PCSC - Interim / Quarterly Report 2018

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS MARCH 31, 2018 AND 2017

For the convenience of readers and for information purposes 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 interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

~1~

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS MARCH 31, 2018 AND 2017 CONTENTS

Items 1. Cover 2. Contents 3. Review report of financial statements 4. Consolidated balance sheets 5. Consolidated statements of comprehensive income 6. Consolidated statements of changes in equity 7. Consolidated statements of cash flows 8. Notes to the consolidated financial statements (1) History and organization (2) Date of authorization for issuance of the consolidated financial statements and procedures for authorization (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
	1 2 3 ~ 4 5 ~ 6 7 ~ 8 9 10 ~ 11 12 ~ 60 12 12 12 ~ 15 16 ~ 22 22 22 ~ 41 41 ~ 43 44 44 44 44 45 ~ 57 58 59 ~ 60

Items
1. Cover
2. Contents
3. Review report of financial statements
4. Consolidated balance sheets
5. Consolidated statements of comprehensive income
6. Consolidated statements of changes in equity
7. Consolidated statements of cash flows
8. Notes to the consolidated financial statements
(1) History and organization
(2) Date of authorization for issuance of the consolidated financial
statements and procedures for authorization
(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

1
2
3 ~ 4
5 ~ 6
7 ~ 8
9
10 ~ 11
12 ~ 60
12
12
12 ~ 15
16 ~ 22
22
22 ~ 41
41 ~ 43
44
44
44
44
45 ~ 57
58
59 ~ 60

~2~

REVIEW REPORT OF FINANCIAL STATEMENTS

TRANSLATED FROM CHINESE

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

Introduction

We have reviewed the accompanying consolidated balance sheets of President Chain Store Corp. and subsidiaries as at March 31, 2018 and 2017, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the three-month periods then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with “Regulations Governing the Preparations of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission. Our responsibility is to express a conclusion on these consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the following paragraph, we conducted our reviews in accordance with the Statement of Auditing Standards No. 65 “Review of Financial Information Performed by the Independent Auditor of the Entity” in the Republic of China. A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As explained in Notes 4(3) and 6(6) , the financial statements of certain insignificant consolidated subsidiaries and investments accounted for using the equity method were not reviewed by independent accountants. Those statements reflect total assets of NT$32,773,706 thousand and NT$29,525,695 thousand, constituting 24% and 32% of the consolidated total assets, and total liabilities of NT$19,999,115 thousand and NT$12,388,452 thousand, constituting 27% and 22% of the consolidated total liabilities as at March 31, 2018 and 2017, and total comprehensive income of NT$311,951 thousand and NT$542,729 thousand, constituting 14% and 20% of the consolidated total comprehensive income for the three-month periods then ended.

~3~

Qualified Conclusion

Except for the adjustments to the consolidated financial statements, if any, as might have been determined to be necessary had the financial statements of certain insignificant consolidated subsidiaries and investments accounted for using the equity method, been reviewed by independent accountants, that we might have become aware of had it not been for the situation described above, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of President Chain Store Corp. and subsidiaries as at March 31, 2018 and 2017, and of its consolidated financial performance and its consolidated cash flows for the three-month periods then ended in accordance with “Regulations Governing the Preparations of Financial Reports by Securities Issuers” and International Accounting Standard 34, “Interim Financial Reporting” as endorsed by the Financial Supervisory Commission.

Chun-Yuan, Hsiao Chien-Hung, Chou

For and on behalf of PricewaterhouseCoopers, Taiwan April 25, 2018

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

~4~

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of March 31, 2018 and 2017 are reviewed, not audited)

Assets	Notes	March 31, 2018 AMOUNT % $ 59,114,211 44 1,521,931 1 4,386,947 3 3,147,066 2 2,645 - 12,300,546 9 1,563,322 1 2,809,311 2 84,845,979 62 85,833 - 989,439 1 - - - - 8,774,817 7 24,622,226 18 1,514,876 1 10,560,417 8 1,625,226 1 3,155,438 2 51,328,272 38 $ 136,174,251 100	December 31, 2017 AMOUNT % $ 35,783,291 26 1,560,025 1 4,868,902 3 28,412,101 20 2,097 - 13,387,122 10 1,417,175 1 2,973,547 2 88,404,260 63 - - - - 1,050,734 1 25,721 - 8,655,722 6 24,982,342 18 1,519,115 1 10,656,713 8 1,409,184 1 3,177,469 2 51,477,000 37 $ 139,881,260 100	March 31, 2017
				AMOUNT % $ 29,709,132 32 992,774 1 3,751,163 4 1,504,805 2 829 - 10,797,405 12 1,359,160 1 2,520,654 3 50,635,922 55 - - - - 955,956 1 27,388 - 10,977,011 12 22,273,332 24 1,534,631 2 1,206,948 1 1,250,480 2 2,843,254 3 41,069,000 45 $ 91,704,922 100
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1170 Accounts receivable, net 1200 Other receivables 1220 Current income tax assets 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	6(1) 6(2) and 12(4) 6(3) and 7 6(6) 6(27) 6(4) 6(2) 6(5) 12(4) 12(4) 6(6) 6(7)(23), 7 and 8 6(8)(29) and 7 6(9) 6(27) 6(10) and 8

(Continued)

~5~

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of March 31, 2018 and 2017 are reviewed, not audited)

					March 31, 2018				December 31, 2017	December 31, 2017			March 31, 2017
	Liabilities and Equity	Notes			AMOUNT	%			AMOUNT	%			AMOUNT	%
	Current liabilities
2100	Short-term borrowings	6(12) and 8		$	5,898,726		4	$	965,180		1	$	2,032,452	2
2110	Short-term notes and bills payable				299,991		-		250,000		-		526,875	1
2130	Contract liabilities - current	6(22)			3,912,917		3		-		-		-	-
2150	Notes payable	7			1,762,995		1		2,066,511		2		1,301,978	1
2170	Accounts payable				18,171,249	14			18,849,947	13			15,787,099	17
2180	Accounts payable - related parties	7			2,345,983		2		2,321,016		2		2,246,581	3
2200	Other payables	6(13)			22,273,380	17			30,980,251	22			18,524,546	20
2230	Current income tax liabilities	6(27)			2,673,886		2		4,834,364		3		1,683,150	2
2300	Other current liabilities	6(14)			1,796,507		1		5,352,651		4		4,403,450	5
21XX	Total current liabilities				59,135,634	44			65,619,920	47			46,506,131	51
	Non-current liabilities
2527	Contract liabilities - non-current	6(22)			224,106		-		-		-		-	-
2540	Long-term borrowings	6(15) and 8			1,086,925		1		1,105,451		1		792,112	1
2570	Deferred income tax liabilities	6(27)			5,317,222		4		4,652,948		3		45,745	-
2640	Net defined benefit liability	6(16)
	- non-current				4,573,913		3		4,574,800		3		4,261,785	5
2670	Other non-current liabilities	6(17)			4,098,367		3		4,421,731		3		4,183,423	4
25XX	Total non-current liabilities				15,300,533	11			14,754,930	10			9,283,065	10
2XXX	Total liabilities				74,436,167	55			80,374,850	57			55,789,196	61
	Equity attributable to owners of the
	parent
	Share capital	6(18)
3110	Share capital - common stock				10,396,223		7		10,396,223		8		10,396,223	11
	Capital surplus	6(19)
3200	Capital surplus				44,411		-		43,875		-		1,194	-
	Retained earnings	6(20)
3310	Legal reserve				9,191,733		7		9,191,733		7		8,208,064	9
3350	Unappropriated retained earnings				33,991,497	25			31,381,290	22			12,580,449	14
	Other equity	6(21)
3400	Other equity interest		(		994,476) (		1) (		398,859) (		1) (		86,271)	-
31XX	Equity attributable to owners of
	the parent				52,629,388	38			50,614,262	36			31,099,659	34
36XX	Non-controlling interest				9,108,696		7		8,892,148		7		4,816,067	5
3XXX	Total equity				61,738,084	45			59,506,410	43			35,915,726	39
3X2X	Total liabilities and equity			$	136,174,251	100		$	139,881,260	100		$	91,704,922	100

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

Chairman: Lo, Chih-Hsien

President : Chen, Jui-Tang

Accounting Manager: Kuo, Ying-Chih

~6~

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

					For the three-month periods	For the three-month periods	For the three-month periods	ended March 31
					2018			2017
	Items	Notes			AMOUNT	%		AMOUNT	%
4000	Operating revenue	6(22) and 7		$	58,947,745	100$		53,001,927	100
5000	Operating costs	6(4)(23) and 7 (			38,446,506) (		65) (	35,645,470) (	67)
5900	Gross profit				20,501,239		35	17,356,457	33
	Operating expenses	6(23)(24)
6100	Selling expenses		(		14,518,012) (		25) (	12,572,889) (	24)
6200	General and administrative expenses		(		2,644,307) (		4) (	2,006,318) (	4)
6450	Expected credit losses (gains)	12(2)	(		3,122)		-	-	-
6000	Total operating expenses		(		17,165,441) (		29) (	14,579,207) (	28)
6900	Operating profit				3,335,798		6	2,777,250	5
	Non-operating income and expenses
7010	Other income	6(25)			536,116		1	404,236	1
7020	Other gains and losses	6(26)		(	17,969)		-(	27,635)	-
7050	Finance costs	6(12)(15)		(	46,543)		-(	24,190)	-
7060	Share of profit of associates and joint ventures	6(6)
	accounted for using equity method				117,216		-	489,070	1
7000	Total non-operating income and expenses				624,758		1	841,481	2
7900	Profit before income tax				3,960,556		7	3,618,731	7
7950	Income tax expense	6(27)	(		1,099,361) (		2) (	571,073) (	1)
8000	Profit for the period from continuing operations				2,861,195		5	3,047,658	6
8200	Profit for the period			$	2,861,195		5$	3,047,658	6

(Continued)

~7~

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

Items	For the three-monthperiods ended March 31	For the three-monthperiods ended March 31	For the three-monthperiods ended March 31
	2018	2017 % AMOUNT % - ( $ 509) - - - - - - - - - - - ( 509 ) - 1) ( 436,104 ) ( 1) - 56,439 - - - - -( 1,318 ) - - 181 - 1) ( 380,802)( 1) 1) ($ 381,311)( 1) 4$ 2,666,347 5 4$ 2,741,471 5 1 306,187 1 5$ 3,047,658 6 4$ 2,483,345 5 - 183,002 - 4$ 2,666,347 5 2.44 $ 2.64 2.43 $ 2.63	2017
Other comprehensive income (loss) 8311 Remeasurements of net actuarial loss on defined benefit plan 8316 Unrealized loss on valuation of equity instruments at fair value through other comprehensive income 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method that will not be reclassified to profit or loss 8349 Income tax effect 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 on valuation of available-for- sale financial assets 8367 Unrealized loss on valuation of bond instruments at fair value through other comprehensive income 8370 Share of other comprehensive loss of associates and joint ventures accounted for using equity method, components of other comprehensive loss 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 loss for the period 8500 Total comprehensive income for the period Profit attributable to: 8610 Owners of the parent 8620 Non-controlling interests Comprehensive income attributable to: 8710 Owners of the parent 8720 Non-controlling interests 9750 Basic earnings per share (in dollars) 9850 Diluted earnings per share (in dollars)
	$

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

Chairman: Lo, Chih-Hsien

President : Chen, Jui-Tang

Accounting Manager: Kuo, Ying-Chih

~8~

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

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

		Equityattributable to owners of theparent
Share capital - common stock $ 10,396,223 - - - - $ 10,396,223 $ 10,396,223 - 10,396,223 - - - - $ 10,396,223	Capital surplus $ 1,158 - 36 - - $ 1,194 $ 43,875 - 43,875 - - - 536 $ 44,411
		Legal reserve
		$ 8,208,064 - - - -
		$ 8,208,064
		$ 9,191,733 -
		9,191,733 - - - -
		$ 9,191,733

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

President : Chen, Jui-Tang

Accounting Manager: Kuo, Ying-Chih

Chairman: Lo, Chih-Hsien

~9~

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

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated profit before income tax for the period
Adjustments to reconcile profit before income tax to net cash
provided by operating activities
Income and expenses having no effect on cash flows
Loss (gain) on valuation of financial assets at fair value
through profit or loss

Provision for doubtful accounts

Expected credit losses

Depreciation on property, plant and equipment

Amortization
Depreciation on investment property

Finance costs
Share of profit of associates and joint ventures accounted
for using equity method
Loss on disposal of property, plant and equipment, net

Interest income

Reversal of impairment loss on property, plant and
equipment

Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Financial assets at fair value through profit or loss
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Net changes in liabilities relating to operating activities
Contract liabilities - current
Accounts payable
Notes payable
Other payables
Advance receipts
Contract liabilities - non-current
Net defined benefit liabilities - non-current
Cash generated from operations
Interest received
Income tax paid
Interest paid
Dividends received
Net cash used by operating activities

Notes

(Continued)

~10~

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

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposal of investments accounted for using the
equity method

Acquisition of subsidiary

Acquisition of property, plant and equipment

Acquisition of investment property

Proceeds from disposal of property, plant and equipment
Increase in guarantee deposits paid
Acquisition of intangible assets

Increase in other non-current assets
Net cash provided by (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings

Increase in short-term notes and bills payable
Increase in long-term borrowings

Repayment of long-term borrowings

Increase in guarantee deposits received
(Decrease) increase in other non-current liabilities
Change in non-controlling interests
Net cash provided by financing activities
Effect of foreign exchange rate changes on cash and cash
equivalents
Increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Notes

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

President : Chen, Jui-Tang

Chairman: Lo, Chih-Hsien

Accounting Manager: Kuo, Ying-Chih

~11~

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

MARCH 31, 2018 AND 2017

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

1. HISTORY AND ORGANIZATION

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

These consolidated financial statements were reported to the Board of Directors on April 25, 2018.

