,576 904,475 330,216 840,000 520,141 237,437 320,741 332,482 50,000 100,400 20,000 102,000 500,000 720,000 3,286,206 91,414 7,112,028 3,191,700 500,000 861,696 637,231 9,506 277,805 213,000 170,000 170,000	171,589,586 78,520,000 103,496,399 55,858,815 22,121,962 27,999,999 48,519,890 23,605,042 25,714,475 24,382,921 10,847,421 9,999,999 2,000,000 10,199,999 70,000,000 72,000,000 21,382,674 6,429,999 145,172,360 190,000,000 44,100,000 19,930,000 6,500,000 2,500,000 8,746,008 1,500,000 12,244,390 1,500,000	100.00 100.00 70.00 80.87 73.74 70.00 90.00 60.00 86.00 86.76 100.00 50.03 100.00 51.00 100.00 20.00 60.00 25.00 19.50 19.00 3.33 12.46 100.00 100.00 92.20 100.00 100.00 100.00	26,348,522 $ 1,432,449 1,634,536 702,347 743,725 543,179 484,058 679,859 493,788 390,054 454,125 398,293 25,120 201,317 567,243 764,191 5,164,559 178,147 5,723,198 2,039,406 459,696 106,384 80,362 67,401 64,706 27,568 6,133 33,462) (	1,105,919 $ 320,671 599,834 106,216 189,810 265,132 18,574 353,843 75,175 80,156 272,543 379,594 120 145,830 12,876 156,197 640,378 205,652 1,812,443 290,953 672,885 66,331) ( 6,464 40,210 2,289 10,746 15,423 8,767	1,105,919 $ 320,671 419,884 85,898 139,966 185,592 16,716 212,306 64,651 69,542 272,543 189,890 120 74,373 12,876 31,239 291,031 51,413 353,425 55,281 22,029 8,265) ( 6,464 40,210 2,110 10,746 15,423 8,767	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Note 1 Subsidiary Subsidiary Note 1 Note 1 Note 1 Note 1 Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

Table 6  Page 1

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Names, locations and other information of investee companies (not including investees in Mainland China) For the year ended December 31, 2019

Investor	Investee	Location	Mainbusinessactivities	Initial invest	ment amount	Sharesheld	asat Decemb	er 31,2019	Net profit (loss) of the investee for the year ended December 31, 2019	Investment income (loss) recognized by the Company for the year ended December 31, 2019	Footnote
				Balance as at December 31, 2019	Balance as at December 31, 2018	Numberofshares	Ownership (%)	Bookvalue
President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. Books.com. Co., Ltd. Mech-President Corp. President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (BVI) Holdings Ltd. President Chain Store (BVI) Holdings Ltd. President Chain Store (Labuan) Holdings Ltd. President Logistics International Corp. President Pharmaceutical Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp.	21 Century Co., Ltd. President Chain Store Tokyo Marketing Corp. Uni-President Oven Bakery Corp. President Collect Service Corp. Afternoon Tea Taiwan Co., Ltd. Mister Donut Taiwan Corp., Ltd. Uni-President Organics Corp. President Technology Corp. Books.com. (BVI) Ltd. Tong Ching Corporation PCSC Restaurant (Cayman) Holdings Limited PCSC (China) Drugstore Limited President Chain Store (Labuan) Holdings Ltd. President Chain Store (Hong Kong) Holdings Limited Philippine Seven Corp. Chieh Shun Logistics International Corp. President Pharmaceutical (Hong Kong) Holdings Limited Books.com. Co., Ltd. Uni-President Department Store Corp. Mech-President Corp. President Information Corp. President Transnet Corp. Q-ware Systems & Services Corp. Duskin Serve Taiwan Co., Ltd.	Taiwan Japan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Cayman Islands British Virgin Islands Malaysia Hong Kong Philippines Taiwan Hong Kong Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Operation of chain restaurants Enterprise management consultancy Bread and pastry retailer Collection agent Operation of restaurants Bakery retailer Health care products and organic food Software development and call center service Professional investment Gas station Professional investment Professional investment Professional investment Professional investment Operation of chain stores Trucking Sales of various health care products, cosmetics, and pharmaceuticals Retail business without shop Department stores Gas station, installment and maintenance of elevators Enterprise information management and consultancy Delivery service Information software services Cleaning instruments leasing and selling	160,680 $ 35,648 391,300 10,500 - 200,000 47,190 7,500 1,478 9,600 - 22,185 874,317 4,669,592 873,477 180,000 178,024 - - - - - - -	160,680 $ 35,648 391,300 10,500 147,900 200,000 47,190 7,500 1,478 9,600 156,138 22,185 874,317 4,669,592 873,477 180,000 178,024 - - - - - - -	10,000,000 9,800 6,511,963 1,049,999 - 7,500,049 1,833,333 750,000 500 960,000 - 740,000 29,163,337 134,603,354 394,970,516 26,670,000 5,935,900 1 1 1 1 1 1 1	100.00 100.00 100.00 70.00 - 50.00 36.67 15.00 100.00 60.00 - 7.80 100.00 100.00 52.22 100.00 100.00 - - - - - - -	86,391 $ 81,783 44,826) ( 84,225 - 100,768 41,430 20,866 593 24,729 - 5,474 2,529,852 4,156,038 2,528,945 326,575 60,236 - - - - - - -	50,117 $ 6,227 13,275) ( 91,615 - 31,471 24,020 26,075 1 12,583 3,255) ( 2,289 424,830 78,069 862,749 33,663 12,758) ( 379,594 265,132 106,216 75,175 599,834 80,156 145,830	50,117 $ 6,227 13,275) ( 64,132 - 14,613 8,807 3,869 1 7,550 3,255) ( 179 424,830 109,818 445,176 33,663 12,758) ( - - - - - - -	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Note 1 Note 1 Note 1 Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary

