PCSC - Audit Report / Information 2018

PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY

FINANCIAL STATEMENTS AND REPORT OF

INDEPENDENT ACCOUNTANTS DECEMBER 31, 2018 AND 2017

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.

PARENT COMPANY ONLY

FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS

DECEMBER 31, 2018 AND 2017

Items 1. Cover 2. Contents 3. Report of independent accountants 4. Parent company only balance sheets 5. Parent company only statements of comprehensive income 6. Parent company only statements of changes in equity 7. Parent company only statements of cash flows 8. Notes to the parent company only financial statements (1) History and organisation (2) The date of authorisation for issuance of the parent company only 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 ~ 69 16 16 16 ~ 20 21 ~ 30 30 30 ~ 51 52 ~ 55 55 55 55 55 55 ~ 68 68 ~ 69 69

Items
1. Cover
2. Contents
3. Report of independent accountants
4. Parent company only balance sheets
5. Parent company only statements of comprehensive income
6. Parent company only statements of changes in equity
7. Parent company only statements of cash flows
8. Notes to the parent company only financial statements
(1) History and organisation
(2) The date of authorisation for issuance of the parent company only
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 ~ 69
16
16
16 ~ 20
21 ~ 30
30
30 ~ 51
52 ~ 55
55
55
55
55
55 ~ 68
68 ~ 69
69

~2~

Items 9. Contents of statement of major accounting items Statement of cash and cash equivalents Statement of inventories Statement of changes in financial assets at fair value through other comprehensive income - non-current Statement of changes in financial assets at fair value through profit or loss - non-current Statement of changes in investments accounted for using equity method Statement of changes in property, plant and equipment Statement of short-term borrowings Statement of operating revenue Statement of operating costs Statement of selling expenses	Page/Reference
	Statement 1 Statement 2 Statement 3 Statement 4 Statement 5 Statement 6 Statement 7 Statement 8 Statement 9 Statement 10

Items
9. Contents of statement of major accounting items
Statement of cash and cash equivalents
Statement of inventories
Statement of changes in financial assets at fair value through other
comprehensive income - non-current
Statement of changes in financial assets at fair value through profit or
loss - non-current
Statement of changes in investments accounted for using equity method
Statement of changes in property, plant and equipment
Statement of short-term borrowings
Statement of operating revenue
Statement of operating costs
Statement of selling expenses

Page/Reference

Statement 1
Statement 2
Statement 3
Statement 4
Statement 5
Statement 6
Statement 7
Statement 8
Statement 9
Statement 10

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REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

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

Opinion

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

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

Basis for opinion

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

Key audit matters

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

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Key audit matters for the Company’s parent company only financial statements of the year ended December 31, 2018 are stated as follows:

Completeness and accuracy of retail sales revenue

Description

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

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

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

How our audit addressed the matter

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

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

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Cost-to-retail ratio of retail inventory method

Description

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

As there are various kinds of merchandise, the retail inventory method is used to estimate the cost of inventory and the cost of goods sold. The retail inventory method uses the ratio of the cost of goods purchased to 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;
Calculated the cost-to-retail ratio to verify its accuracy.

Other matter –Using the work of other auditors

We did not audit the financial statements of certain investee companies. The balance of these investments accounted for using equity method amounted to NT$2,210,541 thousand and NT$1,920,960 thousand, representing 2.5% and 1.9% of total assets as of December 31, 2018 and 2017, respectively, and the related total comprehensive net income (including share of profit of subsidiaries, associates and joint ventures accounted for using equity method and share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method) amounted to NT$ 415,363 thousand and NT$401,705 thousand, representing 3.9% and 1.3%

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of total comprehensive net income for the years then ended, respectively. Those financial statements were audited by other independent accountants whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the financial statements and the information on investees disclosed in Note 13 were based solely on the reports of other independent accountants.

Responsibilities of management and those charged with governance for the parent

company only financial statements

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

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

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

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

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but it is not a guarantee that an audit conducted in accordance with ROC GAAS will always detect a

material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

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

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.

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

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

Chun-Yuan, Hsiao Chien-Hung, Chou

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

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

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.

PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

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

(Continued)

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PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

December 31, 2018 AMOUNT % $ 6,000,000 7 1,293,149 1 1,331,853 1 4,705,638 5 1,437,022 2 8,028,624 9 18,827,308 21 1,049,737 1 1,463,092 2 44,136,423 49 151,550 - 3,916,979 4 2,860,605 3 2,533,958 3 394,951 1 9,858,043 11 53,994,466 60 10,396,223 12 45,059 - 12,293,442 14 398,859 - 12,064,862 14 53,605 - 35,252,050 40 $ 89,246,516 100	December 31, 2017	December 31, 2017
AMOUNT $ 6,000,000 1,293,149 1,331,853 4,705,638 1,437,022 8,028,624 18,827,308 1,049,737 1,463,092 44,136,423 151,550 3,916,979 2,860,605 2,533,958 394,951 9,858,043 53,994,466 10,396,223 45,059 12,293,442 398,859 12,064,862 53,605 35,252,050 $ 89,246,516	AMOUNT $ `-` `-` 1,488,293 4,251,017 1,662,063 7,099,859 22,286,764 1,713,191 2,459,527 40,960,714 `-` 3,373,090 2,842,380 2,435,662 526,905 9,178,037 50,138,751 10,396,223 43,875 9,191,733 - 31,381,290 ( 398,859 ) 50,614,262 $ 100,753,013	%
		`-` `-` 2 4 2 7 22 2 2
		41
		`-` 3 3 2 1
		9
		50
		10 - 9 - 31 -
		50
		100

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

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

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PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

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

Items	Forthe years endedDecember31	Forthe years endedDecember31
	2018	2017
			%
4000 Operating revenue 5000 Operating costs 5900 Gross profit Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6450 Expected credit losses 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit of subsidiaries, associates and joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive loss 8311 Remeasurements of net actuarial loss on defined benefit plan 8316 Unrealized gain on valuation of equity instruments at fair value through other comprehensive income 8330 Share of other comprehensive loss of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive loss that will not be reclassified to profit or loss 8361 Exchange differences from translation of foreign operations 8362 Unrealized gain (loss) on valuation of available-for-sale financial assets 8380 Share of other comprehensive loss of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8399 Income tax relating to the components of other comprehensive income that will be reclassified to profit or loss 8360 Components of other comprehensive loss that will be reclassified to profit or loss 8300 Total other comprehensive income (loss) for the year 8500 Total comprehensive income for the year 9750 Basic earnings per share (in dollars) 9850 Diluted earnings per share (in dollars)

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

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

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PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

(Expressed in thousands of New Taiwan dollars)

Notes		Retained Earnings		Other EquityInterest	Total equity
	Legal reserve $ 8,208,064 - - - 983,669 - - - $ 9,191,733 $ 9,191,733 - 9,191,733 - - - 3,101,709 - - - - $ 12,293,442	Special reserve $ - - - - - - - - $ - $ - - - - - - - 398,859 - - - $ 398,859	Exchange differences from translation of foreign operations ($ 186,228 ) - ( 720,080 ) ( 720,080 ) - - - - ($ 906,308 ) ( $ 906,308 ) - ( 906,308 ) - 626,479 626,479 - - - - - ($ 279,829 )	Unrealized gain or loss on financial assets at fair value through other comprehensive income $ - - - - - - - - $ - $ - 477,996 477,996 - ( 144,562 ) ( 144,562 ) - - - - - $ 333,434
6(18) 6(17) 6(17) 6(17) 3(1) 6(18)					$ 28,616,278
					$ 35,252,050

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PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax for the year
Adjustments to reconcile profit before income tax to net cash
provided by operating activities
Income and expenses having no effect on cash flows
Provision for doubtful accounts

Expected credit losses

Depreciation on property, plant and equipment

Amortization

Finance costs

Share of profit of subsidiaries, associates and joint
ventures accounted for using equity method
Depreciation on investment property

Gain on disposal of investments accounted for using
equity

Interest income

Dividend income

Impairment loss (reversal gain) on property, plant and
equipment
Impairment loss on investment property

Loss on disposal of property, plant and equipment, net

Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Other non-current assets
Net changes in liabilities relating to operating activities
Contract liabilities - current
Notes payable
Accounts payable
Other payables
Advance receipts
Contract liabilities – non-current
Net defined benefit liability - non-current
Other non-current liabilities
Cash generated from operations
Interest received
Income tax paid

Interest paid
Dividends received
Net cash provided by operating activities

For the years ended December 31
Notes
2018
2017
$ 12,433,790 $ 36,501,051
12(4)
-
422
12(2)
2,100
-
6(7)(23)
2,096,300
1,936,919
6(9)(23)
92,846
99,475
6(22)
42,971
30,491
6(6)
(
3,473,458 ) (
26,930,861 )
6(8)
7,365
7,414
6(6)(21)
(
59 ) (
2,099,503 )
6(20)
(
83,534 ) (
104,826 )
6(20)
(
65,124 ) (
17,311 )
6(7)(21)
(
2,401 )
10,110
6(8)
-
3,813
6(21)
9,632
14,868

(
4,992 ) (
87,903 )
76,934 (
834,668 )
(
825,661 ) (
1,190,980 )
70,748 (
71,222 )
86,361 (
24,690 )
(
54,589 )
75,819
140,135
-
298,181
106,249
703,724 (
446,872 )
(
234,672 )
3,824,312
156,252
38,009
939
-
(
10,994 ) (
11,581 )
16,900 (
147,704 )
11,479,694
10,680,831
107,590
104,826
6(25)
(
2,423,741 ) (
1,109,634 )
(
32,687 ) (
20,645 )
7,731,235
2,003,782
16,862,091
11,659,160

(Continued)

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PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Return of capital from financial assets at fair value
through profit or loss – non-current
Acquisition of investments accounted for using
equity method

Proceeds from disposal of investments accounted for
using equity method

Return of capital from investments accounted for
using equity method
Return of capital from available-for-sale financial
assets - non-current
Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and
equipment
Acquisition of intangible assets

Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of cash dividends

Increase in short term borrowings

Increase in guarantee deposit received

Net cash flows used in financing activities
(Decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

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

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

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

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PRESIDENT CHAIN STORE CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017

(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 Company is primarily engaged in the investment and operation of convenience store chains. Business items included sales of food, beverages, coffee, daily commodities of cosmetics and health care products. The common shares of the Company have been listed on the Taiwan Stock Exchange since August 22, 1997.
(2) The Group’s ultimate parent company is Uni-President Enterprises Corp., which holds 45.4% equity interest in the Company.
THE DATE OF AUTHORISATION FOR ISSUANCE OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These parent company only financial statements were authorized for issuance by the Board of Directors on February 27, 2019.

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”).
A. New standards, interpretations and amendments endorsed by FSC effective from 2018 are as follows:

follows:
New Standards,Interpretations and Amendments Amendments to IFRS 2, ‘Classification and measurement of share-based payment transactions’ Amendments to IFRS 4, ‘Applying IFRS 9, Financial instruments with IFRS 4,Insurance contracts’ IFRS 9, ‘Financial instruments’ IFRS 15, ‘Revenue from contracts with customers’ Amendments to IFRS 15, ‘Clarifications to IFRS 15, Revenue from contracts with customers’ Amendments to IAS 7, ‘Disclosure initiative’ Amendments to IAS 12, ‘Recognition of deferred tax assets for unrealized Amendments to IAS 40, ‘Transfers of investment property’ IFRIC 22, ‘Foreign currency transactions and advance consideration’ Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 1,‘First-time adoption of International Financial Reporting Standards’ Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 12,‘Disclosure of interests in other entities’	Effective date by International Accounting Standards Board
	January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2017 January 1, 2017 January 1, 2018 January 1, 2018 January 1, 2018 January 1, 2017

follows:

New Standards,Interpretations and Amendments
Amendments to IFRS 2, ‘Classification and measurement of
share-based payment transactions’
Amendments to IFRS 4, ‘Applying IFRS 9, Financial instruments
with IFRS 4,Insurance contracts’
IFRS 9, ‘Financial instruments’
IFRS 15, ‘Revenue from contracts with customers’
Amendments to IFRS 15, ‘Clarifications to IFRS 15, Revenue from
contracts with customers’
Amendments to IAS 7, ‘Disclosure initiative’
Amendments to IAS 12, ‘Recognition of deferred tax assets for
unrealized
Amendments to IAS 40, ‘Transfers of investment property’
IFRIC 22, ‘Foreign currency transactions and advance consideration’
Annual improvements to IFRSs 2014-2016 cycle - Amendments to
IFRS 1,‘First-time adoption of International Financial Reporting
Standards’
Annual improvements to IFRSs 2014-2016 cycle - Amendments to
IFRS 12,‘Disclosure of interests in other entities’

Effective date by
International Accounting
Standards Board

January 1, 2018
January 1, 2018
January 1, 2018
January 1, 2018
January 1, 2018
January 1, 2017
January 1, 2017
January 1, 2018

January 1, 2018
January 1, 2018
January 1, 2017

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Effective date by
International Accounting
New Standards, Interpretations and Amendments Standards Board
Annual improvements to IFRSs 2014-2016 cycle - Amendments to January 1, 2018 IAS 28,‘Investments in associates and joint ventures’
B. Except for the following, the above standards and interpretations have no significant impact to the Company’s financial condition and operating results based on the Company’s assessment. The quantitative impact will be disclosed when the assessment is complete.