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 as endorsed by FSC effective from 2018 are as 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’ Annual improvements to IFRSs 2014-2016 cycle - Amendments to IAS 28,‘Investments in associates and joint ventures’	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 January 1, 2018

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’
Annual improvements to IFRSs 2014-2016 cycle - Amendments to
IAS 28,‘Investments in associates and joint ventures’

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
January 1, 2018

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

~12~

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 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 Group 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 Group has adopted the modified retrospective approach in IFRS 9 and IFRS 15. The Group 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:

Consolidated 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 Investment accounted using for equity method Other non-current assets Total affected assets	2017 version IFRSs amount $ 4,868,902 83,535,358 - - 1,050,734 ( 25,721( 8,655,722 41,744,823 $ 139,881,260	Effect of adoption of new standards $ 69,169 56,302 85,833 990,622 1,050,734 ) 25,721) 1,696 - $ 127,167	2018 version IFRSs amount $ 4,938,071 83,591,660 85,833 990,622 - - 8,657,418 41,744,823 $ 140,008,427	Remark
				(a)(b) (a) (c) (d) (c)(d) (c) (e)

~13~

Consolidated balance sheet Affected items January 1, 2018 Current liabilities Other current liabilities Contract liabilities - current Refund liabilities Contract liabilities - non-current Other non-current liabilities Total affected liabilities Share capital Capital surplus Retained earnings Other equity interest ( Non-controlling interest Total affected equity Total affected liabilities and equity	2017 version IFRSs amount $ 60,267,269 5,352,651 ( - - - 14,754,930 ( 80,374,850 10,396,223 43,875 40,573,023 398,859 ) ( 8,892,148 ( 59,506,410 ( $ 139,881,260	Effect of adoption of new standards $ - $ 3,935,358 ) 3,935,358 136,360 346,011 346,011 ) 136,360 - - 25,463 29,453 ) ( 5,203 ) 9,193 ) $ 127,167 $	$	2018 version IFRSs amount 60,267,269 1,417,293 3,935,358 136,360 346,011 14,408,919 80,511,210 10,396,223 43,875 40,598,486 428,312 ) 8,886,945 59,497,217 140,008,427	Remark (f) (f) (a) (f) (f) (b)(c)(e) (c)(e) (b)


			$

Explanation:

(a) Under IFRS 15, if the customer returns a product, the Group 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 Group 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 $80,058, refund liability increased by $136,360 and other current assets increased by $56,302 on January 1, 2018.

(b) In line with the regulations of IFRS 9 on provision for impairment, accounts receivable will have to be reduced by $10,889, retained earnings and non-controlling interests decreased by $5,686 and $5,203, respectively.
(c) In accordance with IFRS 9, the Group expects to reclassify available-for-sale financial assets and financial assets at cost in the amount of $60,112 and $25,721, respectively, by increasing financial assets at fair value through profit or loss and retained earnings in the amount of $85,833 and $22,498, respectively, and decreasing other equity interest in the amount of $22,498.
(d) In accordance with IFRS 9, the Group expects to reclassify available-for-sale financial assets in the amount of $990,622 and make 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 $990,622.
(e) The Group’s investee accounted for using the equity method expects to make certain reclassifications in accordance with IFRS 9. Accordingly, the Group expects to increase investments accounted for using the equity method and retained earnings in the amount of $1,696 and $8,651, respectively, and decrease other equity interest in the amount of $6,955.

~14~

(f) Presentation of contract liabilities:

In line with IFRS 15 requirements, the Group expects to change 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 sales receipts in the balance sheet. As of January 1, 2018, the balance would amount to $3,935,358.
(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 $346,011.
(g) Please refer to Note 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

None.

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

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

endorsed by the FSC are as follows:
New Standards, Interpretations and Amendments Amendments to IFRS 9, ‘Prepayment features with negative compensation’ Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 16, ‘Leases’ IFRS 17, ‘Insurance contracts’ 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 To be determined by International Accounting Standards Board January 1, 2019 January 1, 2021 January 1, 2019 January 1, 2019 January 1, 2019 January 1, 2019

endorsed by the FSC are as follows:

New Standards, Interpretations and Amendments
Amendments to IFRS 9, ‘Prepayment features with negative
compensation’
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets
between an investor and its associate or joint venture’
IFRS 16, ‘Leases’
IFRS 17, ‘Insurance contracts’
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
To be determined by
International Accounting
Standards Board
January 1, 2019
January 1, 2021
January 1, 2019
January 1, 2019
January 1, 2019
January 1, 2019

B. Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and operating results based on the Group’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 Group will adopt the modified retrospective transitional provisions of IFRS 16 ‘Lease’, and classify the effects on the lease contract of lessee to January 1, 2019 in accordance with IFRS 16.

~15~

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Except for the compliance statement, basis of preparation, basis of consolidation, and the additional descriptions described below, the other principal accounting policies are in agreement with Note 4 of the consolidated financial statements for the year ended December 31, 2017. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement
A. The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and IAS 34, “Interim Financial Reporting” as endorsed by the FSC.
B. The consolidated financial statements should be read together with the consolidated financial statements for the year ended December 31, 2017.

(2) Basis of preparation

A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
- (a) Financial assets and financial liabilities at fair value through profit or loss.
- (b) Financial assets 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 compliance with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”), requires the use of certain critical accounting estimates and the exercise of management’s judgement in applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.
C. In adopting IFRS 9 and IFRS 15 effective January 1, 2018, the Group 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 first quarter of 2017 was not restated. The financial statements for the first quarter of 2017 were 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.
(3) Basis of consolidation
A. The basis for preparation of consolidated financial statements is as follows:
- (a) The basis for preparation of these consolidated financial statements is consistent with those for the preparation of consolidated financial statements for the year ended December 31, 2017.

~16~

(b) The details of the individual financial statements of the Company’s subsidiaries reviewed or unreviewed by the independent accountants are summarized below:

The details of the individual financial statements of the Company’s subsidiaries reviewed or unreviewed by the independent accountants are summarized below:	The details of the individual financial statements of the Company’s subsidiaries reviewed or unreviewed by the independent accountants are summarized below:
Name of the subsidiaries March 31,2018 March 31,2017
Retail Support International Corp. Financial statements were reviewed Financial statements were reviewed
President Chain Store (BVI) Holdings Ltd.	`〃` `〃`
Shan Dong President Yinzuo Commercial Limited	`〃` `〃`
Mech-President Corp.	`〃` `〃`
President Transnet Corp.	`〃` `〃`
President Drugstore Business Corp.	`〃` `〃`
Books.com. Co., Ltd.	`〃` `〃`
Uni-President Cold-Chain Corp.	`〃` `〃`
Uni-President Superior Commissary Corp.	`〃` `〃`
President Pharmaceutical Corp.	`〃` `〃`
Uni-President Department Store Corp.	`〃` `〃`
President Chain Store (Hong Kong) Holdings Limited `〃` Financial statements were unreviewed
Other subsidiaries Financial statements were unreviewed `〃`

(c) The financial statements of the subsidiary, Philippine Seven Corp., for the year ended December 31, 2017 were audited by other independent accountants, and the financial statements of other subsidiaries were audited by the same independent accountants as appointed by the Company.
B. The subsidiaries included in the consolidated financial statements are as follows:

Main business activities Professional investment Professional investment Logistics and storage of publication and e-commerce Sales of cosmetics, medicine and daily items Professional investment Enterprise management consultancy Art and cultural exhibition	Ownership (%)	Ownership (%)
	March 31, 2018 100.00 92.20 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00	December 31, 2017 100.00 92.20 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Sales of ice cream
Life and property insurance Restaurant and sales of goods Sports and entertainment business

~17~

Name of investor The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company President Chain Store (BVI) Holdings Ltd. President Chain Store (BVI) Holdings Ltd. PCSC (China) Drugstore Limited Wisdom Distribution Service Corp. Wisdom Distribution Service Corp. Uni-President Cold- Chain Corp. Uni-President Cold- Chain Corp. Retail Support International Corp. Retail Support International Corp. Retail Support Taiwan Corp. President Logistics International Corp.	Name of subsidiary Uni-President Oven Bakery Corp. President Chain Store Tokyo Marketing Corp. ICASH Corp. Uni-President Superior Commissary Corp. Q-ware Systems & Services Corp. President Information Corp. Mech-President Corp. President Pharmaceutical Corp. President Collect Services Co., Ltd. Uni-President Department Store Corp. President Transnet Corp. Uni-President Cold-Chain Corp. Uni-Wonder Corp. (Formerly Known as “President Starbucks Coffee Corp.”) Duskin Serve Taiwan Co. Afternoon Tea Taiwan Co., Ltd. Books.com. Co., Ltd. Retail Support International Corp. President Chain Store (Labuan) Holdings Ltd. President Chain Store (Hong Kong) Holdings Limited President Cosmed Chain Store (Shen Zhen) Co., Ltd. President Logistics International Corp. Vision Distribution Service Corp. President Logistics International Corp. Uni-President Logistics (BVI) Holdings Limited Retail Support Taiwan Corp. President Logistics International Corp. President Logistics International Corp. Chieh-Shuen Logistics International Corp.	Main business activities Bread and pastry retailer Enterprise management consultancy Electronic ticketing Fresh food manufacture Information software services Enterprise information management and consultancy Gas station, installment and maintenance of elevators Sales of various health care products, cosmetics, and pharmaceuticals Collection agent Department stores Delivery service Low-temperature logistics and warehousing Coffee chain store Cleaning instruments leasing and selling Operation of restaurants Retail business without shop Room-temperature logistics and warehousing Professional investment Professional investment Wholesale of merchandise Trucking Publishing Trucking Professional investment Logistics and storage of room temperature Trucking Trucking Trucking	Ownership (%)	Ownership (%)	March 31, 2017 100.00 100.00 100.00 90.00 86.76 86.00 80.87 73.74 70.00 70.00 70.00 60.00 - 51.00 51.00 50.03 25.00 100.00 100.00 100.00 20.00 60.00 25.00 100.00 51.00 49.00 6.00 100.00	Description
			March 31, 2018 100.00 100.00 100.00 90.00 86.76 86.00 80.87 73.74 70.00 70.00 70.00 60.00 60.00 51.00 51.00 50.03 25.00 100.00 100.00 100.00 20.00 60.00 25.00 100.00 51.00 49.00 6.00 100.00	December 31, 2017 100.00 100.00 100.00 90.00 86.76 86.00 80.87 73.74 70.00 70.00 70.00 60.00 60.00 51.00 51.00 50.03 25.00 100.00 100.00 100.00 20.00 60.00 25.00 100.00 51.00 49.00 6.00 100.00
						(a) (b)

~18~

Name of investor Duskin Serve Taiwan Co. Books.com. Co., Ltd. Books.com. (BVI) Ltd. Mech-President Corp. Mech-President Corp. President Pharmaceutical Corp. President Pharmaceutical (Hong Kong) Holdings Limited President Chain Store (Labuan) Holdings Ltd. Philippine Seven Corporation President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited Shanghai President Logistics Co., Ltd. Shanghai President Logistics Co., Ltd.	Name of subsidiary Duskin China (BVI) Holdings Limited Books.com. (BVI) Ltd. Bejing Bokelai Customer Co. Safety Elevator Corp. President Jing Corp. President Pharmaceutical (Hong Kong) Holdings Limited President (Shanghai) Health Product Trading Company Ltd. Philippine Seven Corporation Convenience Distribution Inc. PCSC (China) Drugstore Limited President Chain Store (Shanghai) Ltd. Shanghai President Logistics Co., Ltd. PCSC Restaurant (Cayman) Holdings Limited Shan Dong President Yinzuo Commercial Limited PCSC (Chengdu) Hypermarket Limited Shanghai Cold Stone Ice Cream Corporation Ltd. President Chain Store (Taizhou) Ltd. President Chain Store (Zhejiang) Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd. President Logistic ShanDong Co., Ltd.	Main business activities Professional investment Professional investment Enterprise information consulting, network technology development and services Elevator installation, repair and maintenance Gas station Sales of various health care products, cosmetics, and pharmaceuticals Sales of various health care products, cosmetics, and pharmaceuticals Operation of chain store Logistics and warehosuing Professional investment Operation of chain store Logistics and warehousing Professional investment Supermarkets Retail hypermarket Sales of ice cream Logistics and warehousing Operation of chain store Logistics and warehousing Logistics and warehousing	Ownership (%)	Ownership (%)	March 31, 2017 100.00 100.00 100.00 100.00 60.00 100.00 100.00 52.22 100.00 7.80 100.00 100.00 100.00 55.00 100.00 100.00 100.00 - 50.00 100.00	Description
			March 31, 2018 - 100.00 100.00 - 60.00 100.00 100.00 52.22 100.00 7.80 100.00 100.00 100.00 40.00 100.00 100.00 100.00 100.00 50.00 100.00	December 31, 2017 - 100.00 100.00 - 60.00 100.00 100.00 52.22 100.00 7.80 100.00 100.00 100.00 40.00 100.00 100.00 100.00 100.00 50.00 100.00
						(c) (d) (e) (f)

