PCSC - Interim / Quarterly Report 2018

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS JUNE 30, 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.

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PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS JUNE 30, 2018 AND 2017

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 ~ 65 12 12 12 ~ 16 16 ~ 22 22 22 ~ 45 46 ~ 48 49 49 49 49 49 ~ 62 63 64 ~ 65

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 ~ 65
12
12
12 ~ 16
16 ~ 22
22
22 ~ 45
46 ~ 48
49
49
49
49
49 ~ 62
63
64 ~ 65

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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 June 30, 2018 and 2017, and the related consolidated statements of comprehensive income for the three-month and six-month periods then ended, as well as consolidated statements of changes in equity and of cash flows for the six-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 Preparation 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$33,446,885 thousand and NT$30,894,829 thousand, constituting 24% and 32% of the consolidated total assets, and total liabilities of NT$16,616,628 thousand and NT$12,634,770 thousand, constituting 17% and 19% of the consolidated total liabilities as at June 30, 2018 and 2017, respectively, and total comprehensive income of

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NT$722,377 thousand, NT$766,546 thousand, NT$1,034,328 thousand and NT$1,309,275 thousand, constituting 18%, 24%, 16% and 22% of the consolidated total comprehensive income for the threemonth and six-month periods then ended, respectively.

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 June 30, 2018 and 2017, and of its consolidated financial performance for the three-month and six-month periods then ended and its consolidated cash flows for the six-month periods then ended in accordance with “Regulations Governing the Preparation 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 August 3, 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.

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PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of June 30, 2018 and 2017 are reviewed, not audited)

				June 30, 2018			December 31,	2017		June 30, 2017
	Assets	Notes		AMOUNT	%		AMOUNT	%		AMOUNT	%
	Current assets
1100	Cash and cash equivalents	6(1)	$	61,092,649	44	$	35,783,291	26	$	31,324,779	33
1110	Financial assets at fair value through	6(2) and
	profit or loss - current	12(4)		2,520,700	2		1,560,025	1		1,227,787	1
1170	Accounts receivable, net	6(3) and 7		4,551,137	3		4,868,902	3		3,966,738	4
1200	Other receivables	6(6)		2,131,374	2		28,412,101	20		2,207,079	2
1220	Current income tax assets	6(28)		3,812	-		2,097	-		2,393	-
130X	Inventories, net	6(4)		12,863,543	9		13,387,122	10		12,512,663	13
1410	Prepayments			1,622,368	1		1,417,175	1		1,418,901	2
1470	Other current assets			2,582,454	2		2,973,547	2		2,341,158	2
11XX	Total current assets			87,368,037	63		88,404,260	63		55,001,498	57
	Non-current assets
1510	Financial assets at fair value through	6(2)
	profit or loss - non-current			85,683	-		-	-		-	-
1517	Financial assets at fair value through	6(5)
	other comprehensive income
	- non-current			1,001,519	1		-	-		-	-
1523	Available-for-sale financial assets	12(4)
	- non-current			-	-		1,050,734	1		1,029,135	1
1543	Financial assets measured at cost	12(4)
	- non-current			-	-		25,721	-		27,393	-
1550	Investments accounted for using equity	6(6)
	method			8,789,255	6		8,655,722	6		10,988,530	12
1600	Property, plant and equipment, net	6(7)(23), 7
		and 8		24,726,417	18		24,982,342	18		22,570,539	23
1760	Investment property, net	6(8)(30)
		and 7		1,510,637	1		1,519,115	1		1,530,404	2
1780	Intangible assets	6(9)		10,458,862	8		10,656,713	8		1,205,974	1
1840	Deferred income tax assets	6(28)		1,636,424	1		1,409,184	1		1,323,453	1
1900	Other non-current assets	6(10) and 8		3,189,340	2		3,177,469	2		2,896,414	3
15XX	Total non-current assets			51,398,137	37		51,477,000	37		41,571,842	43
1XXX	Total assets		$	138,766,174	100	$	139,881,260	100	$	96,573,340	100

(Continued)

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PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of June 30, 2018 and 2017 are reviewed, not audited)

Liabilities and Equity	Notes	June 30, 2018 December 31, 2017 AMOUNT % AMOUNT % $ 1,070,988 1 $ 965,180 1 200,000 - 250,000 - 4,064,417 3 - - 1,836,336 1 2,066,511 2 19,881,012 15 18,849,947 13 2,583,810 2 2,321,016 2 51,786,689 37 30,980,251 22 1,767,933 1 4,834,364 3 1,743,770 1 5,352,651 4 84,934,955 61 65,619,920 47 280,643 - - - 1,088,026 1 1,105,451 1 5,343,145 4 4,652,948 3 4,577,498 3 4,574,800 3 4,136,979 3 4,421,731 3 15,426,291 11 14,754,930 10 100,361,246 72 80,374,850 57 10,396,223 8 10,396,223 8 44,411 - 43,875 - 12,293,442 9 9,191,733 7 398,859 - - - 7,132,744 5 31,381,290 22 24,437 - ( 398,859 ) ( 1) 30,290,116 22 50,614,262 36 8,114,812 6 8,892,148 7 38,404,928 28 59,506,410 43 $ 138,766,174 100 $ 139,881,260 100	June 30, 2017
			AMOUNT % $ 1,602,936 2 434,943 - - - 1,272,588 1 16,453,415 17 2,411,514 3 29,223,402 30 1,253,951 1 4,398,415 5 57,051,164 59 - - 817,605 1 116,273 - 4,264,693 5 4,247,752 4 9,446,323 10 66,497,487 69 10,396,223 11 44,075 - 9,191,733 10 - - 6,070,279 6 15,707 - 25,718,017 27 4,357,836 4 30,075,853 31 $ 96,573,340 100
Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2130 Contract liabilities - current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2527 Contract liabilities - non-current 2540 Long-term borrowings 2570 Deferred income tax liabilities 2640 Net defined benefit liability - non-current 2670 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to owners of the parent Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity 3400 Other equity interest 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity 3X2X Total liabilities and equity	6(12) and 8 6(22) 7 7 6(13) 6(28) 6(14) 6(22) 6(15) and 8 6(28) 6(16) 6(17) 6(18) 6(19) 6(20) 6(21)

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

Chairman: Lo, Chih-Hsien President: Huang, Jui-Tien Accounting Manager: Kuo, Ying-Chih ~6~

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

(Expressed in thousands of New Taiwan dollars) (UNAUDITED)

Items	Notes	For thethree-monthperiods ended June30 For the six-monthperiods ended June30 2018 2017 2018 2017 AMOUNT % AMOUNT % AMOUNT % AMOUNT % $ 61,229,506 100 $ 55,172,911 100 $ 120,177,251 100 $ 108,174,838 100 ( 40,275,662 )( 66 ) ( 36,924,244 )( 67)( 78,722,168 )( 66 )( 72,569,714 )( 67) 20,953,844 34 18,248,667 33 41,455,083 34 35,605,124 33 ( 15,715,483 ) ( 26 ) ( 13,232,059 ) ( 24 ) ( 30,233,495 ) ( 25 ) ( 25,804,948 ) ( 24 ) ( 1,992,388 ) ( 3 ) ( 2,148,955 ) ( 4 ) ( 4,636,695 ) ( 4 ) ( 4,155,273 ) ( 4 ) ( 419) - - - ( 3,541 ) - - - ( 17,708,290 )( 29) ( 15,381,014 )( 28 )( 34,873,731 )( 29)( 29,960,221 )( 28 ) 3,245,554 5 2,867,653 5 6,581,352 5 5,644,903 5 664,559 2 358,970 1 1,200,675 2 763,206 - ( 10,626 ) - ( 26,259 ) - 7,343 - ( 53,894 ) - ( 32,315 ) - ( 25,343 ) - ( 78,858 ) - ( 49,533 ) - 96,991 - 548,225 1 214,207 - 1,037,295 1 718,609 2 855,593 2 1,343,367 2 1,697,074 1 3,964,163 7 3,723,246 7 7,924,719 7 7,341,977 6 ( 948,022 )( 2 ) ( 607,976 )( 1 )( 2,047,383 )( 2 )( 1,179,049)( 1 ) 3,016,141 5 3,115,270 6 5,877,336 5 6,162,928 5 $ 3,016,141 5 $ 3,115,270 6 $ 5,877,336 5 $ 6,162,928 5	For thethree-monthperiods ended June30 For the six-monthperiods ended June30 2018 2017 2018 2017 AMOUNT % AMOUNT % AMOUNT % AMOUNT % $ 61,229,506 100 $ 55,172,911 100 $ 120,177,251 100 $ 108,174,838 100 ( 40,275,662 )( 66 ) ( 36,924,244 )( 67)( 78,722,168 )( 66 )( 72,569,714 )( 67) 20,953,844 34 18,248,667 33 41,455,083 34 35,605,124 33 ( 15,715,483 ) ( 26 ) ( 13,232,059 ) ( 24 ) ( 30,233,495 ) ( 25 ) ( 25,804,948 ) ( 24 ) ( 1,992,388 ) ( 3 ) ( 2,148,955 ) ( 4 ) ( 4,636,695 ) ( 4 ) ( 4,155,273 ) ( 4 ) ( 419) - - - ( 3,541 ) - - - ( 17,708,290 )( 29) ( 15,381,014 )( 28 )( 34,873,731 )( 29)( 29,960,221 )( 28 ) 3,245,554 5 2,867,653 5 6,581,352 5 5,644,903 5 664,559 2 358,970 1 1,200,675 2 763,206 - ( 10,626 ) - ( 26,259 ) - 7,343 - ( 53,894 ) - ( 32,315 ) - ( 25,343 ) - ( 78,858 ) - ( 49,533 ) - 96,991 - 548,225 1 214,207 - 1,037,295 1 718,609 2 855,593 2 1,343,367 2 1,697,074 1 3,964,163 7 3,723,246 7 7,924,719 7 7,341,977 6 ( 948,022 )( 2 ) ( 607,976 )( 1 )( 2,047,383 )( 2 )( 1,179,049)( 1 ) 3,016,141 5 3,115,270 6 5,877,336 5 6,162,928 5 $ 3,016,141 5 $ 3,115,270 6 $ 5,877,336 5 $ 6,162,928 5
		2018 2017 AMOUNT % AMOUNT $ 61,229,506 100 $ 55,172,911 ( 40,275,662 )( 66 ) ( 36,924,244 ) 20,953,844 34 18,248,667 ( 15,715,483 ) ( 26 ) ( 13,232,059 ) ( 1,992,388 ) ( 3 ) ( 2,148,955 ) ( 419) - - ( 17,708,290 )( 29) ( 15,381,014 ) 3,245,554 5 2,867,653 664,559 2 358,970 ( 10,626 ) - ( 26,259 ) ( 32,315 ) - ( 25,343 ) 96,991 - 548,225 718,609 2 855,593 3,964,163 7 3,723,246 ( 948,022 )( 2 ) ( 607,976 ) 3,016,141 5 3,115,270 $ 3,016,141 5 $ 3,115,270	2017
4000 Operating revenue 5000 Operating costs 5900 Gross profit Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6450 Expected credit losses (gains) 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit of associates and joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8000 Profit for the period from continuing operations 8200 Profit for the period	6(22) and 7 6(4)(23) and 7 6(23)(24) 12(2) 6(25) 6(26) 6(27) 6(6) 6(28)

(Continued)

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

(Expressed in thousands of New Taiwan dollars) (UNAUDITED)

