PCSC - Interim / Quarterly Report 2019

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS JUNE 30, 2019 AND 2018

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

~1~

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS JUNE 30, 2019 AND 2018 CONTENTS

Items 1. Cover 2. Contents 3. Review report of financial statements 4. Consolidated balance sheets 5. Consolidated statements of comprehensive income 6. Consolidated statements of changes in equity 7. Consolidated statements of cash flows 8. Notes to the consolidated financial statements (1) History and organization (2) Date of authorization for issuance of the consolidated financial statements and procedures for authorization (3) Application of new standards, amendments and interpretations (4) Summary of significant accounting policies (5) Critical accounting judgements, estimates and key sources of assumption uncertainty (6) Details of significant accounts (7) Related party transactions (8) Pledged assets (9) Significant contingent liabilities and unrecognized contract commitments (10) Significant disaster loss (11) Significant events after the balance sheet date (12) Others (13) Supplementary disclosures (14) Segment information	Page
	1 2 3 ~ 4 5 ~ 6 7 ~ 8 9 10 ~ 11 12 ~ 61 12 12 12 ~ 14 14 ~ 19 19 19 ~ 45 45 ~ 48 49 49 49 49 49 ~ 58 59 60 ~ 61

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 ~ 61
12
12
12 ~ 14
14 ~ 19
19
19 ~ 45
45 ~ 48
49
49
49
49
49 ~ 58
59
60 ~ 61

~2~

REVIEW REPORT OF FINANCIAL STATEMENTS

TRANSLATED FROM CHINESE

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

Introduction

We have reviewed the accompanying consolidated balance sheets of President Chain Store Corp. and subsidiaries as at June 30, 2019 and 2018, 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$44,088,394 thousand and NT$33,446,885 thousand, constituting 24% and 24% of the consolidated total assets, and total liabilities of NT$26,700,454 thousand and NT$16,616,628 thousand, constituting 19% and 17% of the consolidated total liabilities as at June 30, 2019 and 2018, respectively, and total comprehensive income of

~3~

NT$612,218 thousand, NT$722,377 thousand, NT$1,221,363 thousand and NT$1,034,328 thousand, constituting 19%, 18%, 18% and 16% of the consolidated total comprehensive income for the threemonth and six-month periods then ended.

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, 2019 and 2018, 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.

Yi-Chang, Liang Chien-Hung, Chou

For and on behalf of PricewaterhouseCoopers, Taiwan August 2, 2019

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

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

~4~

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of June 30, 2019 and 2018 are reviewed, not audited)

==> picture [492 x 485] intentionally omitted <==

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

June 30, 2019 December 31, 2018 June 30, 2018
Assets Notes AMOUNT % AMOUNT % AMOUNT %
Current assets
1100 Cash and cash equivalents 6(1) $ 49,386,267 27 $ 48,530,648 38 $ 61,092,649 44
1110 Financial assets at fair value through 6(2)
profit or loss – current 1,953,825 1 844,225 1 2,520,700 2
1170 Accounts receivable, net 6(3) and 7 5,176,417 3 5,264,573 4 4,551,137 3
1200 Other receivables 2,473,104 1 1,535,507 1 2,131,374 2
1220 Current income tax assets 6(30) 2,343 - 1,139 - 3,812 -
130X Inventories, net 6(4) 12,507,826 7 15,121,657 12 12,863,543 9
1410 Prepayments 1,512,402 1 1,340,225 1 1,622,368 1
1470 Other current assets 2,816,250 2 3,004,894 2 2,582,454 2
11XX Total current assets 75,828,434 42 75,642,868 59 87,368,037 63
Non-current assets
1510 Financial assets at fair value through 6(2)
profit or loss – non-current 85,565 - 85,683 - 85,683 -
1517 Financial assets at fair value through 6(5)
other comprehensive income
– non-current 773,087 - 845,345 1 1,001,519 1
1550 Investments accounted for using equity 6(6)
method 9,021,649 5 9,000,580 7 8,789,255 6
1600 Property, plant and equipment, net 6(7)(28)
and 8 24,845,207 14 25,292,763 20 24,726,417 18
1755 Right of use assets 6(8) and 7 52,649,469 29 - - - -
1760 Investment property, net 6(10)(32) 1,515,314 1 1,502,159 1 1,510,637 1
1780 Intangible assets 6(11) 10,219,431 6 10,393,880 8 10,458,862 8
1840 Deferred income tax assets 6(30) 1,795,178 1 1,727,043 1 1,636,424 1
1900 Other non-current assets 6(12) and 8 3,336,294 2 3,204,759 3 3,189,340 2
15XX Total non-current assets 104,241,194 58 52,052,212 41 51,398,137 37
1XXX Total assets $180,069,628 100 $ 127,695,080 100 $ 138,766,174 100
----- End of picture text -----

(Continued)

~5~

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of New Taiwan dollars)

(The consolidated balance sheets as of June 30, 2019 and 2018 are reviewed, not audited)

==> picture [487 x 594] intentionally omitted <==

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

June 30, 2019 December 31, 2018 June 30, 2018
Liabilities and Equity Notes AMOUNT % AMOUNT % AMOUNT %
Current liabilities
2100 Short-term borrowings 6(14) and 8 $ 1,020,059 - $ 7,237,785 6 $ 1,070,988 1
2110 Short-term notes and bills payable 70,000 - - - 200,000 -
2130 Contract liabilities – current 6(24) 3,315,318 2 2,843,189 2 4,064,417 3
2150 Notes payable 7 1,847,536 1 1,866,610 2 1,836,336 1
2170 Accounts payable 21,603,234 12 20,673,579 16 19,881,012 15
2180 Accounts payable – related parties 7 2,829,811 2 2,475,104 2 2,583,810 2
2200 Other payables 6(15) 35,397,998 20 27,954,181 22 51,786,689 37
2230 Current income tax liabilities 6(30) 1,492,360 1 1,801,229 1 1,767,933 1
2280 Lease liabilities – current 7 11,720,946 6 - - - -
2300 Other current liabilities 6(16) 3,209,022 2 3,260,538 3 1,743,770 1
21XX Total current liabilities 82,506,284 46 68,112,215 54 84,934,955 61
Non-current liabilities
2527 Contract liabilities – non-current 6(24) 258,752 - 234,421 - 280,643 -
2540 Long-term borrowings 6(17) and 8 612,467 - 847,040 1 1,088,026 1
2570 Deferred income tax liabilities 6(30) 5,504,744 3 5,386,839 4 5,343,145 4
2580 Lease liabilities – non-current 7 41,760,008 23 - - - -
2640 Net defined benefit liability 6(18)
– non-current 4,735,190 3 4,732,549 4 4,577,498 3
2670 Other non – current liabilities 6(19) 4,256,337 3 4,356,989 3 4,136,979 3
25XX Total non-current liabilities 57,127,498 32 15,557,838 12 15,426,291 11
2XXX Total liabilities 139,633,782 78 83,670,053 66 100,361,246 72
Equity attributable to owners of the
parent
Share capital 6(20)
3110 Share capital – common stock 10,396,223 6 10,396,223 8 10,396,223 8
Capital surplus 6(21)
3200 Capital surplus 45,954 - 45,059 - 44,411 -
Retained earnings 6(22)
3310 Legal reserve 13,314,081 8 12,293,442 10 12,293,442 9
3320 Special reserve - - 398,859 - 398,859 -
3350 Unappropriated retained earnings 7,792,203 4 12,064,862 9 7,132,744 5
Other equity 6(23)
3400 Other equity interest 538,771 - 53,605 - 24,437 -
31XX Equity attributable to owners of
the parent 32,087,232 18 35,252,050 27 30,290,116 22
36XX Non-controlling interest 8,348,614 4 8,772,977 7 8,114,812 6
3XXX Total equity 40,435,846 22 44,025,027 34 38,404,928 28
3X2X Total liabilities and equity $ 180,069,628 100 $ 127,695,080 100 $ 138,766,174 100
----- End of picture text -----

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

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

~6~

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

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

==> picture [711 x 279] intentionally omitted <==

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

For the three-month periods ended June 30 For the six-month periods ended June 30
2019 2018 2019 2018
Items Notes AMOUNT % AMOUNT % AMOUNT % AMOUNT %
4000 Operating revenue 6(24) and 7 $ 63,947,923 100 $ 61,229,506 100 $ 125,033,319 100 $ 120,177,251 100
5000 Operating costs 6(4)(25) and 7 ( 42,020,182 ) ( 66) ( 40,275,662 ) ( 66 ) ( 82,099,651 ) ( 66 ) ( 78,722,168 ) ( 66 )
5900 Gross profit 21,927,741 34 20,953,844 34 42,933,668 34 41,455,083 34
Operating expenses 6(25)(26)
6100 Selling expenses ( 16,396,937 ) ( 26) ( 15,715,483 ) ( 26 ) ( 31,891,173 ) ( 25 ) ( 30,233,495 ) ( 25 )
6200 General and administrative expenses ( 2,171,991 ) ( 3) ( 1,992,388 ) ( 3 ) ( 4,478,790 ) ( 4 ) ( 4,636,695 ) ( 4 )
6450 Expected credit losses (gains) 12(2) ( 1,864 ) - ( 419 ) - ( 3,299 ) - ( 3,541 ) -
6000 Total operating expenses ( 18,570,792 ) ( 29) ( 17,708,290 ) ( 29 ) ( 36,373,262 ) ( 29 ) ( 34,873,731 ) ( 29 )
6900 Operating profit 3,356,949 5 3,245,554 5 6,560,406 5 6,581,352 5
Non-operating income and expenses
7010 Other income 6(27) 637,945 1 664,559 2 1,527,807 1 1,200,675 2
7020 Other gains and losses 6(28) ( 23,089 ) - ( 10,626 ) - ( 36,489 ) - 7,343 -
7050 Finance costs 6(29) ( 299,535 ) - ( 32,315 ) - ( 606,329 ) - ( 78,858 ) -
7060 Share of profit of associates and joint ventures accounted 6(6)
for using equity method 109,377 - 96,991 - 237,575 - 214,207 -
7000 Total non-operating income and expenses 424,698 1 718,609 2 1,122,564 1 1,343,367 2
7900 Profit before income tax 3,781,647 6 3,964,163 7 7,682,970 6 7,924,719 7
7950 Income tax expense 6(30) ( 811,119 ) ( 1) ( 948,022 ) ( 2 ) ( 1,452,800 ) ( 1 ) ( 2,047,383 ) ( 2 )
8000 Profit for the period from continuing operations 2,970,528 5 3,016,141 5 6,230,170 5 5,877,336 5
8200 Profit for the period $ 2,970,528 5 $ 3,016,141 5 $ 6,230,170 5 $ 5,877,336 5
----- End of picture text -----

(Continued)

~7~

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

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

==> picture [711 x 306] intentionally omitted <==

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

For the three-month periods ended June 30 For the six-month periods ended June 30
2019 2018 2019 2018
Items Notes AMOUNT % AMOUNT % AMOUNT % AMOUNT %
Other comprehensive income (loss)
8316 Unrealized gain on valuation of equity instruments at fair value through 6(5)
other comprehensive income $ 15,556 - $ 12,400 - $ 128,473 - $ 11,750 -
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 1,238 - 862 - 1,994 - 1,092 -
8349 Income tax effect that will not be reclassified to profit or loss 6(30) ( 5,022) - ( 1,333) - ( 8,877) - 48,449 -
8310 Components of other comprehensive income (loss) that will not be
reclassified to profit or loss 11,772 - 11,929 - 121,590 - 61,291 -
8361 Exchange differences from translation of foreign operations 282,602 - 1,054,141 2 450,435 - 379,678 -
8367 Unrealized loss on valuation of bond instruments at fair value through 6(5)
- - - -
other comprehensive income ( 388) ( 347) ( 783) ( 907)
8370 Share of other comprehensive loss of associates and joint ventures 6(23)
accounted for using equity method, components of other comprehensive
loss that will be reclassified to profit or loss 687 - ( 5,883) - 1,841 - ( 5,929) -
8360 Components of other comprehensive income that will be reclassified
to profit or loss 282,901 - 1,047,911 2 451,493 - 372,842 -
8300 Total other comprehensive income for the period $ 294,673 - $ 1,059,840 2 $ 573,083 - $ 434,133 -
8500 Total comprehensive income for the period $ 3,265,201 5 $ 4,075,981 7 $ 6,803,253 5 $ 6,311,469 5
Profit attributable to:
8610 Owners of the parent $ 2,589,888 4 $ 2,632,371 4 $ 5,497,751 4 $ 5,169,992 4
8620 Non-controlling interests 380,640 1 383,770 1 732,419 1 707,344 1
$ 2,970,528 5 $ 3,016,141 5 $ 6,230,170 5 $ 5,877,336 5
Comprehensive income attributable to:
8710 Owners of the parent $ 2,821,402 4 $ 3,651,284 6 $ 5,982,917 4 $ 5,669,864 4
8720 Non-controlling interests 443,799 1 424,697 1 820,336 1 641,605 1
$ 3,265,201 5 $ 4,075,981 7 $ 6,803,253 5 $ 6,311,469 5
9750 Basic earnings per share (in dollars) 6(31) $ 2.49 $ 2.53 $ 5.29 $ 4.97
9850 Diluted earnings per share (in dollars) 6(31) $ 2.49 $ 2.53 $ 5.28 $ 4.96
----- End of picture text -----

