PCSC - Interim / Quarterly Report 2019

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

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

Items 1. Cover 2. Contents 3. Review report of financial statements 4. Consolidated balance sheets 5. Consolidated statements of comprehensive income 6. Consolidated statements of changes in equity 7. Consolidated statements of cash flows 8. Notes to the consolidated financial statements (1) History and organization (2) Date of authorization for issuance of the consolidated financial statements and procedures for authorization (3) Application of new standards, amendments and interpretations (4) Summary of significant accounting policies (5) Critical accounting judgements, estimates and key sources of assumption uncertainty (6) Details of significant accounts (7) Related party transactions (8) Pledged assets (9) Significant contingent liabilities and unrecognized contract commitments (10) Significant disaster loss (11) Significant events after the balance sheet date (12) Others (13) Supplementary disclosures (14) Segment information	Page
	1 2 3 ~ 4 5 ~ 6 7 ~ 8 9 10 ~ 11 12 ~ 60 12 12 12 ~ 14 14 ~ 19 19 20 ~ 44 44 ~ 48 48 48 49 49 49 ~ 57 58 59 ~ 60

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

Page

1
2
3 ~ 4
5 ~ 6
7 ~ 8
9
10 ~ 11
12 ~ 60
12
12
12 ~ 14
14 ~ 19
19
20 ~ 44
44 ~ 48
48
48
49
49
49 ~ 57
58
59 ~ 60

~2~

REVIEW REPORT OF FINANCIAL STATEMENTS

TRANSLATED FROM CHINESE

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

Introduction

We have reviewed the accompanying consolidated balance sheets of President Chain Store Corp. and subsidiaries as at September 30, 2019 and 2018, and the related consolidated statements of comprehensive income for the three-month and nine-month periods then ended, as well as the consolidated statements of changes in equity and of cash flows for the nine-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$42,422,134 thousand and NT$32,900,970 thousand, constituting 23% and 27% of the consolidated total assets, and total liabilities of NT$26,160,108 thousand and NT$16,867,459 thousand, constituting 19% and 20% of the consolidated total liabilities as at September 30, 2019 and 2018, respectively, and total comprehensive income of

~3~

NT$524,668 thousand, NT$593,659 thousand, NT$1,746,031 thousand and NT$1,627,987 thousand, constituting 18%, 20%, 18% and 17% of the consolidated total comprehensive income for the threemonth and nine-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 September 30, 2019 and 2018, and of its consolidated financial performance for the three-month and nine-month periods then ended and its consolidated cash flows for the nine-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 November 1, 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 September 30, 2019 and 2018 are reviewed, not audited)

==> picture [523 x 516] intentionally omitted <==

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

September 30, 2019 December 31, 2018 September 30, 2018
Assets Notes AMOUNT % AMOUNT % AMOUNT %
Current assets
1100 Cash and cash equivalents 6(1) $ 52,112,980 28 $ 48,530,648 38 $ 47,448,483 38
1110 Financial assets at fair value through 6(2)
profit or loss – current 1,583,247 1 844,225 1 1,060,297 1
1170 Accounts receivable, net 6(3) and 7 5,510,916 3 5,264,573 4 5,225,680 4
1200 Other receivables 2,301,736 1 1,535,507 1 2,002,468 2
1220 Current income tax assets 6(30) 4,363 - 1,139 - 5,229 -
130X Inventories, net 6(4) 12,766,148 7 15,121,657 12 12,792,092 10
1410 Prepayments 1,383,157 1 1,340,225 1 1,492,321 1
1470 Other current assets 2,846,622 2 3,004,894 2 2,536,350 2
11XX Total current assets 78,509,169 43 75,642,868 59 72,562,920 58
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 739,684 - 845,345 1 979,725 1
1550 Investments accounted for using equity 6(6)
method 9,170,960 5 9,000,580 7 8,898,840 7
1600 Property, plant and equipment, net 6(7)(28)
and 8 25,260,100 14 25,292,763 20 24,863,582 20
1755 Right of use assets 6(8) and 7 53,376,970 29 - - - -
1760 Investment property, net 6(10)(32) 1,511,056 1 1,502,159 1 1,506,398 1
1780 Intangible assets 6(11) 10,131,370 5 10,393,880 8 10,429,227 9
1840 Deferred income tax assets 6(30) 1,819,247 1 1,727,043 1 1,638,803 1
1990 Other non-current assets 6(12) and 8 3,294,313 2 3,204,759 3 3,177,968 3
15XX Total non-current assets 105,389,265 57 52,052,212 41 51,580,226 42
1XXX Total assets $183,898,434 100 $ 127,695,080 100 $ 124,143,146 100
----- 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 September 30, 2019 and 2018 are reviewed, not audited)