Items	Notes	For the three-monthperiods ended June 30	For the three-monthperiods ended June 30	For the three-monthperiods ended June 30	For the six-monthperiods ended June 30	For the six-monthperiods ended June 30	For the six-monthperiods ended June 30
		2018	% - - - - - 2 - - - - 2 2 7 4 1 5 6 1 7 2.53 2.53	2017	2018	2017 % AMOUNT - ($ 509 ) - - - - - - - ( 509) - ( 389,443 ) - 129,709 - - - ( 14,069 ) - ( 6,242) - ( 280,045) - ($ 280,554) 5 $ 5,882,374 4 $ 5,531,948 1 630,980 5 $ 6,162,928 4 $ 5,375,800 1 506,574 5 $ 5,882,374 4.97 $ 4.96 $	2017
		AMOUNT $ - 12,400 862 ( 1,333) 11,929 1,054,141 - ( 347 ) ( 5,883 ) - 1,047,911 $ 1,059,840 $ 4,075,981 $ 2,632,371 383,770 $ 3,016,141 $ 3,651,284 424,697 $ 4,075,981 $		AMOUNT $ - - - - - 46,661 73,270 - ( 12,751) ( 6,423) 100,757 $ 100,757 $ 3,216,027 $ 2,790,477 324,793 $ 3,115,270 $ 2,892,455 323,572 $ 3,216,027 $	AMOUNT $ - 11,750 1,092 48,449 61,291 379,678 - ( 907 ) ( 5,929 ) - 372,842 $ 434,133 $ 6,311,469 $ 5,169,992 707,344 $ 5,877,336 $ 5,669,864 641,605 $ 6,311,469 $			%
Other comprehensive income (loss) 8311 Remeasurements of net actuarial loss on defined benefit plan 8316 Unrealized gain on valuation of equity instruments at fair value through other comprehensive income 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 income (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 income (loss) that will be reclassified to profit or loss 8300 Total other comprehensive income (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)	6(5) 6(28) 6(21) 6(5) 6(21) 6(21)(28) 6(29) 6(29)							- - - -
								-
								- - - - -
								-
								-
								5
								4 1
								5
								5 -
								5
								5.32
		$		$	$		$	5.31

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

Chairman: Lo, Chih-Hsien

President : Huang, Jui-Tien

Accounting Manager: Kuo, Ying-Chih

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

(Expressed in thousands of New Taiwan dollars) (UNAUDITED)

Notes				Equity attr	utable to owners of	the parent	the parent						Non-controlling interest
	Share capital - common stock	Capital surplus		Retained earnings				O	ther equity interest			Total
			Legal reserve	Special reserve	Unappropriated retained earnings	Exchange differences from translation of foreign operations		l	Unrealized gain or oss on valuation of financial assets at fair value through other comprehensive income	s	Unrealized gain or loss on available-for- ale financial assets
6(21) 3(1) 6(21)	$ 10,396,223 - - - - - - - - $ 10,396,223 $ 10,396,223 - 10,396,223 - - - - - - - - $ 10,396,223	$ 1,158 - - - - - 36 42,881 - $ 44,075 $ 43,875 - 43,875 - - - - - - - 536 $ 44,411	$ 8,208,064 - - - 983,669 - - - - $ 9,191,733 $ 9,191,733 - 9,191,733 - - - 3,101,709 - - - - $ 12,293,442	$ - - - - - - - - - $ - $ - - - - - - - 398,859 - - - $ 398,859	$ 9,839,244 5,531,948 ( 266 ) 5,531,682 ( 983,669 ) ( 8,316,978 ) - - - $ 6,070,279 $ 31,381,290 25,463 31,406,753 5,169,992 47,123 5,217,115 ( 3,101,709 ) ( 398,859 ) ( 25,990,556 ) - - $ 7,132,744		($ 186,228 ) - ( 281,818 ) ( 281,818 ) - - - - - ($ 468,046 ) ($ 906,308 ) - ( 906,308 ) - 444,351 444,351 - - - - - ($ 461,957 )		$ - - - - - - - - - $ - $ - 477,996 477,996 - 8,398 8,398 - - - - - $ 486,394		$ 357,817 - 125,936 125,936 - - - - - $ 483,753 $ 507,449 ( 507,449) - - - - - - - - - $ -	$ 28,616,278 5,531,948 ( 156,148 ) 5,375,800 - ( 8,316,978 ) 36 42,881 - $ 25,718,017 $ 50,614,262 ( 3,990 ) 50,610,272 5,169,992 499,872 5,669,864 - - ( 25,990,556 ) - 536 $ 30,290,116	$ 4,644,652 630,980 ( 124,406 ) 506,574 - - - - ( 793,390 ) $ 4,357,836 $ 8,892,148 ( 5,203 ) 8,886,945 707,344 ( 65,739 ) 641,605 - - - ( 1,413,738 ) - $ 8,114,812	$ 33,260,930 6,162,928 ( 280,554`)` 5,882,374 - ( 8,316,978`)` 36 42,881 ( 793,390`)` $ 30,075,853 $ 59,506,410 ( 9,193 `)` 59,497,217 5,877,336 434,133 6,311,469 - - ( 25,990,556`)` ( 1,413,738`)` 536 $ 38,404,928

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

Chairman: Lo, Chih-Hsien

President: Huang, Jui-Tien

Accounting Manager: Kuo, Ying-Chih

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

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

				For the six-month	For the six-month
				periods ended June	30
	Notes			2018	2017
CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated profit before income tax for the period			$	7,924,719 $	7,341,977
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	6(2)and
through profit or loss	12(4)			3,168 (	2,084 )
Provision for doubtful accounts	12(4)			-	9,659
Expected credit losses	12(2)			3,541	-
Depreciation on property, plant and equipment	6(7)			2,961,115	2,534,922
Amortization				281,063	176,580
Depreciation on investment property	6(8)			8,478	8,454
Finance costs	6(27)			78,858	49,533
Share of profit of associates and joint ventures accounted
for using equity method		(		214,207 ) (	1,037,295 )
Loss on disposal of property, plant and equipment, net	6(26)			10,039	12,952
Interest income	6(25)	(		334,867 ) (	82,143 )
Dividend income	6(25)	(		60,668 ) (	15,674 )
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		(		963,843 ) (	377,749 )
Accounts receivable				314,224	349,492
Other receivables		(		255,699 ) (	462,430 )
Inventories				523,579 (	469,243 )
Prepayments		(		205,193 ) (	31,442 )
Other current assets				447,395	228,960
Net changes in liabilities relating to operating activities
Contract liabilities - current				129,059	-
Accounts payable				1,293,859 (	1,062,310 )
Notes payable		(		230,175 ) (	934,525 )
Other payables		(		2,128,703 ) (	2,128,968 )
Advance receipts		(		344,525 )	6,722
Contract liabilities - non-current		(		65,368 )	-
Net defined benefit liabilities - non-current				2,697(	1,279)
Cash generated from operations				9,178,546	4,114,109
Interest received				341,869	93,280
Income tax paid		(		4,604,122 ) (	1,092,892 )
Interest paid		(		80,953 ) (	49,347 )
Dividends received				1,094,064	473,482
Net cash used by operating activities				5,929,404	3,538,632
(Continued)

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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
Return of capital from available-for-sale financial
assets-non-current
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 (decrease) in short-term borrowings

(Decrease) increase in short-term notes and bills payable

Increase in long-term borrowings

Repayment of long-term borrowings

Increase in guarantee deposits received

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: Huang, Jui-Tien

Chairman: Lo, Chih-Hsien

Accounting Manager: Kuo, Ying-Chih

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PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2018 AND 2017

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

(UNAUDITED)

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 August 3, 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

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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.

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)

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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 was 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 was 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 reclassified available-for-sale financial assets and financial assets at cost in the amounts of $60,112 and $25,721, respectively, by increasing financial assets at fair value through profit or loss and retained earnings in the amounts of $85,833 and $22,498, respectively, and decreasing other equity interest in the amount of $22,498.
(d) In accordance with IFRS 9, the Group reclassified available-for-sale financial assets in the amount of $990,622 and made an irrevocable election at initial recognition on equity instruments not held for dealing or trading purpose, by increasing financial assets at fair value through other comprehensive income in the amount of $990,622.

~14~

(e) The Group’s investee accounted for using the equity method made certain reclassifications in accordance with IFRS 9. Accordingly, the Group increased investments accounted for using the equity method and retained earnings in the amounts of $1,696 and $8,651, respectively, and decreased other equity interest in the amount of $6,955.
(f) Presentation of contract liabilities:
In line with IFRS 15 requirements, the Group changed the presentation of certain accounts in the balance sheet as follows:
(i) Under IFRS 15, liabilities in relation to sales of gift certificates and gift cards, and franchise agreements are recognized as contract liabilities, but were previously presented as advance sales receipts in the balance sheet. As of January 1, 2018, the balance amounted 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 amounted to $346,011.
(g) Please refer to Notes 12(4) and 12(5) for other disclosure(s) in relation to the first application of IFRS 9 and IFRS 15.

(2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group New standards, interpretations and amendments endorsed by the FSC effective from 2019 are as follows:

New standards, interpretations and amendments endorsed by the follows:	FSC effective from 2019 are as	FSC effective from 2019 are as
	Effective date by International
New Standards, Interpretations and Amendments	Accounting Standards Board
Amendments to IFRS 9, ‘Prepayment features with negative		January 1, 2019
compensation’
IFRS 16, ‘Leases’		January 1, 2019
Amendments to IAS 19, ‘Plan amendment, curtailment or		January 1, 2019
settlement’
Amendments to IAS 28, ‘Long-term interests in associates and joint		January 1, 2019
ventures’
IFRIC 23, ‘Uncertainty over income tax treatments’		January 1, 2019
Annual improvements to IFRSs 2015-2017 cycle		January 1, 2019
Except for the following, the above standards and interpretations have	no significant impact to the Group’s
financial condition and financial performance based on the Group’s assessment.
IFRS 16,`‘`Leases’

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.

~15~

The Group expects to recognize the lease contract of lessees in line with IFRS 16. However, the Group intends not to restate the financial statements of prior period (referred herein as the “modified retrospective approach”), and the effects will be adjusted on January 1, 2019.

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

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

by the FSC are as follows:
New Standards, Interpretations and Amendments Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’	Effective date by International Accounting Standards Board
	To be determined by International Accounting Standards Board January 1, 2021

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

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 elected to apply modified retrospective approach whereby the cumulative impact of the adoption was recognized as retained earnings or other equity as of January 1, 2018 and the financial statements for the year ended December 31, 2017 and the second quarter of 2017 were not restated. The financial statements for the year ended

~16~

December 31, 2017 and the second 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 and details of significant accounts.