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

Chairman: Lo, Chih-Hsien

President : Huang, Jui-Tien

Accounting Manager: Kuo, Ying-Chih

~8~

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

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

			Equity attr	utable to owners of	the parent	the parent						Non-controlling interest	Total equity
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
$ 10,396,223 - 10,396,223 - - - - - - - - $ 10,396,223 $ 10,396,223 - - - - - - - - - - $ 10,396,223	$ 43,875 - 43,875 - - - - - - - 536 $ 44,411 $ 45,059 - - - - - - - 562 333 - $ 45,954	$ 9,191,733 - 9,191,733 - - - 3,101,709 - - - - $ 12,293,442 $ 12,293,442 - - - 1,020,639 - - - - - - $ 13,314,081	$ - - - - - - - 398,859 - - - $ 398,859 $ 398,859 - - - - ( 398,859) - - - - - $ -	$ 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 $ 12,064,862 5,497,751 - 5,497,751 ( 1,020,639) 398,859 ( 9,148,676) - - - 46 $ 7,792,203		($ 906,308) - ( 906,308) - 444,351 444,351 - - - - - ($ 461,957) ($ 279,829) - 363,038 363,038 - - - - - - - $ 83,209		$ - 477,996 477,996 - 8,398 8,398 - - - - - $ 486,394 $ 333,434 - 122,128 122,128 - - - - - - - $ 455,562		$ 507,449 ( 507,449) - - - - - - - - - $ - $ - - - - - - - - - - - $ -	$ 50,614,262 ( 3,990) 50,610,272 5,169,992 499,872 5,669,864 - - ( 25,990,556) - 536 $ 30,290,116 $ 35,252,050 5,497,751 485,166 5,982,917 - - ( 9,148,676) - 562 333 46 $ 32,087,232	$ 8,892,148 ( 5,203) 8,886,945 707,344 ( 65,739) 641,605 - - - ( 1,413,738) - $ 8,114,812 $ 8,772,977 732,419 87,917 820,336 - - - ( 1,244,699) - - - $ 8,348,614	$ 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 $ 44,025,027 6,230,170 573,083 6,803,253 - - ( 9,148,676`)` ( 1,244,699`)` 562 333 46 $ 40,435,846

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

~9~

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM OPERATING ACTIVITIES
Consolidated profit before income tax for the period
Adjustments to reconcile profit before income tax to net cash
provided by operating activities
Income and expenses having no effect on cash flows
Loss (gain) on valuation of financial assets at fair value
through profit or loss
Expected credit losses
Depreciation on property, plant and equipment
Amortization
Depreciation on investment property
Finance costs
Share of profit of associates and joint ventures accounted
for using equity method
Loss on disposal of property, plant and equipment, net
Interest income
Dividend income
Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Financial assets at fair value through profit or loss
Accounts receivable
Other receivables
Inventories
Prepayments
Other current assets
Net changes in liabilities relating to operating activities
Contract liabilities - current
Accounts payable
Notes payable
Other payables
Advance receipts
Contract liabilities - non-current
Net defined benefit liabilities - non-current
Cash generated from operations
Interest received
Income tax paid
Interest paid
Dividends received
Net cash used by operating activities

Notes

(Continued)

~10~

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

(Expressed in thousands of New Taiwan dollars)

(UNAUDITED)

CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of investments accounted for using the equity method Acquisition of subsidiary Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Return of capital from financial assets at fair value through other comprehensive income Guarantee deposits paid Acquisition of intangible assets Other non-current assets Net cash provided by (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Short-term borrowings Short-term notes and bills payable Proceeds from long-term borrowings Repayment of long-term borrowings Payments of lease liability Guarantee deposits received Other non-current liabilities Change in non-controlling interests Net cash (used in) provided by financing activities Effect of foreign exchange rate changes on cash and cash equivalents Increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	Notes	For the six-month periods ended June 30 2019 2018 $ - $ 25,642,728 - ( 3,226,806 ) ( 3,186,774 ) ( 3,540,653 ) 35,860 40,990 200,000 - ( 131,907 ) ( 34,793 ) ( 26,432 ) ( 35,109 ) ( 134,446 ) ( 25,181 ) ( 3,243,699 ) 18,821,176 ( 6,217,726 ) 105,808 70,000 ( 50,000 ) 56,250 117,640 ( 267,740 ) ( 123,708 ) ( 5,341,346 ) - 60,728 36,491 - 24,769 ( 45,032 ) 3,427 ( 11,684,866 ) 114,427 363,038 444,351 855,619 25,309,358 48,530,648 35,783,291 $ 49,386,267 $ 61,092,649
	6(6) and 7 6(6) 6(33) 6(11) 6(34) 6(34) 6(34) 6(34) 6(8)(34) 6(34) 6(34)

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

~11~

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

JUNE 30, 2019 AND 2018

(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 2, 2019.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”)
A. New standards, interpretations and amendments as endorsed by FSC effective from 2019 are as follows:

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

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

IFRS 16, ‘Leases’

(a) IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard requires lessees to recognize a ‘right-of-use asset’ and a lease liability (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors.
(b) The Group has elected to apply IFRS 16 by not restating the comparative information (referred herein as the ‘modified retrospective approach’) when applying “IFRSs” effective in 2019 as endorsed by the FSC. Accordingly, the Group increased ‘right-of-use asset’ by $52,750,102, increased ‘lease liability’ by $52,938,613, decreased ‘prepayments’ by $270,440, decreased ‘property, plant and equipment’ by $396,233, decreased ‘long-term prepaid rent’ by $84,482 (recognized as ‘other non-current assets’), and decreased ‘other payables’ by $939,666 with respect to the lease contracts of lessees on January 1, 2019.

~12~

(c) The Group has used the following practical expedients permitted by the standard at the date of initial application of IFRS 16:
i. Reassessment as to whether a contract is, or contains, a lease is not required, instead, the application of IFRS 16 depends on whether or not the contracts were previously identified as leases applying IAS 17 and IFRIC 4.
ii. The use of a single discount rate to a portfolio of leases with reasonably similar characteristics.
iii. The accounting for operating leases whose period will end before December 31, 2019 as short-term leases and accordingly, rent expense of $101,658 was recognized for the six-month period ended June 30, 2019.
iv. The exclusion of initial direct costs for the measurement of ‘right-of-use asset’.
(d) The Group calculated the present value of lease liabilities by using the weighted average incremental borrowing interest rate range from 0.88% to 8.54%.
(e) The Group recognized lease liabilities which had previously been classified as ‘operating leases’ under the principles of IAS 17, ‘Leases’. The reconciliation between operating lease commitments under IAS 17 measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate and lease liabilities recognized as of January 1, 2019 is as follows:

Operating lease commitments disclosed by applying IAS 17 as at
December 31, 2018
Add: Lease payable recognized under finance lease by applying IAS 17
as at December 31, 2018
Adjustments relating to changes in the index or rate affecting
variable lease payments
Less: Short-term leases
Contracts reassessed as service agreements
Leases not yet commenced to which the lessee is committed
Total lease contracts amount recognized as lease liabilities by applying
IFRS 16 on January 1, 2019
Incremental borrowing interest rate at the date of
initial application
Lease liabilities recognized as at January 1, 2019 by applying IFRS 16 $
69,815,079
6,962
496,223
(
109,383)
(
132,797)
(
14,328,676)
$ 55,747,408
0.88%~8.54%
$ 52,938,613

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

None.

(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:

New Standards, Interpretations and Amendments Amendments to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of Material’ Amendments to IFRS 3, ‘Definition of a business’

Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’

IFRS 17, ‘Insurance contracts’

Effective date by International Accounting Standards Board January 1, 2020 January 1, 2020 To be determined by International Accounting Standards Board January 1, 2021

~13~

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, 2018. 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, 2018.
(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.

(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, 2018.
(b) The details of the individual financial statements of the Company’s subsidiaries reviewed or unreviewed by the independent accountants are summarized below:

~14~

==> picture [414 x 14] intentionally omitted <==

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

Name of the subsidiaries June 30, 2019 June 30, 2018
----- End of picture text -----

Name of the subsidiaries	June 30, 2019	June 30, 2018
Retail Support International Corp.	Financial statements	Financial statements
	were reviewed	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.	`〃`	`〃`
President Chain Store (Hong Kong) Holdings	`〃`	`〃`
Limited
President Pharmaceutical Corp.	`〃`	`〃`
Uni-Wonder Corp.	`〃`	Financial statements
		were unreviewed
Uni-President Superior Commissary Corp.	Financial statements	Financial statements
	were unreviewed	were reviewed
Uni-President Department Store Corp.	`〃`	`〃`
Other subsidiaries	`〃`	Financial statements
		were unreviewed

(c) The financial statements of the subsidiary, Philippine Seven Corp., for the year ended December 31, 2018 were audited by other independent accountants, and the financial statements of other subsidiaries were audited by the same independent accountants as that 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 The Company The Company The Company The Company The Company The Company	Name of subsidiary President Chain Store (BVI) Holdings Ltd. PCSC (China) Drugstore Limited Wisdom Distribution Service Corp. President Drugstore Business Corp. Ren-Hui Investment Corp. Capital Inventory Services Corp. President Yilan Art and Culture Corp. Cold Stone Creamery Taiwan Ltd. President Chain Store Corporation Insurance Brokers Co., Ltd. 21 Century Enterprise Co., Ltd. President Being 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 Enterprise management consultancy Art and cultural exhibition Sales of ice cream Life and property insurance Restaurant and sales of goods Sports and entertainment business	Ownership (%)	Ownership (%)	June 30, 2018 100.00 92.20 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00	Description
			June 30, 2019 100.00 92.20 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00	December 31, 2018 100.00 92.20 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00

~15~

Name of investor The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company President Chain Store (BVI) Holdings Ltd. President Chain Store (BVI) Holdings Ltd. PCSC (China) Drugstore Limited Wisdom Distribution Service Corp. Wisdom Distribution Service Corp. Uni-President Cold- Chain Corp. Uni-President Cold- Chain Corp. Retail Support International Corp.	Name of subsidiary Uni-President Oven Bakery Corp. President Chain Store Tokyo Marketing Corp. ICASH Corp. Uni-President Superior Commissary Corp. Q-ware Systems & Services Corp. President Information Corp. Mech-President Corp. President Pharmaceutical Corp. President Collect Services Co., Ltd. Uni-President Department Store Corp. President Transnet Corp. Uni-President Cold-Chain Corp. Uni-Wonder Corp. (Formerly Known as “President Starbucks Coffee Corp.”) Duskin Serve Taiwan Co. Afternoon Tea Taiwan Co., Ltd. Books.com. Co., Ltd. Retail Support International Corp. President Chain Store (Labuan) Holdings Ltd. President Chain Store (Hong Kong) Holdings Limited President Cosmed Chain Store (Shen Zhen) Co., Ltd. President Logistics International Corp. Vision Distribution Service Corp. President Logistics International Corp. Uni-President Logistics (BVI) Holdings Limited Retail Support Taiwan Corp.	Main business activities Bread and pastry retailer Enterprise management consultancy Electronic ticketing Fresh food manufacture Information software services Enterprise information management and consultancy Gas station, installment and maintenance of elevators Sales of various health care products, cosmetics, and pharmaceuticals Collection agent Department stores Delivery service Low-temperature logistics and warehousing Coffee chain store Cleaning instruments leasing and selling Operation of restaurants Retail business without shop Room-temperature logistics and warehousing Professional investment Professional investment Wholesale of merchandise Trucking Publishing Trucking Professional investment Room-temperature logistics and warehousing	Ownership (%)	Ownership (%)	June 30, 2018 100.00 100.00 100.00 90.00 86.76 86.00 80.87 73.74 70.00 70.00 70.00 60.00 60.00 51.00 51.00 50.03 25.00 100.00 100.00 100.00 20.00 60.00 25.00 100.00 51.00	Description
			June 30, 2019 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 - 50.03 25.00 100.00 100.00 100.00 20.00 - 25.00 100.00 51.00	December 31, 2018 100.00 100.00 100.00 90.00 86.76 86.00 80.87 73.74 70.00 70.00 70.00 60.00 60.00 51.00 51.00 50.03 25.00 100.00 100.00 100.00 20.00 60.00 25.00 100.00 51.00
						(a) (b) (c)