==> picture [530 x 617] intentionally omitted <==

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

September 30, 2019 December 31, 2018 September 30, 2018
Liabilities and Equity Notes AMOUNT % AMOUNT % AMOUNT %
Current liabilities
2100 Short-term borrowings 6(14) and 8 $ 5,948,113 3 $ 7,237,785 6 $ 7,111,486 6
2110 Short-term notes and bills payable - - - - 210,000 -
2130 Contract liabilities – current 6(24) 3,416,555 2 2,843,189 2 4,180,681 3
2150 Notes payable 7 3,063,910 2 1,866,610 2 2,887,943 2
2170 Accounts payable 23,079,662 12 20,673,579 16 21,369,308 17
2180 Accounts payable – related parties 7 4,018,899 2 2,475,104 2 2,592,302 2
2200 Other payables 6(15) 27,276,879 15 27,954,181 22 26,126,851 21
2230 Current income tax liabilities 6(30) 911,439 - 1,801,229 1 1,138,797 1
2280 Lease liabilities – current 7 11,283,080 6 - - - -
2300 Other current liabilities 6(16) 3,107,172 2 3,260,538 3 1,767,115 2
21XX Total current liabilities 82,105,709 44 68,112,215 54 67,384,483 54
Non-current liabilities
2527 Contract liabilities – non-current 6(24) 405,150 - 234,421 - 307,670 -
2540 Long-term borrowings 6(17) and 8 519,004 - 847,040 1 1,004,980 1
2570 Deferred income tax liabilities 6(30) 5,531,962 3 5,386,839 4 5,357,729 4
2580 Lease liabilities – non-current 7 43,014,213 24 - - - -
2640 Net defined benefit liability 6(18)
– non-current 4,728,819 3 4,732,549 4 4,581,426 4
2670 Other non – current liabilities 6(19) 4,305,909 2 4,356,989 3 4,149,596 4
25XX Total non-current liabilities 58,505,057 32 15,557,838 12 15,401,401 13
2XXX Total liabilities 140,610,766 76 83,670,053 66 82,785,884 67
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 7 12,293,442 10 12,293,442 10
3320 Special reserve - - 398,859 - 398,859 -
3350 Unappropriated retained earnings 10,565,031 6 12,064,862 9 9,906,841 8
Other equity 6(23)
3400 Other equity interest 399,754 - 53,605 - ( 24,647 ) -
31XX Equity attributable to owners of
the parent 34,721,043 19 35,252,050 27 33,015,129 26
36XX Non-controlling interest 8,566,625 5 8,772,977 7 8,342,133 7
3XXX Total equity 43,287,668 24 44,025,027 34 41,357,262 33
3X2X Total liabilities and equity $ 183,898,434 100 $ 127,695,080 100 $ 124,143,146 100
----- 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