~19~

Name of investor PCSC Restaurant (Cayman) Holdings Limited Uni-President Logistics (BVI) Holdings Limited Ren-Hui Investment Corp Ren-Hui Holdings Co., Ltd.	Name of subsidiary Shanghai President Chain Store Corporation Trade Co., Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd. Ren Hui Holding Co., Ltd Shan Dong President Yinzuo Commercial Limited .	Main business activities Trade of food and commodities Logistics and warehousing Professional investment Retail hypermarket	Ownership (%)	Ownership (%)	March 31, 2017 100.00 50.00 - -	Description
			March 31, 2018 100.00 50.00 100.00 15.00	December 31, 2017 100.00 50.00 100.00 15.00
						(g) (e)

  - (a) The Company acquired additional 30% shares of Uni-Wonder Corp. (Formerly known as “President Starbucks Coffee Corp.”), in December 2017 having control over it. Please refer to Note 6(6)D.

  - (b) As the Company controls the financial and operating policies of Retail Support International Corp., the latter is included as a subsidiary in the consolidated financial statements.

  - (c) The Company liquidated the subsidiary, Duskin China (BVI) Holdings Limited, and the process of cancellation of registration has been completed in January 2018.

  - (d) The Company liquidated the subsidiary, Safety Elevator Corp., and the process of cancellation of registration has been completed in June 2017.

  - (e) The Company transferred its 15% shares of the subsidiary, Shan Dong President Yinzuo Commercial Limited to Presiclerc Limited, in August 2017.

  - (f) The subsidiary of the Company was established in July 2017.

  - (g) The subsidiary of the Company was established in August 2017.

C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.
(4) Financial assets at fair value through profit or loss
A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using settlement date accounting.
C. At initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.
D. The Group recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
(5) Financial assets at fair value through other comprehensive income
A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:
- (a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and
- (b) The assets’ contractual cash flows represent solely payments of principal and interest.

~20~

B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using settlement date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:
(a) The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.
(b) Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognized in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.

(6) Accounts and notes receivable

A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.
B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(7) Notes and accounts payable

A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.
B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.
(8) Income tax
A. The interim period income tax expense is recognized based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.
B. If a change in tax rate is enacted or substantively enacted in an interim period, the Group recognizes the effect of the change immediately in the interim period in which the change occurs. The effect of the change on items recognized outside profit or loss is recognized in other comprehensive income or equity while the effect of the change on items recognized in profit or loss is recognized in profit or loss.

(9) Revenue recognition

A. Sale of goods
(a) The Group operates a chain of retail stores. Revenue from the sale of goods is recognized when the Group sells a product to the customer.
(b) Payment of the transaction price is due immediately when the customer purchases the furniture. It is the Group’s policy to sell its products to the end customer with a right of return. Therefore, a refund liability and a right to the returned goods (included in other current assets) are recognized for the products expected to be returned. Accumulated experience is used to estimate such returns using the expected value method. Because the number of products returned has been steady for years, it is highly probable that a significant reversal in the cumulative revenue recognized will not occur. The validity of this assumption and the estimated amount of returns are reassessed at each reporting date.
(c) The Group operates a loyalty program where retail customers accumulate points for purchases made which entitle them to discount on future purchases. The points provide a material right to customers that they would not receive without entering into a contract. Therefore, the promise to provide points to the customer is a separate performance obligation. The transaction price is allocated to the product and the points on a relative stand-alone selling price basis. The stand-alone selling price per point is estimated on the basis of the discount granted when the points are redeemed and on the basis of the

~21~

likelihood of redemption, based on past experience. The stand-alone selling price of the product sold is estimated on the basis of the retail price. A contract liability is recognized for the transaction price which is allocated to the points and revenue is recognized when the points are redeemed or expire.

B. Sales of services

The Group provides delivery services. Revenue from delivering services is recognized when the services have been provided.

C. Financing components

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

There were no significant changes during the period. Please refer to Note 5 of the consolidated financial statements for the year ended December 31, 2017.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

e year ended December 31, 2017. AILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
	March 31, 2018	December 31, 2017	March 31, 2017
Cash on hand and petty cash	$ 1,150,966	$ 1,791,733	$ 949,133
Checking accounts and demand deposits	12,395,613	14,483,269	6,523,974
Cash equivalents
Time deposits	37,358,899	10,178,300	13,985,802
Short-term financial instruments	8,208,733	9,329,989	8,250,223
	$ 59,114,211	$ 35,783,291	$ 29,709,132

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

“Other non-current assets – guarantee deposits paid” is provided in Note 8. Financial assets at fair value through profit or loss
	March 31, 2018
Current items:
Beneficiary certificates	$ 1,520,295
Valuation adjustment	1,636
	$ 1,521,931

Non-current items:
Unlisted stocks	$ 275,554
Valuation adjustment (	189,721)
	$ 85,833

~22~

A. The Group recognized valuation loss of $3,926 and disposal gain of $1,317 in relation to financial assets at fair value through profit or loss for the three-month period ended March 31, 2018.
B. No financial assets at fair value through profit or loss of the Group were pledged to others.
C. Information relating to credit risk is provided in Note 12(2).
D. Information on December 31, 2017 and March 31, 2017, are provided in Note 12(4).
(3) Accounts receivable

Accounts receivable
	March 31, 2018	December 31, 2017		March 31, 2017
Accounts receivable	$ 4,435,645	$ 5,010,640		$ 3,958,914
Less: allowance for sales returns and discounts	-
		( 93,267 ) ( 88,358 )
allowance for doubtful accounts (	48,698)		( 48,471)	( 119,393)
	$ 4,386,947	$ 4,868,902		$ 3,751,163
A. The aging analysis of accounts receivable is as follows: Up to 90 days 91 to 180 days 181 to 365 days
				March 31, 2018
				$ 131,753
				19,388
				1,977
				$ 153,118

A. The aging analysis of accounts receivable is as follows:

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

B. No accounts receivable of the Group were pledged to others.
C. As at March 31, 2018, December 31, 2107, and March 31, 2107, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable were $4,386,947, $4,868,902, and $3,751,163, respectively.
D. Information relating to credit risk is provided in Note 12(2).

(4) Inventories

Inventories
	March 31, 2018
		Allowance for
	Cost	valuation loss	Book value
Raw materials and work in process	$ 73,518	$ -	$ 73,518
Merchandise and finished goods	12,322,436 (	95,408)	12,227,028
	$ 12,395,954 (	$ 95,408)	$ 12,300,546

	December 31, 2017	December 31, 2017
		Allowance for
	Cost	valuation loss	Book value
Raw materials and work in process	$ 78,013	$ -	$ 78,013
Merchandise and finished goods	13,444,900 (	135,791)	13,309,109
	$ 13,522,913 (	$ 135,791)	$ 13,387,122

~23~

	March 31, 2017	March 31, 2017
		Allowance for
	Cost	valuation loss	Book value
Raw materials and work in process	$ 92,363	$ -	$ 92,363
Merchandise and finished goods	10,870,725 (	165,683)	10,705,042
	$ 10,963,088 (	$ 165,683)	$ 10,797,405

The cost of inventories recognized as expenses for the period:

	For the three-month	For the three-month
	period ended	period ended
	March 31, 2018	March 31, 2017
Cost of goods sold	$ 37,981,884	$ 35,246,650
Gain on reversal of valuation of inventories ( 40,383 ) ( 97,695)
Spoilage	447,809	441,832
Others	57,196	54,683
	$ 38,446,506	$ 35,645,470

The Group reversed a previous inventory write-down because the Group sold certain inventories which were previously provided with allowance for the three-month periods ended March 31, 2018 and 2017, respectively.

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

espectively. Financial assets at fair value through other comprehensive income-non-current
	March 31, 2018
Debt instruments
Government bonds	$ 199,866
Valuation adjustment	1,760
	201,626
Equity instruments
Listed stocks	265,606
Unlisted stocks	4,348
	269,954
Valuation adjustment	517,859
	787,813
	$ 989,439

A.The Group has elected to classify the listed and unlisted stocks that are considered to be strategic investments and steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $787,813 as at March 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:

~24~

		For the three-month
		period ended
		March 31, 2018
Equity instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income		($ 650)

Debt instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income		($ 560)
Interest income recognized in profit or loss		$ 590

C. As at March 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 Group was $989,439.
D. No financial assets at fair value through other comprehensive income of the Group were pledged to others.
E. Information relating to credit risk is provided in Note 12(2).
F. Information on December 31, 2017 and March 31, 2017 are provided in Note 12(4).
(6) Investments accounted for using the equity method

	March 31, 2018	December 31, 2017	March 31, 2017
Associates
PresiCarre Corp.	$ 5,289,180	$ 5,198,249	$ 5,224,536
President Fair Development Corp.	1,962,610	1,954,089	1,940,247
Uni-President Development Corp.	751,964	750,774	824,424
President International Development
Corp.	476,135	466,885	468,625
Tung Ho Development Corp.	121,136	123,504	85,217
Uni-President Organics Corp., etc.	69,160	64,989	67,013
	8,670,185	8,558,490	8,610,062
Joint ventures
President Coffee (Cayman) Holdings Ltd.
	$ -	$ -	$ 1,747,855

Uni-Wonder Corp.	-	-	513,731
Mister Dount Taiwan Corp., Ltd.	104,632	97,232	105,363
	104,632	97,232	2,366,949
	$ 8,774,817	$ 8,655,722	$ 10,977,011

A. The Group’s investments accounted for using the equity method are based on the unreviewed financial statements of investees.
B. The investments in associates or joint ventures are not significant to the Group. The details of the Group’s share of the operating results in the aforementioned investments are as follows:

~25~

(a) The Group’s share of the operating results in all individually immaterial associates is summarized below:

below:
	For the three-month	For the three-month
	period ended	period ended
	March 31, 2018	March 31, 2017
Total comprehensive income	$ 110,000	$ 78,994

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

below:
	For the three-month	For the three-month
	period ended	period ended
	March 31, 2018	March 31, 2017
Total comprehensive income	$ 7,400	$ 408,758

C. In December 2017, the Group disposed of 30% shares of its joint venture – President Coffee (Cayman) Holdings Ltd. for a cash consideration of $25,642,728 to Starbucks EMEA Holdings Ltd. (shown as ‘other receivables’ as at December 31, 2017), which was collected in February, 2018.
－
D. The Group originally held 30% shares of its joint venture using the equity method Uni-Wonder Corp. (formerly known as “President Starbucks Coffee Corp.”). In December 2017, the Group acquired an additional 30% shares of Uni-Wonder Corp. for a cash consideration of $3,226,806, (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.