IFRS 9, ‘Financial instruments’

(a) Classification of debt instruments is driven by the entity’s business model and the contractual cash flow characteristics of the financial assets, which would be classified as financial asset at fair value through profit or loss, financial asset measured at fair value through other comprehensive income or financial asset measured at amortized cost. Equity instruments would be classified as financial asset at fair value through profit or loss, unless an entity makes an irrevocable election at inception to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is not held for trading.
(b) The impairment losses of debt instruments are assessed using an ‘expected credit loss’ approach. An entity assesses at each balance sheet date whether there has been a significant increase in credit risk on that instrument since initial recognition to recognize 12-month expected credit losses (‘ECL’) or lifetime expected credit losses ECL (interest revenue would be calculated on the gross carrying amount of the asset before impairment losses occurred); or if the instrument that has objective evidence of impairment, interest revenue after the impairment would be calculated on the book value of net carrying amount (i.e. net of credit allowance). The Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses for trade receivables that do not contain a significant financing component.
C. In adopting the new standards endorsed by the FSC effective from 2018, the Company has adopted the modified retrospective approach in IFRS 9 and IFRS 15. The Company also applied transitional provisions of IFRS 15 to incomplete contracts at the date of January 1, 2018. The significant effects of applying the new standards as of January 1, 2018 are summarized below:

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Balance sheet Affected items January 1, 2018 Accounts receivable, net Other current assets Financial assets at fair value through profit or loss - non-current Financial assets at fair value through other comprehensive income - non-current Available-for-sale financial assets - non-current Financial assets at cost - non-current Investments accounted for using equity method Other non-current assets Total affected assets Balance sheet Affected items January 1, 2018 Advance receipts Contract liabilities - current Refund liabilities Other current liabilities Contract liabilities - non-current Other non-current liabilities Total affected liabilities Share capital Capital surplus Retained earnings Other equity interest Total affected equity Total affected liabilities and equity	$	2017 version IFRSs amount Effect of adoption of new standards 600,671 $ 327 39,088,330 - - 85,833 - 788,463 848,575 ( 848,575) 25,721 ( 25,721) 47,983,892 ( 3,990) 12,205,824 - 100,753,013 ($ 3,663) 2017 version IFRSs amount Effect of adoption of new standards 2,459,527 ( $ 2,393,630) - 2,393,630 - 327 38,501,187 - - 150,611 9,178,037 ( 150,611) 50,138,751 327 10,396,223 - 43,875 - 40,573,023 25,463 398,859) ( 29,453) ( 50,614,262 ( 3,990) 100,753,013 ($ 3,663)	2018 version IFRSs amount $ 600,998 39,088,330 85,833 788,463 - - 47,979,902 12,205,824 $ 100,749,350 2018 version IFRSs amount $ 65,897 2,393,630 327 38,501,187 150,611 9,027,426 50,139,078 10,396,223 43,875 40,598,486 428,312) 50,610,272 $ 100,749,350	Remark
				(a) (b) (c) (b)(c) (b) (d) Remark
	$
	$
				(e) (e) (a) (e) (e) (b)(d) (b)(d)

	(

	$

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Explanation:

  - (a) Under IFRS 15, if the customer returns a product, the Company is obliged to refund the purchase price. Therefore, a gross contract liability (refund liability) for the expected refunds to customers is recognized as adjustment to revenue. At the same time, the Company has a right to recover the product from the customer where the customer exercises his right of return and recognizes an asset and a corresponding adjustment to cost of sales. The asset is measured by reference to the former carrying amount of the product as the products are not material.

     - Liabilities in relation to expected sales discounts and allowances were previously presented as accounts receivable - allowance for sales discounts in the balance sheet. As a result of these changes in accounting policies, accounts receivable will have to be increased by $327, and refund liability increased by $327 on January 1, 2018.

  - (b) In accordance with IFRS 9, the Company reclassified available-for-sale financial assets and financial assets at cost in the amounts of $60,112 and $25,721, respectively, by increasing financial assets at fair value through profit or loss and retained earnings in the amounts of $85,833 and $22,498, respectively and decreasing other equity interest in the amount of $22,498.

  - (c) In accordance with IFRS 9, the Company reclassified available-for-sale financial assets in the amount of $788,463 and made an irrevocable election at initial recognition on equity instruments not held for dealing or trading purpose, by increasing financial assets at fair value through other comprehensive income in the amount of $788,463.

  - (d) The Company’s investee accounted for using equity method made certain reclassifications in accordance with IFRS 9. Accordingly, the Company decreased investments accounted for using equity method and other equity interest in the amounts of $3,990 and $6,955, respectively and increased retained earnings in the amount of $2,965 on January 1, 2018.

  - (e) Presentation of contract assets and contract liabilities In line with IFRS 15 requirements, the Company changed the presentation of certain accounts in the balance sheet as follows:

     - (i) Under IFRS 15, liabilities in relation to sales of gift certificates and gift cards, and franchise agreements are recognized as contract liabilities, but were previously presented as advance receipts in the balance sheet. As of January 1, 2018, the balance would amount to $2,393,630.

     - (ii) Under IFRS 15, liabilities in relation to the customer loyalty program are recognized as contract liabilities, but were previously presented as deferred revenue in the balance sheet. As of January 1, 2018, the balance would amount to $150,611.

  - (f) Please refer to Notes 12(4) and 12(5) for other disclosure(s) in relation to the first application of IFRS 9 and IFRS 15.

(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 2019 are as follows:

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

Except for the following, the above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment. The quantitative impact will be disclosed when the assessment is complete.

IFRS 16, ‘Leases’

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.

The Company expects to recognize the lease contract of lessees in line with IFRS 16. However, the Company does not intend to restate the financial statements of prior period (collectively referred herein as the “modified retrospective approach”). On January 1, 2019, it is expected that “right-of-use asset” and lease liability will be increased by $27,293,202 and $27,486,853, respectively.

(3) IFRSs issued by IASB but not yet endorsed by the FSC

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

IFRSs as endorsed by the FSC are as follows:
New Standards, Interpretations and Amendments Amendment to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of Material’ Amendments to IFRS 3, ‘Definition of a business’ Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’	Effective date by International Accounting Standards Board
	January 1, 2020 January 1, 2020 To be determined by International Accounting Standards Board January 1, 2021

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

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4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

The parent company only financial statements have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

(2) Basis of preparation

A. Except for the following items, the parent company only 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 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 Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.
C. In adopting IFRS 9 and IFRS 15 effective January 1, 2018, the Company has elected to apply modified retrospective approach whereby the cumulative impact of the adoption was recognized as retained earnings or other equity as of January 1, 2018 and the financial statements for the year ended December 31, 2017 was not restated. The financial statements for the year ended December 31, 2017 was prepared in compliance with International Accounting Standard 39 (‘IAS 39’), International Accounting Standard 18 (‘IAS 18’) and related financial reporting interpretations. Please refer to Notes 12(4) and (5) for details of significant accounting policies and details of significant accounts.
(3) Foreign currency translation

Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the Company operates (the “functional currency”). The parent company only 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 re-translated 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.

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(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, non-monetary 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 other 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 group entities, 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 Company 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 Company 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.
(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.

(4) 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 twelve months from the balance sheet date;

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(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve 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 settled within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be se within twelve months from the balance sheet date;
(d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve 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.

(5) 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 are classified as cash equivalents.

(6) 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 Company measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.
D. The Company recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(7) 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 Company 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 Company’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.
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 Company measures the financial assets at fair value plus transaction costs. The Company 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

~23~

as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company 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.

(8) Accounts and notes receivable

A. Accounts and notes receivable entitle the Company 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.

(9) Impairment of financial assets

For debt instruments measured at fair value through other comprehensive income and financial assets at amortize

ed 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.

(10) Leases (lessor)

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.

(11) Inventories

A. Purchases are initially recorded at cost. Cost is determined using the retail inventory method.
B. Ending inventories are stated at the lower of cost and net realizable value, and 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.

– (12) Investments accounted for using equity method subsidiaries, associates and joint ventures

A. Subsidiaries are all entities controlled by the Company. The Company controls an entity when the Company 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.
B. Unrealized gains or losses resulting from inter-company transactions with subsidiaries are eliminated. Necessary adjustments are made to the accounting policies of subsidiaries, to be consistent with the accounting policies of the Company.
C. The Company’s share of its subsidiaries’ 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 Company’s share of losses in a

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subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognize its share in the subsidiary’s loss proportionately.

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 owner. 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 Company loses control of a subsidiary, the Company 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 Company 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.
F. Associates are all entities over which the Company 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.
G. The Company’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 Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
H. 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 Company’s ownership percentage of the associate, the Company recognizes the Company’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.
I. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’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 Company.
J. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of equity interest. If the above condition causes a decrease in the Company’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

~25~

reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

K. Upon loss of significant influence over an associate, the Company 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.
L. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts 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.
M. When the Company 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.
N. The Company accounts for its interest in a joint venture using equity method. Unrealized profits and losses arising from the transactions between the Company and its joint venture are eliminated to the extent of the Company’s interest in the joint venture. The Company’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. 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 Company’s share of losses in a joint venture equals or exceeds its interest in the joint venture together with any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the joint venture.
O. According to “Rules Governing the Preparation of Financial Statements by Securities Issuers”, profit for the year and other comprehensive income for the year reported in the parent company only financial statements, shall be equal to profit for the year and other comprehensive income attributable to owners of the parent reported in the consolidated financial statements, equity reported in the parent company only financial statements shall be equal to equity attributable to owners of parent reported in the consolidated financial statements.

(13) 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 Company 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. Property, plant and equipment are measured subsequently using the cost model. 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

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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 reviewed, 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 50 years Office equipment 4~7 years Leasehold improvements 7 years

(14) Leases (Lessee)

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

(15) 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 50 years.

(16) Intangible assets

Computer software and copyright are stated at cost and amortized on a straight-line basis over its estimated useful life of 3 to 15 years.

(17) Impairment of non-financial assets

A.The Company 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.
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.

(18) Notes and accounts payable

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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.

(19) Provisions

The Company’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.

(20) 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 plan

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 plan
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 Company 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 defined benefit net 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.

C. Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Company’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 Company recognizes expense when it can no longer withdraw an offer of termination benefits or it

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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 Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

(21) 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 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 or 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 Company 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 utilized. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.
E. A deferred tax asset shall be recognized 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 utilized.
(22) Revenue recognition
A. Sale of goods
- (a) The Company operates a chain of retail stores. Revenue from the sale of goods is

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recognized when the Company sells a product to the customer.

(b) Payment of the transaction price is due immediately when the customer purchases the product. It is the Company’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 Company 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 Company provides delivery services. Revenue from delivering services is recognized when the services have been provided.

C. Financing components

The Company 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 Company does not adjust any of the transaction prices for the time value of money.

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

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’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 Company 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

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
	December 31, 2018	December 31, 2017
Cash on hand and petty cash	$ 1,072,918	$ 1,310,407
Checking accounts and demand deposits	8,198,849	9,543,575
Cash equivalents
Time deposits	500,000	6,380,000
Short-term financial instruments	4,298,948	5,188,999

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$ 14,070,715 $ 22,422,981

A. The Company 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. The Company has no cash and cash equivalents pledged to others.

(2) Accounts receivable

		December 31, 2018	December 31, 2018	December 31, 2017	December 31, 2017	December 31, 2017
Accounts receivable		$	605,322	$		607,324
Less: Allowance for sales returns and discounts			- (			327 )
Allowance for doubtful accounts		(	1,432) (			6,326 )
		$	603,890	$		600,671
A. The ageing analysis of accounts receivable that were past			due but not impaired			is as follows:
				December 31, 2018
Not past due				$		427,682
Up to 90 days						175,793
91 to 120 days						684
Over 121 days						1,163
				$		605,322
The above aging analysis was based on past		due date. Information on December 31, 2017 is
provided in Note 12(4).
B. No accounts receivable of the Company were pledged to others.
C. As at December 31, 2018 and 2017, 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 Company’s accounts	receivable were $603,890 and $600,671				respectively.
D. Information relating to credit risk is provided in Note 12(2).
Inventories
			December 31, 2018
			Allowance for
		Cost	valuation loss			Book value
Merchandise	$	8,035,682	($ 15,314)		$	8,020,368
			December 31, 2017
			Allowance for
		Cost	valuation loss			Book value
Merchandise	$	7,220,698	($ 25,991)		$	7,194,707

The above aging analysis was based on past due date. Information on December 31, 2017 is provided in Note 12(4).

(3) Inventories

The cost of inventories recognized as expense:

The cost of inventories recognized as expense:
	For the year ended	For the year ended December 31, 2017
	December 31, 2018
Cost of goods sold	$ 99,191,826	$ 92,101,994
Gain on valuation of inventory	( 10,677)	( 20,062)
Spoilage	1,640,604	1,540,954
Others	240,611	217,697
	$ 101,062,364	$ 93,840,583

The Company reversed a previous inventory write-down because the Company sold certain

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inventories which were previously provided with allowance during the years ended December 31, 2018 and 2017, respectively.

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

2018 and 2017, respectively. Financial assets at fair value through profit or loss
	December 31, 2018
Non-current items:
Unlisted stocks	$ 274,863
Valuation adjustment	( 189,180)
	$ 85,683

A.No financial assets at fair value through profit or loss of the Company were pledged to others.
B. Information relating to credit risk is provided in Note 12(2).
C. Information on December 31, 2017 is provided in Note 12(4).

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

Equity instruments Listed stocks Unlisted stocks Valuation adjustment	December 31, 2018
	$ 265,606 4,348
	269,954 374,660
	$ 644,614

A. The Company 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 $644,614 as at December 31, 2018.
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:

For the year ended December 31, 2018

Equity instruments at fair value through other comprehensive income

Fair value change recognized in other comprehensive income ($ 143,849)

C. As at December 31,2018, 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 Company was $644,614.
D. No financial assets at fair value through other comprehensive income of the Company were pledged to others.
E. Information relating to credit risk is provided in Note 12(2).
F. Information on December 31, 2017 is provided in Note 12(4).