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

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

==> picture [757 x 342] intentionally omitted <==

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

For the three-month periods ended September 30 For the nine-month periods ended September 30
2019 2018 2019 2018
Items Notes AMOUNT % AMOUNT % AMOUNT % AMOUNT %
4000 Operating revenue 6(24) and 7 $ 66,088,666 100 $ 63,003,871 100 $ 191,121,985 100 $ 183,181,122 100
5000 Operating costs 6(4)(25) and 7 ( 43,291,348 ) ( 66) ( 41,319,909 ) ( 66 ) ( 125,390,999 ) ( 66 ) ( 120,042,077 ) ( 66 )
5900 Gross profit 22,797,318 34 21,683,962 34 65,730,986 34 63,139,045 34
Operating expenses 6(25)(26)
6100 Selling expenses ( 16,980,117 ) ( 26) ( 15,770,096 ) ( 25 ) ( 48,871,290 ) ( 25 ) ( 46,003,591 ) ( 25 )
6200 General and administrative expenses ( 2,407,474 ) ( 3) ( 2,560,732 ) ( 4 ) ( 6,886,264 ) ( 4 ) ( 7,197,427 ) ( 4 )
6450 Expected credit losses (gains) 12(2) ( 3,648 ) - 1,146 - ( 6,947 ) - ( 2,395 ) -
6000 Total operating expenses ( 19,391,239 ) ( 29) ( 18,329,682 ) ( 29 ) ( 55,764,501 ) ( 29 ) ( 53,203,413 ) ( 29 )
6900 Operating profit 3,406,079 5 3,354,280 5 9,966,485 5 9,935,632 5
Non-operating income and expenses
7010 Other income 6(27) 641,914 1 519,202 1 2,169,721 1 1,719,877 2
7020 Other gains and losses 6(28) - - - -
( 287 ) ( 29,662 ) ( 36,776 ) ( 22,319 )
7050 Finance costs 6(29) - - - -
( 287,679 ) ( 26,773 ) ( 894,008 ) ( 105,631 )
7060 Share of profit of associates and joint ventures accounted 6(6)
for using equity method 148,203 - 103,053 - 385,778 - 317,260 -
7000 Total non-operating income and expenses 502,151 1 565,820 1 1,624,715 1 1,909,187 2
7900 Profit before income tax
3,908,230 6 3,920,100 6 11,591,200 6 11,844,819 7
7950 Income tax expense 6(30)
( 776,678 ) ( 1) ( 805,570 ) ( 1 ) ( 2,229,478 ) ( 1 ) ( 2,852,953 ) ( 2 )
8000 Profit for the period from continuing operations 3,131,552 5 3,114,530 5 9,361,722 5 8,991,866 5
8200 Profit for the period $ 3,131,552 5 $ 3,114,530 5 $ 9,361,722 5 $ 8,991,866 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 [757 x 327] intentionally omitted <==

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

For the three-month periods ended September 30 For the nine-month periods ended September 30
2019 2018 2019 2018
Items Notes AMOUNT % AMOUNT % AMOUNT % AMOUNT %
Other comprehensive income (loss)
8316 Unrealized gain (loss) on valuation of equity instruments at fair value 6(5)
through other comprehensive income ($ 33,403) - ($ 21,612) - $ 95,070 - ($ 9,862) -
8320 Share of other comprehensive income (loss) of associates and joint
ventures accounted for using equity method that will not be reclassified
to profit or loss ( 994) - ( 559) - 1,000 - 533 -
8349 Income tax effect that will not be reclassified to profit or loss 6(30) 947 - 883 - ( 7,930) - 49,332 -
8310 Components of other comprehensive income (loss) that will not be
reclassified to profit or loss ( 33,450) - ( 21,288) - 88,140 - 40,003 -
8361 Exchange differences from translation of foreign operations ( 138,521) - ( 59,980) - 311,914 - 319,698 -
8367 Unrealized loss on valuation of bond instruments at fair value through 6(5)
- - - - -
other comprehensive income ( 210) ( 783) ( 1,117)
8370 Share of other comprehensive income of associates and joint ventures 6(23)
accounted for using equity method, components of other comprehensive
income that will be reclassified to profit or loss 1,502 - 8,852 - 3,343 - 2,923 -
8360 Components of other comprehensive income (loss) that will be
reclassified to profit or loss ( 137,019) - ( 51,338) - 314,474 - 321,504 -
8300 Total other comprehensive (loss) income for the period ($ 170,469) - ($ 72,626) - $ 402,614 - $ 361,507 -
8500 Total comprehensive income for the period $ 2,961,083 5 $ 3,041,904 5 $ 9,764,336 5 $ 9,353,373 5
Profit attributable to:
8610 Owners of the parent $ 2,772,206 4 $ 2,774,097 4 $ 8,269,957 4 $ 7,944,089 4
8620 Non-controlling interests 359,346 1 340,433 1 1,091,765 1 1,047,777 1
$ 3,131,552 5 $ 3,114,530 5 $ 9,361,722 5 $ 8,991,866 5
Comprehensive income attributable to:
8710 Owners of the parent $ 2,633,189 4 $ 2,725,013 4 $ 8,616,106 4 $ 8,394,877 4
8720 Non-controlling interests 327,894 1 316,891 1 1,148,230 1 958,496 1
$ 2,961,083 5 $ 3,041,904 5 $ 9,764,336 5 $ 9,353,373 5
9750 Basic earnings per share (in dollars) 6(31) $ 2.67 $ 2.67 $ 7.95 $ 7.64
9850 Diluted earnings per share (in dollars) 6(31) $ 2.67 $ 2.67 $ 7.94 $ 7.63
----- End of picture text -----