~26~

(7) Property, plant and equipment

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

Land		Buildings	Transportation equipment		Office equipment	Leasehold improvements	Others	Total
$ 2,273,584		$ 4,296,089	$ 6,343,845		$ 20,180,016	$ 17,259,683	$ 9,456,005	$ 59,809,222

16,366)	(	1,800,537 ) (	4,046,383 )	(	13,384,193) (	10,568,380) (	5,011,021) (	34,826,880 )
$ 2,257,218		$ 2,495,552	$ 2,297,462		$ 6,795,823	$ 6,691,303	$ 4,444,984	$ 24,982,342


$ 2,257,218		$ 2,495,552	$ 2,297,462		$ 6,795,823	$ 6,691,303	$ 4,444,984	$ 24,982,342
-		6,482	7,263		540,522	431,377	387,864	1,373,508
-		- (	5,592 )	(	10,618 ) (	12,033 ) (	3,598) (	31,841)
-	(	240 )	63,408		33,211	1,372 (	89,201)	8,550
-	(	48,092 ) (	139,268 )	(	559,738 ) (	419,549 ) (	309,418) (	1,476,065)
1,538)		291 (	5,597 )		8,329 (	84,013 ) (	151,740) (	234,268)

$ 2,255,680		$ 2,453,993	$ 2,217,676		$ 6,807,529	$ 6,608,457	$ 4,278,891	$ 24,622,226
$ 2,272,046		$ 4,290,907	$ 6,378,570		$ 20,463,001	$ 17,272,073	$ 9,338,398	$ 60,014,995

16,366)	(	1,836,914 ) (	4,160,894 )	(	13,655,472) (	10,663,616 ) (	5,059,507) (	35,392,769 )
$ 2,255,680		$ 2,453,993	$ 2,217,676		$ 6,807,529	$ 6,608,457	$ 4,278,891	$ 24,622,226

~27~

Land	Buildings	Transportation equipment	Office equipment	Leasehold improvements	Others	Total
$ 2,246,915	$ 4,049,783	$ 5,833,407	$ 18,856,770	$ 12,857,463	$ 8,330,108	$ 52,174,446
						29,845,155)
16,520 ) (	1,622,614 ) (	3,721,333 ) (	12,428,793) (	7,790,593 ) (	4,265,302) (
$ 2,230,395	$ 2,427,169	$ 2,112,074	$ 6,427,977	$ 5,066,870	$ 4,064,806	$ 22,329,291
						$ 22,329,291
$ 2,230,395	$ 2,427,169	$ 2,112,074	$ 6,427,977	$ 5,066,870	$ 4,064,806
28,823	4,291	176,852	441,315	399,220	511,080	1,561,581
- (	613 ) (	6,525 ) (	31,037 ) (	17,249 ) (	2,020) (	57,444)
-	-	73,975	13,953	10,288 (	118,144) (	19,928)
- (	45,030 ) (	142,599 ) (	522,229 ) (	292,494 ) (	253,875) (	1,256,227)
-	-	-	221	-	618	839
1,832 ) (	2,880 ) (	5,034 ) (	21,553) (	82,493 )	( 170,988) (	284,780)
$ 2,257,386	$ 2,382,937	$ 2,208,743	$ 6,308,647	$ 5,084,142	$ 4,031,477	$ 22,273,332
$ 2,273,905	$ 4,038,184	$ 5,994,194	$ 18,910,410	$ 12,921,342	$ 8,326,460	$ 52,464,495
						30,191,163)
16,519) (	1,655,247 ) (	3,785,451 ) (	12,601,763) (	7,837,200 ) (	4,294,983) (
$ 2,257,386	$ 2,382,937	$ 2,208,743	$ 6,308,647	$ 5,084,142	$ 4,031,477	$ 22,273,332

B. Information on reversal of impairment loss on property, plant and equipment is provided in Note 6(11).

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

~28~

(8) Investment property

2018 January 1, 2018 Depreciation charge March 31, 2018 2017 January 1, 2017 Additions Depreciation charge March 31, 2017	Land $ 1,059,538 - ( $ 1,059,538 Land $ 902,270 160,747 - ( $ 1,063,017	Buildings $ 459,577 4,239) ( $ 455,338 Buildings $ 456,919 18,922 4,227) ( $ 471,614	Total $ 1,519,115 4,239) $ 1,514,876 Total $ 1,359,189 179,669 4,227) $ 1,534,631

The fair value of the investment property held by the Group ranged from $3,608,641 to $4,186,928 over the period from March 31, 2017 to March 31, 2018, which was assessed based on recent settlement prices of similar and comparable properties, as well as the reports of independent appraisers, which is categorized within Level 3 in the fair value hierarchy.

(9) Intangible assets

	Software	Goodwill	License agreement and customer list	Others	Total
	$ 1,568,017	$ 2,202,519	$ 7,524,890	$ 405,998	$ 11,701,424

(	975,791 )	-	- (	68,920 )	( 1,044,711)
	$ 592,226	$ 2,202,519	$ 7,524,890	$ 337,078	$ 10,656,713

	$ 592,226	$ 2,202,519	$ 7,524,890	$ 337,078	$ 10,656,713
	21,824	-	-	-	21,824
	-	-	-	567	567
(	61,963 )	-	( 48,540) (	7,846 ) ( 118,349 )
	887 (	1,211)	- (	14 )	( 338)

	$ 552,974	$ 2,201,308	$ 7,476,350	$ 329,785	$ 10,560,417
	$ 1,536,354	$ 2,201,308	$ 7,524,890	$ 401,130	$ 11,663,682

(	983,380 )	-	( 48,540) (	71,345 )	( 1,103,265)
	$ 552,974	$ 2,201,308	$ 7,476,350	$ 329,785	$ 10,560,417

~29~

Software	Goodwill	License agreement and customer list	Others	Total
$ 1,368,689	$ 378,673	$ -	$ 160,300	$ 1,907,662

774,768 )	-	-	( 56,718) (	831,486)
$ 593,921	$ 378,673	$ -	$ 103,582	$ 1,076,176

$ 593,921	$ 378,673	$ -	$ 103,582	$ 1,076,176
16,775	-	-	175,623	192,398
334 )	-	-	-	( 334 )
-	-	-	5,036	5,036
52,044 )	-	-	( 6,878)	( 58,922 )
3,374 ) (	1,666 )	-	( 2,366)	( 7,406 )
$ 554,944	$ 377,007	$ -	$ 274,997	$ 1,206,948
$ 1,374,046	$ 377,007	$ -	$ 343,747	$ 2,094,800

819,102 )	-	-	( 68,750)	( 887,852 )
$ 554,944	$ 377,007	$ -	$ 274,997	$ 1,206,948

Amortization expenses on intangible assets are recognized as operating expenses.

(10) Other non-current assets

Other non-current assets
	March 31, 2018	December 31, 2017	March 31, 2017
Guarantee deposits paid	$ 2,639,129	$ 2,656,420	$ 2,370,893
Others	516,309	521,049	472,361
	$ 3,155,438	$ 3,177,469	$ 2,843,254

(11) Impairment of non-financial assets

A. The Group recognized reversal of impairment loss for the three-month periods ended March 31, 2018 and 2017 amounting to $0 and $839, respectively.
B. Goodwill is allocated to the Group’s cash-generating units based on operating segments. The recoverable amount of all cash-generating units has been determined based on value-in-use calculations, which use pre-tax cash flow projections based on five-year financial budgets approved by the management. The Group performs impairment testing annually.

~30~

(12) Short-term borrowings

Type of borrowings Bank borrowings Credit loan Type of borrowings Bank borrowings Credit loan Type of borrowings Bank borrowings Credit loan	March 31, 2018 $ 5,898,726 December 31, 2017 $ 965,180 March 31, 2017 $ 2,032,452	Interest rate range 0.71%~4.35% Interest rate range 0.94%~4.35% Interest rate range 0.80%~4.57%	Collateral
			None Collateral
			None Collateral
			None

There was no capitalization of borrowing costs for the three-month periods ended March 31, 2018 and 2017. Relevant interest expense on borrowings is recognized as “finance costs”.

(13) Other payables

Store collections Wages, salaries and bonus payable Employees’ compensation and remuneration for directors and supervisors Incentive bonus payable to franchisees Sales receipt on behalf of others Rent payable Payables for acquisition of property, plant and equipment Payables for labor and health insurance Payables for equity investments (See Note 6(6)D) Others	March 31, 2018 $ 10,108,950 3,057,090 1,387,488 994,581 951,825 809,401 452,855 230,186 - 4,281,004 $ 22,273,380	December 31, 2017 $ 11,947,975 4,399,047 1,612,325 930,996 1,134,831 803,066 1,071,524 240,769 3,226,806 5,612,912 $ 30,980,251	March 31, 2017
			$ 7,986,564 3,091,068 383,016 873,261 981,595 680,470 453,227 222,311 - 3,853,034 $ 18,524,546

~31~

(14) Other current liabilities

Advance receipts of deposits in icash cards Current portion of long-term liabilities Advance receipts of members’ deposits Advance receipts for gift certificates Advance receipts for gift cards Advance receipts for franchise fee Others	March 31, 2018 $ 1,126,542 285,197 - - - - 384,768 $ 1,796,507	December 31, 2017 $ 1,064,779 273,754 1,059,753 1,240,616 737,431 231,312 745,006 $ 5,352,651	March 31, 2017 $ 961,584 194,446 435,943 1,200,026 680,183 232,377 698,891
			$ 4,403,450

Advance receipts of members’ deposits, gift certificates, gift cards, and franchise fee are recognized as contract liabilities in accordance with IFRS 15 from January 1, 2018. Please refer to Notes 3(1)C and 6(22). - (15) Long term borrowings

Type of borrowings Long-term bank borrowings Credit loan Secured borrowings Less: Current portion Type of borrowings Long-term bank borrowings Credit loan Secured borrowings Less: Current portion Type of borrowings Long-term bank borrowings Credit loan Secured borrowings Less: Current portion	Interest rate range 0.85%~3.643% 1.77%~2.24% Interest rate range 0.85%~3.643% 1.77%~1.98% Interest rate range 0.88%~3.10% 1.99%~2.25%	Collateral None Property, plant and equipment ( Collateral None Property, plant and equipment ( Collateral None Property, plant and equipment (	March 31, 2018 $ 997,064 375,058 1,372,122 285,197) $ 1,086,925 December 31, 2017 $ 1,018,506 360,699 1,379,205 273,754) $ 1,105,451 March 31, 2017 $ 702,438 280,907 983,345 191,233) $ 792,112

There was no capitalization of borrowing costs for the three-month periods ended March 31, 2018 and 2017. Relevant interest expense on borrowings is recognized as “finance costs”.

~32~

(16) Pensions

A. The Company and its domestic subsidiaries operate a defined benefit pension plan, in accordance with the Labor Standards Law, which covers all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Labor Standards Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last six months prior to retirement. The Company and its domestic subsidiaries contributes monthly an amount equal to 2%-8% of employees’ monthly salaries and wages to a retirement fund at the Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is not enough to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contribution for the deficit by next March. Furthermore, the subsidiary, Philippine Seven Corporation, operates an employer matching pension plan, under which the employer contributes the same amount as employees’ to the employee’s individual pension accounts.
- For the aforementioned pension plan, the Group recognized pension costs of $39,143 and $40,183 for the three-month periods ended March 31, 2018 and 2017, respectively.
B. Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
- (a) The Company’s mainland China subsidiaries have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. The contribution percentage for the three-month periods ended March 31, 2018 and 2017 was 14%~25% and 13%~21%, respectively. Other than the monthly contributions, the Group has no further obligations.
- (b) The pension costs under the defined contribution pension plans of the Group for the three-month periods ended March 31, 2018 and 2017 were $226,103 and $198,379, respectively.
(17) Other non-current liabilities

Guarantee deposit received Decommissioning liability Deferred income Others	March 31, 2018 $ 3,384,281 399,620 51,361 263,105 $ 4,098,367	December 31, 2017 $ 3,355,171 392,807 365,868 307,885 $ 4,421,731	March 31, 2017 $ 3,302,704 403,076 230,631 247,012 $ 4,183,423

(18) Share capital

As of March 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 1,039,622,255 as of March 31, 2018 and January 1, 2018.

~33~

(19) 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.

(20) Retained earnings

A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, must first be used to pay all taxes and offset prior years’ operating losses, then 10% of the remaining amount is to be set aside as a legal reserve. The Company may then set aside or reserve a certain amount as special reverse according to the relevant regulations. The appropriation of the remaining earnings and prior years’ unappropriated retained earnings 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 shall not be used for any other purpose. The use of the legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
C. In accordance with the regulations, the Company shall set aside a special reserve for the debit balance on other equity items at the balance sheet date before distributing earnings. When the debit balance on other equity items is reversed subsequently, the reversed amount should be included in the distributable earnings.
D. The appropriations for 2017 as proposed by the Board of Directors on February 23, 2018 and for 2016 as resolved by the shareholders on June 13, 2017 are as follows:

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

As of April 25, 2018, the appropriation for 2017 has not yet resolved by the shareholders.