~16~

Name of investor Retail Support International Corp. Retail Support Taiwan Corp. President Logistics International Corp. Books.com. Co., Ltd. Books.com. (BVI) Ltd. Mech-President Corp. President Pharmaceutical Corp. President Pharmaceutical (Hong Kong) Holdings Limited President Chain Store (Labuan) Holdings Ltd. Philippine Seven Corporation Philippine Seven Corporation President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited	Name of subsidiary President Logistics International Corp. President Logistics International Corp. Chieh-Shuen Logistics International Corp. 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. Store Sites Holding, Inc. PCSC (China) Drugstore Limited President Chain Store (Shanghai) Ltd. Shanghai President Logistics Co., Ltd. PCSC Restaurant (Cayman) Holdings Limited Shan Dong President Yinzuo Commercial Limited PCSC (Chengdu) Hypermarket Limited Shanghai Cold Stone Ice Cream Corporation Ltd. President Chain Store (Taizhou) Ltd.	Main business activities Trucking Trucking Trucking Professional investment Enterprise information consulting, network technology development and services Gas station Sales of various health care products, cosmetics, and pharmaceuticals Sales of various health care products, cosmetics, and pharmaceuticals Operation of chain store Logistics and warehosuing Professional investment 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, 2018 49.00 6.00 100.00 100.00 100.00 60.00 100.00 100.00 52.22 100.00 100.00 7.80 100.00 100.00 100.00 40.00 100.00 100.00 100.00	Description
			June 30, 2019 49.00 6.00 100.00 100.00 100.00 60.00 100.00 100.00 52.22 100.00 100.00 7.80 100.00 100.00 100.00 40.00 - 100.00 100.00	December 31, 2018 49.00 6.00 100.00 100.00 100.00 60.00 100.00 100.00 52.22 100.00 100.00 7.80 100.00 100.00 100.00 40.00 100.00 100.00 100.00
						(d)

~17~

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 Supermarkets	Ownership (%)	Ownership (%)	June 30, 2018 100.00 100.00 50.00 100.00 100.00 50.00 100.00 15.00	Description
			June 30, 2019 100.00 100.00 50.00 100.00 - 50.00 100.00 15.00	December 31, 2018 100.00 100.00 50.00 100.00 100.00 50.00 100.00 15.00
						(e) (f)

  - (a) The Company liquidated the subsidiary, Afternoon Tea Taiwan Corp., Limited, and the process of cancellation of registration has been completed in February 2019.

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

  - (c) The Company liquidated the subsidiary, Vision Distribution Service Corp., and the process of cancellation of registration has been completed in February 2019.

  - (d) The Company liquidated the subsidiary, PCSC (Chengdu) Hypermarket Limited, and the process of cancellation of registration has been completed in March 2019.

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

  - (f) The Company liquidated the subsidiary, Shanghai President Chain Store Corporation Trade Co., Ltd., and the process of cancellation of registration has been completed in May 2019.

C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.
－
(4) Leasing arrangements (lessor) operating leases

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

~18~

(5) Leasing arrangements (lessee) － right-of-use assets/ lease liabilities

A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of low-value assets, lease payments are recognized as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate.

Lease payments are comprised of the following:

(a) Fixed payments, less any lease incentives receivable;
(b) Variable lease payments that depend on an index or a rate; and
(c) Amounts expected to be payable by the lessee under residual value guarantees.

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

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

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

5. 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, 2018.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

e year ended December 31, 2018. AILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
	June 30, 2019	December 31, 2018	June 30, 2018
Cash on hand and petty cash	$ 1,633,850	$ 1,958,556	$ 1,393,710
Checking accounts and demand deposits	13,001,400	12,560,158	16,345,008
Cash equivalents
Time deposits	26,833,457	25,867,905	31,691,911
Short-term financial instruments	7,917,560	8,144,029	11,662,020
	$ 49,386,267	$ 48,530,648	$ 61,092,649

~19~

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

	June 30, 2019	June 30, 2019	December 31,2018	December 31,2018	June 30,2018
Current items:
Beneficiary certificates	$ 1,953,419		$ 844,170		$ 2,518,307
Valuation adjustment	406		55		2,393
	$ 1,953,825		$ 844,225		$ 2,520,700

Non-current items:
Unlisted stocks	$ 275,553		$ 275,403		$ 275,403
Valuation adjustment		( 189,988)		( 189,720)	( 189,720)
	$ 85,565		$ 85,683		$ 85,683

A. The Group recognized net profit or loss of $4,093 and ($17) in relation to financial assets at fair value through profit or loss for the six-month periods ended June 30, 2019 and 2018, respectively.
B. No financial assets at fair value through profit or loss of the Group were pledged to others.
C. Information relating to credit risk is provided in Note 12(2).
(3) Accounts receivable

Accounts receivable
	June 30, 2019	December 31, 2018	June 30, 2018
Accounts receivable	$ 5,230,237	$ 5,320,037	$ 4,596,082
Less: Allowance for doubtful accounts (	53,820)	(55,464) ( 44,945)
	$ 5,176,417	$ 5,264,573	$ 4,551,137
A. The ageing analysis of accounts receivable that were past due but not impaired is June 30, 2019 December 31, 2018 Not past due $ 4,882,507 $ 5,144,165 Up to 90 days 334,813 149,698 91 to 180 days 12,092 18,175 181 to 365 days 770 2,917 Over 365 days 55 5,082 $ 5,230,237 $ 5,320,037			as follows:
	June 30, 2019	December 31, 2018	June 30, 2018
	$ 4,882,507	$ 5,144,165	$ 4,437,053
	334,813	149,698	138,213
	12,092	18,175	18,212
	770	2,917	2,261
	55	5,082	343
	$ 5,230,237	$ 5,320,037	$ 4,596,082

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

The above aging analysis was based on past due date.

B. As of June 30, 2019 and 2018, accounts receivable was all from contracts with customers. And as of January 1, 2018, the balance of receivables from contracts with customers amounted to $4,938,071.
C. Accounts receivable of the Group pledging to others is provided in Note 8.
D. As at June 30, 2019, December 31, 2018 and 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 Group’s accounts receivable were $5,176,417, $5,264,573, and $4,551,137, respectively.
E. Information relating to credit risk is provided in Note 12(2).

~20~

(4) Inventories

Inventories
		June 30, 2019
		Allowance for
	Cost	valuation loss	Book value
Raw materials and work in process	$ 63,150	$ -	$ 63,150
Merchandise and finished goods	12,537,102 (	92,426)	12,444,676
	$ 12,600,252 (	$ 92,426)	$ 12,507,826

		December 31, 2018
		Allowance for
	Cost	valuation loss	Cost
Raw materials and work in process	$ 65,446	$ -	$ 65,446
Merchandise and finished goods	15,151,897 (	95,686)	15,056,211
	$ 15,217,343 (	$ 95,686)	$ 15,121,657

		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

The cost of inventories recognized as expenses for the period:

	For the three-month	For the three-month
	period ended	period ended
	June 30, 2019	June 30, 2018
Cost of goods sold	$ 41,549,508	$ 39,790,070
Gain on reversal of valuation of inventories ( 9,217 ) ( 8,290)
Spoilage	415,099	422,977
Others	64,792	70,905
	$ 42,020,182	$ 40,275,662

	For the six-month	For the six-month
	period ended	period ended
	June 30, 2019	June 30, 2018
Cost of goods sold	$ 81,058,045	$ 77,771,954
Gain on reversal of valuation of inventories ( 3,260 ) ( 48,673)
Spoilage	910,977	870,786
Others	133,889	128,101
	$ 82,099,651	$ 78,722,168

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, 2019 and 2018, respectively.

~21~

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

	June 30, 2019	December 31, 2018	June 30, 2018
Debt instruments
Government bonds	$ -	$ 199,948	$ 199,893
Valuation adjustment	-	783	1,413
	-	200,731	201,306
Equity instruments
Listed stocks	265,606	$ 265,606	265,606
Unlisted stocks	4,348	4,348	4,348
	269,954	269,954	269,954
Valuation adjustment	503,133	374,660	530,259
	773,087	644,614	800,213
	$ 773,087	$ 845,345	$ 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 $773,087, $644,614 and $800,213 as at June 30, 2019, December 31, 2018 and June 30, 2018, respectively.
B. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

	For the three-month	For the three-month
	period ended	period ended
	June 30, 2019	June 30,2018
Equity instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income	$ 15,556	$ 12,400

Debt instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income (	$ 388)	($ 347)
Interest income recognized in profit or loss	$ 590	$ 589

	For the six-month	For the six-month
	period ended	period ended
	June 30, 2019	June 30, 2018
Equity instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income	$ 128,473	$ 11,750

Debt instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income	($ 783)	($ 907)
Interest income recognized in profit or loss	$ 1,180	$ 1,179

C. As at June 30, 2019, December 31, 2018 and 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

~22~

$773,087, $845,345, and $1,001,519, respectively.

D. No financial assets at fair value through other comprehensive income of the Group were pledged to others.
E. Information relating to credit risk is provided in Note 12(2).

(6)Investments accounted for using the equity method

	June 30, 2019	December 31, 2018	June 30, 2018
Associates
PresiCarre Corp.	$ 5,550,986	$ 5,518,380	$ 5,369,010
President Fair Development Corp.	2,006,036	1,984,125	1,969,076
Uni-President Development Corp.	745,759	753,904	738,052
President International Development
Corp.	461,947	461,328	451,655
Tung Ho Development Corp.	110,111	114,755	118,859
Others	53,489	60,209	53,120
	8,928,328	8,892,701	8,699,772
Joint ventures
Mister Donut Taiwan Corp., Ltd.	93,321	$ 107,879	89,483
	$ 9,021,649	$ 9,000,580	$ 8,789,255

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, 2019		June 30, 2018
Total comprehensive income	$ 110,165		$ 94,294

	For the six-month		For the six-month
	period ended		period ended
	June 30, 2019		June 30, 2018
Total comprehensive income	$ 235,012		$ 204,294
The Group’s share of the operating results in all individually immaterial joint below:		ventures is summarized
	For the three-month		For the three-month
	period ended		period ended
	June 30, 2019		June 30, 2018
Total comprehensive income	$ 1,137	($ 2,324)

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

~23~

	For the six-month	For the six-month
	period ended	period ended
	June 30, 2019	June 30, 2018
Total comprehensive income	$ 6,398	$ 5,076

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.

~24~

(7) Property, plant and equipment

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

Land					2019						Total
		Buildings		Transportation equipment	Office equipment		Leasehold improvements		Others

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

$ 2,256,750		$ 2,743,106		$ 2,267,417	$ 6,772,982		$ 6,970,773		$ 4,281,735		$ 25,292,763
-		-		-	-		( 387,770)	(	8,463)	(	396,233)
$ 2,256,750		$ 2,743,106		$ 2,267,417	$ 6,772,982		$ 6,583,003		$ 4,273,272		$ 24,896,530
-		15,900		132,055	1,048,015		896,515		711,819		2,804,304
-		-		( 12,584)	( 44,484 )	(	12,689 )		32,804	(	36,953)
( 18,757 )		12,121		64,328	22,335		157,747	(	185,330 )		52,444
-	(	100,600 )		( 263,401)	( 1,090,938 )	(	911,471 )	(	654,345 )	(	3,020,755)
842		2,934		2,662	10,294		50,861		82,044		149,637

$ 2,238,835		$ 2,673,461		$ 2,190,477	$ 6,718,204		$ 6,763,966		$ 4,260,,264		$ 24,845,207
$ 2,255,201		$ 4,754,581		$ 6,566,580	$ 21,383,964		$ 18,506,683		$ 10,306,239		$ 63,773,248
( 16,366)	(	2,081,120)		( 4,376,103)	( 14,665,760)	(	11,742,717)	(	6,045,975)	(	38,928,041)
$ 2,238,835		$ 2,673,461		$ 2,190,477	$ 6,718,204		$ 6,763,966		$ 4,260,264		$ 24,845,207

~25~

					2018			Total
Land		Buildings	Transportation equipment		Office equipment	Leasehold improvements	Others
$ 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

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

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

~26~

`－` (8) Leasing arrangements lessee

Effective 2019

A. The Group leases various assets including land, buildings, machinery and equipment, etc.. Rental contracts are typically made for periods of 1 to 30 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
B. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings Machinery and equipment Other equipment	June 30, 2019 Carryingamount $ 718,497 51,419,358 86,301 425,313 $ 52,649,469	For the three-month period ended June 30, 2019 Depreciation charge $ 37,856 2,885,058 7,003 19,739 $ 2,949,656	For the six-month period ended June 30, 2019
			Depreciation charge
			$ 67,125 5,735,488 19,172 47,566 $ 5,869,351

C. For the three-month and six-month periods ended June 30, 2019, the additions to right-of-use assets were $3,427,393 and $6,121,287, respectively.
D. The information on income and expense accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets Expense on variable lease payments Gain or loss on sale and leaseback transactions	For the three-month period ended June 30, 2019 $ 270,274 43,545 12,689 92,578 114,005	For the six-month period ended June 30, 2019
		$ 541,667 104,453 28,017 202,818 221,699

E. For the six-month period ended June 30, 2019, the Group’s total cash outflow for leases was $6,218,301.
F. Variable lease payments
(a) Some of the Group’s lease contracts contain variable lease payment terms that are linked to sales generated from a store or department store counter. For the above-mentioned stores, up to 3.01% of lease payments are on the basis of variable payment terms and are accrued based on the sales amount. Variable payment terms are used for a variety of reasons. Various lease payments that depend on sales are recognized in profit or loss in the period in which the event or condition that triggers those payments occurs.
(b) A 1% increase in the aggregate sales amount of all stores with such variable lease contracts would increase total lease payments by approximately $2,028.
G. The Group’s leases not yet commenced to which the lessee is committed are business premises for the lessees, and the lease liabilities undiscounted amount at June 30, 2019 is $15,844,193.