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(6) Investments accounted for using the equity method

For the year ended
December 31, 2018
At January 1
$ 47,983,892
Addition of investments accounted for using equity method
-
Disposal of investments accounted for using equity method (
1,769 )
Share of profit or loss of investment accounted for using
equity method
3,473,458
Earnings distribution of investment accounted for using
equity method
(
2,725,951 )
Changes in other equity items
548,109
Changes in other items
(
183,337)
At December 31
$ 49,094,402

For the year ended
December 31, 2017
$ 22,286,379
6,391,743

-
26,930,861
(
6,926,632 )
(
741,176 )

42,717
$ 47,983,892

Subsidiaries President Chain Store (BVI) Holdings Ltd. Uni-Wonder Corp. President Transnet Corp. President Drugstore Business Corp. President Pharmaceutical Corp. Mech-President Corp. Uni-President Cold-Chain Corp. Uni-President Department Store Corp. Wisdom Distribution Service Corp. President Information Corp. Uni-President Superior Commissary Corp. Books.com. Co., Ltd. Q-ware Systems & Services Corp. ICASH Corp. Duskin Serve Taiwan Co. Retail Support International Corp. President Yilan Art and Culture Corp. President Collect Services Co., Ltd., etc.	December 31, 2018 $ 25,850,474 5,289,524 1,518,487 1,367,838 756,001 694,277 645,440 566,145 506,392 489,299 467,659 417,935 372,945 356,073 194,788 174,830 51,328 374,387 40,093,822	December 31, 2017 $ 24,607,905 5,809,284 1,438,218 1,419,062 728,214 681,820 617,057 530,833 433,012 506,567 456,939 420,255 356,381 352,272 197,140 195,525 231,906 345,780 39,328,170

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	December 31, 2018	December 31, 2018	December 31, 2017	December 31, 2017
Associates
PresiCarre Corp.		5,518,380		5,198,249
President Fair Development Corp.		1,984,125		1,954,089
Uni-President Development Corp.		753,904		750,774
President International Development Corp.		461,328		466,885
Tung Ho Development Corp.		114,755		123,504
President Organics Corp., etc.		60,209		64,989
		8,892,701		8,558,490
Joint ventures
Mister Donut Taiwan Co., Ltd.		107,879		97,232
	$	49,094,402	$	47,983,892

A. Information about the subsidiaries of the Company is provided in Note 4(3), “Basis of preparation” of the consolidated financial statements as of and for the year ended December 31, 2018.
B. The Company originally held 30% shares of its joint venture using the equity method – Uni – Wonder Corp. (formerly “President Starbucks Coffee Corp.”). In December 2017, the Company acquired an additional 30% shares of President Starbucks Coffee Corp. for a cash consideration of $3,226,806 (shown as ‘other payables’as at December 31, 2017) and obtained control over Uni-Wonder Corp.. Relevant cash consideration was fully paid in February, 2018.

The acquisition of additional shares in Uni-Wonder Corp. was in accordance with International Financial Reporting Standards (“IFRS”) 3 “Business Combinations”. The Company recognized a gain of $2,099,503 (shown as ‘gain on disposal of investments’) as a result of measuring at fair value its 30% equity interest in Uni-Wonder Corp. held before the business combination. Please refer to Note 6(21).

C. Information about the Company’s disposal of investments accounted for using equity method in August, 2018 is provided in Note 7(3)f.
D. The acquisition of additional shares in certain investments in associates or joint ventures are not significant to the Company. The details of the Company’s share of the operating results in the aforementioned investments are as follows:
(a) The Company’s share of the operating results in all individually immaterial associates is summarized below:

he acquisition of additional shares in certain investments in associates or joint ventures are not gnificant to the Company. The details of the Company’s share of the operating results in the forementioned investments are as follows: (a) The Company’s share of the operating results in all individually immaterial associates is summarized below:	he acquisition of additional shares in certain investments in associates or joint ventures are not gnificant to the Company. The details of the Company’s share of the operating results in the forementioned investments are as follows: (a) The Company’s share of the operating results in all individually immaterial associates is summarized below:	he acquisition of additional shares in certain investments in associates or joint ventures are not gnificant to the Company. The details of the Company’s share of the operating results in the forementioned investments are as follows: (a) The Company’s share of the operating results in all individually immaterial associates is summarized below:
For the year ended December 31, 2018 For the year ended December 31, 2017 Total comprehensive income $ 398,334 $ 368,535 (b) The Company’s share of the operating results in all individually immaterial joint ventures is summarized below: For the year ended December 31, 2018 For the year ended December 31, 2017 Total comprehensive income $ 23,471 $ 252,743
	For the year ended	For the year ended
	December 31, 2018	December 31, 2017
	$ 23,471	$ 252,743

E. No impairment loss was recognized on investments accounted for using equity method for the years ended December 31, 2018 and 2017, respectively.

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(7) Property, plant and equipment

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

At January 1, 2018 Cost Accumulated depreciation and impairment 2018 Opening net book amount as of January 1 Additions Disposals Transfer Depreciation charge Reversal of impairment loss Closing net book amount as of December 31 At December 31, 2018 Cost Accumulated depreciation and impairment	(	Land $ 1,564,223 16,367) $ 1,547,856 $ 1,547,856 - - - - - $ 1,547,856 $ 1,564,223 16,367) $ 1,547,856	Buildings Office equipment $ 973,001 $ 13,119,148 ( 326,414 ) ( 9,022,956 ) ( $ 646,587 $ 4,096,192 $ 646,587 $ 4,096,192 - 1,299,599 - ( 13,263 ) ( - ( 12 ) ( 19,251 ) ( 1,371,875 ) ( - 1,842 $ 627,336 $ 4,012,483 $ 973,001 $ 13,563,007 ( 345,665 ) ( 9,550,524 ) ( $ 627,336 $ 4,012,483	Leasehold improvements $ 7,789,418 5,134,871 ) $ 2,654,547 $ 2,654,547 992,771 22,396 ) 1,767 704,250 ) 559 $ 2,922,998 $ 8,250,964 5,327,966 ) $ 2,922,998	Others $ 9,529 ( 8,252) ( $ 1,277 $ 1,277 3,193 - ( - ( 924) ( - $ 3,546 $ 12,121 ( 8,575) ( $ 3,546	Total $ 23,455,319 14,508,860) $ 8,946,459 $ 8,946,459 2,295,563 35,659) 1,755 2,096,300) 2,401 $ 9,114,219 $ 24,363,316 15,249,097) $ 9,114,219
	(		(

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At January 1, 2017 Cost Accumulated depreciation and impairment 2017 Opening net book amount as of January 1 Additions Disposals Transfer Depreciation charge Impairment loss and reversal of impairment loss Closing net book amount as of December 31 At December 31, 2017 Cost Accumulated depreciation and impairment		Land Buildings $ 1,535,401 $ 969,608 ( 16,520) ( 295,688 ) $ 1,518,881 $ 673,920 $ 1,518,881 $ 673,920 - - - - 28,822 3,393 - ( 19,604) 153 ( 11,122) $ 1,547,856 $ 646,587 $ 1,564,223 $ 973,001 16,367) ( 326,414 ) $ 1,547,856 $ 646,587	Office equipment $ 12,633,382 ( 8,668,206 ) ( $ 3,965,176 $ 3,965,176 1,464,557 ( 18,504 ) ( 116 ( 1,322,405 ) ( 7,252 $ 4,096,192 $ 13,119,148 ( 9,022,956 ) ( $ 4,096,192	Leasehold improvements Others Total $ 7,381,536 $ 9,529 $ 22,529,456 4,932,724 ) ( 7,623) ( 13,920,761) $ 2,448,812 $ 1,906 $ 8,608,695 $ 2,448,812 $ 1,906 $ 8,608,695 834,505 - 2,299,062 40,943) - ( 59,447) 12,847 - 45,178 594,281) ( 629) ( 1,936,919) ( 6,393 ) - ( 10,110) $ 2,654,547 $ 1,277 $ 8,946,459 $ 7,789,418 $ 9,529 $ 23,455,319 5,134,871 ) ( 8,252) ( 14,508,860) $ 2,654,547 $ 1,277 $ 8,946,459
	(		(

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

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(8) Investment property

2018 January 1, 2018 Depreciation charge December 31, 2018 2017 January 1, 2017 Additions Transfer Depreciation charge Impairment loss ( December 31, 2017	Land Buildings Total $ 962,783 $ 234,036 $ 1,196,819 - ( 7,365) ( 7,365) $ 962,783 $ 226,671 $ 1,189,454 Land Buildings Total $ 805,515 $ 222,862 $ 1,028,377 132,700 15,619 148,319 28,047 3,303 31,350 - ( 7,414) ( 7,414) 3,479) ( 334) ( 3,813) $ 962,783 $ 234,036 $ 1,196,819

A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

Rental income from investment property Direct operating expenses arising from the investment property that generated rental income during the year	For the year ended December 31, 2018 $ 58,548 $ 8,036	For the year ended December 31, 2017 $ 54,704 $ 8,566

B. The fair value of the investment property held by the Company as at December 31, 2018 and 2017 ranged from $2,875,538 to $2,881,471, respectively, which was assessed based on recent settlement prices of similar and comparable properties, as well as the reports of independent appraisers.

(9) Intangible assets

2018 January 1, 2018 Amortization ( December 31, 2018 2017 January 1, 2017 Additions Amortization ( December 31, 2017 Amortization on intangible assets are recognized as operating expenses.	Software and copyright $ 211,865 92,846) $ 119,019 Software and copyright $ 278,320 33,020 99,475) $ 211,865

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(10) Other non-current assets

(10)	Other non-current assets
(11)				December 31, 2018	December 31, 2017
	Guarantee deposits paid			$ 1,231,311	$ 1,174,967
	Others			-	1,755
				$ 1,231,311	$ 1,176,722
	Short-term borrowings Type of borrowings Bank borrowings Credit loan	December 31, 2018 $ 6,000,000	Interest rate range 0.65%~0.68%		Collateral None

A. There was no short-term borrowings at December 31, 2017.
B. There was no capitalization of borrowing costs for the year ended December 31, 2018. Relevant interest expenses on borrowings is recognized as “finance costs”.

(12) Other payables

Store collections Wages, salaries and bonus payable Incentive bonus payable to franchisees Employees’ compensation and remuneration for directors and supervisors Rent payable Payables for acquisition of property, plant and equipment Payables for system development and maintenance expenses Payables for labor and health insurance Payables for equity investments (See Note 6(6)B) Others Advance receipts Advance receipts for gift certificates Advance receipts for gift cards Advance receipts for franchise fee Others	December 31, 2018 $ 12,750,758 1,896,744 1,047,674 769,767 495,621 399,331 77,981 70,483 - 1,318,949 $ 18,827,308 December 31, 2018 $ 1,351,283 - - 111,809 $ 1,463,092	December 31, 2017 $ 11,947,975 2,154,349 931,016 1,534,216 484,075 407,065 254,803 67,579 3,226,806 1,278,880 $ 22,286,764 December 31, 2017 $ 1,240,616 737,431 231,312 250,168 $ 2,459,527

(13) Advance receipts

Advance receipts for gift cards and franchise fee are recognized as contract liabilities in accordance with IFRS15 from January 1, 2018. Please refer to Notes 3(1)c and 6(19).

(14) Pensions

A. The Company has a defined benefit pension plan in accordance with the Labor Standards Law,

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covering 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 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 6 months prior to retirement. The Company contributes monthly an amount equal to 4.46% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company 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 of the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

(a) The amounts recognized in the balance sheet are as follows:

			December	December	31, 2018 December 31, 2017	31, 2018 December 31, 2017	31, 2018 December 31, 2017	31, 2018 December 31, 2017	31, 2018 December 31, 2017
Present value of defined benefit obligations			($	4,337,814) ($					4,248,125)
Fair value of plan assets				1,477,209					1,405,745
Net defined benefit liability			($	2,860,605) ($					2,842,380)
Movements in net defined benefit liability			are as follows:
		Present value of
		defined benefit			Fair value of			Net defined
			obligation			plan assets		benefit liability
For the year ended December 31, 2018
Balance at January 1	($		4,248,125 )	$		1,405,745	($		2,842,380)
Current service cost	(		42,483 )			-	(		42,483 )
Interest (expense) income	(		52,568)			17,523	(		35,045 )
	(		4,343,176)			1,423,268	(		2,919,908 )
Remeasurements:
Return on plan assets			-			38,921			38,921
Change in demographic assumptions	(		479 )			-	(		479 )
Change in financial assumptions	(		131,821 )			-	(		131,821 )
Experience adjustments			64,160			-			64,160
	(		68,140)			38,921	(		29,219 )
Pension fund contribution			-			86,829			86,829
Paid pension			73,502	(		71,809)			1,693
Balance at December 31	($		4,337,814 )	$		1,477,209	($		2,860,605 )

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

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		Present value of
		defined benefit		Fair value of			Net defined
		obligation			plan assets		benefit liability
For the year ended December 31, 2017
Balance at January 1	($	4,043,240 )		$	1,369,491	($		2,673,749)
Current service cost	(	46,902 )			-	(		46,902 )
Past service cost	(	519 )			-	(		519 )
Interest (expense) income	(	60,035 )			20,576	(		39,459 )
	(	4,150,696)			1,390,067	(		2,760,629 )
Remeasurements:
Return on plan assets		-	(		7,147 )	(		7,147 )
Change in demographic assumptions	(	4,556 )			-	(		4,556 )
Change in financial assumptions	(	133,625 )			-	(		133,625 )
Experience adjustments	(	34,884)			-	(		34,884)
	(	173,065 )	(		7,147)	(		180,212 )
Pension fund contribution		-			86,263			86,263
Paid pension		75,636	(		63,438)			12,198
Balance at December 31	($	4,248,125 )		$	1,405,745	($		2,842,380 )

(c) The Bank of Taiwan was commissioned to manage the Fund of the Company’s 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, 2018 and 2017 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

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(d) The principal actuarial assumptions used were as follows:

	For the year ended	For the year ended
	December 31, 2018	December 31, 2017
Discount rate	1.00%	1.25%
Future salary increases	3.00%	3.00%

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 is as follows:

analysis is as follows:
December 31, 2018 Effect on present value of defined benefit obligation( December 31, 2017 Effect on present value of defined benefit obligation(	Discount rate Increase Decrease 0.25% 0.25% $ 131,704) $ 137,399 Discount rate Increase Decrease 0.25% 0.25% $ 133,587) $ 139,547	Future salary increases
		Increase Decrease 0.25% 0.25% $ 134,014 ($ 129,187) Future salary increases
	Increase 0.25% $ 133,587)	Increase 0.25% $ 136,524	Decrease 0.25% $ 131,421)

The sensitivity analysis above was arrived at based on one assumption which changed while the other conditions remained 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 method and assumption used in the current sensitivity analysis are the same as prior year.