E. See Note 6(24) for information on employees’ compensation and directors’ and supervisors’ remuneration.

~34~

(21) Other equity items

For the three-monthperiod ended March 31, 2018 Exchange differences from translation of foreign operations Unrealized gains/(losses) on valuation of financial assets at fair value through other comprehensive income Unrealized gains/(losses) on available- for-sale financial assets Total At January 1, 2018 ($ 906,308) $ - $ 507,449 ($ 398,859) Adjustments under new standards - 477,996 ( 507,449) ( 29,453) Adjusted beginning balance ( 906,308) 477,996 - ( 428,312) Revaluation: –Group - ( 1,210) - ( 1,210) –Associates - 220 - 220 Revaluation-tax - ( 512) - ( 512) Currency translation differences: –Group ( 564,616) - - ( 564,616 ) –Associates ( 46) - - ( 46) At March 31, 2018 ($ 1,470,970) $ 476,494 $ - ($ 994,476) For the three-month period ended March 31, 2017 Exchange differences from translation of foreign operations Unrealized gains/(losses) on available-for-sale financial assets Total At January 1, 2017 ($ 186,228) $ 357,817 $ 171,589 Revaluation: –Group - 56,439 56,439 –Associates - ( 114 ) ( 114 ) Revaluation-tax - 181 181 Currency translation differences: –Group ( 313,162) - ( 313,162 ) –Associates ( 1,204) - ( 1,204) At March 31, 2017 ($ 500,594) $ 414,323 ($ 86,271)		For the three-monthperiod ended March 31, 2018

(22) Operating revenue

Revenue from contracts with customers

For the three-month period ended March 31, 2018 $ 58,947,745

~35~

A. Disaggregation of revenue from contracts with customers

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

B.	For the three-month period ended March 31, 2018 Total segment revenue Inter-segment revenue Revenue from external customer contracts Timing of revenue recognition –At a point in time –Over time At March 31, 2017 Contract liabilities	Convenience stores $ 37,154,144 ( 164,273) 36,989,871 $ 36,865,634 124,237 $ 36,989,871	Retail business group $ 17,244,823 ( 597,690) 16,647,133 $ 13,765,189 2,881,944 $ 16,647,133	Logistics Business group $ 3,650,418 ( 3,178,248) 472,170 $ 418,153 54,017 $ 472,170	Others $ 6,438,162 ( 1,599,591) 4,838,571 $ 4,636,992 201,579 $ 4,838,571	Total $ 64,487,547 ( 5,539,802)
						58,947,745 $ 55,685,968 3,261,777 $ 58,947,745

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

Contract liabilities – advance receipts of gift certificates and gift cards Contract liabilities – members’ deposits Contract liabilities – franchise fee Contract liabilities – customer loyalty programs Contract liabilities – others	March 31, 2018
	$ 2,193,524 1,215,948 225,547 315,176 186,828 $ 4,137,023

Contract liabilities- current Contract liabilities- non-current	March 31, 2018
	$ 3,912,917 224,106 $ 4,137,023

(b) Revenues recognized that were included in the contract liabilities balance at the beginning was $722,737 for the three-month period ended March 31, 2018.
C. Related disclosures for the three-month period ended March 31, 2017 operating revenue are provided in Note 12(5) B.

~36~

(23) Expenses by nature

Cost of goods sold Employee benefit expense Incentive bonuses for franchisees Operating lease payments Depreciation and amortization Utilities expense Other costs and expenses Total operating costs and operating expenses	For the three-month period ended March 31, 2018 $ 34,219,005 6,355,415 5,025,623 3,009,883 1,621,839 875,880 4,504,302 $ 55,611,947	For the three-month period ended March 31, 2017 $ 31,632,327 5,390,014 4,536,664 2,592,709 1,330,076 839,578 3,903,309 $ 50,224,677

(24) Employee benefit expense

Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses	For the three-month period ended March 31, 2018 $ 5,272,559 483,132 265,246 334,478 $ 6,355,415	For the three-month period ended March 31, 2017 $ 4,409,445 444,252 238,562 297,755 $ 5,390,014

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 three-month periods ended March 31, 2018 and 2017 employees’ compensation was accrued at $149,600 and $143,812, respectively; while directors’ and supervisors’ remuneration was accrued at $49,980 and $48,047, respectively.

The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 4.37% and 1.46% of distributable profit of the current period for the three-month period ended March 31, 2018.

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

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.

~37~

(25) Other income

For the three-month
period ended
March 31, 2018
Grants income
$ 173,985

Interest income
147,170
Rental revenue
36,047
Others
178,914
$ 536,116

Other gains and losses

For the three-month
period ended
March 31, 2018
Gain on disposal of investments
$ 1,317

Loss on disposal of property, plant and equipment
(
7,784 ) (
Other gains and losses
24,436
(
$ 17,969
(
Income tax
A. Income tax expense
(a)Components of income tax expense:

For the three-month
period ended
March 31, 2018
Current tax:
Current tax on profits for the period
$ 601,347
Under provision of prior year’s income tax
-
Total current tax
601,347
Deferred tax:
Origination and reversal of temporary differences (
142,290 )
Impact of change in tax rate
640,304
Total deferred tax
498,014
Income tax expense
$ 1,099,361

For the three-month
period ended
March 31, 2017
$ 142,598
37,898
42,573
181,167
$ 404,236
For the three-month
period ended
March 31, 2017
$ 684

8,467 )

19,852)
$ 27,635)
For the three-month
period ended
March 31, 2017
$ 570,573
118
570,691

382
-
382
$ 571,073

(26) Other gains and losses

(27) Income tax

A. Income tax expense

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

		For the three-month	For the three-month		For the three-month	For the three-month
			period ended			period ended
			March 31, 2018			March 31, 2017
Fair value gains/losses on available-for-sale
financial assets		$		-	($	181)
Changes in fair value of financial assets at fair
value through other comprehensive income	(		2,805)			-
Impact of change in tax rate	(		46,977)			-
	($		49,782)		($	181)

B. The Company’s income tax returns through tax year 2015 have been assessed and approved by the Tax Authority.

~38~

C. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China in February, 2018, the Company’s applicable income tax rate was raised from 17% to 20% effective from January 1, 2018. The Group has assessed the impact of the change in income tax rate.
(28) Earnings per share

Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 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’ compensation Shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	For the three-month period ended March	For the three-month period ended March	31, 2018 Earnings per share (in dollars) $ 2.44 $ 2.43 31, 2017 Earnings per share (in dollars) $ 2.64 $ 2.63
	Amount Weighted average number of ordinary shares outstanding after tax (shares in thousands) $ 2,537,621 1,039,622 $ 2,537,621 1,039,622 - 2,838 $ 2,537,621 1,042,460 For the three-month period ended March
	Amount after tax $ 2,741,471 $ 2,741,471 - $ 2,741,471	Weighted average number of ordinary shares outstanding (shares in thousands) 1,039,622 1,039,622 2,153 1,041,775

(29) Operating leases

Lessor

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

~39~

Less than one year Over one year but less than five years Over five years	March 31, 2018 $ 93,898 277,573 43,094 $ 414,565	December 31, 2017 $ 94,376 292,261 51,674 $ 438,311	March 31, 2017 $ 81,140 203,420 59,791 $ 344,351

Lessee

A. The Group leases business premises for its stores. The lease terms are between one and twenty years, and certain lease agreements are renewable at the end of the lease period. Rents are paid in accordance with the agreements. Some leases incur additional rent expenses based on the operating revenue of stores or changes in local price indices. Rental expenses recognized in profit and loss for the three-month periods ended March 31, 2018 and 2017 are as follows:

Rental expenses Contingent rents	For the three-month period ended March 31, 2018 $ 2,917,548 $ 92,335	For the three-month period ended March 31, 2017 $ 2,495,453
		$ 97,256

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	March 31, 2018 $ 9,736,659 30,872,897 15,598,100 $ 56,207,656	December 31, 2017 $ 9,765,924 30,324,865 15,732,948 $ 55,823,737	March 31, 2017 $ 8,433,642 27,257,602 13,857,345 $ 49,548,589

B. The Group has sub-leased certain business premises to others. Sublease revenues recognized in profit and loss for the three-month periods ended March 31, 2018 and 2017 are as follows:

Sublease revenues Contingent rents	For the three-month period ended March 31, 2018 $ 60,408 $ 283,640	For the three-month period ended March 31, 2017 $ 50,240
		$ 289,615

In accordance with non-cancellable sub-lease agreements as of March 31, 2018, sub-lease payments totalling $528,365 are expected to be collected between 2018 and 2029.

(30) Supplemental cash flow information

Investing activities with partial cash payments

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 period	For the three-month period ended March 31, 2018 $ 1,373,508 1,071,524 452,855) ( $ 1,992,177	For the three-month period ended March 31, 2017 $ 1,561,581 883,723 453,227	For the three-month period ended March 31, 2017
		$ 1,992,077

~40~

(31) Changes in liabilities from financing activities

January 1, 2018 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items March 31, 2018		Short-term borrowings	Long-term borrowings		Other	Liabilities from financing activities-gross
		$ 965,180 4,933,546 - - $ 5,898,726	$ 1,105,451 32,945 ( 40,028) ( 11,443) $ 1,086,925	(	$ 4,671,731 72,638 - 346,011) $ 4,398,358	$ 6,742,362 5,039,129 ( 40,028) ( 357,454) $ 11,384,009

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 March 31, 2018.

(2) Names of related parties and relationship

Names of related parties Uni-President Enterprises Corp. Mister Donut Taiwan Co., Ltd.

Tung Ang Enterprises Corp. President Packaging Corp. President Tokyo Crorp. Tait Marketing & Distribution Co., Ltd. Lien-Bo Enterprises Corp. Kuang Chuan Dairy Corp.

Weilih Food Industrial Co., Ltd. Kang Na Hsiung Enterprises Co., Ltd.

Tung Chan Enterprises Corp. Koasa Yamako Corp.

Relationship with the Group Ultimate parent company Investees of the Group accounted for using the equity method Subsidiaries of ultimate parent company 〃〃〃

〃

Investees of ultimate parent company accounted for using the equity method

〃

Investees of subsidiaries of ultimate parent company accounted for using the equity method

〃 The Company is a director of Koasa Yamako Corp.

~41~

(3) Significant related party transactions and balances

A. Operating revenue

Sales of goods Ultimate parent Associates Sister companies Other related parties Sales of services Ultimate parent Associates Sister companies Other related parties	For the three-month period ended March 31, 2018 $ 142,050 37,902 63,789 18,176 2,368 7,603 2,639 1,337 $ 275,864	For the three-month period ended March 31, 2017 $ 135,969 300,507 56,437 13,586 1,867 41,342 2,921 884 $ 553,513

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

B. Purchases

Ultimate parent Associates Sister companies Other related parties	For the three-month period ended March 31, 2018 $ 3,538,542 82,857 953,554 479,714 $ 5,054,667	For the three-month period ended March 31, 2017 $ 3,469,362 120,610 946,558 209,139 $ 4,745,669

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

C. Receivables from related parties

Ultimate parent Associates Sister companies Other related parties	March 31, 2018 $ 149,638 53,511 49,231 5,489 $ 257,869	December 31, 2017 $ 190,171 68,686 72,400 8,725 $ 339,982	March 31, 2017 $ 154,245 143,983 35,690 4,446 $ 338,364

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

D. Payables to related parties

Ultimate parent Associates Sister companies Other related parties	March 31, 2018 $ 1,563,339 70,286 448,647 279,751 $ 2,362,023	December 31, 2017 $ 1,558,451 68,577 406,713 327,697 $ 2,361,438	March 31, 2017 $ 1,582,352 112,833 430,313 139,181 $ 2,264,679

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

~42~

E. Long-term installment payable

The subsidiaries, President Transnet Corp. and President Logistics International Corp., acquired transportation equipment on installment for up to five years. There was no related transaction in March 31, 2018 and December 31, 2017 as it was already paid. Details of the related long-term installment payables (under “Other current liabilities” and “Other non-current liabilities”) in March 31, 2017 are as follows:

Sister companies Discount on the long-term installment payable ( Net amount Less: Current portion (	March 31, 2017 $ 3,229 10) 3,219 3,213) $ 6

F. Property transactions

Acquisition of property, plant and equipment and investment property:

Sister companies	Accounts Property, plant and equipment Investment property	For the three-month period ended March 31, 2017 $ 32,215 179,669 $ 211,884

For the three-month period ended March 31, 2018, the Group did not conduct any property transaction.

(4) Key management compensation

Salaries and other short-term employee benefits	For the three-month period ended March 31, 2018 $ 189,512	For the three-month period ended March 31, 2017 $ 169,737

~43~

8. PLEDGED ASSETS

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

			Book value	Book value	Book value
	Pledged asset		March 31, 2018		December 31, 2017		Purpose
Land		$	314,492	$		368,869	Long-term and short-term
							borrowings and guarantee
							facilities
Buildings			71,388			187,884	Long-term and short-term
							borrowings and guarantee
							facilities
Transportation equipment			513,622			493,134	Long-term borrowings and
							long-term installment
							payable
Pledged time deposits
(Recognized as “Other
non-current assets - guarantee
deposits	paid ”)		49,665			49,665	Performance guarantee
		$	949,167	$		1,099,552
					Book	value
	Pledged asset				March	31, 2017	Purpose
Land					$	368,869	Long-term and short-term
							borrowings and guarantee
							facilities
Buildings						205,280	Long-term and short-term
							borrowings and guarantee
							facilities
Transportation equipment						306,957	Long-term borrowings and
							long-term installment
							payable
Pledged time deposits
(Recognized as “Other
non-current assets - guarantee
deposits	paid ”)					49,165	Performance guarantee
				$		930,271

SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

~44~

12. OTHERS

(1) Capital management

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

(2) Financial instruments

A. Financial instruments by category

Financial assets Financial assets measured at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets held for trading Financial assets at fair value through other comprehensive income Designation of equity instrument Qualifying 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 Financial liabilities Financial liabilities measured at fair value through profit or loss Short-term borrowings Short-term notes and bills payable Notes payable Accounts payables Other payables Long-term borrowings (including current portion) Guarantee deposit received	March 31, 2018 $ 1,607,764 - 787,813 201,626 - - 59,114,211 4,386,947 3,147,066 2,639,129 $ 71,884,556 $ 5,898,726 299,991 1,762,995 20,517,232 22,273,380 1,372,122 3,384,281 $ 55,508,727	December 31, 2017 $ - 1,560,025 - - 1,050,734 25,721 35,783,291 4,868,902 28,412,101 2,656,420 $ 74,357,194 $ 965,180 250,000 2,066,511 21,170,963 30,980,251 1,379,205 3,355,171 $ 60,167,281	March 31, 2017 $ - 992,774 - - 955,956 27,388 29,709,132 3,751,163 1,504,805 2,370,893 $ 39,312,111 $ 2,032,452 526,875 1,301,978 18,033,680 18,524,546 983,345 3,302,704 $ 44,705,580

B. Risk management policies

(a) The Group’s risk management and hedging policies mainly focus on hedging business risk. The Group also establishes hedge positions when trading derivative financial instruments. The choice of instruments should hedge risks relating to interest expense, assets or liabilities arising from business operations.