~27~

(9) Leasing arrangements – lessor

Effective 2019

A. The Group leases various assets including land, buildings, machinery and equipment, etc. Rental contracts are typically made for periods of 1 and 16 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
B. Information on profit or loss in relation to lease contracts is as follows:

nformation on profit or loss in relation to lease	contracts is as follows:
Rental revenue Rental revenue from variable lease payments Rental revenue Rental revenue from variable lease payments	For the three-month period ended June 30, 2019 $ 369,573 $ 272,347 For the six-month period ended June 30, 2019 $ 737,495 $ 560,020	For the three-month period ended June 30, 2018 $ 344,430 $ 312,833
		For the six-month period ended June 30, 2018 $ 694,512 $ 626,868

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

2019 2020 2021 2022 2023 2024 After 2025 Total	June 30,2019
	$ 645,626 367,506 173,812 112,580 60,138 27,788 50,185 $ 1,437,635

~28~

(10) Investment property

2019 January 1, 2019 Depreciation charge Reclassifications June 30, 2019 2018 January 1, 2018 Depreciation charge June 30, 2018	Land Buildings Total $ 1,059,538 $ 442,621 $ 1,502,159 - ( 8,515) ( 8,515) 18,757 2,913 21,670 $ 1,078,295 $ 437,019 $ 1,515,314 Land Buildings Total $ 1,059,538 $ 459,577 $ 1,519,115 - (8,478) ( 8,478 ) $ 1,059,538 $ 451,099 $ 1,510,637

The fair value of the investment property held by the Group ranged from $3,956,088 to $4,116,572 at June 30, 2019, December 31, 2018, and 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.

(11) Intangible assets

within level 3 in the fair value hierarchy. Intangible assets	hierarchy.
Software At January 1 Cost $ 1,648,652 Accumulated amortization and impairment (1,164,405 ) $ 484,247 At January 1 Opening net book amount as of January 1 $ 484,247 Additions 19,657 Reclassifications 39,140 Amortization expenses ( 129,402 ) Net exchange differences 864 Closing net book amount as of June 30 $ 414,506 At June 30 Cost $ 1,703,662 Accumulated amortization and impairment (1,289,156 ) $ 414,506	Software		2019		Total
		Goodwill	License agreement and customer list	Others
	$ 1,648,652	$ 2,204,284	$ 7,524,890	$ 469,957	$ 11,847,783

	1,164,405 )	-	(194,160)	( 95,338 ) (	1,453,903 )
	$ 484,247	$ 2,204,284	$ 7,330,730	$ 374,619	$ 10,393,880

	$ 484,247	$ 2,204,284	$ 7,330,730	$ 374,619	$ 10,393,880
	19,657	-	-	6,775	26,432
	39,140	-	-	5,712	44,852
		-	( 97,080) ( 20,732 )		( 247,214)
	864	638	-	21 )	1,481
	$ 414,506	$ 2,204,922	$ 7,233,650	$ 366,353	$ 10,219,431
	$ 1,703,662	$ 2,204,922	$ 7,524,890	$ 480,294	$ 11,913,768

	1,289,156 )	-	(291,240)	( 113,941 ) (	1,694,337 )
	$ 414,506	$ 2,204,922	$ 7,233,650	$ 366,353	$ 10,219,431

~29~

Software		2018		Total
	Goodwill	License agreement and customer list	Others
$ 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
	-	- ( 237 ) ( 540 )
	-	( 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

Amortization expenses on intangible assets are recognized as operating expenses.

(12) Other non-current assets

Other non-current assets
	June 30, 2019	December 31, 2018	June 30, 2018
Guarantee deposits paid	$ 2,898,820	$ 2,766,913	$ 2,691,213
Others	437,474	437,846	498,127
	$ 3,336,294	$ 3,204,759	$ 3,189,340

(13) Impairment of non-financial assets

A. There were no impairment loss nor reversal of impairment loss recognized for the six-month periods ended June 30, 2019 and 2018.
B. Goodwill is allocated to the Group’s cash-generating units based on operating segments. The recoverable amount of all cash-generating units has been determined based on value-in-use calculations, which use pre-tax cash flow projections based on five-year financial budgets approved by the management. The Group performs impairment testing annually.

~30~

(14) 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, 2019 $ 1,020,059 December 31, 2018 $ 7,237,785 June 30, 2018 $ 1,070,988	Interest rate range 0.85%~6.00% Interest rate range 0.65%~7.00% Interest rate range 0.92%~4.50%	Collateral
			None Collateral
			None Collateral
			None

There was no capitalization of borrowing costs for the six-month periods ended June 30, 2019 and 2018. Relevant interest expense on borrowings is recognized as “finance costs”.

(15) Other payables

Store collections Dividend payable Wages, salaries and bonus payable Incentive bonus payable to franchisees Sales receipt on behalf of others Payables for acquisition of property, plant and equipment Employees’ compensation and remuneration for directors and supervisors Payables for labor and health insurance Rent payable Others	June 30, 2019 $ 12,899,484 10,348,343 4,522,227 1,104,040 903,727 532,087 450,178 242,990 56,206 4,338,716 $ 35,397,998	December 31, 2018 $ 12,750,758 - 5,033,232 1,047,674 1,176,154 914,557 879,671 238,255 848,049 5,065,831 $ 27,954,181	June 30, 2018
			$ 11,300,379 27,407,721 4,654,105 974,430 975,847 435,181 454,192 246,252 827,343 4,511,239
			$ 51,786,689

(16) Other current liabilities

Advance receipts for gift certificates Advance receipts of deposits in icash cards Current portion of long-term liabilities Others	June 30, 2019 $ 1,327,437 1,245,625 376,667 259,293 $ 3,209,022	December 31, 2018 $ 1,338,984 1,199,455 335,860 386,239 $ 3,260,538	June 30, 2018
			$ - 1,144,119 297,704 301,947
			$ 1,743,770

~31~

- (17) 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 0.79%~6.867% 1.72%~1.96% Interest rate range 0.80%~6.298% 1.75%~1.96% Interest rate range 0.84%~4.00% 1.79%~1.96%	Collateral None Property, plant and equipment ( Collateral None Property, plant and equipment ( Collateral None Property, plant and equipment (	June 30, 2019 $ 568,261 420,873 989,134 376,667) $ 612,467 December 31, 2018 $ 741,157 441,743 1,182,900 335,860) $ 847,040 June 30, 2018
			$ 977,834 407,896 1,385,730 297,704) $ 1,088,026

There was no capitalization of borrowing costs for the six-month periods ended June 30, 2019 and 2018. Relevant interest expense on borrowings is recognized as “finance costs”.

(18) Pensions

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

~32~

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 $36,608, $38,964, $70,409, and $78,107 for the three-month and six-month periods ended June 30, 2019 and 2018, 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, 2019 and 2018 was 14%~20% and 14%~25%, 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, 2019 and 2018 were $240,130, $234,114, $476,438 and $460,217, respectively.

(19) Other non-current liabilities

Guarantee deposit received Decommissioning liability Others	June 30, 2019 $ 3,473,993 488,787 293,557 $ 4,256,337	December 31, 2018 $ 3,413,265 421,966 521,758 $ 4,356,989	June 30, 2018
			$ 3,391,663 404,656 340,660
			$ 4,136,979

(20) Share capital

As of June 30, 2019, the Company’s authorized capital was $10,500,000, consisting of 1,050,000,000 shares of ordinary stock, and the paid-in capital was $10,396,223 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected. The number of the Company’s outstanding ordinary shares was both 1,039,622,255 as of June 30, 2019 and January 1, 2019.

(21) 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.

(22) Retained earnings

A. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, must first be used to pay all taxes and offset prior years’ operating losses, then 10% of the remaining amount is to be set aside as a legal reserve. 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.

~33~

B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of the legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
C. In accordance with the regulations, the Company shall set aside a special reserve for the debit balance on other equity items at the balance sheet date before distributing earnings. When the debit balance on other equity items is reversed subsequently, the reversed amount should be included in the distributable earnings.
D. The appropriations for 2018 and 2017 were resolved by the shareholders on June 12, 2019 and June 12, 2018, respectively, as follows:

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

E. See Note 6(26) for information on employees’ compensation and directors’ and supervisors’ remuneration.
(23) Other equity items

At January 1, 2019 Revaluation: –Group –Associates Revaluation-tax Currency translation differences: –Group –Associates At June 30, 2019		For the six-monthperiod ended June 30,	For the six-monthperiod ended June 30,	2019
		Exchange differences from translation of foreign operations ($ 279,829) - - - 362,518 520 $ 83,209	Unrealized gains/(losses) on valuation of financial assets at fair value through other comprehensive income Total $ 333,434 $ 53,605 127,690 127,690 3,315 3,315 ( 8,877) ( 8,877) - 362,518 - 520 $ 455,562 $ 538,771

~34~

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

(24) Operating revenue

Revenue from contracts with customers Revenue from contracts with customers	For the three-month period ended June 30, 2019 $ 63,947,923 For the six-month period ended June 30, 2019 $ 125,033,319	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 overtime and at a point in time. The operating revenue is categorized based on operating departments and goods or services recognition timing as follows:

~35~

For the three-month period ended June 30, 2019 Total segment revenue Inter-segment revenue Revenue from external customer contracts Timing of revenue recognition –At a point in time –Over time 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, 2019 Total segment revenue Inter-segment revenue ( Revenue from external customer contracts Timing of revenue recognition –At a point in time –Over time	Convenience stores $ 39,592,336 ( 142,682) $ 39,449,654 $ 39,320,436 129,218 $ 39,449,654 Convenience stores $ 38,901,410 ( 150,837) $ 38,750,573 $ 38,617,342 133,231 $ 38,750,573 Convenience stores $ 77,520,611 296,338) ( $ 77,224,273 $ 76,972,820 251,453 $ 77,224,273	Retail business group $ 19,618,284 ( 514,930) $ 19,103,354 $ 15,681,487 3,421,867 $ 19,103,354 Retail business group $ 17,630,750 ( 544,639) $ 17,086,111 $ 14,388,032 2,698,079 $ 17,086,111 Retail business group $ 37,986,111 1,079,054) ( $ 36,907,057 $ 30,612,018 6,295,039 $ 36,907,057	Logistics business group $ 3,920,792 ( 3,400,312) $ 520,480 $ 109,009 411,471 $ 520,480 Logistics business group $ 3,853,227 ( 3,367,406) $ 485,821 $ 425,581 60,240 $ 485,821 Logistics business group $ 7,671,582 6,616,510) ( $ 1,055,072 $ 590,633 464,439 $ 1,055,072	Others $ 6,606,600 (1,732,165) $ 4,874,435 $ 4,599,905 274,530 $ 4,874,435 Others $ 6,566,826 (1,659,825) $ 4,907,001 $ 4,691,602 215,399 $ 4,907,001 Others $ 13,248,139 3,401,222) ( $ 9,846,917 $ 9,355,927 490,990 $ 9,846,917	Total $ 69,738,012 (5,790,089) $ 63,947,923 $ 59,710,837 4,237,086 $ 63,947,923 Total $ 66,952,213 (5,722,707) $ 61,229,506 $ 58,122,557 3,106,949 $ 61,229,506 Total $ 136,426,443 11,393,124) $ 125,033,319 $ 117,531,398 7,501,921 $ 125,033,319

~36~

For the six-month period
ended June 30, 2018
Convenience
stores
Retail business
group
Logistics
business group
Others
Total
Total segment revenue
$ 76,055,554
$ 34,875,573
$ 7,503,645
$ 13,004,988
$ 131,439,760
Inter-segment revenue
(
315,110)
(
1,142,329)
(
6,545,654)
(
3,259,416)
(
11,262,509)
Revenue from external
customer contracts
$ 75,740,444
$ 33,733,244
$ 957,991
$ 9,745,572
$ 120,177,251
Timing of revenue
recognition
–At a point in time
$ 75,482,976
$ 28,153,221
$ 843,734
$ 9,328,594
$ 113,808,525
–Over time
257,468
5,580,023
114,257
416,978
6,368,726
$ 75,740,444
$ 33,733,244
$ 957,991
$ 9,745,572
$ 120,177,251
Contract liabilities
(a) The Group has recognized the following revenue-related contract liabilities:
June 30, 2019
December 31, 2018
June 30, 2018
January 1, 2018
Contract liabilities –
advance receipts
of gift certificates
and gift cards
$ 1,643,329
$ 1,392,390
$ 2,263,037
$ 2,104,769
Contract liabilities –
members’ deposits
773,363
764,782
1,313,447
1,246,600
Contract liabilities –
franchise fee
438,855
230,812
225,934
231,312
Contract liabilities –
customer loyalty
programs
343,628
344,970
280,643
346,011
Contract liabilities –
others
374,895
344,656
261,999
352,677
$ 3,574,070
$ 3,077,610
$ 4,345,060
$ 4,281,369
June 30, 2019
December 31, 2018
June 30, 2018
January 1, 2018
Contract liabilities –
current
$ 3,315,318
$ 2,843,189
$ 4,064,417
$ 3,935,358
Contract liabilities –
non-current
258,752
234,421
280,643
346,011
$ 3,574,070
$ 3,077,610
$ 4,345,060
$ 4,281,369

(b) Revenues recognized that were included in the contract liabilities balance at the beginning were $1,792,586 and $927,654 for the six-month periods ended June 30, 2019 and 2018, respectively.