(e) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2019 amounts to $87,771.
(f) As of December 31, 2018, the weighted average duration of the retirement plan is 11 years. The analysis of timing of the future pension payment is as follows:

The analysis of timing of the future pension payment is as follows:
Within 1 year 1-2 year(s) 2-5 years Over 5 years	$ 90,073 137,653 429,617 4,241,902
	$ 4,899,245

B. Effective July 1, 2005, the Company has established a defined contribution pension plan (the

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“New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes 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. The pension costs under the Company’s defined contribution pension plan for the years ended December 31, 2018 and 2017 were $196,584 and $189,546, respectively.

(15) Share capital

As of December 31, 2018, 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, 2018 and 2017.

(16) Capital surplus

In accordance with the Company Act of the Republic of China, any capital surplus arising from paid-in 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 surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(17) 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 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 year 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 be 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 is 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 2017 and 2016 were resolved by the shareholders on June 12, 2018 and

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June 13, 2017, respectively, as follows:

Legal reserve Special reserve Cash dividends - retained earnings	2017	2017	2016 Dividends per share Amount (in dollars) $ 983,669 - 8,316,978 $ 8.00	2016 Dividends per share Amount (in dollars) $ 983,669 - 8,316,978 $ 8.00
	Amount $ 3,101,709 398,859 25,990,556	Dividends per share (in dollars) $ 25.00	Amount $ 983,669 - 8,316,978
				$ 8.00

E. The appropriations for 2018 as resolved by the Board of Directors on February 27, 2019 is as follows:

follows:
Legal reserve Cash dividends - retained earnings	2018
	Amount $ 1,020,639 9,148,676	Dividends per share (in dollars)
		$ 8.80

F. Information about employees’ compensation and directors’ and supervisors’ remuneration is provided in Note 6(24).

(18) Other equity items

ther equity items
At January 1, 2018 Adjustments under new standards Adjusted beginning balance Revaluation: –The Company –Subsidiaries –Associates –Revaluation - tax Currency translation differences: –The Company –Subsidiaries –Associates At December 31, 2018			For theyear ended December31,2018
	Exchange differences from translation of Unrealized gains/(losses) on Financial assets at fair value through other foreign operations comprehensive income ($ 906,308 ) $ - - 477,996 ( ( 906,308 ) 477,996 - ( 143,849 ) - ( 1,537 ) - ( 2,842 ) - 3,666 619,530 - 593 - 6,356 - ($ 279,829 ) $ 333,434			Unrealized gains/(losses) on available-for-sale Total financial assets $ 507,449 ($ 398,859 ) 507,449) ( 29,453 ) - ( 428,312 ) - ( 143,849 ) - ( 1,537 ) - ( 2,842 ) - 3,666 619,530 593 - 6,356 $ - $ 53,605

~43~

At January 1, 2017 Revaluation: –The Company –Subsidiaries –Associates –Revaluation - tax Currency translation differences: –The Company –Subsidiaries –Associates At December 31, 2017	For the	year ended December31,2017	year ended December31,2017
	Exchange differences from translation of foreign operations ($ 186,228 ) - - - - ( 697,337 ) ( 2,361 ) ( 20,382 ) ($ 906,308 )	Unrealized gains/(losses) on available-for-sale financial assets $ 357,817 152,186 ( 933 ) 4,662 ( 6,283 ) - - - $ 507,449	Total $ 171,589 152,186 ( 933 ) 4,662 ( 6,283 ) ( 697,337 ) ( 2,361 ) ( 20,382) ($ 398,859)

(19) Operating revenue

Revenue from contracts with customers

For the year ended December 31, 2018 $ 154,074,731

A. Disaggregation of revenue from contracts with customers

The Company operates a chain of retail stores and derives revenue from the transfer of goods and services over time and at a point in time. The operating revenue is categorized based on operating departments and goods or services recognition timing as follows:

For the year ended December 31, 2018 Revenue from external customer contracts Timing of revenue recognition –At a point in time –Over time	Convenience stores $ 154,074,731	Convenience stores
	$ 153,544,331 530,400
	$ 154,074,731

B. Contract liabilities

(a) The Company has recognized the following revenue-related contract liabilities:

Contract liabilities – advance receipts of gift cards Contract liabilities – franchise fee Contract liabilities – customer loyalty programs Contract liabilities – others	$	December 31, 2018 980,048 230,812 151,550 82,289
	$	1,444,699

~44~

Contract liabilities- current Contract liabilities- non-current	December 31, 2018 $ 1,293,149 151,550 $ 1,444,699

(b) Revenues recognized that were included in the contract liabilities balance at the beginning was $626,164 for the year ended December 31, 2018.
C. Related disclosures on operating revenue for the year ended December 31, 2017 are provided in Note 12(5) B.

(20) Other income

Grants income Dividend income Rental revenue Interest income Other income	For the year ended December 31, 2018 $ 492,535 65,124 77,399 83,534 698,946 $ 1,417,538	For the year ended December 31, 2017 $ 480,437 17,311 76,794 104,826 694,824 $ 1,374,192

(21) Other gains and losses

Other gains and losses
	For the year ended			For the year ended
	December 31, 2018			December 31, 2017
Reversal of impairment loss (Impairment loss)	$	2,401		($	13,923 )
Gain on disposal of investments (See Note 6(6)B)		59			2,100,386
Loss on disposal of property, plant and equipment	(	9,632 )		(	14,868 )
Others	(	61,644)		(	91,831 )
	($	68,816	)	$	1,979,764
Financial costs
	December 31, 2018			December 31, 2017
Interest expense	$	42,971		$	30,491

(22) Financial costs

~45~

(23) Expenses by nature

Cost of goods sold Incentive bonuses for franchisees Employee benefit expense Operating lease payments Utilities expense Depreciation and amortization Other costs and expenses Total operating costs and operating expenses	For the year ended December 31, 2018 $ 99,181,149 20,904,939 7,131,255 6,660,551 2,225,153 2,189,146 8,127,957 $ 146,420,150	For the year ended December 31, 2017 $ 92,081,932 19,604,749 8,398,951 6,376,434 2,172,928 2,036,394 7,561,767 $ 138,233,155

(24) Employee benefit expense

Wages and salaries Labor and health insurance fees Pension costs Directors’ remuneration Other personnel expenses	For the year ended December 31, 2018 $ 5,831,681 461,590 274,112 204,485 359,387 $ 7,131,255	For the year ended December 31, 2017 $ 6,789,931 437,886 276,426 557,119 337,589 $ 8,398,951

Note: As of December 31, 2018 and 2017, the Company had 8,106 and 7,877 employees (including part-timers), including 10 directors, respectively.
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, 2018 and 2017, employees’ compensation was accrued at $576,995 and $985,057, respectively; while directors’ and supervisors’ remuneration was accrued at $192,772 and $549,159, 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, 2018. The employees’ compensation and directors’ and supervisors’ remuneration as resolved by the Board of Directors were $576,995 and $192,772, respectively, and the employees’ compensation will be distributed in the form of cash.

Employees’ compensation and directors’ and supervisors’ remuneration for 2017 as resolved at the meeting of Board of Directors were in agreement with those amounts recognized in the 2017 financial statements.

~46~

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

(25) Income tax

A. Income tax expense

(a)Components of income tax expense:

Current tax: Current tax on profits for the year Tax on undistributed surplus earnings Under (over) provision of prior year's income tax Total current tax Deferred tax: Origination and reversal of temporary differences Impact of change in tax rate Income tax expense	For the year ended December 31, 2018 $ 1,751,318 135,157 ( 126,188) 1,760,287 ( 46,101) 513,216 $ 2,227,402	For the year ended December 31, 2017 $ 2,123,673 35,532 6,430 2,165,635 3,318,322 - $ 5,483,957

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

as follows:
	For the year ended				For the year ended
	December 31, 2018				December 31, 2017
Changes in fair value of financial assets at fair
value through other comprehensive income	($	6,984)			$	-
Fair value gains/losses on available-for-sale
financial assets		-				6,283
Remeasurement of defined benefit obligations	(	5,843)		(		30,636)
Impact of change in tax rate	(	36,898)				-
	($	49,725	)	($		24,353 )

~47~

B. Reconciliation between income tax expense and accounting profit

Tax calculated based on profit before tax and
statutory tax rate
Expenses disallowed by tax regulation
(
Capital reduction plan to offset accumulated
deficit by subsidiaries
(
Tax on profit for using equity method by domestic
subsidiaries
(
Additional 10% tax on undistributed earnings
Under (over) provision of prior year’s income tax (
Investment tax credits
(
Impact of change in tax rate
Income tax expense

For the year ended
December 31, 2018
For the year ended
December 31, 2017
$ 2,486,758 $ 6,205,179

201,937 ) (
159,717 )

8,302 ) (
151,165 )

570,644 ) (
452,152 )
135,157
35,532

126,188 )
6,430

658 ) (
150 )
513,216
-
$ 2,227,402
$ 5,483,957

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

2018 Impact of change inRecognized in January 1 taxrate profit or loss Deferred tax assets: Allowance for doubtful accounts $ 1,002 $ 177 ($ 980 ) Unrealized sales allowance 56 10 ( 66 ) Unrealized expenses 139,303 24,583 9,347 Contract liabilities - non-current 25,764 4,547 188 Remeasurements of defined benefit obligation 438,656 77,409 - Others 69,178 12,208 ( 6,767) 673,959 118,934 1,722 Deferred tax liabilities Unrealized gain ( 28,210 ) ( 4,979 ) - Foreign investment income (3,344,880 ) ( 590,273 ) 44,379 (3,373,090 ) (595,252 ) 44,379 ($ 2,699,131) ($ 476,318 ) $ 46,101			2018
				Recognized in other comprehensive income
				$ - - - - 5,843 -

~48~

Deferred tax assets:
Allowance for doubtful
accounts
Unrealized sales allowance
Unrealized expenses
Deferred revenues
Remeasurements of defined
benefit obligation
Others
Deferred tax liabilities
Unrealized gain
Foreign investment income

2017
Recognized
in other
Recognized in comprehensive
January 1
profit or loss
income
December 31
$ 12,555 ($ 11,553 ) $ - $ 1,002
134 ( 78 ) - 56
131,706
7,597 - 139,303
13,678
12,086 - 25,764
408,020
- 30,636
438,656
38,158
18,506
12,514
69,178
604,251
26,558
43,150
673,959
(
9,413 ) - ( 18,797 ) ( 28,210 )
-
(3,344,880 )
-
(
3,344,880)
(
9,413 )
(3,344,880 )
(18,797)
(
3,373,090)
$ 594,838
($ 3,318,322)
$ 24,353
($ 2,699,131)

D. The Company’s income tax returns through 2016 have been assessed and approved by the Tax Authority.
E. All unappropriated earnings were generated on and after January 1, 1998.
F. 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 Company has assessed the impact of the change in income tax rate.

(26) Earnings per share

change in income tax rate. arnings 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, 2018
	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	Earnings per share (in dollars) $ 9.82 $ 9.79
				$ 9.82 $ 9.79

~49~

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, 2017 Amount after tax Weighted average number of ordinary shares outstanding (shares in thousands) Earnings per share (in dollars) $ 31,017,094 1,039,622 $ 29.83 $ 31,017,094 1,039,622 - 3,848 $ 31,017,094 1,043,470 $ 29.72	For the year ended December 31, 2017 Amount after tax Weighted average number of ordinary shares outstanding (shares in thousands) Earnings per share (in dollars) $ 31,017,094 1,039,622 $ 29.83 $ 31,017,094 1,039,622 - 3,848 $ 31,017,094 1,043,470 $ 29.72	For the year ended December 31, 2017 Amount after tax Weighted average number of ordinary shares outstanding (shares in thousands) Earnings per share (in dollars) $ 31,017,094 1,039,622 $ 29.83 $ 31,017,094 1,039,622 - 3,848 $ 31,017,094 1,043,470 $ 29.72
	Amount after tax $ 31,017,094 $ 31,017,094 - $ 31,017,094	Weighted average number of ordinary shares outstanding (shares in thousands) 1,039,622 1,039,622 3,848 1,043,470

(27) Operating leases

Lessor

A. The Company leases its investment property and shopping centres to others under operating lease agreements on terms between 2 and 10 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 $ 60,250 207,825 6,195 $ 274,270	December 31, 2017 $ 58,193 225,428 30,324 $ 313,945

Lessee

A. The Company leases business premises for its stores. The lease terms are between 1 and 20 years, and certain lease agreements are renewable at the end of the lease period. Rents are paid in accordance with the agreements. Certain leases incur extra rent based on the operating revenue of stores or changes in local price indices. Rental expenses recognized in profit and loss for the years ended December 31, 2018 and 2017 are as follows:

~50~

	For the year ended	For the year ended
	December 31, 2018	December 31, 2017
Rental expenses	$ 6,397,092	$ 6,138,050
Contingent rents	$ 263,459	$ 238,384

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 $ 6,468,378 22,180,633 12,723,044 $ 41,372,055	December 31, 2017 $ 6,014,560 20,158,903 9,999,009 $ 36,172,472

B. The Company has sub-leased certain business premises to others. Sublease revenues recognized in profit and loss for the years ended December 31, 2018 and 2017 are as follows:

Sublease revenues Contingent rents	For the year ended December 31, 2018 $ 153,047 $ 389,452	For the year ended December 31, 2017 $ 149,827 $ 357,378

In accordance with non-cancellable sub-lease agreements as of December 31, 2018, sub-lease payments totalling $294,113 are expected to be collected between 2019 and 2028.

(28) Supplemental cash flow information

Investing activities with partial cash payments

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	For the year ended	For the year ended
	December 31, 2018	December 31, 2017
	$ 2,295,563	$ 2,299,062
	407,065	387,239
	399,331) (	407,065 )
	$ 2,303,297	$ 2,279,236

(29) Changes in liabilities from financing activities

January 1, 2018 Changes in cash flow from financing activities December 31, 2018	Short-term borrowings $ - 6,000,000 $ 6,000,000	Other non-current liabilities - guarantee deposits received $ 2,435,662 98,296 $ 2,533,958	Liabilities from financing Activities -gross $ 2,435,662 6,098,296 $ 8,533,958

~51~

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, 2018.