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

basis for preparation of consolidated financial statements is as follows: 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. The details of the individual financial statements of the Company’s subsidiaries reviewed or unreviewed by the independent accountants are summarized below:	basis for preparation of consolidated financial statements is as follows: 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. 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 June 30,2018 June 30,2017
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:

Name of investor The Company The Company The Company The Company The Company	Name of subsidiary President Chain Store (BVI) Holdings Ltd. PCSC (China) Drugstore Limited Wisdom Distribution Service Corp. President Drugstore Business Corp. Ren-Hui Investment Corp.	Main business activities Professional investment Professional investment Logistics and storage of publication and e-commerce Sales of cosmetics, medicine and daily items Professional investment	Ownership (%)	Ownership (%)	June 30, 2017 100.00 92.20 100.00 100.00 100.00	Description
			June 30, 2018 100.00 92.20 100.00 100.00 100.00	December 31, 2017 100.00 92.20 100.00 100.00 100.00

~17~

Main business activities Enterprise management consultancy Art and cultural exhibition	Ownership (%)	Ownership (%)	Description
	June 30, 2018 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 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	December 31, 2017 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 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
			(a) (b)
Sales of ice cream
Life and property insurance Restaurant and sales of goods Sports and entertainment business 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

~18~

Name of investor Retail Support International Corp. Retail Support International Corp. Retail Support Taiwan Corp. President Logistics International Corp. Duskin Serve Taiwan Co. Books.com. Co., Ltd. Books.com. (BVI) Ltd. 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	Name of subsidiary Retail Support Taiwan Corp. President Logistics International Corp. President Logistics International Corp. Chieh-Shuen Logistics International Corp. Duskin China (BVI) Holdings Limited Books.com. (BVI) Ltd. Bejing Bokelai Customer Co. 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.	Main business activities Room-temperature logistics and warehousing Trucking Trucking Trucking Professional investment Professional investment Enterprise information consulting, network technology development and services Gas station Sales of various health care products, cosmetics, and pharmaceuticals Sales of various health care products, cosmetics, and pharmaceuticals 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	Ownership (%)	Ownership (%)	June 30, 2017 51.00 49.00 6.00 100.00 100.00 100.00 100.00 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	Description
			June 30, 2018 51.00 49.00 6.00 100.00 - 100.00 100.00 60.00 100.00 100.00 52.22 100.00 7.80 100.00 100.00 100.00 40.00 100.00 100.00 100.00	December 31, 2017 51.00 49.00 6.00 100.00 - 100.00 100.00 60.00 100.00 100.00 52.22 100.00 7.80 100.00 100.00 100.00 40.00 100.00 100.00 100.00
						(c) (d)

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Name of investor President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited Shanghai President Logistics Co., Ltd. Shanghai President Logistics Co., Ltd. PCSC Restaurant (Cayman) Holdings Limited Uni-President Logistics (BVI) Holdings Limited Ren-Hui Investment Corp Ren-Hui Holdings Co., Ltd.	Name of subsidiary President Chain Store (Zhejiang) Ltd. Beauty Wonder (Zhejiang) Trading Co.,Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd. President Logistic ShanDong Co., Ltd. Shanghai President Chain Store Corporation Trade Co., Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd. Ren Hui Holding Co., Ltd Shan Dong President Yinzuo Commercial Limited .	Main business activities Operation of chain store Sales of cosmetics and medicine Logistics and warehousing Logistics and warehousing Trade of food and commodities Logistics and warehousing Professional investment Retail hypermarket	Ownership (%)	Ownership (%)	June 30, 2017 - - 50.00 100.00 100.00 50.00 - -	Description
			June 30, 2018 100.00 100.00 50.00 100.00 100.00 50.00 100.00 15.00	December 31, 2017 100.00 - 50.00 100.00 100.00 50.00 100.00 15.00
						(e) (f) (g) (d)

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

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

  - (f) The subsidiary of the Company was established in June 2018.

  - (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.

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(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.
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

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highly probable that a significant reversal in the cumulative revenue recognized will not occur. The validity of this assumption and the estimated amount of returns are reassessed at each reporting date.

(c) The Group operates a loyalty program where retail customers accumulate points for purchases made which entitle them to discount on future purchases. The points provide a material right to customers that they would not receive without entering into a contract. Therefore, the promise to provide points to the customer is a separate performance obligation. The transaction price is allocated to the product and the points on a relative stand-alone selling price basis. The stand-alone selling price per point is estimated on the basis of the discount granted when the points are redeemed and on the basis of the likelihood of redemption, based on past experience. The stand-alone selling price of the product sold is estimated on the basis of the retail price. A contract liability is recognized for the transaction price which is allocated to the points and revenue is recognized when the points are redeemed or expire.
B. Sales of services
The Group provides delivery services. Revenue from delivering services is recognized when the services have been provided.
C. Financing components

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

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
	June 30, 2018	December 31, 2017	June 30, 2017
Cash on hand and petty cash	$ 1,393,710	$ 1,791,733	$ 901,128
Checking accounts and demand deposits	16,345,008	14,483,269	11,213,855
Cash equivalents
Time deposits	31,691,911	10,178,300	10,826,635
Short-term financial instruments	11,662,020	9,329,989	8,383,161
	$ 61,092,649	$ 35,783,291	$ 31,324,779

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.

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

nancial assets at fair value through profit or loss
	June 30, 2018
Current items:
Beneficiary certificates	$ 2,518,307
Valuation adjustment	2,393
	$ 2,520,700

Non-current items:
Unlisted stocks	$ 275,403
Valuation adjustment (	189,720)
	$ 85,683

A. The Group recognized valuation loss of $3,168 and disposal gain of $3,151 in relation to financial assets at fair value through profit or loss for the six-month period ended June 30, 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 June 30, 2017 is provided in Note 12(4).
(3) Accounts receivable

Accounts receivable
	June 30, 2018	December 31, 2017		June 30, 2017
Accounts receivable	$ 4,596,082	$ 5,010,640		$ 4,165,478
Less: Allowance for sales returns and discounts	-
		( 93,267 ) ( 78,300 )
Allowance for uncollectible accounts (	44,945)
			( 48,471)	( 120,440)
	$ 4,551,137	$ 4,868,902		$ 3,966,738

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

accounts ( 44,945) ( 48,471) $ 4,551,137 $ 4,868,902 The ageing analysis of accounts receivable that were past due but not impaired is as	( 120,440) $ 3,966,738 follows:
	June 30, 2018
Not past due	$ 4,437,053
Up to 90 days	138,213
91 to 180 days	18,212
181 to 365 days	2,261
Over 365 days	343
	$ 4,596,082

The above aging analysis was based on past due date. Information on December 31, 2017 and June 30, 2017 is provided in Note 12(4).

B. No accounts receivable of the Group were pledged to others.
C. As at June 30, 2018, December 31, 2017 and June 30, 2017, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable were $4,551,137, $4,868,902, and $3,966,738, respectively.
D. Information relating to credit risk is provided in Note 12(2).

~23~

(4) Inventories

Inventories
	June 30, 2018
		Allowance for
	Cost	valuation loss	Book value
Raw materials and work in process	$ 58,230	$ -	$ 58,230
Merchandise and finished goods	12,892,431 (	87,118)	12,805,313
	$ 12,950,661 (	$ 87,118)	$ 12,863,543

	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

	June 30, 2017
		Allowance for
	Cost	valuation loss	Book value
Raw materials and work in process	$ 76,812	$ -	$ 76,812
Merchandise and finished goods	12,569,186 (	133,335)	12,435,851
	$ 12,645,998 (	$ 133,335)	$ 12,512,663

The cost of inventories recognized as expenses for the period:

	For the three-month	For the three-month
	period ended	period ended
	June 30, 2018	June 30, 2017
Cost of goods sold	$ 39,790,070	$ 36,510,999
Gain on reversal of valuation of inventories ( 8,290 ) ( 32,348)
Spoilage	422,977	379,785
Others	70,905	65,808
	$ 40,275,662	$ 36,924,244

	For the six-month	For the six-month
	period ended	period ended
	June 30, 2018	June 30, 2017
Cost of goods sold	$ 77,771,954	$ 71,757,649
Gain on reversal of valuation of inventories ( 48,673 ) ( 130,043)
Spoilage	870,786	821,617
Others	128,101	120,491
	$ 78,722,168	$ 72,569,714

The Group reversed a previous inventory write-down because the Group sold and scrapped certain inventories which were previously provided with allowance for the three-month and six-month periods ended June 30, 2018 and 2017, respectively.

~24~

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

Financial assets at fair value through other comprehensive income-non-current
	June 30, 2018
Debt instruments
Government bonds	$ 199,893
Valuation adjustment	1,413
	201,306
Equity instruments
Listed stocks	265,606
Unlisted stocks	4,348
	269,954
Valuation adjustment	530,259
	800,213
	$ 1,001,519

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 $800,213 as at June 30, 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:

at fair value through other comprehensive income are listed below:
		For the three-month
		period ended
		June 30, 2018
Equity instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income		$ 12,400

Debt instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income		($ 347)
Interest income recognized in profit or loss		$ 589

		For the six-month
		period ended
		June 30, 2018
Equity instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income		$ 11,750

Debt instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income		($ 907)
Interest income recognized in profit or loss		$ 1,179

C. As at June 30, 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 $1,001,519.

~25~

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 June 30, 2017 is provided in Note 12(4).
(6) Investments accounted for using the equity method

	June 30, 2018	December 31, 2017	June 30, 2017
Associates
PresiCarre Corp.	$ 5,369,010	$ 5,198,249	$ 5,046,546
President Fair Development Corp.	1,969,076	1,954,089	1,923,650
Uni-President Development Corp.	738,052	750,774	736,233
President International Development
Corp.	451,655	466,885	447,906
Tung Ho Development Corp.	118,859	123,504	126,325
Uni-President Organics Corp., etc.	53,120	64,989	54,748
	8,699,772	8,558,490	8,335,408
Joint ventures
President Coffee (Cayman) Holdings
Ltd.	$ -	$ -	$ 2,199,936
Uni-Wonder Corp.	-	-	355,110
Mister Dount Taiwan Corp., Ltd.	89,483	97,232	98,076
	89,483	97,232	2,653,122
	$ 8,789,255	$ 8,655,722	$ 10,988,530

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:
(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
	June 30, 2018	June 30, 2017
Total comprehensive income	$ 94,294	$ 66,255

	For the six-month	For the six-month
	period ended	period ended
	June 30, 2018	June 30, 2017
Total comprehensive income	$ 204,294	$ 145,249

~26~

(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
		June 30, 2018	June 30, 2017
Total comprehensive income	($ 2,324)		$ 469,219


		For the six-month	For the six-month
		period ended	period ended
		June 30, 2018	June 30, 2017
Total comprehensive income		$ 5,076	$ 877,977

C. In December 2017, the Group disposed 30% shares of its joint venture – President Coffee (Cayman) Holdings Ltd. for a cash consideration of $25,642,728 to Starbucks EMEA Holdings Ltd. (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.

~27~

(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
-	8,539	175,842		930,674	905,309	883,946	2,904,310
- (	38 ) (	7,918 )	(	16,052 ) (	22,656 ) (	4,365) (	51,029)
-	660	89,028		37,569	8,757 (	126,697)	9,317
- (	94,380 ) (	279,835 )	(	1,135,209 ) (	842,758 ) (	608,933) (	2,961,115)
1,014) (	261 ) (	1,635 )		3,164 (	56,623 ) (	101,039) (	157,408)

$ 2,256,204	$ 2,410,072	$ 2,272,944		$ 6,615,969	$ 6,683,332	$ 4,487,896	$ 24,726,417
$ 2,272,570	$ 4,293,175	$ 6,526,334		$ 20,498,529	$ 17,589,035	$ 9,268,551	$ 60,448,194

16,366) (	1,883,103 ) (	4,253,390 )	(	13,882,560) (	10,905,703 ) (	4,780,655) (	35,721,777 )
$ 2,256,204	$ 2,410,072	$ 2,272,944		$ 6,615,969	$ 6,683,332	$ 4,487,896	$ 24,726,417

~28~

Land		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
-	113,898	319,022	912,054	822,183	1,056,881	3,224,038
- (	613 ) (	12,529 ) (	49,965 ) (	33,219 ) (	436) (	96,762)
28,822	55,770	82,888	48,071	110,211 (	386,507) (	60,745)
- (	89,473 ) (	284,872 ) (	1,047,975 ) (	594,968 ) (	517,634) (	2,534,922)
1,890 ) (	1,922 ) (	4,641 ) (	13,660) (	86,461 ) (	181,787) (	290,361)
$ 2,257,327	$ 2,504,829	$ 2,211,942	$ 6,276,502	$ 5,284,616	$ 4,035,323	$ 22,570,539
$ 2,273,847	$ 4,204,312	$ 6,060,845	$ 19,004,492	$ 13,270,208	$ 8,521,429	$ 53,335,133
						30,764,594)
16,520) (	1,699,483 ) (	3,848,903 ) (	12,727,990) (	7,985,592 ) (	4,486,106) (
$ 2,257,327	$ 2,504,829	$ 2,211,942	$ 6,276,502	$ 5,284,616	$ 4,035,323	$ 22,570,539

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.