~37~

(25) Expenses by nature

Cost of goods sold Employee benefit expense Incentive bonuses for franchisees Depreciation and amortization Utilities expense Operating lease payments Other costs and expenses Total operating costs and operating expenses	For the three-month period ended June 30, 2019 $ 37,586,382 6,436,631 5,469,781 4,624,174 1,117,402 148,812 5,207,792 $ 60,590,974	For the three-month period ended June 30, 2018
		$ 36,036,573 6,358,412 5,301,285 1,628,817 1,038,388 3,019,427 4,601,050
		$ 57,983,952

Cost of goods sold Employee benefit expense Incentive bonuses for franchisees Depreciation and amortization Utilities expense Operating lease payments Other costs and expenses Total operating costs and operating expenses	For the six-month period ended June 30, 2019 $ 73,290,177 12,841,328 10,596,294 9,187,656 2,104,313 335,288 10,117,857 $ 118,472,913	For the six-month period ended June 30, 2018
		$ 70,255,578 12,713,827 10,326,908 3,250,656 1,914,268 6,029,310 9,105,352
		$ 113,595,899

(26) 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, 2019 $ 5,293,875 492,277 276,738 373,741 $ 6,436,631 For the six-month period ended June 30, 2019 $ 10,567,716 1,013,076 546,847 713,689 $ 12,841,328	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

A. According to the Articles of Incorporation of the Company, a ratio of distributable profit of the current

~38~

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 and six-month periods ended June 30, 2019 and 2018, employees’ compensation was accrued at $142,031and $151,065, $292,859 and $300,665 respectively; while directors’ and supervisors’ remuneration was accrued at $47,452, $50,471, $97,843 and $100,451, 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, 2019, respectively.

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

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

(27) Other income

Other income
Grants income Interest income Rental revenue Dividend income Others	For the three-month period ended June 30, 2019 $ 170,145 214,263 76,311 47,234 129,992 $ 637,945	For the three-month period ended June 30, 2018 $ 131,591 187,697 32,011 60,668 252,592
		$ 664,559

Grants income Interest income Rental revenue Dividend income Others	For the six-month period ended June 30, 2019 $ 323,724 410,953 149,372 47,234 596,524 $ 1,527,807	For the six-month period ended June 30, 2018
		$ 305,576 334,867 68,058 60,668 431,506
		$ 1,200,675

~39~

(28) Other gains and losses

			For the three-month	For the three-month		For the three-month	For the three-month
				period ended			period ended
				June 30, 2019			June 30, 2018
(Loss) gain on disposal of investments	($			3,432)		$	1,834
Gain (loss) on disposal of property, plant and				2,379	(		2,255 )
equipment
Other gains and losses	(			22,036 )	(		10,205 )
	($			23,089 )	($		10,626 )
				For the six-month		For the six-month
				period ended			period ended
				June 30, 2019			June 30, 2018
(Loss) gain on disposal of investments	($			3,432 )		$	3,151
Loss on disposal of property, plant and equipment	(			1,093 )	(		10,039 )
Other gains and losses	(			31,964 )			14,231
	($			36,489 )		$	7,343
(29)Finance costs
			For the three-month			For the three-month
				period ended			period ended
				June 30, 2019			June 30, 2018
Interest expense		$		299,535		$	32,315
				For the six-month		For the six-month
				period ended			period ended
				June 30, 2019			June 30, 2018
Interest expense		$		606,329		$	78,858
(30)Income tax
A. Income tax expense
(a) Components of income tax expense:
				For the three-month		For the three-month
				period ended			period ended
				June 30, 2019			June 30, 2018
Current tax:
Current tax on profits for the period		$		786,830		$	799,467
Tax on undistributed surplus earnings				20,212			135,163
Over provision of prior year’s income tax		(		371)			-
Total current tax				806,671			934,630
Deferred tax:
Origination and reversal of temporary differences				4,448			13,392
Total deferred tax				4,448			13,392
Income tax expense		$		811,119		$	948,022

~40~

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 six-month period ended June 30, 2019 For the six-month period ended June 30, 2018 $ 1,390,697 $ 1,400,814 20,212 135,163 997 - 1,411,906 1,535,977 40,894 ( 128,898) - 640,304 40,894 511,406 $ 1,452,800 $ 2,047,383	For the six-month period ended June 30, 2018
		$ 1,400,814 135,163 -
		1,535,977
		511,406
		$ 2,047,383

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

Changes in fair value of financial assets at fair value through other comprehensive income Changes in fair value of financial assets at fair value through other comprehensive income Impact of change in tax rate	For the three-month period ended June 30, 2019 For the three-month period ended June 30, 2018 $ 5,022 $ 1,333 $ 5,022 $ 1,333 For the six-month period ended June 30, 2019 For the six-month period ended June 30, 2018 8,877 ($ 1,472) - ( 46,977) $ 8,877 ($ 48,449)	For the three-month period ended June 30, 2018 $ 1,333
		$ 1,333
		$ 48,449)

B. The Company’s income tax returns through tax year 2017 have been assessed and approved by the Tax Authority.

~41~

(31) Earnings per share

For the three-month period ended June	For the three-month period ended June	30, 2019
Amount Weighted average number of ordinary shares outstanding after tax (shares in thousands) $ 2,589,888 1,039,622 $ 2,589,888 1,039,622 - 473 $ 2,589,888 1,040,095 For the three-month period ended June		Earnings per share (in dollars) $ 2.49
		$ 2.49
		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 six-month period ended June 30, 2019

	For the six-month period ended June 30, 2019	For the six-month period ended June 30, 2019	0, 2019
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Amount Weighted average number of ordinary shares outstanding Earnings per share after tax (shares in thousands) (in dollars) $ 5,497,751 1,039,622 $ 5.29 $ 5,497,751 1,039,622 - 1,581 $ 5,487,751 1,041,203 $ 5.28 For the six-month period ended June 30, 2018		Earnings per share (in dollars) $ 5.29
			$ 5.28
	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	Earnings per share (in dollars) $ 4.97
			$ 4.96

(32) Operating leases

Lessor 2018

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

Less than one year Over one year but less than five years Over five years	December 31, 2018 $ 90,898 224,263 6,195 $ 321,356	June 30, 2018 $ 93,630 262,943 34,513 $ 391,086

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

~43~

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, 2019 and 2018 are as follows:

Rental expenses Contingent rents	For the three-month period ended June 30, 2018 $ 2,905,706 $ 113,721	For the six-month period ended June 30, 2018
		$ 5,823,254
		$ 206,056

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

Less than one year Over one year but less than five years Over five years	December 31, 2018 $ 10,955,633 36,200,668 22,658,778 $ 69,815,079	June 30, 2018
		$ 9,931,342 34,413,678 12,721,318
		$ 57,066,338

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 are as follows:

Sublease revenues Contingent rents	For the three-month period ended June 30, 2018 $ 56,746 $ 287,412	For the six-month period ended June 30, 2018
		$ 117,154
		$ 571,052

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.

(33) Supplemental cash flow information

A. 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, 2019 $ 2,804,304 914,557 532,087 ) $ 3,186,774 For the six-month period ended June 30, 2019 $ 9,148,676 1,199,667 $ 10,348,343	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, 2018

B. Financing activities with no cash flow effects

~44~

(34) Changes in liabilities from financing activities

At January 1 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items At June 30				2019
		Short-term borrowings $ 7,237,785 ( 6,217,726) - - $ 1,020,059	Short-term notes and bills payable $ - 70,000 ( - - ( $ 70,000	Long-term borrowings Lease liabilities $ 847,040 $ 52,938,613 211,490) ( 5,341,346) 17,724 260,363 40,807) 5,623,324 $ 612,467 $ 53,480,954	Other non- current liabilities- guarantee deposits received $ 3,413,265 60,728 - - $ 3,473,993	Liabilities from financing activities- gross $ 64,436,703 ( 11,639,834) 278,087 5,582,517 $ 58,657,473

At January 1 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items At June 30				2018	2018
		Short-term borrowings $ 965,180 105,808 - - $ 1,070,988	Short-term notes and bills payable $ 250,000 ( 50,000) - - $ 200,000	Long-term borrowings $ 1,105,451 ( 6,068) 12,593 ( 23,950) $ 1,088,026	Other non- current liabilities- guarantee deposits received $ 3,355,171 36,492 - - $ 3,391,663	Other non- current liabilities- other $ 1,066,560 24,767 - ( 346,011) $ 745,316	Liabilities from financing activities- gross $ 6,742,362 110,999 12,593 ( 369,961) $ 6,495,993

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, 2019.

~45~

(2) Names of related parties and relationship

Names of related parties Relationship with the Group Uni-President Enterprises Corp. Ultimate parent company Tait Marketing & Distribution Co., Ltd. Subsidiaries of ultimate parent company Tung Ang Enterprises Corp. 〃 Lien-Bo Enterprises Corp. 〃 President Packaging Corp. 〃 President Tokyo Corp. 〃 Uni-President (Kunshan) Trading Co., Ltd. 〃 President Professional Baseball Team Corp. 〃 Presco Netmarketing Inc. 〃 Zhenzhou President Enterprises Co., Ltd. 〃 Mister Donut Taiwan Co., Ltd. Investees of the Company accounted for using the equity method 〃

Uni-President Development Corp. President Technology Corp. Kuang Chuan Dairy Corp.

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

Weilih Food Industrial Co., Ltd. Prince Housing Development Corp. Tung Chan Enterprises Corp.

〃
〃

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

Kang Na Hsiung Enterprises Co., Ltd. Koasa Yamako Corp.

The Company is a director of Koasa Yamako Corp.

(3) Significant related party transactions and balances

A. Operating revenue

Sales of goods Ultimate parent 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, 2019 $ 142,653 32,513 58,997 18,706 4,107 15,764 3,528 1,109 $ 277,377	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

~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, 2019 $ 289,838 70,138 126,688 37,931 6,416 29,846 5,999 2,656 $ 569,512	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

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 Ultimate parent Associates Sister companies Other related parties	For the three-month period ended June 30, 2019 $ 4,167,059 62,275 1,028,395 614,630 $ 5,872,359 For the six-month period ended June 30, 2019 $ 8,044,464 133,538 1,981,460 1,133,529 $ 11,292,991	For the three-month period ended June 30, 2018 $ 3,933,949 69,261 1,002,310 568,222 $ 5,573,742 For the six-month period ended June 30, 2018 $ 7,472,491 152,118 1,955,864 1,047,936 $ 10,628,409

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, 2019 $ 135,791 67,232 32,281 5,163 $ 240,467	December 31, 2018 $ 201,321 73,101 85,384 4,722 $ 364,528	June 30, 2018
			$ 109,211 62,603 50,208 5,010 $ 227,032

~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, 2019 $ 1,823,952 65,499 547,547 466,624 $ 2,903,622	December 31, 2018 $ 1,631,289 63,739 442,907 370,822 $ 2,508,757	June 30, 2018
			$ 1,650,096 56,328 509,197 395,613
			$ 2,611,234

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

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

(b) Acquisition of right of use assets

leases were paid on a monthly basis. Acquisition of right of use assets
Ultimate parent Associates Sister companies	For the six-month period ended June 30, 2019 $ 102,360 12,157 8,502
	$ 123,019

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

by $1,401,225. Lease liabilities
Ultimate parent Associates Sister companies Other related parties	June 30, 2019
	$ 154,746 739,096 301,485 24,480
	$ 1,219,807

(4) Key management compensation

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, 2019 $ 192,583 For the six-month period ended June 30, 2019 $ 371,668	For the three-month period ended June 30, 2018
		$ 160,244
		For the six-month period ended June 30, 2018
		$ 349,756