~45~

(b) For managing derivative instruments, the treasury department is responsible for managing trading positions of derivative instruments and assesses market values periodically. If transactions and gains (losses) are abnormal, the treasury will respond accordingly and report to the Board of Directors immediately.
(c)There is no related transaction about derivative financial instruments that are used to hedge certain exchange rate risk.
C. Significant financial risks and degrees of financial risks
(a)Market risk

Foreign exchange risk

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

(Foreign currency: functional currency) Financial assets Monetary items USD: NTD RMB:NTD JPY:NTD HKD:NTD EUR:NTD Non-monetary items JPY: NTD Financial liabilities Monetary items USD: NTD JPY: NTD	March 31, 2018 Foreign currency amount (In thousands) Exchange rate Book value (NTD) $ 3,881 29.1050 $ 112,957 1,090 4.6379 5,055 47,807 0.2739 13,094 7,320 3.7082 27,144 801 35.8700 28,732 $ 809,100 0.2739 $ 221,612 $ 4,194 29.1050 $ 122,066 91,022 0.2739 24,931	March 31, 2018 Foreign currency amount (In thousands) Exchange rate Book value (NTD) $ 3,881 29.1050 $ 112,957 1,090 4.6379 5,055 47,807 0.2739 13,094 7,320 3.7082 27,144 801 35.8700 28,732 $ 809,100 0.2739 $ 221,612 $ 4,194 29.1050 $ 122,066 91,022 0.2739 24,931	December 31, 2017	December 31, 2017	Book value (NTD) $ 107,434 2,318,907 27,667 16,795 - $ 235,640 $ 2,970,465 16,788
	Foreign currency amount (In thousands) $ 3,881 1,090 47,807 7,320 801 $ 809,100 $ 4,194 91,022	Exchange rate 29.1050 4.6379 0.2739 3.7082 35.8700 0.2739 29.1050 0.2739	Foreign currency amount (In thousands) $ 3,610 507,009 104,720 4,410 - $ 891,900 $ 99,814 63,542	Exchange rate 29.7600 4.5737 0.2642 3.8085 - 0.2642 29.7600 0.2642

~46~

(Foreign currency: functional currency) Financial assets Monetary items USD: NTD RMB:NTD JPY:NTD Non-monetary items JPY: NTD Financial liabilities Monetary items USD: NTD JPY: NTD	March 31, 2017	March 31, 2017	Book value (NTD) $ 25,871 141,587 26,587 $ 197,615 $ 17,197 24,228
	Foreign currency amount (In thousands) $ 853 32,151 97,997 $ 728,400 $ 567 89,303	Exchange rate 30.330 4.4038 0.2713 0.2713 30.330 0.2713

IV. Total exchange gain (loss), including realized and unrealized from significant foreign exchange variations on monetary items held by the Group amounted to $47,970 and ($1,153) for the threemonth periods ended March 31, 2018 and 2017, respectively.

Price risk

I. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss, 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 Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.
II. The Group’s investments in equity securities comprise shares and open-ended funds issued by the domestic companies. The prices of equity securities would change due to change of the future value of investee companies. If the prices of these equity securities increase / decrease by 5% , and open-ended funds increase / decrease by 0.25%, with all other variables held constant, the post-tax profit for the three-month periods ended March 31, 2018 and 2017 would have increased/decreased by $8,096 and $2,469, 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 $39,391 and $34,435, respectively, as a result of other comprehensive income classified as available-for-sale equity investment and equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

I. The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk, which are partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. During the three-month periods ended March 31, 2018 and 2017, the Group’s borrowings at variable rate were mainly denominated in New Taiwan dollars and Philippine Peso.
II. If the borrowing interest rate had increased/decreased by 0.25% with all other variables held constant, profit, net of tax for the three-month periods ended March 31, 2018 and 2017 would have increased/decreased by $2,680 and $2,208, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.
III. If the government bond yield rate had increased/decreased by 0.25% with all other variables held constant, other comprehensive income for the three-month periods ended March 31, 2018 and 2017 would have decreased by $621 and $1,118 or increased by $624 and $1,127, respectively. The main factor is that changes in market interest rates would affect the fair value of fixed interest rate bond investments held by the Group classified as financial assets at fair value through other comprehensive income.

~47~

(b) Credit risk

I. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortized cost, at fair value through profit or loss and at fair value through other comprehensive income.
II. The Group manages their credit risk taking into consideration the entire group’s concern. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted.
III. The Group operates a chain of retail stores, thus the ratio of accounts receivable to total asset is low. The Group classifies customer’s accounts receivable in accordance with credit rating of customer. The Group applies the simplified approach using provision matrix to estimate expected credit loss under the provision matrix basis and using the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable. Movements in relation to the group applying the simplified approach to provide loss allowance for accounts receivable are as follows:

are as follows:
		March 31, 2018
	Accounts receivable
At January 1_IAS 39	$	48,471
Adjustments under new standards		10,889
At January 1_IFRS 9		59,360
Provision for impairment		3,122
Reversal of impairment	(	1,678)
Write-offs	(	11,115)
Effect of foreign exchange	(	991)
At March 31	$	48,698

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

~48~

II. The Group invests surplus cash in interest bearing current accounts, time deposits, money market fund and marketable securities, and chooses instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the aforementioned forecasting. The Group held money market funds of $1,521,931, $1,560,025 and $992,774 as at March 31, 2018, December 31, 2017, and March 31, 2017, respectively, which are expected to readily generate cash inflows for the purpose of managing liquidity risk.
III. The Group has undrawn borrowing facilities of $15,586,976, $11,302,389 and $7,590,834 as of March 31, 2018, December 31, 2017 and March 31, 2017, respectively.
IV. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

undiscounted cash flows. Non-derivative financial liabilities:
March 31, 2018 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Long-term borrowings (including current portion) Non-derivative financial liabilities:	Less than 1 year Between 1 and 2 years Between 2 and 3 years $ 6,026,212 $ - $ - 299,991 - - 1,762,995 - - 20,517,232 - - 22,273,380 - - 316,437 514,058 96,052	Over 3 years
		$ - - - - - 515,016

December 31, 2017 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Long-term borrowings (including current portion)	Less than 1 year Between 1 and 2 years Between 2 and 3 years Over 3 years $ 986,476 $ - $ - $ - 250,000 - - - 2,066,511 - - - 21,170,963 - - - 30,980,251 - - - 304,830 510,498 95,568 554,210

Non-derivative financial liabilities:

Non-derivative financial liabilities:
March 31, 2017 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Long-term borrowings (including current portion)	Less than 1 year Between 1 and 2 years Between 2 and 3 years $ 2,081,616 $ - $ - 526,875 - - 1,301,978 - - 18,033,680 - - 18,524,546 - - 214,130 358,334 7,053	Over 3 years
		$ - - - - - 456,192

~49~

(3) Fair value information

A. The different levels of the inputs used in valuation techniques to measure the fair value of financial and non-financial instruments are defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks, beneficiary certificates and on-the-run Taiwan central government bonds is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investments without an active market is included in Level 3.
B. Fair value information of the Group’s investment property at cost is provided in Note 6(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.

	March 31, 2018	March 31, 2018
Book value $ 2,639,129 $ 3,384,281		Fair value
	Level 1 Level 2 $ - $ - $ - $ - December 31, 2017		Level 3 $ 2,623,753 $ 3,360,372
Book value $ 2,656,420 $ 3,355,171		Fair value
	Level 1 Level 2 $ - $ - $ - $ - March 31, 2017		Level 3 $ 2,639,566 $ 3,327,231 Level 3 $ 2,356,564 $ 3,273,860
Book value $ 2,370,893 $ 3,302,704	Level 1 $ - $ -	Fair value Level 2 $ - $ -

(b) Guarantee deposits paid/received are measured at fair value, which is calculated based on the discounted future cash flow.

~50~

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	of assets and liabilities, relevant	of assets and liabilities, relevant	of assets and liabilities, relevant	information is as	information is as	follows:	follows:
March 31, 2018		Level 1		Level 2		Level 3		Total
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Open-ended funds	$	1,521,931	$	-	$	-	$	1,521,931
Equity securities		-		-		85,833		85,833
		1,521,931		-		85,833		1,607,764
Financial assets at fair value through
other comprehensive income
Equity securities		783,465		-		4,348		787,813
Debt securities		201,626		-		-		201,626
		985,091		-		4,348		989,439
	$	2,507,022	$	-	$	90,181	$	2,597,203
December 31, 2017		Level 1		Level 2		Level 3		Total
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Open-ended funds	$	1,560,025	$	-	$	-	$	1,560,025
Available-for-sale financial assets
Equity securities		784,115		-		64,460		848,575
Government bond		202,159		-		-		202,159
		986,274		-		64,460		1,050,734
	$	2,546,299	$	-	$	64,460	$	2,610,759
March 31, 2017		Level 1		Level 2		Level 3		Total
Assets
Recurring fair value measurements
Financial assets at fair value through
profit or loss
Open-ended funds	$	992,774	$	-	$	-	$	992,774
Available-for-sale financial assets
Equity securities		688,690		-		64,577		753,267
Government bond		202,689		-		-		202,689
		891,379		-		64,577		955,956
	$	1,884,153	$	-	$	64,577	$	1,948,730

~51~

(b) The methods and assumptions the Group used to measure fair value are as follows:
I. The instruments the Group 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.
E. For the three-month period ended March 31, 2018, there was no transfer between Level 1 and Level 2.
F. For the three-month periods ended March 31, 2018 and 2017, there was no significant transfer in or out of Level 3.
G. The Group is in charge of valuation procedures for fair value measurements being categorised within Level 3, which to verify the independent fair value of financial instruments. Such assessments are to ensure the valuation results are reasonable by applying independent information to compare the results to current market conditions, confirming the information resources are independent, reliable and in line with other resources, and represented as the exercisable price, and frequently making any other necessary adjustments to the fair value. Investment property is assessed by independent appraisers or based on recent closing prices of similar property in the neighbouring area.
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 Non-derivative equity instrument: Unlisted shares	Fair value at March 31, 2018 $ 90,181 Fair value at December 31, 2017 $ 64,460 Fair value at March 31, 2017 $ 64,577	Valuation technique Net asset value Valuation technique Net asset value Valuation technique Net asset value	Significant unobservable input Net asset value Significant unobservable input Net asset value Significant unobservable input Net asset value	Range (weighted average) - Range (weighted average) - Range (weighted average) -	Relationship of inputs to 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 Relationship of inputs to fair value The higher the net asset value, the higher the fair value

~52~

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

(4) Effects on initial application of IFRS 9, ‘Leases’

A. Summaries of adopting significant accounting policies in the first quarter 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 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 Group 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 Group 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;
  - (iii) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost.
- III. When the Group 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

~53~

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:

								Available-for		Available-for
								sale-equity		sale-liability											Effects
				Measured at				Measured at		Measured at
					fair value			fair value		fair value		Measured
		Accounts			through			through other		through other			at											Non-
		receivable,			profit or		comprehensive			comprehensive		amortized					Retained				Other		controlling
		net			loss		income-equity		income-liability				cost		Total		earnings				equity		interest
IAS39		$ 4,868,902		$	-		$	848,575	$	202,159		$	25,721		$ 5,945,357		$	-		$		-	$		-
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			-		-			-		-			-			-		8,651	(		6,955)				-
Impairment loss
adjustment	(	10,889)			-			-		-			-	(	10,889)		(	5,686)				-	(	5,203)
IFRS9		$ 4,858,013		$	85,833		$	788,463	$	202,159		$	-		$ 5,934,468		$	25,463	($		29,453 )		($	5,203)

~54~

(a) Under IAS 39, because the cash flows of debt instruments, which were classified as: available-forsale financial assets, amounting to $202,159, met the condition that it is intended to settle the principal and interest on the outstanding principal balance, and the Group hold these assets for the purpose of receiving cash inflow and sale, thus were reclassified as “financial assets at fair value through other comprehensive income (debt instruments)” on initial application of IFRS 9.
(b) Under IAS 39, the equity instruments, which were classified as: available-or-sale financial assets, financial assets at cost, amounting to $60,112 and $25,721, respectively, were reclassified as “financial assets at fair value through profit or loss (equity instruments)”, increased retained earnings and decreased other equity interest in the amounts of $22,498 and $22,498, respectively, under IFRS 9.
(c) The Group’s investee accounted for using the equity method expects to make certain reclassifications in accordance with IFRS 9. Accordingly, the Group was expected to increase investments accounted for using the equity method and retained earnings in the amount of $1,696 and $8,651, respectively, and decrease other equity interest in the amount of $6,955.
(d) The Group’s accounts receivable for impairment and provision from December 31, 2017, as these are impaired under IAS 39, to January 1, 2018, as these are expected to be impaired under IFRS 9. In line with the regulation of IFRS 9 on provision for impairment, accounts receivable were reduced by $10,889, decreased retained earnings and non-controlling interests in the amounts of $5,686 and $5,203, respectively.
C. The significant accounts as of December 31, 2017 and for the three-month period ended March 31, 2017 are as follows:
(a) Financial assets at fair value through profit or loss

Financial assets held for trading Open-ended fund Valuation adjustment of financial assets held for trading	December 31, 2017 $ 1,554,463 5,562 $ 1,560,025	March 31, 2017 $ 987,566 5,208 $ 992,774

The Group recognized net gain of $1,820 on financial assets held for trading for the three-month period ended March 31, 2017.