~29~

(8) Investment property

2018 January 1, 2018 Depreciation charge June 30, 2018 2017 January 1, 2017 Additions Reclassifications Depreciation charge June 30, 2017	Land $ 1,059,538 - ( $ 1,059,538 Land $ 902,270 132,700 28,047 - ( $ 1,063,017	Buildings $ 459,577 8,478) ( $ 451,099 Buildings $ 456,919 15,619 3,303 8,454) ( $ 467,387	Total $ 1,519,115 8,478) $ 1,510,637 Total $ 1,359,189 148,319 31,350 8,454) $ 1,530,404

The fair value of the investment property held by the Group ranged from $3,608,223 to $4,186,928 over the period from June 30, 2017 to June 30, 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

ntangible assets
At January 1, 2018 Cost Accumulated amortization and impairment ( 2018 Opening net book amount as of January 1 Additions Reclassifications ( Amortization expenses ( Net exchange differences Closing net book amount as of June 30 At June 30, 2018 Cost Accumulated amortization and impairment (	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
	33,528	-	-	1,581	35,109
	303 )	-	- (	237 ) (	540 )
	123,030 )	-	( 97,080) (	14,730 ) (	234,840 )
	1,127	1,294	- (	1 )	2,420
	$ 503,548	$ 2,203,813	$ 7,427,810	$ 323,691	$ 10,458,862
	$ 1,556,875	$ 2,203,813	$ 7,524,890	$ 401,907	$ 11,687,485

	1,053,327 )	-	( 97,080) (	78,216 ) (	1,228,623)
	$ 503,548	$ 2,203,813	$ 7,427,810	$ 323,691	$ 10,458,862

~30~

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
71,182	-	-	179,418	250,600
52 )	-	-	-	( 52 )
-	-	-	4,669	4,669
106,159 )	-	-	( 13,942)	( 120,101 )
2,255 ) (	1,500 )	-	( 1,563)	( 5,318 )
$ 556,637	$ 377,173	$ -	$ 272,164	$ 1,205,974
$ 1,431,250	$ 377,173	$ -	$ 348,346	$ 2,156,769

874,613 )	-	-	( 76,182)	( 950,795 )
$ 556,637	$ 377,173	$ -	$ 272,164	$ 1,205,974

Amortization expenses on intangible assets are recognized as operating expenses.

(10) Other non-current assets

Other non-current assets
	June 30, 2018	December 31, 2017	June 30, 2017
Guarantee deposits paid	$ 2,691,213	$ 2,656,420	$ 2,402,042
Others	498,127	521,049	494,372
	$ 3,189,340	$ 3,177,469	$ 2,896,414

(11) Impairment of non-financial assets

A. No impairment loss was recognized for the six-month periods ended June 30, 2018 and 2017 .
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.

~31~

(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	June 30, 2018 $ 1,070,988 December 31, 2017 $ 965,180 June 30, 2017 $ 1,602,936	Interest rate range 0.92%~4.50% Interest rate range 0.94%~4.35% Interest rate range 0.95%~4.57%	Collateral
			None Collateral
			None Collateral
			None

There was no capitalization of borrowing costs for the six-month periods ended June 30, 2018 and 2017. Relevant interest expense on borrowings is recognized as “finance costs”.

(13) Other payables

Dividend payable Store collections Wages, salaries and bonus payable Sales receipt on behalf of others Incentive bonus payable to franchisees Rent payable Employees’ compensation and remuneration for directors and supervisors Payables for acquisition of property, plant and equipment Payables for labor and health insurance Payables for equity investments (See Note 6(6)D) Others	June 30, 2018 $ 27,407,721 11,300,379 4,654,105 975,847 974,430 827,343 454,192 435,181 246,252 - 4,511,239 $ 51,786,689	December 31, 2017 $ - 11,947,975 4,399,047 1,134,831 930,996 803,066 1,612,325 1,071,524 240,769 3,226,806 5,612,912 $ 30,980,251	June 30, 2017
			$ 8,978,668 8,554,070 3,973,870 918,293 908,234 685,554 437,585 542,921 227,140 - 3,997,067 $ 29,223,402

~32~

(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	June 30, 2018 $ 1,144,119 297,704 - - - - 301,947 $ 1,743,770	December 31, 2017 $ 1,064,779 273,754 1,059,753 1,240,616 737,431 231,312 745,006 $ 5,352,651	June 30, 2017
			$ 978,438 163,373 418,336 1,186,481 720,487 231,820 699,480
			$ 4,398,415

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 0.84%~4.00% 1.79%~1.96% Interest rate range 0.85%~3.643% 1.77%~1.98% Interest rate range 0.88%~3.15% 1.98%~2.24%	Collateral None Property, plant and equipment ( Collateral None Property, plant and equipment ( Collateral None Property, plant and equipment (	June 30, 2018 $ 977,834 407,896 1,385,730 297,704) $ 1,088,026 December 31, 2017 $ 1,018,506 360,699 1,379,205 273,754) $ 1,105,451 June 30, 2017 $ 676,479 304,499 980,978 163,373) $ 817,605

There was no capitalization of borrowing costs for the six-month periods ended June 30, 2018 and 2017. Relevant interest expense on borrowings is recognized as “finance costs”.

~33~

(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 $38,964, $37,097, $78,107, and $77,280 for the three-month and six-month periods ended June 30, 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 six-month periods ended June 30, 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 and six-month periods ended June 30, 2018 and 2017 were $234,114, $205,517, $460,217 and $403,896, respectively.

(17) Other non-current liabilities

Guarantee deposit received Decommissioning liability Deferred income Others	June 30, 2018 $ 3,391,663 404,656 13,864 326,796 $ 4,136,979	December 31, 2017 $ 3,355,171 392,807 365,868 307,885 $ 4,421,731	June 30, 2017
			$ 3,339,788 405,142 250,743 252,079 $ 4,247,752

(18) Share capital

As of June 30, 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 June 30, 2018 and January 1, 2018.

~34~

(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 and 2016 were resolved by the shareholders on June 12, 2018 and June 13, 2017, respectively, as follows:

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

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

~35~

(21) Other equity items

For the six-month period ended June 30, 2018

Exchange differences from translation of foreign operations At January 1, 2018 ($ 906,308) Adjustments under new standards - Adjusted beginning balance ( 906,308) Revaluation: –Group - –Associates - ( Revaluation-tax - ( Currency translation differences: –Group 448,598 –Associates ( 4,247) At June 30, 2018 ($ 461,957)	Unrealized gains/(losses) on valuation of financial assets at fair value through other comprehensive income $ - 477,996 477,996 10,843 600) 1,845) - - $ 486,394	Unrealized gains/(losses) on available- for-sale financial assets Total $ 507,449 ($ 398,859) ( 507,449) ( 29,453) - ( 428,312) - 10,843 - ( 600) - ( 1,845) - 448,598 - ( 4,247) $ - $ 24,437

At January 1, 2017 Revaluation: –Group –Associates Revaluation-tax Currency translation differences: –Group –Associates At June 30, 2017	For the six-monthperiod ended June 30, 2017	For the six-monthperiod ended June 30, 2017
	Exchange differences from translation of foreign operations	Unrealized gains/(losses) on available-for-sale financial assets Total
	($ 186,228) - - - ( 265,280) ( 16,538) ($ 468,046)	$ 357,817 $ 171,589 129,709 129,709 2,469 2,469 ( 6,242) ( 6,242) - ( 265,280 ) - ( 16,538) $ 483,753 $ 15,707

~36~

(22) Operating revenue

Revenue from contracts with customers	For the three-month period ended June 30, 2018 $ 61,229,506	For the six-month period ended June 30, 2018 $ 120,177,251

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 categorized based on operating departments and goods or services recognition timing as follows:

For the three-month period ended June 30, 2018 Total segment revenue Inter-segment revenue Revenue from external customer contracts Timing of revenue recognition –At a point in time –Over time For the six-month period ended June 30, 2018 Total segment revenue Inter-segment revenue Revenue from external customer contracts Timing of revenue recognition –At a point in time –Over time	Convenience stores $ 38,901,410 ( 150,837) 38,750,573 $ 38,617,342 133,231 $ 38,750,573 Convenience stores $ 76,055,554 ( 315,110) 75,740,444 $ 75,482,976 257,468 $ 75,740,444	Retail business group $ 17,630,750 ( 544,639) 17,086,111 $ 14,388,032 2,698,079 $ 17,086,111 Retail business group $ 34,875,573 ( 1,142,329) 33,733,244 $ 28,153,221 5,580,023 $ 33,733,244	Logistics business group $ 3,853,227 ( 3,367,406) 485,821 $ 425,581 60,240 $ 485,821 Logistics business group $ 7,503,645 ( 6,545,654) 957,991 $ 843,734 114,257 $ 957,991	Others $ 6,566,826 ( 1,659,825) 4,907,001 $ 4,691,602 215,399 $ 4,907,001 Others $ 13,004,988 ( 3,259,416) 9,745,572 $ 9,328,594 416,978 $ 9,745,572	Total
					$ 66,952,213 ( 5,722,707)
					61,229,506
					$ 58,122,557 3,106,949
					$ 61,229,506
					Total
					$ 131,439,760 ( 11,262,509)
					120,177,251
					$ 113,808,525 6,368,726
					$ 120,177,251

B. Contract liabilities

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

Contract liabilities – advance receipts of gift certificates and gift cards Contract liabilities – members’ deposits Contract liabilities – franchise fee Contract liabilities – customer loyalty programs Contract liabilities – others	June 30, 2018 $ 2,263,037 1,313,447 225,934 280,643 261,999 $ 4,345,060

~37~

Contract liabilities- current Contract liabilities- non-current	June 30, 2018 $ 4,064,417 280,643 $ 4,345,060

  - (b) Revenues recognized that were included in the contract liabilities balance at the beginning was $927,654 for the six-month period ended June 30, 2018.

C. Related disclosures on operating revenue for the three-month and six-month periods ended June 30, 2017 are provided in Note 12(5) B.
(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 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 June 30, 2018 $ 36,036,573 6,358,412 5,301,285 3,019,427 1,628,817 1,038,388 4,601,050 $ 57,983,952 For the six-month period ended June 30, 2018 $ 70,255,578 12,713,827 10,326,908 6,029,310 3,250,656 1,914,268 9,105,352 $ 113,595,899		For the three-month period ended June 30, 2017
			$ 32,689,303 5,684,765 4,864,190 2,617,825 1,381,426 938,751 4,128,998
			$ 52,305,258
			For the six-month period ended June 30, 2017
			$ 64,321,630 11,074,779 9,400,854 5,210,534 2,711,502 1,778,329 8,032,307
			$ 102,529,935

~38~

(24) Employee benefit expense

Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses	For the three-month period ended June 30, 2018 $ 5,225,714 506,327 273,078 353,293 $ 6,358,412 For the six-month period ended June 30, 2018 $ 10,498,273 989,459 538,324 687,771 $ 12,713,827	For the three-month period ended June 30, 2017 $ 4,698,785 415,578 242,614 327,788 $ 5,684,765 For the six-month period ended June 30, 2017 $ 9,108,230 859,830 481,176 625,543 $ 11,074,779

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 June 30, 2018 and 2017 and six-month periods ended June 30, 2018 and 2017, employees’ compensation was accrued at $151,065 and $147,063, $300,665 and $290,875 respectively; while directors’ and supervisors’ remuneration was accrued at $50,471, $49,133, $100,451 and $97,180, 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 six-month period ended June 30, 2018, respectively.