~48~

8. PLEDGED ASSETS

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

Pledged asset		Book value	Purpose
	June 30,2019	December 31, 2018
Accounts receivable Land Buildings Transportation equipment Pledged time deposits (Recognized as “Other non-current assets – guarantee deposits paid ”)	$ - 128,643 44,209 568,056 56,495 $ 797,403	$ 20,000 128,643 50,230 586,353 56,495	Performance guarantee 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
		$ 841,721

SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT SUBSEQUENT EVENTS

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 at fair value through other comprehensive income Designation of equity instrument Qualifying equity instrument 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 Lease liabilities Long-term borrowings (including current portion) Guarantee deposit received	June 30, 2019 $ 2,039,390 773,087 - 773,087 49,386,267 5,176,417 2,473,104 2,898,820 59,934,608 $ 62,747,085 $ 1,020,059 70,000 1,847,536 24,433,045 35,397,998 53,480,954 989,134 3,473,993 $ 120,712,719	December 31, 2018 $ 929,908 644,614 200,731 845,345 48,530,648 5,264,573 1,535,507 2,766,913 58,097,641 $ 59,872,894 $ 7,237,785 - 1,866,610 23,148,683 27,954,181 - 1,182,900 3,413,265 $ 64,803,424	June 30, 2018 $ 2,606,383 800,213 201,306 1,001,519 61,092,649 4,551,137 2,131,374 2,691,213 70,466,373 $ 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

~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:

June 30, 2019	June 30, 2019	December 31, 2018	December 31, 2018
Foreign currency amount (In thousands) $ 1,101 1,849 51,963 1,886 $ 849,300 $ 2,693 129,327 1,799	Exchange rate 31.0600 4.5232 0.2886 3.9766 0.2886 31.0600 0.2886 4.5232	Foreign currency amount (In thousands) $ 739 1,742 8,522 - $ 721,500 $ 3,745 80,786 1,152	Exchange rate 30.7150 4.4654 0.2782 - 0.2782 30.7150 0.2782 4.4654	Book value (NTD)
				$ 22,698 7,779 2,371 - $ 200,721 $ 115,028 22,475 5,144

~51~

June 30, 2018	June 30, 2018
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	Book value (NTD)
		$ 131,465 9,215 4,452 14,619 $ 228,279 $ 96,589 27,970

IV. Total exchange gain (loss), including realized and unrealized from significant foreign exchange variations on monetary items held by the Group amounted to $802, $15,043, ($196) and $63,013 for the three-month and six-month periods ended June 30, 2019 and 2018, respectively.
V. Analysis of foreign currency market risk arising from significant foreign exchange variation: Foreign exchange risk with respect to USD primarily arises from the exchange gain or loss resulting from foreign currency translation of cash and cash equivalents, accounts receivable and accounts payable denominated in USD. As of June 30, 2019 and 2018, if the NTD:USD exchange rate appreciates/depreciates by 5% with all other factors remaining constant, the Group’s profit for the six-month periods ended June 30, 2019 and 2018 would increase/decrease by $2,472 and $1,744, respectively. Foreign exchange risk with respect to JPY primarily arises from the exchange gain or loss resulting from foreign currency translation of cash and cash equivalents, accounts receivable, financial assets at fair value through other comprehensive income - noncurrent and accounts payable denominated in JPY. If the NTD:JPY exchange rate appreciates/depreciates by 5%, with all other factors remaining constant, the Group’s profit for the six-month periods ended June 30, 2019 and 2018 would increase/decrease by $11,139 and $10,238, 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. 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, 2019 and 2018 would have increased/decreased by $9,163 and $10,586, 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 $38,654 and $40,011, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

~52~

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, 2019 and 2018, the Group’s borrowings at variable rate were mainly denominated in New Taiwan dollars and Philippine Peso.
II. If the borrowing interest rate had increased/decreased by 0.25% with all other variables held constant, profit, net of tax for the six-month periods ended June 30, 2019 and 2018 would have increased/decreased by $2,223 and $2,714, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.
(b) Credit risk
I. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at 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 customers’ 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 forecast ability 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:
			2019
		Accounts receivable
At January 1	$		55,464
Provision for impairment			3,299
Reversal of impairment	(		4,741)
Write-offs	(		120)
Effect of foreign exchange	(		82)
At June 30	$		53,820
			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

~53~

in debt instrument at fair value through other comprehensive income for the six-month period ended June 30, 2019.

V. The Group has no written-off financial assets that are still under recourse procedures on June 30, 2019, December 31 2018 and June 30, 2018.
(c) Liquidity risk
I. Cash flow forecasting is performed by the operating entities of the Group and aggregated by the Group’s finance department. It monitors rolling forecasts of liquidity requirements to ensure the Group has sufficient cash to meet operational needs, while maintaining sufficient headroom on its undrawn committed borrowing facilities, at all times, so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, and compliance with internal balance sheet ratio targets.
II. The Group invests surplus cash in interest bearing current accounts, time deposits, money market fund and marketable securities, and chooses instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the aforementioned forecasting. The Group held money market funds of $1,953,825, $844,225 and $2,520,700 as at June 30, 2019, December 31, 2018, and June 30, 2018, respectively, which are expected to readily generate cash inflows for the purpose of managing liquidity risk.
III. The Group has undrawn borrowing facilities of $17,738,288, $14,006,462 and $16,857,317 as of June 30, 2019, December 31, 2018 and June 30, 2018, respectively.
IV. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

June 30, 2019 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Lease liabilities Long-term borrowings (including current portion) Non-derivative financial liabilities:	Less than 1 year Between 1 and 2 years Between 2 and 3 years Over 3 years $ 1,036,630 $ - $ - $ - 70,000 - - - 1,847,536 - - - 24,433,045 - - - 35,397,998 - - - 11,458,159 10,231,264 10,241,276 27,180,876 416,498 223,146 96,793 331,457	Over 3 years

December 31, 2018 Short-term borrowings Notes payable Accounts payable Other payables Long-term borrowings (including current portion)	Less than 1 year Between 1 and 2 years Between 2 and 3 years Over 3 years $ 7,286,725 $ - $ - $ - 1,866,610 - - - 23,148,683 - - - 27,954,181 - - - 372,094 264,270 189,983 407,867	Over 3 years

~54~

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)	Less than 1 year Between 1 and 2 years Between 2 and 3 years Over 3 years $ 1,094,073 $ - $ - $ - 200,000 - - - 1,836,336 - - - 22,464,822 - - - 51,786,689 - - - 329,534 519,718 99,594 508,068	Over 3 years

(3)Fair value information

A. The different levels of the inputs used in valuation techniques to measure the fair value of financial and non-financial instruments are defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the 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(10).
C. Financial instruments not measured at fair value
(a) Except for those listed in the table below, the carrying amounts of cash and cash equivalents, accounts receivable, other receivables, short-term borrowings, notes payable, accounts payable and other payables are approximate to their fair values.

Financial assets: Guarantee deposit paid Financial liabilities: Guarantee deposit received		June 30, 2019	June 30, 2019
	Book value $ 2,898,820 $ 3,473,993		Fair value
		Level 1 $ - $ -	Level 2 $ - $ -	Level 3 $ 2,876,936 $ 3,442,380

~55~

	December 31, 2018	December 31, 2018
Book value $ 2,766,913 $ 3,413,265		Fair value
	Level 1		Level 3
	$ -		$ 2,748,262 $ 3,384,951
	$ -
Book value $ 2,691,213 $ 3,391,663		Fair value
	Level 1 $ - $ -	Level 2 $ - $ -	Level 3
			$ 2,671,906 $ 3,366,105

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

June 30, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Open-ended funds Equity securities Financial assets at fair value through other comprehensive income Equity securities	Level 1 $ 1,953,825 - 1,953,825 768,739 768,739 $ 2,722,564	Level 2 $ - - - - - $ -	Level 3 $ - 85,565 85,565 4,348 4,348 $ 89,913	Total
				$ 1,953,825 85,565
				2,039,390
				773,087
				773,087
				$ 2,812,477

~56~

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

(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, 2019 and 2018, there was no transfer between Level 1 and
Level 2.
F. For the six-month periods ended June 30, 2019 and 2018, there was no significant transfer in or out of Level 3.
G. The Group is in charge of valuation procedures for fair value measurements being categorized within

~57~

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 Non-derivative equity instrument: Unlisted shares	Fair value at June 30, 2019 $ 89,913 Fair value at December 31, 2018 $ 90,031 Fair value at June 30, 2018 $ 90,031	Valuation technique Market comparable companies Net asset value Valuation technique Market comparable companies Net asset value Valuation technique Market comparable companies Net asset value	Significant unobservable input Price to book ratio multiplier Net asset value Significant unobservable input Price to book ratio multiplier Net asset value Significant unobservable input Price to book ratio multiplier Net asset value	Range (weighted average) 2.61 - Range (weighted average) 2.61 - Range (weighted average) 2.21 -	Relationship of inputs to fair value
					The higher the multiplier, the higher the fair value The higher the net asset value, the higher the fair value Relationship of inputs to fair value
					The higher the multiplier, the higher the fair value The higher the net asset value, the higher the fair value Relationship of inputs to fair value
					The higher the multiplier, the higher the fair value The higher the net asset value, the higher the fair value

I. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, the use of different valuation models or assumptions may result in different measurements. If net assets from financial assets and liabilities categorized within Level 3 had increased or decreased by 1%, other comprehensive income would not have been significantly impacted as of June 30, 2019, December 31, 2018, and June 30, 2018.

~58~

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.

~59~

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.

~60~

(3) Segment information

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

	For the six-month period ended June 30, 2019	For the six-month period ended June 30, 2019	For the six-month period ended June 30, 2019
Convenience stores $ 77,224,273 296,338 $ 77,520,611 $ 6,310,879	Retail business group $ 36,907,057 1,079,054 $ 37,986,111 $ 1,771,831	Logistics business group $ 1,055,072 6,616,510 $ 7,671,582 $ 679,517	Other operating segments Adjustment and elimination $ 9,846,917 ($ -) 3,401,222 ( 11,393,124) $ 13,248,139 ($ 11,393,124) $ 1,556,306 ($ 2,635,563)	Total
				$ 125,033,319 -
				$ 125,033,319
				$ 7,682,970

External revenue (net) Internal department revenue Total segment revenue Segment income		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
	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)		Total
							$ 120,177,251 - $ 120,177,251 $ 7,924,719

(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.

~61~

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, 2019

Securitiesheld by	Typeandname ofsecurities	Relationship with the securitiesissuer	General ledger account		As ofJune 30,2019	As ofJune 30,2019		Footnote
				Number ofshares	Bookvalue	Ownership (%)	Fairvalue
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. 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. President Drugstore Business Corp. President Drugstore Business Corp. President Information Corp. President Information Corp. President Logistics International Corp. President Logistics International Corp. President Pharmaceutical Corp. Q-ware Systems & Services Corp.	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 Hwa-win Money Market Fund Taishin 1699 Money Market Fund UPAMC James Bond Money Market Fund Taishin 1699 Money Market Fund FSITC Taiwan Money Market Fund Prudential Financial Money Market Fund Nomura Taiwan Money Market Fund Union Money Market Fund FSITC Taiwan Money Market Fund Taishin 1699 Money Market Fund Prudential Financial Money Market Fund Jih Sun Money Market Fund Taishin 1699 Money Market Fund UPAMC James Bond Money Market Fund Taishin 1699 Money Market Fund Eastspring Investments Well Pool Money Market Fund	Director of President Investment Trust Corp. None `〃` Director of PK Venture Capital Corp. None Investees of Uni-President Enterprises Corp. under the equity method None Director of Koasa Yamako Corp. None `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Financial assets at fair value through profit or loss - non-current `〃` `〃` `〃` `〃` Financial assets at fair value through other comprehensive income - non - current `〃` `〃` Financial assets at fair value through profit or loss - current `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	2,667,600 837,753 2,572,127 321,300 9 38,221,259 300,000 650,000 16,860,505 11,791,597 2,475,250 3,228,945 22,148,067 19,582,501 9,471,790 4,897,400 3,026,199 3,916,620 1,845,727 3,257,265 1,086,447 3,027,282 3,108,532 7,034,525 20,197,591	45,298 $ 14,545 25,722 - - 523,631 245,108 4,348 250,105 $ 130,097 33,528 54,021 300,000 300,000 150,000 80,000 40,000 60,002 25,001 51,584 16,116 41,005 52,005 95,284 275,077	7.60 5.37 0.92 6.67 - 2.75 0.56 10.00 - - - - - - - - - - - - - - - - -	45,298 $ 14,545 25,722 - - 523,631 245,108 4,348 250,105 $ 130,097 33,528 54,021 300,000 300,000 150,000 80,000 40,000 60,002 25,001 51,584 16,116 41,005 52,005 95,284 275,077