(b) Available-for-sale financial assets

Listed stocks Unlisted stocks Government bonds Valuation adjustment	December 31, 2017 $ 265,606 41,963 199,840 507,409 543,325 $ 1,050,734	March 31, 2017 $ 265,606 42,079 199,760 507,445 448,511 $ 955,956

I. The Group recognized $56,439 in other comprehensive income for fair value change for the three-month period ended March 31, 2017.
II. The counterparties of the Group’s investments in debt instruments have good credit quality.
(c) Financial assets at cost
I. According to the Group’s intention, its investment objectives should be classified as ‘availablefor-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 Group classified those stocks as ‘financial assets measured at cost’.
II. As of December 31, 2017 and March 31, 2017, no financial assets measured at cost held by the Group were pledged to others.

~55~

D. Credit risk information as of December 31, 2017 and for the three-month period ended March 31, 2017 are as follows :
(a) Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. 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 three-month period ended March 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 Group’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 ageing analysis of financial assets that were past due but not impaired is as follows:

	December 31, 2017	March 31, 2017
Up to 90 days	$ 119,587	$ 128,197
91 to 180 days	11,421	5,667
181 to 365 days	2,062	1,863
Over 365 days	11	-
	$ 133,081	$ 135,727

(e) Movements in the provision for impairment of accounts receivable for the three-month period ended March 31, 2017 are as follows:

March 31, 2017 are as follows:
		For the three-month
			period ended
			March 31, 2017
At January 1		$	112,649
Provision for impairment			12,769
Reversal of impairment	(		5,455 )
Write-offs	(		570)
At March 31		$	119,393

(5) Effects of initial application of IFRS 15

A. The significant accounting policies applied on revenue recognition for the three-month period ended March 31, 2017 are set out below:
(a) Sales of goods
- I. The Group’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 Group’s activities. Revenue arising from the sales of goods is recognized when the Group 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 Group offers customers volume discounts and right of return for defective products. The Group estimates such discounts and returns based on historical experience. Allowance for such liabilities are recorded when the sales are recognized.
- III. The Group has customer loyalty programs where the Group 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

~56~

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 Group 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 Group 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 three-month period ended March 31, 2017 are as follows:

2017 are as follows:
	For the three-month
		period ended
		March 31, 2017
Sales revenue	$	46,994,671
Service revenue		3,218,005
Other operating revenue		2,789,251
Total	$	53,001,927

C. The effects and description of current balance sheets if the Group continues adopting above accounting policies are as follows and no significant effects on current comprehensive income statements.

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)			March31,2018
			Balance by using IFRS 15 $ 4,386,947 2,809,311 1,796,507 3,912,917 224,106 4,098,367	Balance by using previous accounting policies $ 4,338,399 2,774,332 5,625,897 - - 4,322,473	Effects from changes in accounting policy $ 48,548 34,979 ( 3,829,390) 3,912,917 224,106 ( 224,106)

(a) Under IFRS 15, liability in relation to expected discounts and refunds to customers is recognized as refund liability in the amount of $83,527. At the same time, the Group 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 $34,979. 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 certificates, gift cards, and franchise agreements are recognized as contract liabilities, but were previously presented as advance sales receipts in the balance sheet. As of March 31, 2018, the balance amounted to $3,912,917. 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 March 31, 2018, the balance amounted to $224,106 and was presented as non-current liability.

~57~

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.
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.

~58~

14. SEGMENT INFORMATION

(1) General information

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

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

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

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

(2) Measurement of segment information

The chief operating decision-maker evaluates the performance of the operating segments based on operating revenue and profit before income tax, which are the basis for measuring performance.

~59~

(3) Segment information

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

External revenue (net) Internal department revenue Total segment revenue Segment income (loss)		For the three-month period ended March 31, 2018	For the three-month period ended March 31, 2018	For the three-month period ended March 31, 2018	For the three-month period ended March 31, 2018	For the three-month period ended March 31, 2018		Total $ 58,947,745 - $ 58,947,745 $ 3,960,556
	Convenience stores $ 36,989,871 164,273 $ 37,154,144 $ 3,223,754	Retail business group $ 16,647,133 597,690 $ 17,244,823 $ 810,863	Logistics business group $ 472,170 3,178,248 $ 3,650,418 $ 275,173		Other operating segments $ 4,838,571 1,599,591 $ 6,438,162 $ 592,016	Adjustment and elimination $ - ( 5,539,802) ($ 5,539,802) ($ 941,250)

External revenue (net) Internal department revenue Total segment revenue Segment income (loss)		For the three-month period ended March 31, 2017	For the three-month period ended March 31, 2017	For the three-month period ended March 31, 2017	For the three-month period ended March 31, 2017	For the three-month period ended March 31, 2017		Total $ 53,001,927 - $ 53,001,927 $ 3,618,731
	Convenience stores $ 34,181,441 156,850 $ 34,338,291 $ 3,099,036	Retail business group $ 15,856,405 567,897 $ 16,424,302 $ 788,969	Logistics business group $ 694,691 2,937,348 $ 3,632,039 $ 283,447		Other operating segments $ 2,269,390 1,429,614 $ 3,699,004 $ 707,320	Adjustment and elimination $ - ( 5,091,709) ($ 5,091,709) ($ 1,260,041)

(4) Reconciliation of segment income (loss)

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

~60~

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) March 31, 2018

Securities held by	Type and name of securities	Relationship with the securities issuer	General ledger account		As of March	31,2018		Footnote
				Number of shares	Book value (Note)	Ownership (%)	Fair value
President Chain Store Corp. 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. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. President Information Corp. President Information Corp. President Logistics International Corp. President Pharmaceutical Corp. President (Shanghai) Health Product Trading Company Ltd. Retail Support Taiwan Corp. Zhejiang Uni-Champion Logistics Development Co., Ltd. Q-ware Systems & Services Corp. President Drugstore Business Corp. President Drugstore Business Corp. ICASH Corp.	Stock: President Investment Trust Corp. Q-ware Systems & Services 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: Jih Sun Money Market Fund UPAMC James Bond Money Market Fund Eastspring Investments Well Pool Money Market Fund Union Money Market Fund Nomura money market fund Allianz Global Investors Taiwan Money Market Fund FSITC Taiwan Money Market Fund Taishin 1699 Money Market Fund Cathay Taiwan Money Market Fund Jih Sun Money Market Fund Prudential Financial Money Market Fund Eastspring Investments Well Pool Money Market Fund Jih Sun Money Market Fund CIFM Money Market Fund FSITC Money Market Fund CIFM RMB Money Market Fund Eastspring Investments Well Pool Money Market Fund Jih Sun Money Market Fund FSITC Taiwan Money Market Fund Bond: Government bond	Director of President Investment Trust Corp. Director of Q-ware Systems & Services 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 21,494 837,753 2,572,127 321,300 9 38,221,259 300,000 650,000 4,070,722 1,202,617 5,022,995 6,848,481 6,157,901 2,405,851 16,421,332 6,685,783 2,420,448 7,635,462 6,842,141 369,582 5,593,066 1,146,563 139,801 13,124,492 21,799,064 1,357,575 4,598,491 -	45,298 $ - 14,814 25,721 - - 561,853 221,612 4,348 60,017 $ 20,002 68,006 90,000 100,000 30,000 250,000 90,000 30,000 112,573 107,696 5,004 82,461 5,318 24,823 60,870 295,138 20,015 70,008 201,626 $	7.60 10.00 5.37 0.92 6.67 - 2.75 0.56 10.00 - - - - - - - - - - - - - - - - - - - -	45,298 $ - 14,814 25,721 - - 561,853 221,612 4,348 60,017 $ 20,002 68,006 90,000 100,000 30,000 250,000 90,000 30,000 112,573 107,696 5,004 82,461 5,318 24,823 60,870 295,138 20,015 70,008 201,626 $

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 three-month period ended March 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	Addi	tion		Disposal	Disposal		Other increase (decrease)	Other increase (decrease)	Expressed in (Except as ot Balance as at	thousands of NTD herwise indicated) March 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. Uni-Wonder Corp. Uni-Wonder Corp. Q-ware Systems & Services Corp.	Open ended funds: Jih Sun Money Market Fund FSITC Taiwan Money Market Fund Nomura money market Fund Eastspring Investments Well Pool Money Market Fund	Note 1 `〃` `〃` `〃`	Not applicable `〃` `〃` `〃`	Not applicable `〃` `〃` `〃`	1,358,373 13,151,752 12,328,480 17,449,813	20,005 $ 200,000 200,000 236,000	34,611,591 19,708,491 12,318,306 22,981,814	510,000 $ 300,000 200,000 311,000	31,899,242 16,438,911 18,488,885 18,632,563	470,124 $ 250,268 300,128 252,125	470,000 $ 250,000 300,000 252,000	124 $ 268 128 125	- - - -	12 $ - - 138	4,070,722 16,421,332 6,157,901 21,799,064	60,017 $ 250,000 100,000 295,138

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

Table 2  Page 1

Table 3

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more For the three-month period ended March 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. Chieh-Shuen Logistics International Corp. Uni-Wonder Corp. President Information Corp. President Logistics International Corp. Uni-President Superior Commissary Corp. President Transnet Corp. Q-ware Systems & Services Corp. President Drugstore Business Corp. Wisdom Distribution Service Corp. President Pharmaceutical Corp. Vision Distribution Service Corp.	Uni-President Enterprises Corp. Uni-President Superior Commissary Corp. Q-ware Systems & Services Corp. Tung Ang Enterprises Corp. Lien-Bo Enterprises Corp. Kuang Chuan Dairy Corp. Vision Distribution Service Corp. President Transnet Corp. President Logistics International Corp. Tung Chan Enterprise Corp. President Chain Store Corp. Retail Support International Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. Chieh-Shuen Logistics International Corp. President Chain Store Corp. Chieh-Shuen Logistics International Corp. President Chain Store Corp. President Pharmaceutical Corp. President Logistics International Corp. President Drugstore Business Corp. President Chain Store Corp.	Ultimate parent company Subsidiary `〃` Sister company `〃` Other related party Subsidiary Subsidiary of President Chain Parent company Other related party Parent company `〃` Subsidiary of President Chain `〃` Subsidiary Parent company Subsidiary of President Chain Parent company Subsidiary of President Chain `〃` `〃` Parent company	Purchases `〃` `〃` `〃` `〃` `〃` Purchases returns Delivery revenue `〃` Purchases Service revenue Delivery revenue `〃` `〃` Service cost Sales revenue Service cost Service revenue Purchases Service cost Sales revenue Sales returns	3,449,400 $ 826,262 158,781 428,235 160,446 103,246 149,679) ( 189,516) ( 249,869) ( 221,091 168,911) ( 182,249) ( 239,731) ( 285,209) ( 249,869 826,262) ( 189,516 158,781) ( 189,405 285,209 189,405) ( 149,679	14 3 1 2 1 - - 41) ( 55) ( 24 65) ( 23) ( 31) ( 36) ( 33 100) ( 8 69) ( 8 43 38) ( -	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 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 10~54 days from the end of the month when invoice is issued Net 30~65 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 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 25 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 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 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 70 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 30~60 days from the end of the month when invoice is issued	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	1,151,822) ($ 590,220) ( 100,835) ( 182,559) ( 82,147) ( 95,396) ( - 80,575 82,283 53,428) ( 146,991 63,592 86,582 98,225 82,283) ( 590,220 80,575) ( 100,835 80,066) ( 98,225) ( 80,066 -	8) ( 4) ( 1) ( 1) ( 1) ( 1) ( - 48 49 14) ( 65 23 31 36 60) ( 100 7) ( 78 4) ( 51) ( 18 -

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 three-month period ended March 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)
Retail Support International Corp. Uni-President Cold-Chain Corp.	President Logistics International Corp. President Logistics International Corp.	Subsidiary Subsidiary of President Chain	Service cost `〃`	182,249 $ 239,731	42 38	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	No significant differences `〃`	No significant differences `〃`	63,592) ($ 86,582) (	47) ( 18) (

Table 3  Page 2

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

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

Creditor	Counterparty	Relationship with the counterparty	Balance as of March 31,2018	Turnover rate	Overdue r	eceivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
President Chain Store Corp. President Information Corp. Q-ware Systems & Services Corp. Uni-President Superior Commissary Corp.	Wisdom Distribution Service Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp.	Subsidiary Parent company `〃` `〃`	840,323 $ 146,991 100,835 590,220	Note 3.94 6.05 5.73	- $ - - -	None `〃` `〃` `〃`	1,218 $ 7,179 59,646 284,511	- $ - - -

Note: It is not applicable to calculate receivables turnover ratio since most of the collections pertain to purchase rebate for goods collection.