Table 6  Page 2

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Names, locations and other information of investee companies (not including investees in Mainland China) For the year ended December 31, 2019

Investor	Investee	Location	Mainbusinessactivities	Initial invest	ment amount	Sharesheld	asat Decemb	er 31,2019	Net profit (loss) of the investee for the year ended December 31, 2019	Investment income (loss) recognized by the Company for the year ended December 31, 2019	Footnote
				Balance as at December 31, 2019	Balance as at December 31, 2018	Numberofshares	Ownership (%)	Bookvalue
Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Retail Support International Corp. Retail Support International Corp. Retail Support Taiwan Corp. Uni-President Cold-Chain Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. Wisdom Distribution Service Corp. Philippine Seven Corp. Philippine Seven Corp.	President Pharmaceutical Corp. Mister Donut Taiwan Corp., Ltd. Uni-President Superior Commissary Corp. Uni-President Cold-Chain Corp. Retail Support International Corp. President Collect Service Corp. Afternoon Tea Taiwan Co., Ltd. Ren Hui Holding Co., Ltd. Retail Support Taiwan Corp. President Logistics International Corp. President Logistics International Corp. President Logistics International Corp. Uni-President Logistics (BVI) Holdings Limited President Logistics International Corp. Vision Distribution Service Corp. Convenience Distribution Inc. Store Sites Holding, Inc.	Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Philippines Philippines	Sales of various health care products, cosmetics, and pharmaceuticals Bakery retailer Fresh food manufacture Low-temperature logistics and warehousing Room-temperature logistics and warehousing Collection agent Operation of restaurants Professional investment Room-temperature logistics and warehousing Trucking Trucking Trucking Professional investment Trucking Publishing Industry Logistics and warehousing Professional investment	- $ - - - - - - 60,374 15,300 44,975 5,425 23,850 87,994 18,850 - 26,633 28,848	- $ - - - - - - 60,374 15,300 44,975 5,425 23,850 87,994 18,850 - 26,633 28,848	1 1 1 1 1 1 - 2,000,000 2,871,300 9,481,500 1,161,000 4,837,500 2,990 3,870,000 - 4,500,000 40,000	- - - - - - - 100.00 51.00 49.00 6.00 25.00 100.00 20.00 - 100.00 100.00	- $ - - - - - - 63,018 76,789 168,876 20,679 86,161 97,736 68,929 - 26,633 28,848	189,810 $ 31,471 18,574 353,843 205,652 91,615 - 2,893 45,447 81,573 81,573 81,573 10,968 81,573 - 29,260 918	- $ - - - - - - 2,893 23,178 39,971 4,894 20,393 10,968 16,315 - - -	Subsidiary of a subsidiary Note 1 Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary

Note 1: The investee was recognized using equity method by the company.

Table 6  Page 3

Table 7

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES Information on investments in Mainland China