Table 1  Page 1

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

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, 2019

Investor	Type and name of securities	General ledger account	Counterparty	Relationship with the investor	Balance January1	as at ,2019	Addi	tion		Dispos	al		Other increa	se(decrease)	Balance as at J	une 30,2019
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount	Number of shares	Amount
Books.com. Co., Ltd. Books.com. Co., Ltd. Chieh-Shuen Logistics International Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. President Drugstore Business President Pharmaceutical Corp. Q-ware Systems & Services Corp.	Open ended funds: Yuanta De-Li Money Market Fund Jih Sun Money Market Fund Taishin 1699 Money Market Fund Taishin 1699 Money Market Fund FSITC Taiwan Money Market Fund Prudential Financial Money Market Fund Nomura Taiwan Money Market Fund Union Money Market Fund Allianz Global Investors Taiwan Money Market Fund FSITC Taiwan Money Market Fund Taishin 1699 Money Market Fund Eastspring Investments Well Pool Money Market Fund	Note 1 `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Not applicable `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Not applicable `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	1,843,148 - - 2,220,988 - - - 15,170,478 3,996,323 - 3,036,177 16,121,671	30,008 $ - - 30,000 - - - 200,000 50,000 - 41,011 219,000	43,579,059 31,709,417 24,315,638 70,207,508 55,544,109 18,944,836 26,959,349 25,755,722 47,900,434 46,970,866 29,152,620 111,448,928	710,000 $ 470,000 329,000 950,000 850,000 300,000 440,000 340,000 600,000 719,000 394,400 1,516,000	45,422,207 14,848,912 21,840,388 50,280,429 35,961,608 9,473,046 22,061,949 37,900,001 51,896,757 43,054,246 25,154,272 107,373,008	740,300 $ 220,177 295,564 680,415 550,525 150,020 360,092 500,303 650,558 659,111 340,260 1,460,590	740,000 $ 220,000 295,476 680,000 550,000 150,000 360,000 500,000 650,000 659,000 340,133 1,460,000	300 $ 177 88 415 525 20 92 303 558 111 127 590	- - - - - - - - - - - -	8) ($ 105 4 - - - - - - 2 6 77	- 16,860,505 2,475,250 22,148,067 19,582,501 9,471,790 4,897,400 3,026,199 - 3,916,620 7,034,525 20,197,591	$ - 250,105 33,528 300,000 300,000 150,000 80,000 40,000 - 60,002 95,284 275,077

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, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in t compared t transa	ransaction terms o third party ctions	Notes/accounts	receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
President Chain Store Corp. Chieh-Shuen Logistics International Corp. President Transnet Corp. Uni-Wonder Corp. President Information Corp.	Uni-President Enterprises Corp. Uni-President Superior Commissary Corp. Tung Ang Enterprises Corp. Lien-Bo Enterprises Corp. Tait Marketing & Distribution Co., Ltd. President Packaging Corp. President Transnet Corp. Kuang Chuan Dairy Corp. Weilih Food Industrial Co., Ltd. 21 Century Enterprise Co., Ltd. Q-ware Systems & Services Corp. President Transnet Corp. President Logistics International Corp. Chieh-Shuen Logistics International Corp. President Chain Store Corp. Uni-President Enterprises Corp. Tung Chan Enterprise Corp. President Chain Store Corp.	Ultimate parent company Subsidiary Sister company `〃` `〃` `〃` Subsidiary Other related party `〃` Subsidiary `〃` Subsidiary of President Chain Store Corp. Parent company Subsidiary of President Chain Store Corp. Parent company Ultimate parent company Other related party Parent company	Purchases `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Delivery revenue `〃` Service cost Sales revenue Purchases `〃` Service revenue	7,766,347 $ 1,831,128 942,351 330,001 180,285 209,510 167,388 282,198 150,404 163,268 315,170 335,416) ( 492,455) ( 335,416 167,388) ( 160,331 492,336 380,906) (	15 4 2 1 - - - 1 - - 1 39) ( 57) ( 7 59) ( 8 25 66) (	Net 30~40 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 10~54 days from the end of the month when invoice is issued Net 20~70 days from the end of the month when invoice is issued Net 15~60 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 30~65 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 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 40 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 25 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` 〃〃〃〃 `〃` `〃` `〃`	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` 〃〃〃〃 `〃` `〃` `〃`	1,369,130) ($ 706,438) ( 185,421) ( 129,068) ( 76,959) ( 66,236) ( 26,142) ( 164,196) ( 81,038) ( 30,907) ( 107,360) ( 112,413 93,748 112,413) ( 26,142 57,948) ( 89,164) ( 303,763	9) ( 5) ( 1) ( 1) ( - - - 1) ( 1) ( - 1) ( 53 45 7) ( 2 9) ( 14) ( 75

Table 3  Page 1

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, 2019

Table 3

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in t compared t transa	ransaction terms o third party ctions	Notes/accounts	receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
President Logistics International Corp. Retail Support International Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. Q-ware Systems & Services Corp. President Drugstore Business Corp. President Pharmaceutical Corp. 21 Century Enterprise Co., Ltd. Uni-President Superior Commissary Corp. Retail Support Taiwan Corp. Zhejiang Uni-Champion Logistics Development Co., Ltd. Shanghai President Logistic Co., Ltd. Duskin Serve Taiwan Co.	Chieh-Shuen Logistics International Corp. Retail Support International Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. Retail Support Taiwan Corp. President Logistics International Corp. President Logistics International Corp. President Logistics International Corp. Books.com. Co., Ltd. President Chain Store Corp. President Pharmaceutical Corp. President Drugstore Business Corp. President Chain Store Corp. President Chain Store Corp. Retail Support International Corp. Shanghai President Logistic Co., Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd. President Chain Store Corp.	Subsidiary Parent company Subsidiary of President Chain Store Corp. `〃` Subsidiary `〃` Subsidiary of President Chain Store Corp. `〃` `〃` Parent company Subsidiary of President Chain Store Corp. `〃` Parent company `〃` `〃` `〃` Subsidiary Parent company	Service cost Delivery revenue `〃` `〃` Service cost `〃` `〃` `〃` Service revenue `〃` Purchases Sales revenue `〃` `〃` Delivery revenue `〃` Service cost Service revenue	492,455 $ 377,389) ( 515,865) ( 519,291) ( 152,944 377,389 515,865 519,291 145,479) ( 315,170) ( 299,494 299,494) ( 163,268) ( 1,831,128) ( 152,944) ( 101,358) ( 101,358 139,826) (	33 24) ( 33) ( 33) ( 20 49 37 44 10) ( 68) ( 6 36) ( 36) ( 99) ( 87) ( 33) ( 30 22) (	Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 15~20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 70 days from the end of the month when invoice is issued Net 70 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 15~20 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 15~60 days from the end of the month when invoice is issued	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	93,748) ($ 74,629 101,403 94,213 27,805) ( 74,629) ( 101,403) ( 94,213) ( 26,183 107,360 27,473) ( 27,473 30,907 706,438 27,805 48,177 48,177) ( 55,940	34) ( 25 34 31 18) ( 48) ( 2) ( 38) ( 4 77 1) ( 7 34 100 78 45 46) ( 28

Table 3  Page 2

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Receivables from related parties reaching $100 million or 20% of paid-in capital or more June 30, 2019

		June 30, 2019
Table 4 Creditor	Counterparty	Relationship with the counterparty	Balance as of June 30,2019	Turnover rate	Overdue r	eceivables	Expressed in thousands of NTD (Except as otherwise indicated) Amount collected subsequent to the balance sheet date Allowance for doubtful accounts
					Amount	Action taken
President Information Corp. Q-ware Systems & Services Corp. Uni-President Superior Commissary Corp. Chieh-Shuen Logistics International Corp. President Logistics International Corp.	President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Transnet Corp. Uni-President Cold-Chain Corp.	Parent company `〃` `〃` Subsidiary of President Chain Store Corp. `〃`	303,763 $ 107,360 706,438 112,413 101,403	2.79 5.88 5.51 5.55 10.80	- $ - - - -	none `〃` `〃` `〃` `〃`	25,571 $ 37,372 326,537 53,562 101,403	- $ - - - -

Table 4  Page 1

Table 5

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Significant inter-company transactions during the reporting periods

For the six-month period ended June 30, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

						Transaction
Number	Companyname	Counterparty	Relationship	General ledgeraccount	Amount	Transactionterms	Percentage of consolidated total operating revenues ortotalassets
`1` `1` `2` `2` `3` `3` `4` `5` `5` `5` `6` `6` `6` `6` `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. President Pharmaceutical Corp. Chieh-Shuen Logistics International Corp. Chieh-Shuen Logistics International Corp. Chieh-Shuen Logistics International Corp. President Logistics International Corp. President Logistics International Corp. President Logistics International Corp. President Logistics International Corp. Duskin Serve Taiwan Co. 21 Century Enterprise Co., Ltd. Wisdom Distribution Service Corp. Retail Support Taiwan Corp. Zhejiang Uni-Champion Logistics Development Co., Ltd.	President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Drugstore Business Corp. President Logistics International Corp. President Transnet Corp. President Transnet Corp. Retail Support International Corp. Uni-President Cold-Chain Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. President Chain Store Corp. President Chain Store Corp. Books.com. Co., Ltd. Retail Support International Corp. Shanghai President Logistic Co., Ltd.	Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to parent company Subsidiary to parent company Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary	Service revenue Accounts receivable Service revenue Accounts receivable Sales revenue Accounts receivable Sales revenue Delivery revenue Accounts receivable Delivery revenue Delivery revenue Delivery revenue Accounts receivable Delivery revenue Service revenue Sales revenue Service revenue Delivery revenue Delivery revenue	380,906) ($ 303,763 315,170) ( 107,360 1,831,128) ( 706,438 299,494) ( 492,455) ( 112,413 335,416) ( 377,389) ( 515,865) ( 101,403 519,291) ( 139,826) ( 163,268) ( 145,479) ( 152,944) ( 101,358) (	Net 45 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 70 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 15~60 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 15~20 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued	0.31 0.17 0.25 0.06 1.47 0.39 0.24 0.39 0.06 0.27 0.30 0.41 0.06 0.42 0.11 0.13 0.12 0.12 0.08

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

Table 5  Page 1

Table 6

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, 2019

Investor	Investee	Location	Mainbusiness activities	Initial invest	ment amount	Shareshe	ld as at June	30,2019	Net profit (loss) of the investee for the six-month period ended June 30, 2019	Investment income (loss) recognized by the Company for the six- month period ended June 30,2019	Footnote
				Balance as at June 30,2019	Balance as at December 31, 2018	Numberofshares	Ownership (%)	Bookvalue
President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp.	President Chain Store (BVI) Holdings Ltd. President Drugstore Business Corp. President Transnet Corp. Mech-President Corp. President Pharmaceutical Corp. Uni-President Department Store Corp. Uni-President Superior Commissary Corp. Uni-President Cold-Chain Corp. President Information Corp. Q-ware Systems & Services Corp. Wisdom Distribution Service Corp. Books.com. Co., Ltd. President Yilan Art and Culture Corp. Duskin Serve Taiwan Co. ICASH Corp. Uni-President Development Corp. Uni-Wonder Corp. Retail Support International Corp. Presicarre Corp. President Fair Development Corp. President International Development Corp. Tung Ho Development Corp. Ren-Hui Investment Corp. Capital Inventory Services Corp. PCSC (China) Drugstore Limited President Chain Store Corporation Insurance Brokers Co., Ltd. Cold Stone Creamery Taiwan Ltd. President Being Corp.	British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Taiwan	Professional investment Sales of cosmetics, medicines and daily items Delivery service Gas station, installment and maintenance of elevators Sales of various health care products, cosmetics, and pharmaceuticals Department stores Fresh food manufacture Low-temperature logistics and warehousing Enterprise information management and consultancy Information software services Logistics and storage of publication and e-commerce Retail business without shop Art and cultural exhibition Cleaning instruments leasing and selling Electronic ticketing services Construction, development and operation of an MRT station Coffee chain store Room-temperature logistics and warehousing Management of retail department store Operation of shopping mall, department store, international trade, etc. Professional investment Management of entertainment business Professional investment Enterprise management consultancy Professional investment Life and property insurance Sales of ice cream Sports and entertainment business	6,712,138 $ 288,559 711,576 904,475 330,216 840,000 520,141 237,437 320,741 332,482 50,000 100,400 20,000 102,000 700,000 720,000 3,286,206 91,414 7,112,028 3,191,700 500,000 861,696 637,231 9,506 277,805 213,000 170,000 170,000	6,712,138 $ 288,559 711,576 904,475 330,216 840,000 520,141 237,437 320,741 332,482 50,000 100,400 20,000 102,000 500,000 720,000 3,286,206 91,414 7,112,028 3,191,700 500,000 861,696 637,231 9,506 277,805 213,000 170,000 170,000	171,589,586 78,520,000 103,496,399 55,858,815 22,121,962 27,999,999 48,519,890 23,605,042 25,714,475 24,382,921 10,847,421 9,999,999 2,000,000 10,199,999 70,000,000 72,000,000 21,382,674 6,429,999 130,801,027 190,000,000 44,100,000 19,930,000 6,500,000 2,500,000 8,746,008 1,500,000 12,244,390 1,500,000	100.00 100.00 70.00 80.87 73.74 70.00 90.00 60.00 86.00 86.76 100.00 50.03 100.00 51.00 100.00 20.00 60.00 25.00 19.50 19.00 3.33 12.46 100.00 100.00 92.20 100.00 100.00 100.00	26,848,831 $ 1,287,409 1,439,731 663,849 690,969 444,877 450,955 603,809 458,417 347,281 311,436 304,113 25,251 165,607 582,285 745,759 5,017,149 144,826 5,550,986 2,006,036 461,947 110,111 72,015 50,366 66,289 25,265 923) ( 35,777) (	638,241 $ 172,618 305,576 50,673 120,492 125,989 18,560) ( 226,530 32,727 37,521 130,467 192,138 251 74,720 26,994 64,034 302,956 106,534 913,951 115,321 544,406 37,240) ( 1,145) ( 19,116 495 8,443 8,553 6,954	638,241 $ 172,618 213,877 40,980 88,031 88,192 16,704) ( 135,951 28,145 34,173 130,467 96,127 251 38,107 26,994 12,807 135,176 26,580 176,319 21,911 20,062 4,645) ( 1,145) ( 19,116 456 8,443 8,531 6,954	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Note 1 Subsidiary Subsidiary Note 1 Note 1 Note 1 Note 1 Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