(2) Names of related parties and relationship

Names of relatedparties
Uni-President Enterprises Corp.

21 Century Enterprise Co., Ltd.

Books.com. Co., Ltd.

Capital Inventory Services Corp.

Duskin Serve Taiwan Co.

ICASH Corp.

President Chain Store (BVI) Holdings Ltd.

President Information Corp.

President Logistics International Corp.

Uni-President Superior Commissary Corp.

President Pharmaceutical Corp.

President Transnet Corp.

Retail Support International Corp.

Uni-President Cold-Chain Corp.

Vision Distribution Service Corp.

Q-ware Systems & Services Corp.

Wisdom Distribution Service Corp.

Uni-Wonder Corp.

Tung Ang Enterprises Corp.

President Baseball Team Corp.

Presco Netmarketing Inc.

Tait Marketing & Distribution Co., Ltd.

President Packaging Ind. Corp.

Lien-Bo Enterprises Corp.

President Organics Corp.

Mister Donut Taiwan Co., Ltd.

Kuang Chuan Dairy Co.,Ltd

Wei Lih Food Industrial Co., Ltd. Relationship with theCompany

Ultimate parent company
Subsidiary
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
〃
Sister company
〃
〃
〃
〃
〃
Investee of the Company accounted for under
the equity method
〃
Investee of ultimate parent company accounted
for under the equity method
〃

~52~

(3) Significant related party transactions and balancese

A. Operating revenue

Commission revenue from collection services Subsidiaries Sister companies Purchases (net of purchase rebate) Ultimate parent Subsidiaries Sister companies Associates Other related parties	For the year ended December 31, 2018 $ 352,711 3,040,132 $ 3,392,843 For the year ended December 31, 2018 $ 14,923,741 4,384,596 3,376,375 234,899 722,188 $ 23,641,799	For the year ended December 31, 2017 $ 373,475 2,763,654 $ 3,137,129 For the year ended December 31, 2017 $ 14,628,726 4,835,388 3,389,670 259,831 541,462 $ 23,655,077

B. Purchases (net of purchase rebate)

(a) The purchases above is a net amount after deducting the replacement for defects and rebate.
(b) The Company’s purchases from the related parties are priced in accordance with the agreed terms that are generally not different from general vendors. The payment terms are net 10-60 days from the end of the month when invoice is issued and is generally not different from the general vendors.

C. Promotion income (recorded as deduction to “operating costs”)

Ultimate parent Subsidiaries Sister companies Associates Other related parties	For the year ended December 31, 2018 $ 454,755 236,068 165,667 13,837 96,782 $ 967,109	For the year ended December 31, 2017 $ 574,658 219,998 186,022 12,384 56,619 $ 1,049,681

The promotion income includes shelf display fee, advertising sponsorship and performance incentives, which are calculated and collected in a manner equivalent to the general suppliers.

~53~

D. Non-operating income

Ultimate parent Subsidiaries Sister companies Associates Other related parties Receivables (payables) from related parties Other receivables Ultimate parent Subsidiaries Sister companies Associates Other related parties Payables Ultimate parent Subsidiaries Sister companies Associates Other related parties	For the year ended December 31, 2018 $ 32,467 846,863 5,626 17,406 8 $ 902,370 December 31, 2018 $ 20,921 1,552,056 93,233 3,451 4 $ 1,669,665 $ 393,380 12,316,777 2,013 9,356 12,736 $ 12,734,262	For the year ended December 31, 2017 $ 30,115 856,266 4,181 19,084 6 $ 909,652 December 31, 2017 $ 72,563 6,475,700 71,301 24,230 - $ 6,643,794 $ 376,500 10,891,796 9,281 64,730 8,569 $ 11,350,876

E. Receivables (payables) from related parties

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

F. Property Transactions

Disposal of financial assets

				For the year ended	For the year ended
				December	31, 2018

	Accounts	No. of shares	Objects	Proceeds	Gain
Sister companies	Investments		Grand Bills
	accounted for using
	equity method	108,160	Finance Corp.	$ 1,828	$ 59

~54~

(4) Key management compensation

Key management compensation
	For the year ended	For the year ended
	December 31, 2018	December 31, 2017
Other short-term employee benefits	$ 297,731	$ 659,498

8. PLEDGED ASSETS

None.

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

The Company’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

Financial assets Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Available-for-sale financial assets Financial assets measured at cost Financial assets at amortized cost/Loans and receivables Cash and cash equivalents Accounts receivable, net Other receivables Guarantee deposit paid	December 31, 2018 $ 85,683 644,614 - - 14,070,751 603,890 2,515,131 1,231,311 $ 19,151,344	December 31, 2017 $ - - 848,575 25,721 22,422,981 600,671 7,556,281 1,174,967 $ 32,629,196

~55~

Financial liabilities Financial liabilities at amortized cost Short-term borrowings Notes payable Accounts payable Other payables Guarantee deposit received	December 31, 2018 $ 6,000,000 6,037,491 9,465,646 18,827,308 2,533,958 $ 42,864,403	December 31, 2017 $ - 5,739,310 8,761,922 22,286,764 2,435,662 $ 39,223,658

B. Risk management policies

(a) The Company’s risk management and hedging policies mainly focus on hedging business risk. The Company 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 assess 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 Company operates internationally and is exposed to foreign exchange risk arising from of the Company 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 the segments to manage their foreign exchange risk against their functional currencies.
III. The Company’s businesses involve some non-functional currency operations.( The Company’s functional currency is the New Taiwan dollar,NTD) The assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations are as follows:

~56~

(Foreign currency: functional currency) Financial assets Non-monetary items JPY:NTD Investments accounted for using equity method USD: NTD (Foreign currency: functional currency) Financial assets Non-monetary items JPY: NTD Investments accounted for using equity method USD: NTD Financial liabilities Monetary items USD: NTD			December 31, 2018	December 31, 2018	Book value (NTD) $ 200,721 $ 25,915,469 Book value (NTD) $ 235,640 24,672,816 $ 2,875,828
		Foreign currency amount (In thousands) Exchange rate $ 721,500 0.2782 $ 843,740 30.7150 December 31, 2017
				Exchange rate 0.2642 29.7600 29.7600

IV. The total exchange gain (loss), including realized and unrealized gain (loss) from significant foreign exchange variation on the monetary items held by the Company amounted to $18,145 and $927 for the years ended December 31, 2018 and 2017, respectively.
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 and accounts payable denominated in USD. As of December 31, 2018 and 2017, 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, 2018 and 2017 would increase/decrease by $1,295,773 and $1,089,849, respectively. Foreign exchange risk with respect to JPY primarily arises from the exchange gain or loss resulting from foreign currency translation of financial assets at fair value through other comprehensive income - non-current denominated in JPY. If the NTD:JPY exchange rate appreciates/depreciates by 5%, with all other factors remaining constant, the Group’s profit for the years ended December 31, 2018 and 2017 would

~57~

increase/decrease by $10,036 and $11,782, respectively.

Price risk

I. The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income and available-for-sale financial assets. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.
II. The Company’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 year ended December 31, 2018 would have increased/decreased by $4,284, 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 $32,231 and $39,206, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income and available-for-sale equity investment.

Cash flow and fair value interest rate risk

I. The Company’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Company 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 Company to fair value interest rate risk. For the years ended December 31, 2018 and 2017, the Company’s borrowings at variable rate were mainly denominated in New Taiwan dollars and Philippine Peso.

(b) Credit risk

I. Credit risk refers to the risk of financial loss to the Company 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 amortized cost, at fair value through profit or loss and at fair value through other comprehensive income.
II. The Company 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 Company operates a chain of retail stores, thus the ratio of accounts receivable to total asset is low. The Company classifies customers’ accounts receivable in accordance with credit rating of customer. The Company applies the simplified approach using provision matrix to estimate expected credit loss under the provision matrix basis and using the forecast ability to adjust historical and timely information to assess the default possibility of accounts receivable. Movements in relation to the Company applying the simplified approach to provide loss allowance for accounts

~58~

receivable are as follows:

receivable are as follows:
At January 1_IAS 39 Adjustments under new standards At January 1_IFRS 9 Provision for impairment Reversal of impairment Write-offs At December 31	December 31 2018
	Accounts receivable
	$ 6,326 - 6,326 2,100 ( 250) ( 6,744) $ 1,432

IV. The Company’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 Company has no unrecognized allowance for investment in debt instrument at fair value through other comprehensive income for the year ended December 31, 2018.
V. The Company has no written-off financial assets that are still under recourse procedures on December 31, 2018.
VI. Credit risk information for the year ended December 31, 2017 is provided in Note 12(4).

(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 Company invests surplus cash in interest bearing current accounts, time deposits, money market fund and marketable securities, and chooses instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the aforementioned forecasting. The Company held no money market funds at December 31, 2018 and 2017, respectively.
III. The Company has undrawn borrowing facilities beyond one year of $9,334,699 and $7,932,175 as of December 31, 2018 and 2017, respectively.
III. The table below analyses the Company’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. The amounts disclosed in the table are the contractual undiscounted cash flows.

~59~

Non-derivative financial liabilities:

December 31, 2018 Less than 1 year Short-term borrowings $ 6,003,262 Notes payable 6,037,491 Accounts payable 9,465,646 Other payables 18,827,308 Non-derivative financial liabilities: December 31, 2017 Less than 1 year Notes payable $ 5,739,310 Accounts payable 8,761,922 Other payables 22,286,764	Between 1 and 2 years $ - - - - Between 1 and 2 years $ - - -	Between 2 and 3 years $ - - - - Between 2 and 3 years $ - - -	Over 3 years $ - - - - Over 3 years $ - - -

(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 Company’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.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s investment in equity investments without an active market is included in Level 3.
B. Fair value information of the Company’s investment property at cost is provided in Note 6(8).
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 and other payables are approximate to their fair values.

December 31, 2018

Financial assets: Guarantee deposit paid Financial liabilities: Guarantee deposit received	Book value $ 1,231,311 $ 2,533,958		Fair value
		Level 1 $- $-	Level 2 $ - $ -	Level 3
				$ 1,216,127 $ 2,507,486

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Financial assets: Financial assets measured at cost Guarantee deposit paid Financial liabilities: Guarantee deposit received				December 31, 2017	December 31, 2017
	Book value $25,721 1,174,967 $ 1,200,688 $ 2,435,662				Fair value
				Level 1 - - $- $-	Level 2 - - $ - $ -	Level 3 $ 25,721 1,161,218 $ 1,186,939 $ 2,409,648

(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:

follows:
December 31, 2018 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Financial assets at fair value through other comprehensive income Equity securities December 31, 2017 Assets Recurring fair value measurements Available-for-sale financial assets	Level 1 $ - 640,266 $ 640,266 Level 1 $ 784,115	Level 2 $ - - $ - Level 2 $ -	Level 3 $ 85,683 4,348 $ 90,031 Level 3 $ 64,460	Total $ 85,683
				644,614 $ 730,297 Total $ 848,575

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

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.

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E. For the years ended December 31, 2018 and 2017, there was no transfer between Level 1 and Level 2.
F. For the years ended December 31, 2018 and 2017, there was no significant transfer in or out of Level 3.
G. The Company is in charge of valuation procedures for fair value measurements being categorised within Level 3, which aim 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.
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, 2018 $ 90,031 Fair value at December 31, 2017 $ 64,460	Valuation technique Market comparable companies Net asset value Valuation technique Net asset value	Significant unobservable input Price to book ratio multiplier Net asset value Significant unobservable input Net asset value	Range (weighted average) 2.61 - Range (weighted average) -	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 net asset value, the higher the fair value

I. The Company has carefully assessed the valuation models and assumptions used to measure fair value, and regards its fair value measurements as reasonable. However, the use of different valuation models or assumptions may result in different measurements. If net assets from financial assets and liabilities categorised within Level 3 had increased or decreased by 1%, other comprehensive income would not have been significantly impacted as of December 31, 2018 and 2017.

(4) Effects on initial application of IFRS 9 and information on application of IAS 39 in 2017

A.Summary of significant accounting policies adopted for the year of 2017:
(a) Financial assets at fair value through profit or loss
- I. They are financial assets held for trading. Financial assets are classified in this category of held for trading if acquired principally for the purpose of selling in the

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short-term.

II. 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.
III. Financial assets at fair value through profit or loss are initially recognized at fair value. Related transaction costs are expensed in profit or loss. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in profit or loss.
(b) Available for sale financial assets
I. They are non-derivatives that are either designated in this category or not classified in any of the other categories.
II. On a regular way purchase or sale basis, available-for-sale financial assets are recognized and derecognized using trade date accounting.
III. They are initially recognized at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognized in other comprehensive income. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‘ financial assets measured at cost’.
(c) Loans and receivables

Accounts receivable are loans and receivables originated by the entity. They are created by the entity by selling goods or providing services to customers in the ordinary course of business. They are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. However, short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(d) Impairment of financial assets
I. The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
II. The criteria that the Company uses to determine whether there is objective evidence of an impairment loss is as follows:
- (i) Significant financial difficulty of the issuer or debtor;
- (ii) A breach of contract, such as a default or delinquency in interest or principal payments;

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(iii) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.
III. When the Company assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows according to the category of financial assets:
(i) Financial assets at amortized cost

The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate, and is recognized in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset does not exceed its amortized cost that would have been at the date of reversal had the impairment loss not been recognized previously. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

(ii) Financial assets at cost

The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at current market return rate of similar financial asset, and is recognized in profit or loss. Impairment loss recognized for this category shall not be reversed subsequently. Impairment loss is recognized by adjusting the carrying amount of the asset through the use of an impairment allowance account.