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.

~39~

(25) Other income

Other income
		For the three-month		For the three-month
		period ended		period ended
		June 30, 2018		June 30, 2017
Grants income	$	131,591		$ 146,267
Interest income		187,697		44,245
Rental revenue		32,011		40,852
Dividend income		60,668		15,674
Others		252,592		111,932
	$	664,559		$ 358,970
		For the six-month		For the six-month
		period ended		period ended
		June 30, 2018		June 30, 2017
Grants income	$	305,576		$ 288,865
Interest income		334,867		82,143
Rental revenue		68,058		83,424
Dividend income		60,668		15,674
Others		431,506		293,100
	$	1,200,675		$ 763,206
Other gains and losses
		For the three-month		For the three-month
		period ended		period ended
		June 30, 2018		June 30, 2017
Gain on disposal of investments	$	1,834		$ 966
Loss on disposal of property, plant and equipment	(	2,255 )	(	4,485 )
Other gains and losses	(	10,205)	(	22,740)
	($	10,626 )	($ 26,259)
		For the six-month		For the six-month
		period ended		period ended
		June 30, 2018		June 30, 2017
Gain on disposal of investments	$	3,151		$ 1,650
Loss on disposal of property, plant and equipment	(	10,039 )	(	12,952 )
Other gains and losses		14,231	(	42,592)
	$	7,343	($ 53,894)

(26) Other gains and losses

~40~

(27) Finance costs

Interest expense

Interest expense

Income tax
A. Income tax expense
(a)Components of income tax expense:

Current tax:
Current tax on profits for the period
Tax on undistributed surplus earnings
Over provision of prior year’s income tax
Total current tax
Deferred tax:
Origination and reversal of temporary differences
Impact of change in tax rate
Total deferred tax
Income tax expense

Current tax:
Current tax on profits for the period
Tax on undistributed surplus earnings
Over provision of prior year’s income tax
Total current tax
Deferred tax:
Origination and reversal of temporary differences
Impact of change in tax rate
Total deferred tax
Income tax expense

For the three-month
period ended
June 30, 2018
For the three-month
period ended
June 30, 2017
$ 32,315
$ 25,343
For the six-month
period ended
June 30, 2018
For the six-month
period ended
June 30, 2017
$ 78,858
$ 49,533
For the three-month
period ended
June 30, 2018
For the three-month
period ended
June 30, 2017
$ 799,467
$ 606,542
135,163
11,619
-
(
1,661)
934,630
616,500
13,392 ( 8,524)
-
-
13,392
( 8,524)
$ 948,022
$ 607,976
For the six-month
period ended
June 30, 2018
For the six-month
period ended
June 30, 2017
$ 1,400,814
$ 1,177,115
135,163
11,619
-
(
1,543)
1,535,977
1,187,191
(
128,898 ) (
8,142)
640,304
-
511,406
(
8,142)
$ 2,047,383
$ 1,179,049

(28) Income tax

A. Income tax expense

~41~

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

For the three-month
period ended
June 30, 2018
Fair value gains/losses on available-for-sale
financial assets
$ -
Changes in fair value of financial assets at fair
value through other comprehensive income
1,333
Impact of change in tax rate
-
$ 1,333

For the six-month
period ended
June 30, 2018
Fair value gains/losses on available-for-sale
financial assets
$ -
Changes in fair value of financial assets at fair
value through other comprehensive income
(
1,472)
Impact of change in tax rate
(
46,977)
($ 48,449)

For the three-month
period ended
June 30, 2017

$ 6,423
-
-

$ 6,423
For the six-month
period ended
June 30, 2017
$ 6,242
-
-

$ 6,242

B. The Company’s income tax returns through tax year 2015 have been assessed and approved by the Tax Authority.
C. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China on February 7, 2018, the Company’s applicable income tax rate was raised from 17% to 20% effective from January 1, 2018. The Group has assessed the impact of the change in income tax rate.
(29) Earnings per share

For the three-month period ended June 30, 2018	For the three-month period ended June 30, 2018	For the three-month period ended June 30, 2018
Amount after tax $ 2,632,371 $ 2,632,371 - $ 2,632,371	Weighted average number of ordinary shares outstanding (shares in thousands) 1,039,622 1,039,622 437 1,040,059	Earnings per share (in dollars)
		$ 2.53
		$ 2.53

~42~

For the three-month period ended June 30, 2017

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	Amount after tax $ 2,790,477 $ 2,790,477 - $ 2,790,477	Weighted average number of ordinary shares outstanding (shares in thousands) 1,039,622 1,039,622 538 1,040,160	Earnings per share (in dollars) $ 2.68 $ 2.68

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 six-month period ended June 30, 2018 Amount Weighted average number of ordinary shares outstanding Earnings per share after tax (shares in thousands) (in dollars) $ 5,169,992 1,039,622 $ 4.97 $ 5,169,992 1,039,622 - 2,035 $ 5,169,992 1,041,657 $ 4.96	For the six-month period ended June 30, 2018 Amount Weighted average number of ordinary shares outstanding Earnings per share after tax (shares in thousands) (in dollars) $ 5,169,992 1,039,622 $ 4.97 $ 5,169,992 1,039,622 - 2,035 $ 5,169,992 1,041,657 $ 4.96
	Amount after tax $ 5,169,992 $ 5,169,992 - $ 5,169,992	Weighted average number of ordinary shares outstanding (shares in thousands) 1,039,622 1,039,622 2,035 1,041,657

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 six-month period ended June 30, 2017 Amount Weighted average number of ordinary shares outstanding Earnings per share after tax (shares in thousands) (in dollars) $ 5,531,948 1,039,622 $ 5.32 $ 5,531,948 1,039,622 - 1,822 $ 5,531,948 1,041,444 $ 5.31	For the six-month period ended June 30, 2017 Amount Weighted average number of ordinary shares outstanding Earnings per share after tax (shares in thousands) (in dollars) $ 5,531,948 1,039,622 $ 5.32 $ 5,531,948 1,039,622 - 1,822 $ 5,531,948 1,041,444 $ 5.31
	Amount after tax $ 5,531,948 $ 5,531,948 - $ 5,531,948	Weighted average number of ordinary shares outstanding (shares in thousands) 1,039,622 1,039,622 1,822 1,041,444

~43~

(30) 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:

Less than one year Over one year but less than five years Over five years	June 30, 2018 $ 93,630 262,943 34,513 $ 391,086	December 31, 2017 $ 94,376 292,261 51,674 $ 438,311	June 30, 2017
			$ 72,747 194,799 52,009 $ 319,555

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 threemonth and six-month periods ended June 30, 2018 and 2017 are as follows:

	For the three-month	For the three-month	For the three-month
	period ended		period ended
	June 30, 2018		June 30, 2017
Rental expenses	$ 2,905,706	$	2,557,143
Contingent rents	$ 113,721	$	60,682
	For the six-month		For the six-month
	period ended		period ended
	June 30, 2018		June 30, 2017
Rental expenses	$ 5,823,254	$	5,052,596
Contingent rents	$ 206,056	$	157,938
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	June 30, 2018 $ 9,931,342 34,413,678 12,721,318 $ 57,066,338	December 31, 2017 $ 9,765,924 30,324,865 15,732,948 $ 55,823,737	June 30, 2017
			$ 8,525,031 27,924,603 13,870,894 $ 50,320,528

B. The Group has sub-leased certain business premises to others. Sublease revenues recognized in profit and loss for the three-month and six-month periods ended June 30, 2018 and 2017 are as follows:

Sublease revenues Contingent rents	For the three-month period ended June 30, 2018 $ 56,746 $ 287,412	For the three-month period ended June 30, 2017 $ 52,255 $ 288,417

~44~

Sublease revenues Contingent rents	For the six-month period ended June 30, 2018 $ 117,154 $ 571,052	For the six-month period ended June 30, 2017 $ 102,495 $ 578,032

In accordance with non-cancellable sub-lease agreements as of June 30, 2018, sub-lease payments totalling $587,286 are expected to be collected between 2018 and 2028.

(31) Supplemental cash flow information

A. 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 Financing activities with no cash flow effects Unpaid cash dividends – the company Unpaid cash dividends – subsidiary	For the six-month period ended June 30, 2018 $ 2,904,310 1,071,524 435,181) ( $ 3,540,653 For the six-month period ended June 30, 2018 $ 25,990,556 1,417,165 $ 27,407,721	For the six-month period ended June 30, 2017 $ 3,224,038 883,723 542,921) $ 3,564,840 For the six-month period ended June 30, 2017 $ 8,316,978 661,690
		$ 8,978,668

B. Financing activities with no cash flow effects

(32)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 June 30, 2018	Short-term borrowings $ 965,180 105,808 ( - - ( $ 1,070,988	Long-term borrowings $ 1,105,451 6,068) ( 12,593 23,950) $ 1,088,026	Short-term notes and bills payable $ 250,000 50,000) - - $ 200,000	Other non- current liabilities- guarantee deposits received $ 3,355,172 36,491 - - ( $ 3,391,663	Other non- current liabilities- other $ 1,066,559 24,769 - 346,012) ( $ 745,316	Liabilities from financing activities- gross
						$ 6,742,362 111,000 12,593 369,962)
						$ 6,495,993

~45~

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 June 30, 2018.

(2) Names of related parties and relationship

Names of related parties Uni-President Enterprises Corp. Uni-President Organics Corp.

Mister Donut Taiwan Co., Ltd. Hefei President Enterprises Co., Ltd. Uni-President (Kunshan) Trading Co., Ltd. Presco Netmarketing Inc. 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.

(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 June 30, 2018 $ 146,143 34,376 73,170 17,981 3,569 11,982 2,686 921 $ 290,828	For the three-month period ended June 30, 2017 $ 132,941 276,133 67,500 14,929 2,127 44,962 2,838 447 $ 541,877

~46~

Sales of goods Ultimate parent Associates Sister companies Other related parties Sales of services Ultimate parent Associates Sister companies Other related parties	For the six-month period ended June 30, 2018 $ 288,193 72,278 136,959 36,157 5,937 19,585 5,325 2,258 $ 566,692	For the six-month period ended June 30, 2017 $ 268,910 576,640 123,937 28,515 3,994 86,304 5,759 1,331 $ 1,095,390

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 June 30, 2018 $ 3,933,949 69,261 1,002,310 568,222 $ 5,573,742	For the three-month period ended June 30, 2017 $ 3,780,390 127,970 973,836 234,344 $ 5,116,540

Ultimate parent Associates Sister companies Other related parties	For the six-month period ended June 30, 2018 $ 7,472,491 152,118 1,955,864 1,047,936 $ 10,628,409	For the six-month period ended June 30, 2017 $ 7,249,752 248,580 1,920,394 443,483 $ 9,862,209

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

C. Receivables from related parties

Receivables from related parties
Ultimate parent Associates Sister companies Other related parties	June 30, 2018 $ 109,211 62,603 50,208 5,010 $ 227,032	December 31, 2017 $ 190,171 68,686 72,400 8,725 $ 339,982	June 30, 2017
			$ 145,730 134,732 44,517 5,988 $ 330,967

~47~

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

Payables to related parties
Ultimate parent Associates Sister companies Other related parties	June 30, 2018 $ 1,650,096 56,328 509,197 395,613 $ 2,611,234	December 31, 2017 $ 1,558,451 68,577 406,713 327,697 $ 2,361,438	June 30, 2017
			$ 1,673,613 121,483 448,866 197,046 $ 2,441,008

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

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 June 30, 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 June 30, 2017 are as follows:

Sister companies Discount on the long-term installment payable Net amount Less: Current portion	June 30, 2017
	$ 6 - 6 - $ 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 June 30, 2017 $ - - $ -	For the six-month period ended June 30, 2017 $ 32,215 179,669 $ 211,884

For the six-month period ended June 30, 2018, the Group did not conduct any property transaction.