For the year ended December 31, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Investeein Mainland China	Mainbusiness activities	Paid-incapital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as ofJanuary1,2019	Amount rem Taiwan to China/ Amou back to Tai year e December	itted from Mainland nt remitted wan for the nded 31,2019	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2019	Net income of investee for the year ended December 31,2019	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the year ended December31,2019	Book value of investments in Mainland China as of December31,2019	Accumulated amount of investment income remitted back to Taiwan as of December 31,2019	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Shanghai President Chain Store Corporation Trade Co., Ltd. President Cosmed Chain Store (Shen Zhen) Co., Ltd. President Chain Store (Shanghai) Ltd. Shanghai President Logistic Co., Ltd. Shanghai Cold Stone Ice Cream Corporation PCSC (Chengdu) Hypermarket Limited Shan Dong President Yinzuo Commercial Limited President (Shanghai) Health Product Trading Company Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd. Bejing Bokelai Customer Co. President Chain Store (Taizhou) Ltd. President Logistic ShanDong Co., Ltd. President Chain Store (Zhejiang) Ltd. Beauty Wonder (Zhejiang) Trading Co.,Ltd.	Trade of food and commodities Wholesale of merchandise Operation of chain stores Logistics and warehousing Sales of ice cream Retail hypermarket Supermarkets Sales of various health care products, cosmetics, and pharmaceuticals Logistics and warehousing Enterprise information consulting, network technology development and services Logistics and warehousing Logistics and warehousing Operation of chain stores Sales of cosmetics and daily items	- $ 430,549 2,152,745 59,960 958,159 - 258,329 168,591 172,220 450 258,329 215,275 602,769 129,165	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	155,014 $ 282,330 2,316,779 59,960 981,516 532,935 122,269 168,591 169,483 - 258,329 215,275 602,769 129,165	- $ - - - - - - - - - - - - -	- $ - - - - - - - - - - - - -	155,014 $ 282,330 2,316,779 59,960 981,516 532,935 122,269 168,591 169,483 - 258,329 215,275 602,769 129,165	11) ($ 2,400 39,455 81,169 307) ( 565) ( 2,988) ( 8,353) ( 22,943 2) ( 32,980 1,979 111,787) ( 34,903) (	- 100.00 100.00 100.00 100.00 - 55.00 73.74 80.00 50.03 100.00 100.00 100.00 100.00	11) ($ 2,383 39,455 81,169 307) ( 582) ( 11,501 6,160) ( 24,113 1) ( 32,980 2,427 111,787) ( 34,903) (	- $ 69,520 103,731 477,450 45,630 - 187,281 21,879 156,194 16 350,970 195,509 290,607 75,992	- $ - - - - - - 55,794 25,553 - - - - -	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2

Note 1: Indirect investment in PRC through the existing company located in the third area. Note 2: The financial statements were reviewed by the CPA of parent company in Taiwan.

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December31,2019	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commissionof MOEA
President Chain Store Corp. President Pharmaceutical Corp. Uni-President Cold-Chain Corp. Ren-Hui Investment Corp.	4,621,058 $ 168,591 88,963 51,664	8,258,690 $ 168,591 88,963 51,664	27,136,391 $ 475,937 667,534 80,000

Table 7  Page 1

AI assistant

PCSC — Annual Report 2019

52232_rns_2019-11-22_d0d276c4-1a42-4b7f-b9fc-1d2d41614e09.pdf

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND AUDIT REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2019 AND 2018 CONTENTS

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Declaration of Consolidated Financial Statements of Affiliated Enterprises

REPORT OF INDEPENDENT ACCOUNTANTS

Opinion

Basis for opinion

Key audit matters

Completeness and accuracy of retail sales revenue

Description

Cost-to-retail ratio of retail inventory method

Description

How our audit addressed the matter

Other matter – Using the work of other auditors

Other matters – Parent company - only financial reports

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

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

5.

6.

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

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

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

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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

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

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2018

1. HISTORY AND ORGANISATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(3) Basis of consolidation

(4) Foreign currency translation

(5) Classification of current and non-current items

(6) Cash equivalents

(7) Financial assets at fair value through profit or loss

(8) Financial assets at fair value through other comprehensive income

(10) Impairment of financial assets

- (11) Leasing arrangements (Lessor) operating leases

(12) Inventories

(13) Investments accounted for using equity method - associates

(17) Leases (lessee) (Prior to 2019 )

(18) Investment property

(19) Intangible assets

(20) Impairment of non-financial assets

(21) Notes and accounts payable

(22) Provisions

(23) Employee benefits

A. Short-term employee benefits

(25) Revenue recognition

A. Sales of goods

(26) Business Combination

(27) Operating segments

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

(2) Financial assets at fair value through profit or loss

December 31, 2019 December 31, 2018

(3) Accounts receivable

(4) Inventories

(7) Property, plant and equipment

A. The details of property, plant and equipment are as follows:

－ (8) Leasing arrangements lessee

(9) Leasing arrangements – lessor

Effective from 2019

(10)Investment property

(11)Intangible assets

(12) Other non-current assets

(15) Other payables

(19) Other non-current liabilities

(20) Share capital

(21) Capital surplus

(23) Other equity items

(24) Operating revenue

Revenue from contracts with customers

A. Disaggregation of revenue from contracts with customers

PCSC Annual Report 2019

`－` (8) Leasing arrangements lessee

`－` E. Leasing arrangements lessee