(iii) Available-for-sale financial assets
- The amount of the impairment loss is measured as the difference between the asset’s acquisition cost and current fair value, less any impairment loss on that financial asset previously recognized in profit or loss, and is reclassified from ‘other comprehensive income’ to ‘profit or loss’. Impairment loss of an investment in an equity instrument recognized in profit or loss shall not be reversed through profit or loss. Impairment loss is recognized and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.
B. The reconciliations of carrying amount of financial assets transferred from December 31, 2017, IAS 39, to January 1, 2018, IFRS 9, were as follows:

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							Available-for
							sale-equity							Effects
				Measured at			Measured at
	Investments accounted for using equity				fair value through profit or loss –	fair value through other comprehensive		Measured at amortized					Retained			Other
		method		non current		income-equity			cost		Total		earnings			equity
IAS 39	$		-	$	-	$	848,575	$	25,721	$	874,296		$	-	$		-
Transferred into and
measured at fair value
through profit or loss			-		85,833	(	60,112)	(	25,721)			-		22,498	(	22,498)
Recognized the IFRS 9
effects through
investment accounted
for using equity
method	(	3,990)			-		-		-	(	3,990)			2,965	(	6,955)
IFRS 9	($	3,990)		$	85,833	$	788,463	$	-	$	870,306		$	25,463	($	29,453)

(a) In accordance with IFRS 9, the Company reclassified available-for-sale financial assets and financial assets at cost in the amounts of $60,112 and $25,721, respectively, by increasing financial assets at fair value through profit or loss and retained earnings in the amounts of $85,833 and $22,498, respectively and decreasing other equity interest in the amount of $22,498.
(b) In accordance with IFRS 9, the Company reclassified available-for-sale financial assets in the amount of $788,463 and made an irrevocable election at initial recognition on equity instruments not held for dealing or trading purpose, by increasing financial assets at fair value through other comprehensive income in the amount of $788,463.
(c) The Company’s investee accounted for using equity method made certain re-classifications in accordance with IFRS 9. Accordingly, the Company decreased investments accounted for using equity method and other equity interest in the amounts of $3,990 and $6,955, respectively and increased retained earnings in the amount of $2,965 on January 1, 2018.
C. The significant accounts as of December 31, 2017 and for the year ended Deceember 31, 2017 are as follows:
(a) Available-for-sale financial assets - non-current

s follows: Available-for-sale financial assets - non-current
Listed stocks Unlisted stocks Valuation adjustment	December 31, 2017 $ 265,606 41,963
	307,569 541,006
	$ 848,575

I. The Company recognized $152,186 in other comprehensive gain in relation to fair value changes for the year ended December 31, 2017 .
II. The counterparties of the Company’s investments in debt instruments have good credit quality.

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(b) Financial assets at cost
- I. According to the Company’s intention, its investment objectives should be classified as ‘available-for-sale financial assets’. However, as the investment objectives are not traded in active market, and no sufficient industry information of companies similar to their financial information cannot be obtained, the fair value of the investment objectives cannot be measured reliably. The Company classified those stocks as ‘financial assets measured at cost’.
- II. As of December 31, 2017, no financial assets measured at cost held by the Company were pledged to others.
D. Credit risk information as of December 31, 2017 and for the year ended December 31, 2017 are as follows:
(a) Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. Credit risk arises from cash and cash equivalents, and deposits with banks and financial institutions, as well as credit outstanding receivables. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted.
(b) For the year ended December 31, 2017, no credit limits were exceeded during the reporting periods, and management does not expect any significant losses from non-performance by these counterparties.
(c) The Company’s accounts receivable that are neither past due nor impaired are fully performing in line with the credit standards prescribed based on counterparties’ industrial characteristics, scale of business and profitability.
(d) The Company’s accounts receivable were not past due but not impaired.
(e) Movements in the provision for impairment of accounts receivable for the year ended December 31, 2017 are as follows:

(5)	For the year ended December 31, 2017 At January 1 $ 74,286 Provision for impairment 422 Write-offs ( 68,382) At December 31 $ 6,326 Effects of initial application of IFRS 15 and information on application of IAS 11 and IAS 18 in 2017	For the year ended December 31, 2017

A.The significant accounting policies applied on revenue recognition for the year ended December 31, 2017 are set out below:
(a) Sales of goods
- I. The Company’s revenue is measured at the fair value of the consideration received or receivable taking into account of business tax, returns, rebates and discounts for the sale of goods to external customers in the ordinary course of the Company’s

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activities. Revenue arising from the sales of goods is recognized when the Company has delivered the goods to the customer, the amount of sales revenue can be measured reliably and it is probable that the future economic benefits associated with the transaction will flow to the entity.

II. The Company offers customers volume discounts and right of return for defective products. The Company estimates such discounts and returns based on historical experience. Allowance for such liabilities are recorded when the sales are recognized.
III. The Company has customer loyalty programs where the Company grants loyalty award credits (such as ‘points’; the award credits can be used to exchange for free or discounted goods) to customers as part of a sales transaction. The fair value of the consideration received or receivable in respect of the initial sale shall be allocated between the initial sale of goods and the award credits. The amount of proceeds allocated to the award credits is measured by reference to the fair value of goods that can be redeemed by using the award credits and the proportion of award credits that are expected to be redeemed by customers. The Company recognizes the deferred portion of the proceeds allocated to the award credits as revenue only when it has fulfilled its obligations in respect of the award credits.
(b) Sales of services

The Company provides delivering services. Revenue from delivering services is recognized when the services is completed and the outcome of services provided can be estimated reliably. If the outcome of a service contract cannot be estimated reliably, contract revenue should be recognized only to the extent that contract costs incurred are likely to be recoverable.

B. The revenue recognized by using above accounting policies for the year ended December 31, 2017 are as follows:

Sales revenue Other operating revenue Total	For the year ended December 31, 2017 $ 135,032,826 9,447,054 $ 144,479,880

C. The effects and description of current balance sheet items if the Company continues adopting above accounting policies are as follows and no significant effects on current comprehensive income statement.

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Balance sheet items Accounts receivable, net Other current assets Other current liabilities Contract liabilities-current Contract liabilities-non-current Other non-current liabilities	Description (a) (a) (a)(b) (b) (b) (b)			December31,2018	December31,2018
			Balance by using IFRS 15 $ 603,890 1,560,262 1,463,092 1,293,149 151,550 394,951	Balance by using previous accounting policies $ 603,890 1,560,028 2,756,007 - - 546,501	Effects from changes in accounting policy $ - 234 ( 1,292,915) 1,293,149 151,550 ( 151,550)

(a) Under IFRS 15, liability in relation to expected discounts and refunds to customers is recognized as refund liability in the amount of $234. At the same time, the Company has a right to recover the product from the customer where the customer exercises his right of return and recognizes as current asset (shown as ‘other current assets’) in the amount of $234. But were previously presented as accounts receivable - allowance for sales discounts in the balance sheet.
(b) Under IFRS 15, liabilities in relation to sales of gift cards, and franchise agreements are recognized as contract liabilities, but were previously presented as advance sales receipts in the balance sheet. As of December 31, 2018, the balance amounted to $1,293,149. Liabilities in relation to the customer loyalty program are recognized as contract liabilities, but were previously presented as deferred revenue in the balance sheet. As of December 31, 2018, the balance amounted to $151,550 and was presented as non-current liability.

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.

14. SEGMENT INFORMATION

None.

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Table 1

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, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

Securities held by	Type and name of securities	Relationship with the securities issuer	General ledger account		As of December 31,2018	As of December 31,2018		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-Shuen Logistics International Corp. Chieh-Shuen Logistics International Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. President Information Corp. President Logistics International Corp. President Logistics International Corp. President Pharmaceutical Corp. President Pharmaceutical Corp. Retail Support Taiwan Corp. Q-ware Systems & Services Corp. ICASH 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. Open ended funds: Yuanta De-Li Money Market Fund UPAMC James Bond Money Market Fund Eastspring Investments Well Pool Money Market Fund Union Money Market Fund Allianz Global Investors Taiwan Money Market Fund Taishin 1699 Money Market Fund Prudential Financial Money Market Fund UPAMC James Bond Money Market Fund Eastspring Investments Well Pool Money Market Fund Jih Sun Money Market Fund Taishin 1699 Money Market Fund FSITC Money Market Fund Eastspring Investments Well Pool Money Market Fund Bond: Government bond	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 `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` 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 `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Financial assets at fair value through other comprehensive income - non-current	2,667,600 837,753 2,572,127 321,300 9 38,221,259 300,000 650,000 1,843,148 2,037,832 1,730,169 15,170,478 3,996,323 2,220,988 7,643,267 3,266,653 2,429,553 112,825 3,036,177 38,207 16,121,671 -	45,298 $ 14,663 25,722 - - 439,544 200,722 4,348 30,008 $ 34,002 23,503 200,000 50,000 30,000 120,716 54,506 33,004 1,669 41,011 6,806 219,000 200,731 $	7.60 5.37 0.92 6.67 - 2.75 0.56 10.00 - - - - - - - - - - - - - -	45,298 $ 14,663 25,722 - - 439,544 200,722 4,348 30,008 $ 34,002 23,503 200,000 50,000 30,000 120,716 54,506 33,004 1,669 41,011 6,806 219,000 200,731 $

Table 1  Page 1

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, 2018

Table 2 Investor	Type and name of securities	General ledger account	Counterparty	Relationship with the investor	Balance as at January1,2018	Balance as at January1,2018	Addition	Addition		Disposal	Disposal		Other increase(decrease)	Other increase(decrease)	Expressed in thousands of NTD (Except as otherwise indicated) Balance as at December 31,2018	Expressed in thousands of NTD (Except as otherwise indicated) Balance as at December 31,2018
					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-Shuen Logistics International 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. President Chain Store (Hong Kong) Holdings Limited	Open ended funds: Jih Sun Money Market Fund Yuanta De-Li Money Market Fund Eastspring Investments Well Pool Money Market Fund Union Money Market Fund FSITC Taiwan Money Market Fund Taishin 1699 Money Market Fund Nomura Taiwan Money Market Fund Allianz Global Investors Taiwan Money Market Fund Jih Sun Money Market Fund FSITC Taiwan Money Market Fund Jih Sun Money Market Fund Prudential Financial Money Market Fund UPAMC James Bond Money Market Fund Eastspring Investments Well Pool Money Market Fund Jih Sun Money Market Fund Eastspring Investments Well Pool Money Market Fund Stock: President Chain Store (Zhejiang) Ltd.	Note 1 `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Note 2	Not applicable `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Issuance of common stock for cash	Not applicable `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Parent company to subsidiary	1,358,373 - 5,250,222 6,855,158 13,151,752 3,718,301 12,328,480 2,408,497 - - 9,323,901 5,474,517 - 2,810,047 5,968,302 17,449,813 -	20,005 $ - 71,007 90,000 200,000 50,000 200,000 30,000 - - 137,318 86,074 - 38,004 87,898 236,000 187,329 $	88,163,118 49,194,595 55,345,735 56,210,346 42,667,230 48,240,853 46,138,977 35,233,545 65,155,152 91,027,726 40,572,270 27,857,708 21,726,534 51,773,619 57,797,690 225,576,138 -	1,300,000 $ 800,000 750,000 740,000 650,000 650,000 750,000 440,000 961,000 1,388,000 598,800 439,216 362,000 702,000 853,000 3,059,000 357,228 $	89,521,491 47,351,447 58,865,788 47,895,026 55,818,982 49,738,166 58,467,457 33,645,719 65,155,152 91,027,726 49,896,170 25,688,958 18,459,881 52,154,113 63,653,167 226,904,280 -	1,320,528 $ 770,193 797,675 630,569 850,603 670,296 950,406 420,182 961,135 1,388,223 736,582 405,166 307,563 707,132 939,519 3,077,260 - $	1,320,000 $ 770,000 797,500 630,000 850,000 670,000 950,000 420,000 961,000 1,388,000 736,118 404,574 307,500 706,999 939,203 3,076,000 - $	528 $ 193 175 569 603 296 406 182 135 223 464 592 63 133 316 1,260 - $	- - - - - - - - - - - - - - - - -	5) ($ 8 4) ( - - - - - - - - - 6 1) ( 26) ( - 131,610) ($	- 1,843,148 1,730,169 15,170,478 - 2,220,988 - 3,996,323 - - - 7,643,267 3,266,653 2,429,553 112,825 16,121,671 -	- $ 30,008 23,503 200,000 - 30,000 - 50,000 - - - 120,716 54,506 33,004 1,669 219,000 412,947 $

Note 1: The security was recognized as "Financial assets at fair value through profit or loss–current".

Note 2: The security was recognized as "Investments accounted for using equity method ".