(4) Key management compensation

Salaries and other short-term employee benefits Salaries and other short-term employee benefits	For the three-month period ended June 30, 2018 $ 160,244 For the six-month period ended June 30, 2018 $ 349,756	For the three-month period ended June 30, 2017 $ 139,876 For the six-month period ended June 30, 2017 $ 309,613

~48~

8. PLEDGED ASSETS

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

Pledged asset		Book value	June 30, 2017 $ 368,869 199,405 459,858 50,365 $ 1,078,497	Purpose
	June 30, 2018 $ 128,643 57,807 543,654 42,465 $ 772,569	December 31, 2017 $ 368,869 187,884 493,134 49,665 $ 1,099,552
Land Buildings Transportation equipment Pledged time deposits (Recognized as “Other non-current assets – guarantee deposits paid ”)				Long-term and short-term borrowings and guarantee facilities Long-term and short-term borrowings and guarantee facilities Long-term borrowings and long-term installment payable Performance guarantee

SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

None.

12. OTHERS

(1) Capital management

The 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.

~49~

(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 at amortized cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Long-term borrowings (including current portion) Guarantee deposit received	June 30, 2018 $ 2,606,383 - 800,213 201,306 - - 61,092,649 4,551,137 2,131,374 2,691,213 $ 74,074,275 $ 1,070,988 200,000 1,836,336 22,464,822 51,786,689 1,385,730 3,391,663 $ 82,136,228	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	June 30, 2017 $ - 1,227,787 - - 1,029,135 27,393 31,324,779 3,966,738 2,207,079 2,402,042 $ 42,184,953 $ 1,602,936 434,943 1,272,588 18,864,929 29,223,402 980,978 3,339,788 $ 55,719,564

~50~

B. Risk management policies

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

C. Significant financial risks and degrees of financial risks

(a)Market risk

Foreign exchange risk

I. The Group operates internationally and is exposed to foreign exchange risk arising from of the Company and its subsidiaries used in various functional currency, the transactions primarily with respect to the USD and RMB. Exchange risk arises from future commercial transactions and recognized assets and liabilities.
II. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currencies.
III. The Company’s and certain subsidiaries’ functional currency is 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 Non-monetary items JPY: NTD Financial liabilities Monetary items USD: NTD JPY: NTD	June 30, 2018	June 30, 2018	Book value (NTD) $ 131,465 9,215 4,452 14,619 $ 228,279 $ 96,589 27,970	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) $ 4,316 2,003 16,165 3,766 $ 828,900 $ 3,171 101,562	Exchange rate 30.4600 4.6005 0.2754 3.8819 0.2754 30.4600 0.2754		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

~51~

(Foreign currency: functional currency) Financial assets Monetary items USD: NTD RMB:NTD JPY:NTD HKD:NTD Non-monetary items JPY: NTD Financial liabilities Monetary items USD: NTD JPY: NTD	June 30, 2017	June 30, 2017	Book value (NTD) $ 34,922 231,218 61,467 30,349 $ 235,396 $ 14,723 17,889
	Foreign currency amount (In thousands) $ 1,148 51,541 226,314 7,789 $ 866,700 $ 484 65,866	Exchange rate 30.4200 4.4861 0.2716 3.8964 0.2716 30.4200 0.2716

IV. Total exchange gain (loss), including realized and unrealized from significant foreign exchange variations on monetary items held by the Group amounted to $15,043, $2,839, $63,013 and $1,686 for the three-month and six-month periods ended June 30, 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 six-month periods ended June 30, 2018 and 2017 would have increased/decreased by $10,586 and $3,054, respectively, as a result of gains/losses on equity securities and open-ended funds classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $40,011 and $38,113, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income and available-for-sale equity investment.

Cash flow and fair value interest rate risk

I. The 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 six-month periods ended June 30, 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 six-month periods ended June 30, 2018 and 2017 would have increased/decreased by $2,714 and $2,202, 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 six-month periods ended June 30, 2018 and 2017 would have decreased by $507 and $1,008 or increased by $490 and $986, respectively. The main factor is that changes in market interest rates would affect the fair value of fixed interest rate

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bond investments held by the Group classified as financial assets at fair value through other comprehensive income.

(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:
		June 30, 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		3,541
Reversal of impairment	(	1,607)
Write-offs	(	15,688)
Effect of foreign exchange	(	661)
At June 30	$	44,945

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 six-month period ended June 30, 2018.
V. The Group has no written-off financial assets that are still under recourse procedures on June 30, 2018.
VI. Credit risk information for the six-month period ended June 30, 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.

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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 $2,520,700, $1,560,025 and $1,227,787 as at June 30, 2018, December 31, 2017, and June 30, 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 $16,857,317, $11,302,389 and $10,878,768 as of June 30, 2018, December 31, 2017 and June 30, 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:
June 30, 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: 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 $ 1,094,073 $ - $ - 200,000 - - 1,836,336 - - 22,464,822 - - 51,786,689 - - 329,534 519,718 99,594 Less than 1 year Between 1 and 2 years Between 2 and 3 years $ 986,476 $ - $ - 250,000 - - 2,066,511 - - 21,170,963 - - 30,980,251 - - 304,830 510,498 95,568	Over 3 years
		$ - - - - - 508,068 Over 3 years
		$ - - - - - 554,210

Non-derivative financial liabilities:

Non-derivative financial liabilities:
June 30, 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 $ 1,647,069 $ - $ - 434,943 - - 1,272,588 - - 18,864,929 - - 29,223,402 - - 174,814 430,324 67,802	Over 3 years
		$ - - - - - 252,925

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(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.

	June 30, 2018	June 30, 2018
Book value $ 2,691,213 $ 3,391,663		Fair value
	Level 1 Level 2 $ - $ - $ - $ - December 31, 2017		Level 3 $ 2,671,906 $ 3,366,105
Book value $ 2,656,420 $ 3,355,171		Fair value
	Level 1 Level 2 $ - $ - $ - $ - June 30, 2017		Level 3 $ 2,639,566 $ 3,327,231 Level 3 $ 2,386,828 $ 3,309,733
Book value $ 2,402,042 $ 3,339,788	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.

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D. The related information for financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:
(a) Classification according to the nature of assets and liabilities, relevant information is as follows:

June 30, 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	$ 2,520,700	$		-	$	-	$	2,520,700
Equity securities	-			-		85,683		85,683
	2,520,700			-		85,683		2,606,383
Financial assets at fair value through
other comprehensive income
Equity securities	795,865			-		4,348		800,213
Debt securities	201,306			-		-		201,306
	997,171			-		4,348		1,001,519
	$ 3,517,871	$		-	$	90,031	$	3,607,902
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
June 30, 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	$ 1,227,787	$		-	$	-	$	1,227,787
Available-for-sale financial assets
Equity securities	762,269			-		64,460		826,729
Government bond	202,406			-		-		202,406
	964,675			-		64,460		1,029,135
	$ 2,192,462	$		-	$	64,460	$	2,256,922

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(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 six-month periods ended June 30, 2018 and 2017, there was no transfer between Level 1 and Level 2.
F. For the six-month periods ended June 30, 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 categorized within Level 3, which to verify the independent fair value of financial instruments. Such assessments are to ensure the valuation results are reasonable by applying independent information to compare the results to current market conditions, confirming the information resources are independent, reliable and in line with other resources, and represented as the exercisable price, and frequently making any other necessary adjustments to the fair value. Investment property is assessed by independent appraisers or based on recent closing prices of similar property in the neighbouring area.
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:

below:
Non-derivative equity instrument: Unlisted shares Non-derivative equity instrument: Unlisted shares	Fair value at June 30, 2018 $ 90,031 Fair value at December 31, 2017 $ 64,460	Valuation technique Market comparable companies Net asset value Valuation technique Net asset value	Significant unobservable input Price to book ratio multiplier Net asset value Significant unobservable input Net asset value	Range (weighted average) 2.21 - Range (weighted average) -	Relationship of inputs to fair value
					The higher the multiplier, the higher the fair value The higher the net asset value, the higher the fair value Relationship of inputs to fair value The higher the net asset value, the higher the fair value

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Non-derivative equity instrument: Unlisted shares	Fair value at June 30, 2017 $ 64,460	Valuation technique Net asset value	Significant unobservable input Net asset value	Range (weighted average) -	Relationship of inputs to fair value
					The higher the net asset value, the higher the fair value

I. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, the use of different valuation models or assumptions may result in different measurements. If net assets from financial assets and liabilities categorized within Level 3 had increased or decreased by 1%, other comprehensive income would not have been significantly impacted as of June 30, 2018, December 31, 2017, and June 30, 2017.

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

A. Summary of significant accounting policies adopted in the second 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.

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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 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
IAS 39		$	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)
IFRS 9		$	4,858,013		$	85,833		$	788,463	$	202,159		$	-		$ 5,934,468		$	25,463	($		29,453 )	($	5,203)

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(a) Under IAS 39, because the cash flows of debt instruments, which were classified as available-for-sale 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 held 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 and 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 which were impaired under IAS 39, is converted to expected credit losses 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 noncontrolling interests in the amounts of $5,686 and $5,203, respectively.
C. The significant accounts as of December 31, 2017 and for the six-month period ended June 30, 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	June 30, 2017 $ 1,221,631 6,156 $ 1,227,787

The Group recognized net gain of $1,914 and $3,734 on financial assets held for trading for the three-month and six-month periods ended June 30, 2017, respectively.

(b) Available-for-sale financial assets - non-current

Listed stocks Unlisted stocks Government bonds Valuation adjustment	December 31, 2017 $ 265,606 41,963 199,840 507,409 543,325 $ 1,050,734	June 30, 2017 $ 265,606 41,962 199,786 507,354 521,781 $ 1,029,135

I. The Group recognized $73,270 and $129,709 in other comprehensive gain in relation to fair value changes for the three-month and six-month periods ended June 30, 2017, respectively.
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 June 30, 2017, no financial assets measured at cost held by the Group were pledged to others.

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D. Credit risk information as of December 31, 2017 and for the six-month period ended June 30, 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 six-month period ended June 30, 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	June 30, 2017
Up to 90 days	$ 119,587	$ 124,769
91 to 180 days	11,421	3,012
181 to 365 days	2,062	2,284
Over 365 days	11	-
	$ 133,081	$ 130,065

(e) Movements in the provision for impairment of accounts receivable for the six-month period ended June 30, 2017 are as follows:

une 30, 2017 are as follows:
		For the six-month
			period ended
			June 30, 2017
At January 1		$	112,649
Provision for impairment			15,155
Write-offs	(		1,868 )
Reversal of impairment	(		5,496)
At June 30		$	120,440

(5) Effects of initial application of IFRS 15 and information on application of IAS 11 and IAS 18 in 2017

A. The significant accounting policies applied on revenue recognition for the six-month period ended June 30, 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

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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 six-month period ended June 30, 2017 are as follows:

Sales revenue Service revenue Other operating revenue Total	For the three-month period ended June 30, 2017 $ 49,551,418 3,096,626 2,524,867 $ 55,172,911	For the six-month period ended June 30, 2017 $ 96,546,089 6,314,631 5,314,118 $ 108,174,838

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 statement.