Table 4  Page 1

Table 5

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Significant inter-company transactions during the reporting periods

For the three-month period ended March 31, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

Number	Companyname	Counterparty	Relationship	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets
0 1 1 2 2 3 3 4 5 6 6 7 7 7	President Chain Store Corp. President Information Corp. President Information Corp. Q-ware Systems & Services Corp. Q-ware Systems & Services Corp. Uni-President Superior Commissary Corp. Uni-President Superior Commissary Corp. Vision Distribution Service Corp. President Pharmaceutical Corp. Chieh-Shuen Logistics International Corp. Chieh-Shuen Logistics International Corp. President Logistics International Corp. President Logistics International Corp. President Logistics International Corp.	Wisdom Distribution Service Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Drugstore Business Corp. President Logistics International Corp. President Transnet Corp. Retail Support International Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp.	Parent company to subsidiary Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary	Other receivables Service revenue Accounts receivable Service revenue Accounts receivable Sales revenue Accounts receivable Sales returns Sales revenue Delivery revenue Delivery revenue Delivery revenue Delivery revenue Delivery revenue	840,323 $ 168,911) ( 146,991 158,781) ( 100,835 826,262) ( 590,220 149,679 189,405) ( 249,869) ( 189,516) ( 182,249) ( 239,731) ( 285,209) (	Net 30-60 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 30-60 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 20 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued	0.62 0.29 0.11 0.27 0.07 1.40 0.43 0.25 0.32 0.42 0.32 0.31 0.41 0.48

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

Table 5  Page 1

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Names, locations and other information of investee companies (not including investees in Mainland China) For the three-month period ended March 31, 2018

Investor	Investee	Location	Main business activities	Initial invest	ment amount	Shares hel	d as at March	31,2018	Net profit (loss) of the investee for the three- month period ended March31,2018	Investment income (loss) recognised by the Company for the three- month period ended March31,2018	Footnote
				Balance as at March31,2018	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 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-Wonder 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. 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. Retail Support International Corp. Uni-President Development Corp. Presicarre Corp. President Fair Development Corp. President International Development Corp.	British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Taiwan Taiwan Japan Taiwan Taiwan Taiwan Taiwan Taiwan 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 Coffee chain store Professional investment Enterprise management consultancy Professional investment Life and property insurance Sales of ice cream Sports and entertainment business Operation of chain restaurants Enterprise management consultancy Bread and pastry retailer Collection agent Operation of restaurants Room-temperature logistics and warehousing Construction, development and operation of an MRT station Management of retail department store Operation of shopping mall, department store, international trade, etc. Professional investment	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 3,286,206 637,231 9,506 277,805 213,000 170,000 170,000 160,680 35,648 391,300 10,500 147,900 91,414 720,000 7,112,028 3,191,700 500,000	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 3,286,206 637,231 9,506 277,805 213,000 170,000 170,000 160,680 35,648 391,300 10,500 147,900 91,414 720,000 7,112,028 3,191,700 500,000	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 20,000,000 10,199,999 50,000,000 21,382,674 6,500,000 2,500,000 8,746,008 1,500,000 12,244,390 1,500,000 10,000,000 9,800 6,511,963 1,049,999 14,789,999 6,429,999 72,000,000 130,801,027 190,000,000 44,100,000	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 60.00 100.00 100.00 92.20 100.00 100.00 100.00 100.00 100.00 100.00 70.00 51.00 25.00 20.00 19.50 19.00 3.33	24,150,716 $ 1,447,260 1,543,791 704,414 799,007 609,982 455,981 678,747 526,365 379,534 482,760 480,893 232,116 217,068 354,105 5,775,286 82,214 80,744 65,927 21,273 19,809) ( 55,915) ( 19,603 68,305 8,299) ( 89,753 41,802 212,528 751,964 5,289,180 1,962,610 476,135	116,436 $ 27,570 152,644 27,268 96,783 112,943 1,064) ( 100,103 22,327 25,782 49,626 120,717 210 38,313 2,393 206,729 2,304 4,640 145 274) ( 3,730 4,272 10,103 3,361) ( 1,171 18,342 225) ( 68,026 5,952 461,298 44,842 265,157	116,436 $ 27,570 104,900 22,052 71,604 79,060 958) ( 60,042 19,201 22,368 49,626 60,395 210 19,540 2,393 34,710) ( 2,304 4,640 134 274) ( 3,730 4,272 10,103 3,361) ( 1,171 12,839 115) ( 16,772 1,190 90,931 8,520 7,378	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Note 1 Note 1 Note 1 Note 1

Table 6  Page 1

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Names, locations and other information of investee companies (not including investees in Mainland China) For the three-month period ended March 31, 2018

Investor	Investee	Location	Main business activities	Initial invest	ment amount	Shares hel	d as at March	31,2018	Net profit (loss) of the investee for the three- month period ended March31,2018	Investment income (loss) recognised by the Company for the three- month period ended March31,2018	Footnote
				Balance as at March31,2018	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. 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. Ren-Hui Investment Corp. Ren-Hui Investment Corp.	Tung Hong Development Corp. 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. Mister Donut Taiwan Corp., Ltd. Uni-President Superior Commissary Corp.	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 Taiwan Taiwan	Management of entertainment business 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 Bakery retailer Fresh food manufacture	861,696 $ 200,000 47,190 7,500 1,050 1,478 9,600 151,581 21,538 4,533,305 848,799 847,983 180,000 89,415 - - - - - - - - - -	861,696 $ 200,000 47,190 7,500 1,050 1,478 9,600 151,581 21,538 4,533,305 848,799 847,983 180,000 89,415 - - - - - - - - - -	19,930,000 7,500,049 1,833,333 750,000 108,160 500 960,000 8,880,000 740,000 134,603,354 29,163,337 394,970,516 26,670,000 3,000,000 1 1 1 1 1 1 1 1 1 1	12.46 50.00 36.67 15.00 0.02 100.00 60.00 100.00 7.80 100.00 100.00 52.22 100.00 100.00 - - - - - - - - - -	121,136 $ 104,633 48,268 19,013 1,878 590 31,747 32,252 5,577 27,263,617 1,855,054 1,854,343 322,718 6,433 - - - - - - - - - -	19,004) ($ 14,801 12,721 3,438) ( 160,677 - 3,597 18) ( 145 120,249 56,474 109,817 13,274 1,219) ( 120,717 112,943 27,268 22,327 152,644 25,782 38,313 96,783 14,801 1,064) (	2,367) ($ 7,400 4,647 516) ( 32 - 2,158 18) ( 11 120,249 56,474 56,475 13,274 1,219) ( - - - - - - - - - -	Note 1 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 Note 1 Subsidiary of a subsidiary

Table 6  Page 2

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Names, locations and other information of investee companies (not including investees in Mainland China) For the three-month period ended March 31, 2018

Investor	Investee	Location	Main business activities	Initial invest	ment amount	Shares hel	d as at March	31,2018	Net profit (loss) of the investee for the three- month period ended March31,2018	Investment income (loss) recognised by the Company for the three- month period ended March31,2018	Footnote
				Balance as at March31,2018	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. 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.	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 British Virgin Islands Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Philippines Philippines	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 60,000 25,091 27,177	- - - - 60,374 15,300 44,975 5,425 23,850 87,994 18,850 60,000 25,091 27,177	1 1 1 1 2,000,000 2,871,300 9,481,500 1,161,000 4,837,500 2,990 3,870,000 6,000,000 4,500,000 40,000	- - - - 100.00 51.00 49.00 6.00 25.00 100.00 20.00 60.00 100.00 40.00	- $ - - - 69,210 80,047 164,874 20,189 84,120 109,245 66,828 48,169 25,091 27,177	100,103 $ 68,026 18,342 225) ( 2,080 12,669 17,376 17,376 17,376 4,276 17,376 29,601) ( 7,430 290	- $ - - - 2,080 6,461 8,514 914 4,344 4,276 3,008 17,761) ( - -	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

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 three-month period ended March 31, 2018

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2018	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three-month period ended March 31,2018	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the three-month period ended March 31,2018	Accumulated amount of remittance from Taiwan to Mainland China as of March 31,2018	Net income of investee for the three-month period ended March 31, 2018	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the three- month period ended March 31,2018	Book value of investments in Mainland China as of March 31,2018	Accumulated amount of investment income remitted back to Taiwan as of March 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.	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	258,452 $ 463,788 2,318,940 58,210 1,032,130 612,200 278,273 87,315 185,515 437 278,273 231,894 278,273	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	150,490 $ 274,090 2,249,161 58,210 952,869 517,380 118,700 87,315 173,103 - 278,273 231,894 278,273	- $ - - - - - - - - - - - -	- $ - - - - - - - - - - - -	150,490 $ 274,090 2,249,161 58,210 952,869 517,380 118,700 87,315 173,103 - 278,273 231,894 278,273	111 $ 146 52,446) ( 21,195 4,204) ( 1,661) ( 13,661 2,622) ( 7,771 - 6,332 4,218 28,110) (	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	111 $ 146 52,056) ( 21,195 4,204) ( 1,661) ( 7,514 1,932) ( 6,843 - 6,332 4,252 29,316) (	32,135 $ 70,689 176,674 379,702 49,638 77,499 209,952 18,398) ( 168,598 16 323,950 205,808 160,443	- $ - - - - - - 53,769 3,970 - - - -	Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 2 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3

Note 1: Indirect investment in PRC through the existing company located in the third area. Note 2: The financial statements were audited by the CPA of parent company in Taiwan. Note 3: These amounts are based solely on their unreviewed financial statements.

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of March 31,2018	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs(MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
President Chain Store Corp. President Pharmaceutical Corp. Uni-President Cold-Chain Corp. Ren-Hui Investment Corp.	4,486,188 $ 87,315 86,367 50,156	87,315 86,367 50,156 $ 7,316,238	$ 37,042,851 520,726 666,443 80,000

Table 7  Page 1

AI assistant

PCSC — Interim / Quarterly Report 2018

52232_rns_2018-11-27_0c85b430-156c-4d13-bbf2-c9a2567c00c8.pdf

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS MARCH 31, 2018 AND 2017

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS MARCH 31, 2018 AND 2017 CONTENTS

REVIEW REPORT OF FINANCIAL STATEMENTS

TRANSLATED FROM CHINESE

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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

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

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

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

MARCH 31, 2018 AND 2017

1. HISTORY AND ORGANIZATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

IFRS 9, “Financial instruments”

(f) Presentation of contract liabilities:

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

IFRS 16, “Leases”

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(2) Basis of preparation

(6) Accounts and notes receivable

(7) Notes and accounts payable

(9) Revenue recognition

6. DETAILS OF SIGNIFICANT ACCOUNTS

(4) Inventories

(7) Property, plant and equipment

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

(8) Investment property

(9) Intangible assets

(12) Short-term borrowings

(13) Other payables

(14) Other current liabilities

(16) Pensions

(18) Share capital

(19) Capital surplus

(20) Retained earnings

(21) Other equity items

A. Disaggregation of revenue from contracts with customers

(23) Expenses by nature

(24) Employee benefit expense

(25) Other income

(27) Income tax

(29) Operating leases

Lessor

Lessee

(30) Supplemental cash flow information

(31) Changes in liabilities from financing activities

7. RELATED PARTY TRANSACTIONS

(1) Parent and ultimate controlling party

(2) Names of related parties and relationship

(3) Significant related party transactions and balances

A. Operating revenue

B. Purchases

C. Receivables from related parties

D. Payables to related parties

E. Long-term installment payable

F. Property transactions

(4) Key management compensation

8. PLEDGED ASSETS

10. SIGNIFICANT DISASTER LOSS

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

12. OTHERS

(1) Capital management

(2) Financial instruments

A. Financial instruments by category

B. Risk management policies

Foreign exchange risk

Price risk

Cash flow and fair value interest rate risk

PCSC Interim / Quarterly Report 2018