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, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	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 Inventory Services Corp. Chieh-Shuen Logistics International Corp. Duskin Serve Taiwan Co. Uni-Wonder Corp. President Information Corp.	Uni-President Enterprises Corp. Uni-President Superior Commissary Corp. Tung Ang Enterprises Corp. Lien-Bo Enterprises Corp. Vision Distribution Service Corp. Tait Marketing & Distribution Co., Ltd. Q-ware Systems & Services Corp. President Packaging Corp. Kuang Chuan Dairy Corp. President Transnet Corp. Weilih Food Industrial Co., Ltd. 21 Century Enterprise Co., Ltd. Mister Donut Taiwan Corp., Ltd. President Pharmaceutical Corp. President Chain Store Corp. President Transnet Corp. President 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 Sister company Subsidiary Sister company Other related party Subsidiary Other related party Subsidiary Associate Subsidiary 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 `〃` `〃` `〃` Purchases returns Purchases `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Service revenue Delivery revenue `〃` Service revenue Purchases `〃` `〃` Service revenue	14,923,741 $ 3,566,700 1,908,658 647,614 149,679) ( 381,636 632,058 335,435 398,310 224,880 267,673 277,271 159,797 101,850 170,565) ( 708,839) ( 969,846) ( 282,209) ( 270,060 1,041,904 195,552 772,627) (	15 4 2 1 - - 1 - - - - - - - 68) ( 40) ( 60) ( 23) ( 6 25 5 67) (	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 30~60 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 40 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 30~65 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 30~60 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 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 15~60 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 `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	1,177,885) ($ 622,404) ( 136,637) ( 103,372) ( - 76,213) ( 107,036) ( 67,993) ( 88,129) ( 23,798) ( 57,714) ( 64,673) ( 29,185) ( 124,435) ( 33,902 129,144 85,555 78,425 33,063) ( 112,967) ( 18,200) ( 243,134	8) ( 4) ( 1) ( 1) ( - - 1) ( - 1) ( - - - - 1) ( 57 59 39 37 6) ( 21) ( 3) ( 69

Table 3  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, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	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. Uni-President Superior Commissary Corp. President Transnet Corp. Retail Support Taiwan Corp. Q-ware Systems & Services Corp. Wisdom Distribution Service Corp. President Drugstore Business Corp. President Pharmaceutical Corp. 21 Century Enterprise Co., Ltd. Vision Distribution Service Corp. Retail Support International Corp. Uni-President Cold-Chain Corp.	Retail Support International Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. Chieh-Shuen Logistics International Corp. President Chain Store Corp. President Chain Store Corp. Chieh-Shuen Logistics International Corp. Retail Support International Corp. President Chain Store Corp. Books.com. Co., Ltd. President Logistics International Corp. President Pharmaceutical Corp. President Drugstore Business Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Logistics International Corp. Retail Support Taiwan Corp. Uni-Wonder Corp. President Logistics International Corp.	Parent company Subsidiary of President Chain Store Corp. `〃` Subsidiary Parent company `〃` Subsidiary of President Chain Store Corp. Parent company `〃` Subsidiary of President Chain Store Corp. `〃` `〃` `〃` Parent company `〃` `〃` Subsidiary `〃` Subsidiary of President Chain Store Corp. `〃`	Delivery revenue `〃` `〃` Service cost Sales revenue `〃` Service cost Delivery revenue Service revenue `〃` Service cost Purchases Sales revenue `〃` `〃` Sales returns Service cost `〃` Delivery revenue Service cost	751,640) ($ 1,035,971) ( 1,064,345) ( 969,846 3,566,700) ( 224,880) ( 708,839 305,169) ( 632,058) ( 283,188) ( 1,064,345 668,736 668,736) ( 101,850) ( 277,271) ( 149,679 751,640 305,169 195,552) ( 1,035,971	24) ( 33) ( 33) ( 32 99) ( 44) ( 8 85) ( 69) ( 9) ( 44 7 37) ( 4) ( 33) ( - 42 17 7) ( 37	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 45 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 40 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 40 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 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 30~60 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 15~20 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	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	69,244 $ 89,672 103,177 85,555) ( 622,404 23,798 129,144) ( 27,199 107,036 26,449 103,177) ( 26,941) ( 26,941 124,435 64,673 - 69,244) ( 27,199) ( 18,200 89,672) (	24 31 35 31) ( 100 2 8) ( 79 78 28 38) ( 1) ( 7 31 47 - 45) ( 18) ( 6 2) (

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, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms compared to third party transactions	Differences in transaction terms compared to third party transactions	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)
Zhejiang Uni-Champion Logistics Development Co., Ltd. Shanghai President Logistic Co., Ltd. ICASH Corp. President Logistic ShanDong Co., Ltd. Shan Dong President Yinzuo Commercial Limited	Shanghai President Logistic Co., Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd. President Chain Store Corp. Shan Dong President Yinzuo Commercial Limited President Logistic ShanDong Co., Ltd.	Parent company Subsidiary Parent company Subsidiary of President Chain Store Corp. `〃`	Delivery revenue Service cost Service revenue Delivery revenue Service cost	199,852) ($ 199,852 116,273) ( 120,713) ( 120,713	30) ( 34 32) ( 99) ( 5	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 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 30 days from the end of the month when invoice is issued	No significant differences `〃` `〃` `〃` `〃`	No significant differences `〃` `〃` `〃` `〃`	52,590 $ 52,590) ( 20,326 11,136 11,136) (	47 37) ( 36 99 2) (

Table 3  Page 3

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Receivables from related parties reaching $100 million or 20% of paid-in capital or more December 31, 2018

		December 31, 2018
Table 4 Creditor	Counterparty	Relationship withthe counterparty	Balance as of December31,2018	Turnover rate	Overdue receivables		Expressed in thousands of NTD (Except as otherwise indicated) Amount collected subsequent to the balance sheet date Allowance for doubtfulaccounts
					Amount	Action taken
President Information Corp. Uni-President Superior Commissary Corp. Chieh-Shuen Logistics International Corp. President Logistics International Corp.	President Chain Store Corp. President Chain Store Corp. President Transnet Corp. Wisdom Distribution Service Corp.	Parent company `〃` Subsidiary of President Chain Store Corp. `〃`	243,134 $ 622,404 129,144 103,177	3.52 6.02 5.21 9.69	- $ - - -	`None` `〃` `〃` `〃`	191,194 $ 622,401 78,796 94,415	- $ - - -

Table 4  Page 1

Table 5

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Significant inter-company transactions during the reporting period

For the year ended December 31, 2018

Expressed in thousands of NTD (Except as otherwise indicated) Transaction

						Transaction
Number	Companyname	Counterparty	Relationship	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets
0 0 1 1 2 3 4 5 6 6 6 7 7 7 7 8 9 10 11 11 12 13 14 15 16	President Chain Store Corp. President Chain Store Corp. President Information Corp. President Information Corp. Q-ware Systems & Services Corp. Duskin Serve Taiwan Co. Uni-President Cold-Chain Corp. Capital Inventory Services Corp. Chieh-Shuen Logistics International Corp. Chieh-Shuen Logistics International Corp. Chieh-Shuen Logistics International Corp. President Logistics International Corp. President Logistics International Corp. President Logistics International Corp. President Logistics International Corp. President Logistic ShanDong Co., Ltd. President Pharmaceutical Corp. Zhejiang Uni-Champion Logistics Development Co., Ltd. Uni-President Superior Commissary Corp. Uni-President Superior Commissary Corp. 21 Century Enterprise Co., Ltd. Wisdom Distribution Service Corp. Retail Support Taiwan Corp. Vision Distribution Service Corp. Retail Support International 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 Logistics International Corp. President Transnet Corp. President Transnet Corp. Retail Support International Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. Wisdom Distribution Service Corp. Shan Dong President Yinzuo Commercial Limited President Drugstore Business Corp. Shanghai President Logistic Co., Ltd. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. Books.com. Co., Ltd. Retail Support International Corp. President Chain Store Corp. Uni-Wonder 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 subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary 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 parent company Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to parent company Subsidiary to subsidiary	Other operating income Other operating income Accounts receivable Service revenue Service revenue Service revenue Other operating income Service revenue Delivery revenue Delivery revenue Accounts receivable Delivery revenue Delivery revenue Delivery revenue Accounts receivable Delivery revenue Sales revenue Sales revenue Accounts receivable Sales revenue Sales revenue Service revenue Delivery revenue Sales returns Delivery revenue	170,172) ($ 169,894) ( 243,134 772,627) ( 632,058) ( 282,209) ( 343,690) ( 170,565) ( 969,846) ( 708,839) ( 129,144 751,640) ( 1,035,971) ( 1,064,345) ( 103,177 120,713) ( 668,736) ( 199,852) ( 622,404 3,566,700) ( 277,271) ( 283,188) ( 305,169) ( 149,679 195,552) (	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 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 15-60 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 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 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 30 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 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 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 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	0.07 0.07 0.19 0.32 0.26 0.12 0.14 0.07 0.40 0.29 0.10 0.31 0.42 0.44 0.08 0.05 0.27 0.08 0.49 1.46 0.11 0.12 0.13 0.06 0.08

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

Table 5  Page 1

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, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2018	as at December 31,2018	Net profit (loss) of the investee for the year ended December 31, 2018	Investment income (loss) recognized by the Company for the year ended December 31, 2018	Footnote
				Balance as at December 31, 2018	Balance as at December 31, 2017	Number of shares	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 Yilan Art and Culture Corp. Duskin Serve Taiwan Co. 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 Inventory Services 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 20,000 102,000 500,000 720,000 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	6,712,138 $ 288,559 711,576 904,475 330,216 840,000 520,141 237,437 320,741 332,482 50,000 100,400 200,000 102,000 500,000 720,000 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 50,000,000 72,000,000 21,382,674 6,429,999 130,801,027 190,000,000 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	25,850,474 $ 1,367,838 1,518,487 694,277 756,001 566,145 467,659 645,440 489,299 372,945 506,392 417,935 51,328 194,788 356,073 753,904 5,289,524 174,830 5,518,380 1,984,125 461,328 114,755 82,833 59,241 64,995 22,808 9,454) ( 42,731) (	611,941 $ 290,300 490,073 99,980 227,432 333,022 17,497 341,444 76,172 80,643 271,711 422,359 676 133,258 5,787 116,093 711,814 216,951 1,677,876 158,079 475,420 68,624) ( 7,452 31,630 1,764 6,651 14,507 18,558	615,496 $ 290,300 343,051 80,855 167,956 233,115 15,747 204,866 65,508 69,965 271,711 211,285 676 67,941 5,787 23,219 198,444 54,238 327,178 30,035 16,591 8,691) ( 7,452 31,630 1,626 6,651 14,507 18,558	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

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, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2018	as at December 31,2018	Net profit (loss) of the investee for the year ended December 31, 2018	Investment income (loss) recognized by the Company for the year ended December 31, 2018	Footnote
				Balance as at December 31, 2018	Balance as at December 31, 2017	Number of shares	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. 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. Ren-Hui Investment Corp.	21 Century Enterprise Co., Ltd. President Chain Store Tokyo Marketing Corp. Uni-President Oven Bakery Corp. President Collect Services Co., Ltd. Afternoon Tea Taiwan Co., Ltd. Mister Donut Taiwan Corp., Ltd. Uni-President Organics Corp. President Technology Corp. Grand Bills Finance Corp. Books.com. (BVI) Ltd. President Jing Corp. PCSC Restaurant (Cayman) Holdings Limited PCSC (China) Drugstore Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Labuan) Holdings Ltd. Philippine Seven Corp. Chieh-Shuen 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. President Pharmaceutical Corp.	Taiwan Japan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Cayman Islands British Virgin Islands Hong Kong Malaysia Philippines Taiwan Hong Kong Taiwan 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 Securities trading 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 Sales of various health care products, cosmetics, and pharmaceuticals	160,680 $ 35,648 391,300 10,500 147,900 200,000 47,190 7,500 - 1,478 9,600 159,966 22,729 4,784,073 895,752 894,891 180,000 178,024 - - - - - - - -	160,680 $ 35,648 391,300 10,500 147,900 200,000 47,190 7,500 1,050 1,478 9,600 159,966 22,729 4,784,073 895,752 894,891 180,000 89,415 - - - - - - - -	10,000,000 9,800 6,511,963 1,049,999 14,789,999 7,500,049 1,833,333 750,000 - 500 960,000 8,880,000 740,000 134,603,354 29,163,337 394,970,516 26,670,000 5,935,900 1 1 1 1 1 1 1 1	100.00 100.00 100.00 70.00 51.00 50.00 36.67 15.00 - 100.00 60.00 100.00 7.80 100.00 100.00 52.22 100.00 100.00 - - - - - - - -	34,523 $ 76,331 29,439) ( 73,621 41,659 107,879 38,862 21,347 - 592 26,003 31,162 5,499 4,160,454 2,211,268 2,210,541 310,438 72,393 - - - - - - - -	24,027 $ 3,114 14,764) ( 85,542 509) ( 41,756 21,446 38,142 568,805 2 16,339 80 1,764 86,522 385,752 887,060 19,473 28,202) ( 422,359 333,022 99,980 76,172 490,073 80,643 133,258 227,432	24,027 $ 3,114 14,764) ( 59,878 260) ( 22,118 7,863 5,718 67 3 9,803 80 138 86,522 385,752 399,934 19,473 28,202) ( - - - - - - - -	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Note 1 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 Subsidiary of a subsidiary

Table 6  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, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held	as at December 31,2018	as at December 31,2018	Net profit (loss) of the investee for the year ended December 31, 2018	Investment income (loss) recognized by the Company for the year ended December 31, 2018	Footnote
				Balance as at December 31, 2018	Balance as at December 31, 2017	Number of shares	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. 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.	Mister Donut Taiwan Corp., Ltd. Uni-President Superior Commissary Corp. Uni-President Cold-Chain Corp. Retail Support International Corp. President Collect Services Co., Ltd. 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 British Virgin Islands Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Philippines Philippines	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 - 26,299 28,486	- $ - - - - - 60,374 15,300 44,975 5,425 23,850 87,994 18,850 60,000 26,299 28,486	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 40.00	- $ - - - - - 70,287 74,413 161,679 19,797 82,489 103,772 65,991 - 26,299 28,486	41,756 $ 17,497 341,444 216,951 85,542 509) ( 4,024 45,403 75,685 75,685 75,685 12,628 75,685 31,023) ( 23,046 1,262	- $ - - - - - 4,024 23,156 37,086 4,413 18,921 12,628 15,137 17,539) ( - -	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, 2018

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 ofJanuary1,2018	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2018	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2018	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2018	Net income of investee for the year ended December 31, 2018	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the year ended December31,2018	Book value of investments in Mainland China as of December31,2018	Accumulated amount of investment income remitted back to Taiwan as of December 31,2018	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 warehouse Enterprise information consulting, network technology development and services Logistics and warehousing Logistics and warehousing Operation of chain stores Sales of cosmetics and daily items	272,749 $ 446,536 2,232,680 61,430 993,737 589,428 267,922 174,851 178,614 461 267,922 223,268 625,150 133,961	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	158,815 $ 289,252 2,373,578 61,430 1,005,579 546,000 125,267 85,544 174,654 - 267,922 223,268 267,922 -	- $ - - - - - - 89,307 - - - - 357,228 133,961	- $ - - - - - - - - - - - - -	158,815 $ 289,252 2,373,578 61,430 1,005,579 546,000 125,267 174,851 174,654 - 267,922 223,268 625,150 133,961	266 $ 1,855 155,505) ( 75,487 4,323) ( 21,399) ( 34,356 29,280) ( 25,610 - 25,872 6,904 129,811) ( 20,741) (	100.00 100.00 100.00 100.00 100.00 100.00 55.00 73.74 80.00 50.03 100.00 100.00 100.00 100.00	266 $ 1,855 155,507) ( 76,970 4,323) ( 21,696) ( 17,331 21,591) ( 21,953 - 25,863 6,447 129,813) ( 20,741) (	31,093 $ 69,725 68,214 420,437 47,631 54,972 195,037 28,837 159,862 17 331,098 200,347 412,947 113,642	- $ - - - - - - 56,866 13,946 - - - - -	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.