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)			June30,2018
			Balance by using IFRS 15 $ 4,551,137 2,582,454 1,743,770 4,064,417 280,643 4,136,979	Balance by using previous accounting policies $ 4,502,387 2,547,802 5,724,785 - - 4,417,622	Effects from changes in accounting policy $ 48,750 34,652 ( 3,981,015) 4,064,417 280,643 ( 280,643)

(a) Under IFRS 15, liability in relation to expected discounts and refunds to customers is recognized as refund liability in the amount of $83,402. 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 $34,652. 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 June 30, 2018, the balance amounted to $4,064,417. 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 June 30, 2018, the balance amounted to $280,643 and was presented as non-current liability.

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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.

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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, supporting business group and China business. The supporting business group mainly provides services relating to the Group’s business, such as system maintenance and development and food manufacturing and supply.

(2) Measurement of segment information

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

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(3) Segment information

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

External revenue (net) Internal department revenue Total segment revenue Segment income (loss)		For the six-month period ended June 30, 2018	For the six-month period ended June 30, 2018	For the six-month period ended June 30, 2018	For the six-month period ended June 30, 2018			Total $ 120,177,251 - $ 120,177,251 $ 7,924,719
	Convenience stores $ 75,740,444 315,110 $ 76,055,554 $ 6,496,095	Retail business group $ 33,733,244 1,142,329 $ 34,875,573 $ 1,694,338	Logistics business group $ 957,991 6,545,654 $ 7,503,645 $ 612,522		Other operating segments Adjustment and elimination $ 9,745,572($ -) 3,259,416 ( 11,262,509) $ 13,004,988 ($ 11,262,509) $ 1,169,139 ($ 2,047,375)

External revenue (net) Internal department revenue Total segment revenue Segment income (loss)		For the six-month period ended June 30, 2017	For the six-month period ended June 30, 2017	For the six-month period ended June 30, 2017	For the six-month period ended June 30, 2017			Total $ 108,174,838 - $ 108,174,838 $ 7,341,977
	Convenience stores $ 70,173,377 301,869 $ 70,475,246 $ 6,268,134	Retail business group $ 32,100,758 1,080,717 $ 33,181,475 $ 1,564,422	Logistics business group $ 1,356,736 6,116,306 $ 7,473,042 $ 581,823		Other operating segments $ 4,543,967 2,907,921 $ 7,451,888 $ 1,604,690	Adjustment and elimination $ - ( 10,406,813) ($ 10,406,813) ($ 2,677,092)

(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.

~65~

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) June 30, 2018

Securities held by	Type and name of securities	Relationship with the securities issuer	General ledger account		As of June 30,2018	As of June 30,2018		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. 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 Chain Store (Taizhou) Ltd. President Drugstore Business Corp. President Information Corp. President Information Corp. President Logistics International 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. Shan Dong President Yinzuo Commercial Limited Shan Dong President Yinzuo Commercial Limited Shan Dong President Yinzuo Commercial Limited Q-ware Systems & Services Corp. ICASH Corp.	Stock: President Investment Trust Corp. Career Consulting Co. Ltd Kaohsiung Rapid Transit Corp. PK Venture Capital Corp. Yamay International Development Corp. President Securities Corp. Duskin Co., Ltd. Koasa Yamako Corp. Open ended funds: Jih Sun Money Market Fund UPAMC James Bond Money Market Fund Eastspring Investments Well Pool Money Market Fund FSITC Taiwan Money Market Fund Nomura Taiwan Money Market Fund Union Money Market Fund Allianz Global Investors Taiwan Money Market Fund Taishin 1699 Money Market Fund Cathay Taiwan Money Market Fund CIFM RMB Money Market Fund FSITC Taiwan Money Market Fund Jih Sun Money Market Fund Prudential Financial Money Market Fund UPAMC James Bond Money Market Fund Eastspring Investments Well Pool Money Market Fund Jih Sun Money Market Fund CIFM RMB Money Market Fund FSITC Money Market Fund CIFM RMB Money Market Fund CIFM RMB Money Market Fund HSBC Jintrust Money Market Fund Harvest Prime Liquidity Money Market Fund Eastspring Investments Well Pool Money Market Fund Bond: Government bond	Director of President Investment Trust Corp. None `〃` Director of PK Venture Capital Corp. None Investees of Uni-President Enterprises Corp. under the equity method None Director of Koasa Yamako Corp. None `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` None	Financial assets at fair value through profit or loss - non-current `〃` `〃` `〃` `〃` Financial assets at fair value through other comprehensive income - non - current `〃` `〃` Financial assets at fair value through profit or loss - current `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Financial assets at fair value through other comprehensive income - non-current	2,667,600 837,753 2,572,127 321,300 9 38,221,259 300,000 650,000 26,432,454 660,774 3,394,425 16,403,554 12,303,225 12,923,039 10,414,497 7,421,040 2,418,399 4,000,000 5,249,706 3,846,705 10,284,717 3,484,119 4,870,286 2,049,065 1,157,208 105,208 18,263,027 5,005,182 20,000,000 8,021,067 34,096,933 -	45,298 $ 14,663 25,722 - - 567,586 228,279 4,348 390,116 $ 11,001 46,005 250,000 200,000 170,000 130,000 100,000 30,000 18,402 80,009 56,750 162,057 58,007 66,008 30,243 5,324 18,699 84,019 23,026 92,010 36,901 462,123 201,306 $	7.60 5.37 0.92 6.67 - 2.75 0.56 10.00 - - - - - - - - - - - - - - - - - - - - - - - -	45,298 $ 14,663 25,722 - - 567,586 228,279 4,348 390,116 $ 11,001 46,005 250,000 200,000 170,000 130,000 100,000 30,000 18,402 80,009 56,750 162,057 58,007 66,008 30,243 5,324 18,699 84,019 23,026 92,010 36,901 462,123 201,306 $

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 six-month period ended June 30, 2018

Investor Table 2	Type and name of securities	General ledger account	Counterparty	Relationship with the investor	Balance as at January1,2018	Balance as at January1,2018	Add	ition		Disposal	Disposal		Other increase (decrease)	Other increase (decrease)	Balance as a Expressed in (Except as ot	t June 30,2018 thousands of NTD herwise indicated)
					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. Chieh-Shuen Logistics International Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. President Drugstore Business Corp. President Drugstore Business Corp. President Information Corp. President Pharmaceutical Corp. Q-ware Systems & Services Corp.	Open ended funds: Jih Sun Money Market Fund Eastspring Investments Well Pool Money Market Fund FSITC Taiwan Money Market Fund Nomura Taiwan Money Market Fund Union Money Market Fund Taishin 1699 Money Market Fund Jih Sun Money Market Fund FSITC Taiwan Money Market Fund Jih Sun Money Market Fund Jih Sun Money Market Fund Eastspring Investments Well Pool Money Market Fund	Note 1 `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Not applicable `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Not applicable `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	1,358,373 5,250,222 13,151,752 12,328,480 6,855,158 3,718,301 - - 9,323,901 5,968,302 17,449,813	20,005 $ 71,007 200,000 200,000 90,000 50,000 - - 137,318 87,898 236,000	84,778,496 31,538,205 36,112,045 30,777,839 25,854,211 31,193,070 58,719,522 30,859,834 15,186,907 23,948,067 79,969,113	1,250,000 $ 427,000 550,000 500,000 340,000 420,000 866,000 470,000 223,800 353,000 1,083,000	59,704,415 33,394,002 32,860,243 30,803,094 19,786,330 27,490,331 58,719,522 25,610,128 20,664,103 27,867,304 63,321,993	880,276 $ 452,100 500,539 500,307 260,195 370,131 866,118 390,111 304,570 410,800 857,479	880,000 $ 452,000 500,000 500,000 260,000 370,000 866,000 390,000 304,378 410,636 857,000	276 $ 100 539 307 195 131 118 111 192 164 479	- - - - - - - - - - -	111 $ 2) ( - - - - - 9 10 19) ( 123	26,432,454 3,394,425 16,403,554 12,303,225 12,923,039 7,421,040 - 5,249,706 3,846,705 2,049,065 34,096,933	390,116 $ 46,005 250,000 200,000 170,000 100,000 - 80,009 56,750 30,243 462,123

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 six-month period ended June 30, 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. Duskin Serve Taiwan Co. Uni-Wonder Corp. President Information Corp. President Logistics International Corp. Uni-President Superior Commissary Corp.	Uni-President Enterprises Corp. Uni-President Superior Commissary Corp. Tung Ang Enterprises Corp. Lien-Bo Enterprises Corp. Kuang Chuan Dairy Corp. Q-ware Systems & Services Corp. Tait Marketing & Distribution Co., Ltd. Vision Distribution Service Corp. President Packaging Corp. Weilih Food Industrial Co., Ltd. President Transnet Corp. 21 Century Enterprise Co., Ltd. President Transnet Corp. President Logistics International Corp. President Chain Store Corp. Uni-President Enterprises 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.	Ultimate parent company Subsidiary Sister company `〃` Other related party Subsidiary Sister company Subsidiary Sister company Other related party Subsidiary `〃` Subsidiary of President Chain Store Corp. Parent company `〃` Ultimate parent company Other related party Parent company `〃` Subsidiary of President Chain Store Corp. `〃` Subsidiary Parent company	Purchases `〃` `〃` `〃` `〃` `〃` `〃` Purchases returns Purchases `〃` `〃` `〃` Delivery revenue `〃` Service revenue Purchases `〃` Service revenue Delivery revenue `〃` `〃` Service cost Sales revenue	7,276,592 $ 1,738,199 953,825 338,419 210,880 319,353 170,098 149,679) ( 148,962 143,341 141,195 120,109 354,777) ( 491,400) ( 130,414) ( 130,328 482,870 343,416) ( 368,595) ( 506,515) ( 547,135) ( 491,400 1,738,199) (	15 3 2 1 - 1 - - - - - - 40) ( 56) ( 22) ( 7 25 64) ( 23) ( 32) ( 35) ( 32 100) (	Net 30~40 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 10~54 days from the end of the month when invoice is issued Net 30~65 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 20~70 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 15~60 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 15~60 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 25 days from the end of the month when invoice is issued Net 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	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	1,229,233) ($ 660,609) ( 180,512) ( 132,364) ( 107,439) ( 104,476) ( 64,191) ( - 50,483) ( 74,314) ( 30,271) ( 19,442) ( 118,097 86,416 39,766 40,805) ( 86,563) ( 299,491 67,929 96,510 90,683 86,416) ( 660,609	8) ( 4) ( 1) ( 1) ( 1) ( 1) ( - - - - - - 57 41 22 7) ( 15) ( 72 24 34 32 45) ( 100

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 six-month period ended June 30, 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 Transnet Corp. Retail Support Taiwan Corp. Q-ware Systems & Services Corp. Wisdom Distribution Service Corp. President Drugstore Business Corp. President Pharmaceutical Corp. 21 Century Enterprise Co., Ltd. Vision Distribution Service Corp. Retail Support International Corp. Uni-President Cold-Chain Corp. Zhejiang Uni-Champion Logistics Development Co., Ltd. Shanghai President Logistic Co., Ltd.	President Chain Store Corp. Chieh-Shuen Logistics International Corp. Retail Support International Corp. President Chain Store Corp. Books.com. Co., Ltd. President Logistics International Corp. President Pharmaceutical Corp. President Drugstore Business Corp. President Chain Store Corp. President Chain Store Corp. President Logistics International Corp. Retail Support Taiwan Corp. President Logistics International Corp. Shanghai President Logistic Co., Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd.	Parent company Subsidiary of President Chain Store Corp. Parent company `〃` Subsidiary of President Chain Store Corp. `〃` `〃` `〃` Parent company `〃` Subsidiary `〃` Subsidiary of President Chain Store Corp. Parent company Subsidiary	Sales revenue Service cost Delivery revenue Service revenue `〃` Service cost Purchases Sales revenue `〃` Sales returns Service cost `〃` `〃` Delivery revenue Service cost	141,195) ($ 354,777 148,302) ( 319,353) ( 144,320) ( 547,135 330,467 330,467) ( 120,109) ( 149,679 368,595 148,302 506,515 100,470) ( 100,470	49) ( 8 82) ( 69) ( 9) ( 44 7 34) ( 30) ( - 42 17 38 40) ( 35	Net 60 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 15~20 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 70 days from the end of the month when invoice is issued Net 70 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 15~20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	30,271 $ 118,097) ( 27,082 104,476 27,212 90,683) ( 21,234) ( 21,234 19,442 - 67,929) ( 27,082) ( 96,510) ( 54,137 54,137) (	2 8) ( 77 75 4 32) ( 1) ( 5 24 - 47) ( 19) ( 2) ( 38 39) (