Table 6  Page 1

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Names, locations and other information of investee companies (not including investees in Mainland China) For the six-month period ended June 30, 2019

Investor	Investee	Location	Mainbusiness activities	Initial invest	ment amount	Shareshe	ld as at June	30,2019	Net profit (loss) of the investee for the six-month period ended June 30, 2019	Investment income (loss) recognized by the Company for the six- month period ended June 30,2019	Footnote
				Balance as at June 30,2019	Balance as at December 31, 2018	Numberofshares	Ownership (%)	Bookvalue
President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. Books.com. Co., Ltd. Mech-President Corp. President Chain Store (Hong Kong) Holdings Limited President Chain Store (Hong Kong) Holdings Limited President Chain Store (BVI) Holdings Ltd. President Chain Store (BVI) Holdings Ltd. President Chain Store (Labuan) Holdings Ltd. President Logistics International Corp. President Pharmaceutical Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp.	21 Century Enterprise Co., Ltd. President Chain Store Tokyo Marketing Corp. Uni-President Oven Bakery Corp. President Collect Services Co., Ltd. Afternoon Tea Taiwan Co., Ltd. Mister Donut Taiwan Corp., Ltd. Uni-President Organics Corp. President Technology Corp. Books.com. (BVI) Ltd. President Jing Corp. PCSC Restaurant (Cayman) Holdings Limited PCSC (China) Drugstore Limited President Chain Store (Labuan) Holdings Ltd. President Chain Store (Hong Kong) Holdings Philippine Seven Corp. Chieh-Shuen Logistics International Corp. President Pharmaceutical (Hong Kong) Holdings Limited Books.com. Co., Ltd. Uni-President Department Store Corp. Mech-President Corp. President Information Corp. President Transnet Corp. Q-ware Systems & Services Corp. Duskin Serve Taiwan Co. President Pharmaceutical Corp.	Taiwan Japan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Cayman Islands British Virgin Islands Malaysia Hong Kong Philippines Taiwan Hong Kong Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Operation of chain restaurants Enterprise management consultancy Bread and pastry retailer Collection agent Operation of restaurants Bakery retailer Health care products and organic food Software development and call center service Professional investment Gas station Professional investment Professional investment Professional investment Professional investment Operation of chain stores Trucking Sales of various health care products, cosmetics, and pharmaceuticals Retail business without shop Department stores Gas station, installment and maintenance of elevators Enterprise information management and consultancy Delivery service Information software services Cleaning instruments leasing and selling Sales of various health care products, cosmetics, and pharmaceuticals	160,680 $ 35,648 391,300 10,500 - 200,000 47,190 7,500 1,478 9,600 161,763 22,984 905,813 4,837,810 904,943 180,000 178,024 - - - - - - - -	160,680 $ 35,648 391,300 10,500 147,900 200,000 47,190 7,500 1,478 9,600 161,763 22,984 905,813 4,837,810 904,943 180,000 178,024 - - - - - - - -	10,000,000 9,800 6,511,963 1,049,999 - 7,500,049 1,833,333 750,000 500 960,000 8,880,000 740,000 29,163,337 134,603,354 394,970,516 26,670,000 5,935,900 1 1 1 1 1 1 1 1	100.00 100.00 100.00 70.00 - 50.00 36.67 15.00 100.00 60.00 100.00 7.80 100.00 100.00 52.22 100.00 100.00 - - - - - - - -	54,669 $ 81,421 31,664) ( 49,391 - 93,322 36,756 16,732 591 21,590 28,926 5,735 2,435,377 4,365,121 2,434,664 306,807 68,293 - - - - - - - -	20,146 $ 2,209 2,226) ( 42,435 - 16,664 13,544 1,763) ( - 7,351 3,357) ( 495 143,544 112,900 287,920 13,896 6,795) ( 192,138 125,989 50,673 32,727 305,576 37,521 74,720 120,492	20,146 $ 2,184 2,226) ( 29,705 - 6,398 4,987 264) ( 2) ( 4,411 3,357) ( 39 143,544 144,728 143,565 13,896 6,809) ( - - - - - - - -	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Note 1 Note 1 Note 1 Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary 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, 2019

Investor	Investee	Location	Mainbusiness activities	Initial invest	ment amount	Shareshe	ld as at June	30,2019	Net profit (loss) of the investee for the six-month period ended June 30, 2019	Investment income (loss) recognized by the Company for the six- month period ended June 30,2019	Footnote
				Balance as at June 30,2019	Balance as at December 31, 2018	Numberofshares	Ownership (%)	Bookvalue
Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Ren-Hui Investment Corp. Retail Support International Corp. Retail Support International Corp. Retail Support Taiwan Corp. Uni-President Cold-Chain Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. Wisdom Distribution Service Corp. Philippine Seven Corp. Philippine Seven Corp.	Mister Donut Taiwan Corp., Ltd. Uni-President Superior Commissary Corp. Uni-President Cold-Chain Corp. Retail Support International Corp. President Collect Services Co., Ltd. Afternoon Tea Taiwan Co., Ltd. Ren Hui Holding Co., Ltd. Retail Support Taiwan Corp. President Logistics International Corp. President Logistics International Corp. President Logistics International Corp. Uni-President Logistics (BVI) Holdings Limited President Logistics International Corp. Vision Distribution Service Corp. Convenience Distribution Inc. Store Sites Holding, Inc.	Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Philippines Philippines	Bakery retailer Fresh food manufacture Low-temperature logistics and warehousing Room-temperature logistics and warehousing Collection agent Operation of restaurants Professional investment Room-temperature logistics and warehousing Trucking Trucking Trucking Professional investment Trucking Publishing Industry Logistics and warehousing Professional investment	- $ - - - - - 60,374 15,300 44,975 5,425 23,850 87,994 18,850 - 27,248 29,514	- $ - - - - - 60,374 15,300 44,975 5,425 23,850 87,994 18,850 - 27,248 29,514	1 1 1 1 1 - 2,000,000 2,871,300 9,481,500 1,161,000 4,837,500 2,990 3,870,000 - 4,500,000 40,000	- - - - - - 100.00 51.00 49.00 6.00 25.00 100.00 20.00 - 100.00 100.00	- - - - - - 65,801 65,017 145,808 17,854 74,392 112,778 59,465 - 27,248 29,514	16,664 $ 18,560) ( 226,530 106,534 42,435 - 1,521) ( 22,549 37,556 37,556 37,556 7,542 37,556 - 11,907 548	- - - - - - 1,521) ( 11,500 18,403 2,253 9,389 7,527 7,463 - - -	Note 1 Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary

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

Table 6  Page 3

Table 7

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

For the six-month period ended June 30, 2019

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 January1,2019	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the six-month period ended June 30,2019	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the six-month period ended June 30,2019	Accumulated amount of remittance from Taiwan to Mainland China as of June 30,2019	Net income of investee for the six-month period ended June 30,2019	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the six- month period ended June 30,2019	Book value of investments in Mainland China as of June 30,2019	Accumulated amount of investment income remitted back to Taiwan as of June 30, 2019	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Shanghai President Chain Store Corporation Trade Co., Ltd. President Cosmed Chain Store (Shen Zhen) Co., Ltd. President Chain Store (Shanghai) Ltd. Shanghai President Logistic Co., Ltd. Shanghai Cold Stone Ice Cream Corporation PCSC (Chengdu) Hypermarket Limited Shan Dong President Yinzuo Commercial Limited President (Shanghai) Health Product Trading Company Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd. Bejing Bokelai Customer Co. President Chain Store (Taizhou) Ltd. President Logistic ShanDong Co., Ltd. President Chain Store (Zhejiang) Ltd. Beauty Wonder (Zhejiang) Trading Co.,Ltd.	Trade of food and commodities Wholesale of merchandise Operation of chain stores Logistics and warehousing Sales of ice cream Retail hypermarket Supermarkets Sales of various health care products, cosmetics, and pharmaceuticals Logistics and warehousing Enterprise information consulting, network technology development and services Logistics and warehousing Logistics and warehousing Operation of chain stores Sales of cosmetics and daily items	- $ 452,321 2,261,605 62,120 1,006,611 - 271,393 177,116 180,928 466 271,393 226,161 633,249 135,696	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	160,598 $ 292,501 2,400,238 62,120 1,016,874 552,133 126,674 177,116 176,760 - 285,011 226,161 645,579 145,362	- $ - - - - - - - - - - - - -	- $ - - - - - - - - - - - - -	160,598 $ 292,501 2,400,238 62,120 1,016,874 552,133 126,674 177,116 176,760 - 285,011 226,161 645,579 145,362	11) ($ 544 95,785 45,037 43) ( 584) ( 8,045) ( 5,415) ( 18,735 2) ( 22,962 540) ( 57,118) ( 15,169) (	- 100.00 100.00 100.00 100.00 - 55.00 73.74 80.00 50.03 100.00 100.00 100.00 100.00	11) ($ 544 94,871 45,038 43) ( 583) ( 4,484) ( 3,993) ( 14,944 1) ( 22,962 83) ( 58,542) ( 15,160) (	- $ 71,169 163,081 470,481 48,207 - 176,878 25,208 160,403 16 358,140 203,314 360,310 100,098	- $ - - - - - - 57,661 14,103 - - - - -	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 30,2019	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
President Chain Store Corp. President Pharmaceutical Corp. Uni-President Cold-Chain Corp. Ren-Hui Investment Corp.	4,787,527 $ 177,116 92,168 53,525	92,168 53,525 177,116 8,584,173 $	24,261,508 $ 433,679 591,451 80,000

Table 7  Page 1

AI assistant

PCSC — Interim / Quarterly Report 2019

52232_rns_2019-11-22_a10bf9f0-d20e-46e0-9ab2-62a97076cd75.pdf

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS JUNE 30, 2019 AND 2018

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS JUNE 30, 2019 AND 2018 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, 2019 AND 2018

1. HISTORY AND ORGANIZATION

AND PROCEDURES FOR AUTHORIZATION

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(3) Basis of consolidation

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

UNCERTAINTY

6. DETAILS OF SIGNIFICANT ACCOUNTS

(7) Property, plant and equipment

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

－ (8) Leasing arrangements lessee

Effective 2019

(9) Leasing arrangements – lessor

Effective 2019

(10) Investment property

(11) Intangible assets

(12) Other non-current assets

(14) Short-term borrowings

(15) Other payables

- (17) Long term borrowings

(18) Pensions

(20) Share capital

(22) Retained earnings

(24) Operating revenue

A. Disaggregation of revenue from contracts with customers

(25) Expenses by nature

(27) Other income

(28) Other gains and losses

(31) Earnings per share

(32) Operating leases

(33) Supplemental cash flow information

(34) Changes in liabilities from financing activities

7. RELATED PARTY TRANSACTIONS

(1) Parent and ultimate controlling party

(2) Names of related parties and relationship

(3) Significant related party transactions and balances

A. Operating revenue

B. Purchases

C. Receivables from related parties

D. Payables to related parties

(b) Acquisition of right of use assets

(4) Key management compensation

8. PLEDGED ASSETS

10. SIGNIFICANT DISASTER LOSS

11. SIGNIFICANT SUBSEQUENT EVENTS

12. OTHERS

(1) Capital management

(2)Financial instruments

A. Financial instruments by category

B. Risk management policies

C. Significant financial risks and degrees of financial risks

Foreign exchange risk

Price risk

Cash flow and fair value interest rate risk

(3)Fair value information

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

(2) Information on investees

PCSC Interim / Quarterly Report 2019

`－` (8) Leasing arrangements lessee