Investment amount approved by the Accumulated amount of remittance Investment Commission of the Ceiling on investments in Mainland from Taiwan to Mainland China as Ministry of Economic Affairs China imposed by the Investment Company name of December 31, 2018 (MOEA) Commission of MOEA President Chain Store Corp. $ 4,734,350 $ 8,488,824 $ 26,415,016 President Pharmaceutical Corp. 174,851 174,851 485,926 Uni-President Cold-Chain Corp. 91,144 91,144 633,116 Ren-Hui Investment Corp. 52,931 52,931 80,000

Table 7  Page 1

PRESIDENT CHAIN STORE CORP. STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2018

Expressed in thousands of NTD


Statement 1 Item Cash on hand and petty cash Demand deposits and checking accounts Cash equivalents Time deposits – New Taiwan dollar Short-term financial instruments	Expressed i Description Due dates are during September 2018 and March 2019, and interest rates are at 0.8%. Due dates are within one month, interest rates are at 0.45%~0.5%.	n thousands of NTD Amount
		$ 1,072,918 8,198,849 500,000 4,298,948
		$22,2 $ 14,070,715	$22,2

Statement 1

	PRESIDENT CHAIN STORE CORP. STATEMENT OF INVENTORIES DECEMBER 31, 2018 Expressed in thousands of NTD Amount Cost Market value Footnote 8,020,368 $ 8,998,487 The net realizable value is the market value.	PRESIDENT CHAIN STORE CORP. STATEMENT OF INVENTORIES DECEMBER 31, 2018 Expressed in thousands of NTD Amount Cost Market value Footnote 8,020,368 $ 8,998,487 The net realizable value is the market value.


	Cost
$		The net realizable value is the market value.

Statement 2

PRESIDENT CHAIN STORE CORP.

STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT FOR THE YEAR ENDED DECEMBER 31, 2018

Statement 3 Name Listed stocks President Securities Corp. Duskin Co., Ltd. Unlisted stocks Koasa Yamako Corp. Subtotal Valuation adjustment	Balance as of January 1, 2018 Number of shares Book value 38,221,259 $ 140,534 300,000 125,072 650,000 4,348 269,954 518,509 $ 788,463	Additions Number of shares Amount - $ - - - - - - - $ -	Decreases Number of shares Amount - $ - - - - - - (143,849) ($ 143,849)	Expressed in thousands of NTD Balance as of December 31, 2018 Number of shares Book value Collateral 38,221,259 $ 140,534 None 300,000 125,072 `〃` 650,000 4,348 `〃` 269,954 374,660 $ 644,614	Expressed in thousands of NTD Balance as of December 31, 2018 Number of shares Book value Collateral 38,221,259 $ 140,534 None 300,000 125,072 `〃` 650,000 4,348 `〃` 269,954 374,660 $ 644,614
	Number of shares 38,221,259 300,000 650,000	Number of shares - - -	Number of shares - - -
					None `〃` `〃`

Statement 3

PRESIDENT CHAIN STORE CORP.

STATEMENT OF CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS - NON-CURRENT FOR THE YEAR ENDED DECEMBER 31, 2018

Statement 4 Name Unlisted stocks PK Venture Capital Corp. Kaohsiung Rapid Transit Corp. Q-ware Systems & Services Corp. Career Consulting Co. Ltd President Investment Trust Corp. Subtotal Valuation adjustment	Balance as of January 1, 2018 Number of shares Book value 321,300 $ 33,685 2,572,127 203,714 4,172,422 - 837,753 14,815 2,667,600 22,800 275,014 (189,180) $ 85,834	Additions Number of shares Amount - $ - - - - - - - - - - - $ -	Decreases Number of Amount shares (Note1) (Note2) - $ - - - ( 4,172,422) - - ( 151) - - ( 151) - ($ 151)	Expressed in thousands of NTD Balance as of December 31, 2018 Number of shares Book value Collateral 321,300 $ 33,685 None 2,572,127 203,714 `〃` - - 837,753 14,664 2,667,600 22,800 274,863 (189,180) $ 85,683
	Number of shares 321,300 2,572,127 4,172,422 837,753 2,667,600	Number of shares - - - - -	Number of shares (Note1) - - ( 4,172,422) - -	Number of shares 321,300 2,572,127 - 837,753 2,667,600

Note1: The number of shares decreased includings capital reduction for cover accumulated deficits and disposal from share premium this year. Note2: The amount decreased this year due to cash dividends paid from share premium and distributed by investees.

Statement 4

PRESIDENT CHAIN STORE CORP.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2018

Statement 5

Expressed in thousands of NTD

Balance as of January 1, 2018 Number of shares Amount 171,589,586 $ 24,607,905 78,520,000 1,419,062 103,496,399 1,438,218 55,858,815 681,820 22,121,962 728,214 27,999,999 530,833 48,519,890 456,939 23,605,042 617,057 25,714,475 506,567 24,382,921 356,381 10,847,421 433,012 9,999,999 420,255 20,000,000 231,906 10,199,999 197,140 50,000,000 352,272 72,000,000 750,774 21,382,674 5,809,284 6,429,999 195,525	Additio	Decreases	(Note 2) Amount $ - - - - - - - - - - - - ( 180,000) - - - - -	Balances	as of December 31, 201	Market price subsidiaries an
Number of shares 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 20,000,000 10,199,999 50,000,000 72,000,000 21,382,674 6,429,999	Number of shares - - - - - - - - - - - - - - - - - -	Number of shares - - - - - - - - - - - - ( 18,000,000) - - - - -		Number of shares 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 50,000,000 72,000,000 21,382,674 6,429,999	Percentage of ownership	Unit Price 150.65 17.42 14.49 12.43 27.00 20.22 9.64 26.82 14.80 14.76 46.68 41.79 25.66 19.10 7.12 10.47 31.56 25.79
					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
		Stateme	nt 5, Page 1

Name PresiCarre Corp. President Fair Development Corp. President International Development Corp. Tung Ho Development Corp. Mister Donut Taiwan Corp., Ltd., etc.	Balance as of January 1, 2018 Number of shares Amount 130,801,027 $ 5,198,249 190,000,000 1,954,089 44,100,000 466,885 19,930,000 123,504 - 508,001 $ 47,983,892	Addition	s (Note 1) Amount $ 327,178 30,035 16,591 - 203,209 $ 3,497,173	Decreases	(Note 2) Amount $ - - - ( 8,691) ( 16,793) ($ 205,484)	Other Adjustments (Note 3) Amount ($ 7,047) - ( 22,146) ( 58) ( 151,943) ($ 2,181,179)	Balances	as of December 31, 2018	Amount $ 5,518,380 1,984,125 461,328 114,755 542,475 $ 49,094,402	Market price subsidiaries an	or Equity of d Associates Total price $ 2,600,981 1,811,591 472,907 114,755 542,472
	Number of shares 130,801,027 190,000,000 44,100,000 19,930,000 -	Number of shares - - - - -		Number of shares - - - - -			Number of shares 130,801,027 190,000,000 44,100,000 19,930,000 -	Percentage of ownership 19.50 19.00 3.33 12.46 -		Unit Price 19.89 9.53 10.72 5.76 -
											$ 41,080,411

Note 1: The additions this year includes recognized gains on investments of $3,497,173.

Note 2: The decreases this year includes recognized losses on investments of ($23,715), disposal on investment ($1,769) and capital reduction returned shares ($180,000)

Note 3: Other adjustments are cash dividends of ($2,725,951), exchange differences from translation of foreign operations of $626,479, actuarial loss on measurement of defined benefit plan of ($73,992), changes in fair value of financial assets at fair value through other comprehensive income ($4,378) and others of ($3,337).

Statement 5, Page 2

PRESIDENT CHAIN STORE CORP. STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 2018

Statement 6 Item Cost Land Buildings Office equipment Leasehold improvements Others Accumulated depreciation Buildings Office equipment Leasehold improvements Others Accumulated impairment Book value	Balance as of January 1,2018 $ 1,564,223 973,001 13,119,148 7,789,418 9,529 23,455,319 ( 313,843 )( ( 8,792,980 )( ( 5,128,478 )( ( 8,252 )( ( 14,243,553 )( ( 265,307 ) $ 8,946,459	Additions $ - - 1,299,599 ( 992,771 ( 3,193 ( $ 2,295,563 ( $ 19,251 ) 1,371,875 ) 704,250 ) 924 ) $ 2,096,300 ) $ 2,401	Disposals Reclassifications $ - $ - - - 855,700 )( 40 ) 533,020 ) 1,795 601 ) - $ 1,389,321 ) $ 1,755 $ - $ - ( 840,355 27 ( 510,233 ( 27 ) ( 601 - ( $ 1,351,189 $ - ( $ 2,473 $ - (	Expressed in thousands of NTD Balance as of December 31, 2018 Collateral $ 1,564,223 None 973,001 `〃` 13,563,007 `〃` 8,250,964 `〃` 12,121 `〃` 24,363,316 333,094 ) `〃` 9,324,473 ) `〃` 5,322,522 ) `〃` 8,575 ) `〃` 14,988,664 ) 260,433 ) $ 9,114,219	Expressed in thousands of NTD Balance as of December 31, 2018 Collateral $ 1,564,223 None 973,001 `〃` 13,563,007 `〃` 8,250,964 `〃` 12,121 `〃` 24,363,316 333,094 ) `〃` 9,324,473 ) `〃` 5,322,522 ) `〃` 8,575 ) `〃` 14,988,664 ) 260,433 ) $ 9,114,219
					None `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`

Statement 6

PRESIDENT CHAIN STORE CORP. STATEMENT OF SHORT-TERM BORROWINGS

DECEMBER 31, 2018

Statement 7 Type of borrowings HSBC Bank (Taiwan) Limited Sumitomo Mitsui Banking Corp. Banco Bilbao Vizcaya Argentaria S.A. CTBC Commercial Bank Co., Ltd.	Explanation Credit loan Credit loan Credit loan Credit loan	Balance as of December 31, 2018 $ 1,800,000 1,000,000 1,200,000 2,000,000 $ 6,000,000	Contract period 2018/11/2~2019/1/8 2018/12/3~2019/1/8 2018/11/2~2019/2/19 2018/12/3~2019/2/19	Interest rate range Collateral 0.67% None 0.68% `〃` 0.65% `〃` 0.65% `〃` Expressed in thousands of NTD	Interest rate range Collateral 0.67% None 0.68% `〃` 0.65% `〃` 0.65% `〃` Expressed in thousands of NTD
					None `〃` `〃` `〃`

Statement 7

PRESIDENT CHAIN STORE CORP. STATEMENT OF OPERATING REVENUE FOR THE YEAR ENDED DECEMBER 31, 2018

Statement 8 Item Revenue from Contracts with Customers	Amount $ 154,074,731	Expressed in thousands of NTD Footnote Sales of food, cans, beverages and daily commodities, etc.

Statement 8

PRESIDENT CHAIN STORE CORP. STATEMENT OF OPERATING COSTS

FOR THE YEAR ENDED DECEMBER 31, 2018

Statement 9

Expressed in thousands of NTD

Item Inventory at beginning of the year Inventory purchased Compensation for damaged merchandise Promotion income Inventory at end of the year Others Operating costs	Amount $ 7,194,707 99,551,551 ( 333,931 ) ( 566,610 ) ( 8,020,368 ) 3,237,015 $ 101,062,364

Statement 9

PRESIDENT CHAIN STORE CORP. STATEMENT OF SELLING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2018

Statement 10

Expressed in thousands of NTD

Item Incentive bonuses for franchisees Operating lease payments Wages and salaries Utilities expense Depreciation Other expenses	Amount
	$ 20,904,939 6,496,663 3,504,004 2,219,392 2,118,092 5,798,107
	$ 41,041,167

Statement 10

AI assistant

PCSC — Audit Report / Information 2018

52232_rns_2018-11-27_3dd1c538-fdb8-4dd8-b55a-3a834725035e.pdf

PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY

FINANCIAL STATEMENTS AND REPORT OF

PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY

FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS

DECEMBER 31, 2018 AND 2017

CONTENTS

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

Opinion

Basis for opinion

Key audit matters

Completeness and accuracy of retail sales revenue

Description

How our audit addressed the matter

Cost-to-retail ratio of retail inventory method

Description

How our audit addressed the matter

Other matter –Using the work of other auditors

Responsibilities of management and those charged with governance for the parent

company only financial statements

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

PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY BALANCE SHEETS

PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY BALANCE SHEETS

PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

PRESIDENT CHAIN STORE CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

PRESIDENT CHAIN STORE CORP.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017

1. HISTORY AND ORGANISATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

IFRS 16, ‘Leases’

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(5) Cash equivalents

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

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

(8) Accounts and notes receivable

(9) Impairment of financial assets

(10) Leases (lessor)

(11) Inventories

(13) Property, plant and equipment

(14) Leases (Lessee)

(15) Investment property

(16) Intangible assets

(17) Impairment of non-financial assets

(18) Notes and accounts payable

(19) Provisions

(20) Employee benefits

(21) Income tax

B.Sales of services

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

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

(2) Accounts receivable

(3) Inventories

(6) Investments accounted for using the equity method

(7) Property, plant and equipment

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

(8) Investment property

(9) Intangible assets

(10) Other non-current assets

(12) Other payables

(13) Advance receipts

(14) Pensions

(d) The principal actuarial assumptions used were as follows:

(15) Share capital

(16) Capital surplus

(17) Retained earnings

PCSC Audit Report / Information 2018