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 June 30, 2018

Creditor	Counterparty	Relationship with the counterparty	Balance as of June 30,2018	Turnover rate	Overdue r	eceivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
President Information Corp. Uni-President Superior Commissary Corp. Q-ware Systems & Services Corp. Chieh-Shuen Logistics International Corp.	President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Transnet Corp.	Parent company `〃` `〃` Subsidiary of President Chain Store Corp.	299,491 $ 660,609 104,476 118,097	2.77 5.68 5.98 5.43	`-` `$` `-` `-` `-`	None 〃〃〃	121,760 $ 331,906 33,728 40,542	`-` `$` `-` `-` `-`

Table 4  Page 1

Table 5

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Significant inter-company transactions during the reporting period

For the six-month period ended June 30, 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 0 1 1 2 2 3 4 5 6 6 6 7 7 7 8 9 10 11	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. Wisdom Distribution Service Corp. Duskin Serve Taiwan Co. 21 Century Enterprise Co., Ltd. Chieh-Shuen Logistics International Corp. Chieh-Shuen Logistics International Corp. Chieh-Shuen Logistics International Corp. President Logistics International Corp. President Logistics International Corp. President Logistics International Corp. President Pharmaceutical Corp. Zhejiang Uni-Champion Logistics Development Co., Ltd. Vision Distribution Service Corp. Retail Support Taiwan Corp.	President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. Books.com. Co., Ltd. President Chain Store Corp. President Chain Store Corp. President Logistics International Corp. President Transnet Corp. President Transnet Corp. Retail Support International Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. President Drugstore Business Corp. Shanghai President Logistic Co., Ltd. President Chain Store Corp. Retail Support International Corp.	Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to subsidiary Subsidiary to parent company Subsidiary to parent company Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to parent company Subsidiary to subsidiary	Accounts receivable Service revenue Accounts receivable Service revenue Accounts receivable Sales revenue Service revenue Service revenue Sales revenue Delivery revenue Delivery revenue Accounts receivable Delivery revenue Delivery revenue Delivery revenue Sales revenue Sales revenue Sales returns Delivery revenue	299,491 $ 343,416) ( 104,476 319,353) ( 660,609 1,738,199) ( 144,320) ( 130,414) ( 120,109) ( 491,400) ( 354,777) ( 118,097 368,595) ( 506,515) ( 547,135) ( 330,467) ( 100,470) ( 149,679 148,302) (	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 days from the end of the month when invoice is issued Net 15-60 days from the end of the month when invoice is issued Net 30-60 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 70 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 30-60 days from the end of the month when invoice is issued Net 15-20 days from the end of the month when invoice is issued	0.22 0.29 0.08 0.27 0.48 1.45 0.12 0.11 0.10 0.41 0.30 0.09 0.31 0.42 0.46 0.28 0.08 0.13 0.12

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 six-month period ended June 30, 2018

Investor	Investee	Location	Main business activities	Initial invest	ment amount	Shares h	eld as atJune30,2018	eld as atJune30,2018	Net profit (loss) of the investee for the six- month period ended June30,2018	Investment income (loss) recognized by the Company for the six- month period ended June30,2018	Footnote
				Balance as at June30,2018	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. Retail Support International 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. 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 Taiwan British Virgin Islands Taiwan Taiwan Taiwan Taiwan Japan 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 Room-temperature logistics and warehousing 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 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 91,414 277,805 213,000 170,000 170,000 160,680 35,648 391,300 10,500 147,900 720,000 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 91,414 277,805 213,000 170,000 170,000 160,680 35,648 391,300 10,500 147,900 720,000 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 6,429,999 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 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 25.00 92.20 100.00 100.00 100.00 100.00 100.00 100.00 70.00 51.00 20.00 19.50 19.00 3.33	25,319,804 $ 1,190,785 1,371,038 663,559 704,753 461,762 463,793 583,626 471,054 346,803 350,186 317,392 231,015 163,538 360,026 5,139,477 80,873 43,469 154,457 65,689 20,880 11,278) ( 50,228) ( 23,321 80,874 15,486) ( 40,574 41,810 738,052 5,369,010 1,969,076 451,655	277,087 $ 103,481 252,927 59,454 164,369 183,230 7,616 218,104 46,727 45,595 117,226 218,195 363 69,903 8,661 350,322 4,227 11,537 115,378 435 4,722 12,236 9,959 13,822 8,339 6,016) ( 38,088 207) ( 36,830 747,400 78,877 489,681	277,088 $ 103,481 177,025 48,081 121,222 128,261 6,854 130,787 40,185 39,558 115,749 109,163 362 35,629 8,661 28,147 4,227 11,537 28,852 402 4,722 12,260 9,959 13,822 8,337 6,017) ( 26,662 106) ( 7,366 170,761 14,987 15,925	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 six-month period ended June 30, 2018

Investor	Investee	Location	Main business activities	Initial invest	ment amount	Shares h	eld as atJune30,2018	eld as atJune30,2018	Net profit (loss) of the investee for the six- month period ended June30,2018	Investment income (loss) recognized by the Company for the six- month period ended June30,2018	Footnote
				Balance as at June30,2018	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 Ho 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 9,600 158,638 22,540 4,744,355 888,315 887,462 180,000 89,415 - - - - - - - - - -	861,696 $ 200,000 47,190 7,500 1,050 1,478 9,600 158,638 22,540 4,744,355 888,315 887,462 180,000 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 - - - - - - - - - -	118,859 $ 89,483 35,836 15,466 1,818 590 21,052 31,758 5,557 4,269,735 1,998,072 1,997,327 305,226 7,347 - - - - - - - - - -	36,200) ($ 11,540 13,433 1,069) ( 292,438 1 8,088 260) ( 435 163,487 154,157 302,167 14,262 2,599) ( 218,195 183,230 59,454 46,727 252,927 45,595 69,903 164,369 11,540 7,616	4,645) ($ 5,076 4,843 164) ( 58 - 4,853 260) ( 34 163,487 154,157 154,158 14,262 2,598) ( - - - - - - - - - -	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 six-month period ended June 30, 2018

Investor	Investee	Location	Main business activities	Initial invest	ment amount	Shares h	eld as atJune30,2018	eld as atJune30,2018	Net profit (loss) of the investee for the six- month period ended June30,2018	Investment income (loss) recognized by the Company for the six- month period ended June30,2018	Footnote
				Balance as at June30,2018	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 25,682 27,817	- - - - 60,374 15,300 44,975 5,425 23,850 87,994 18,850 60,000 25,682 27,817	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	- $ - - - 71,368 63,290 141,259 17,297 72,071 117,788 57,629 47,880 25,682 27,817	218,104 $ 115,378 38,088 207) ( 3,841 23,667 35,233 35,233 35,233 7,732 35,233 30,083) ( 11,117 583	- $ - - - 3,841 12,070 17,264 1,986 8,808 7,732 7,019 18,050) ( - -	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 six-month period ended June 30, 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 six-month period ended June 30,2018	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the six-month period ended June 30,2018	Accumulated amount of remittance from Taiwan to Mainland China as of June 30,2018	Net income of investee for the six-month period ended June 30,2018	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the six- month period ended June 30,2018	Book value of investments in Mainland China as of June 30,2018	Accumulated amount of investment income remitted back to Taiwan as of June 30, 2018	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Shanghai President Chain Store Corporation President Cosmed Chain Store (Shen Zhen) Co., Ltd. President Chain Store (Shanghai) Ltd. Shanghai President Logistic Co., Ltd. Shanghai Cold Stone Ice Cream PCSC (Chengdu) Hypermarket Limited Shan Dong President Yinzuo Commercial Limited President (Shanghai) Health Product Trading Company Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd. Bejing Bokelai Customer Co. President Chain Store (Taizhou) Ltd. President Logistic ShanDong Co., Ltd. President Chain Store (Zhejiang) Ltd. Beauty Wonder (Zhejiang) Trading Co.,Ltd.	Trade of food and commodities Wholesale of merchandise Operation of chain stores Logistics and warehousing Sales of ice cream Retail hypermarket Supermarkets Sales of various health care products, cosmetics, and pharmaceuticals Logistics and warehouse Enterprise information consulting, network technology development and services Logistics and warehousing Logistics and warehousing Operation of chain stores Sales of cosmetics and daily items	270,485 $ 460,051 2,300,255 60,920 1,023,814 607,267 276,031 91,380 184,020 457 276,031 230,026 276,031 138,015	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	157,496 $ 286,850 2,353,872 60,920 997,231 541,467 124,227 91,380 176,425 - 276,031 230,026 276,031 -	- $ - - - - - - - - - - - - 138,015	- $ - - - - - - - - - - - - -	157,496 $ 286,850 2,353,872 60,920 997,231 541,467 124,227 91,380 176,425 - 276,031 230,026 276,031 138,015	120) ($ 483 78,672) ( 32,579 4,557) ( 3,783) ( 31,770 4,562) ( 18,225 - 8,251 2,147 56,202) ( 17	100.00 100.00 100.00 100.00 100.00 100.00 55.00 73.74 80.00 50.03 100.00 100.00 100.00 100.00	120) ($ 483 78,309) ( 27,601 4,558) ( 4,118) ( 15,881 3,365) ( 15,730 - 8,252 2,251 56,051) ( 17	31,645 $ 70,441 149,537 382,850 48,912 74,446 198,778 19,666) ( 161,327 17 323,194 202,138 132,813 138,028	- $ - - - - - - 56,288 4,155 - - - - -	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 3

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

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of June 30,2018	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.	4,695,045 $ 91,380 90,388 52,491	91,380 90,388 52,491 $ 8,418,349	$ 23,042,957 444,579 571,377 80,000

Table 7  Page 1

AI assistant

PCSC — Interim / Quarterly Report 2018

52232_rns_2018-11-27_7a552b73-62bf-4afa-a9cf-f9e0b5914212.pdf

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS JUNE 30, 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

JUNE 30, 2018 AND 2017

1. HISTORY AND ORGANIZATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(3) Basis of consolidation

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

(6) Accounts and notes receivable

(8) Income tax

(9) Revenue recognition

6. DETAILS OF SIGNIFICANT ACCOUNTS

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

(4) Inventories

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

(7) Property, plant and equipment

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

(8) Investment property

(9) Intangible assets

(10) Other non-current assets

(12) Short-term borrowings

(13) Other payables

(14) Other current liabilities

(16) Pensions

(17) Other non-current liabilities

(18) Share capital

(19) Capital surplus

(20) Retained earnings

(21) Other equity items

(22) Operating revenue

A. Disaggregation of revenue from contracts with customers

B. Contract liabilities

(24) Employee benefit expense

(25) Other income

(26) Other gains and losses

(27) Finance costs

(28) Income tax

For the three-month period ended June 30, 2017

(30) Operating leases

Lessor

Lessee

(31) Supplemental cash flow information

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

PCSC Interim / Quarterly Report 2018