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

President : Huang, Jui-Tien

Chairman: Lo, Chih-Hsien

Accounting Manager: Kuo, Ying-Chih

~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
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 7,944,089 47,123 7,991,212 ( 3,101,709) ( 398,859) ( 25,990,556) - - $ 9,906,841 $ 12,064,862 8,269,957 - 8,269,957 ( 1,020,639) 398,859 ( 9,148,676) - - - 668 $ 10,565,031		($ 906,308) - ( 906,308) - 417,222 417,222 - - - - - ($ 489,086) ($ 279,829) - 257,660 257,660 - - - - - - - ($ 22,169)		$ - 477,996 477,996 - ( 13,557) ( 13,557) - - - - - $ 464,439 $ 333,434 - 88,489 88,489 - - - - - - - $ 421,923		$ 507,449 ( 507,449) - - - - - - - - - $ - $ - - - - - - - - - - - $ -	$ 50,614,262 ( 3,990) 50,610,272 7,944,089 450,788 8,394,877 - - ( 25,990,556) - 536 $ 33,015,129 $ 35,252,050 8,269,957 346,149 8,616,106 - - ( 9,148,676) - 562 333 668 $ 34,721,043	$ 8,892,148 ( 5,203) 8,886,945 1,047,777 ( 89,281) 958,496 - - - ( 1,503,308) - $ 8,342,133 $ 8,772,977 1,091,765 56,465 1,148,230 - - - ( 1,354,582) - - - $ 8,566,625	$ 59,506,410 ( 9,193`)` 59,497,217 8,991,866 361,507 9,353,373 - - ( 25,990,556`)` ( 1,503,308`)` 536 $ 41,357,262 $ 44,025,027 9,361,722 402,614 9,764,336 - - ( 9,148,676`)` ( 1,354,582`)` 562 333 668 $ 43,287,668

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
(Gain) loss 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
Gain on disposal of investments accounted for using the
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
Cash generated from operations
Interest received
Income tax paid
Interest paid
Dividends received
Net cash provided 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 (used in) provided by 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
Payment of cash dividends - the company
Payment of cash dividends - subsidiaries
Net cash used in financing activities
Effect of foreign exchange rate changes on cash and cash
equivalents
Increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Notes

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

President: Huang, Jui-Tien

Chairman: Lo, Chih-Hsien

Accounting Manager: Kuo, Ying-Chih

~11~

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

SEPTEMBER 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.

2. 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 November 1, 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 $144,164 was recognized for the nine-month period ended September 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:

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

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

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

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

~13~

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

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

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

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 [441 x 15] intentionally omitted <==

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

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

Name of the subsidiaries	September 30, 2019	September 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 (%)	September 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
			September 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 (%)	September 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
			September 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. Beijing 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 warehousing 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 (%)	September 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
			September 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 - 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) (e)

~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 (%)	September 30, 2018 100.00 100.00 50.00 100.00 100.00 50.00 100.00 15.00	Description
			September 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
						(f)

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

(4) Employee benefits

Defined benefit plans

Pension cost for the interim period is calculated on a year-to-date basis by using the pension cost rate derived from the actuarial valuation at the end of the prior financial year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events. And, the related information is disclosed accordingly.

~18~

(5) Income tax

A. The interim period income tax expense is recognized based on the estimated average annual effective income tax rate expected for the full financial year applied to the pretax income of the interim period, and the related information is disclosed accordingly.
B. If a change in tax rate is enacted or substantively enacted in an interim period, the Group recognizes the effect of the change immediately in the interim period in which the change occurs. The effect of the change on items recognized outside profit or loss is recognized in other comprehensive income or equity while the effect of the change on items recognized in profit or loss is recognized in profit or loss.
－
(6) 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.

(7) 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.

~19~

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

AILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
	September 30, 2019	December 31, 2018	September 30, 2018
Cash on hand and petty cash	$ 1,289,869	$ 1,958,556	$ 1,585,137
Checking accounts and demand deposits
	18,051,327	12,560,158	12,118,990

Cash equivalents
Time deposits	26,851,598	25,867,905	24,997,235
Short-term financial instruments	5,920,186	8,144,029	8,747,121
	$ 52,112,980	$ 48,530,648	$ 47,448,483

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

		September 30, 2019			December 31,2018	September 30, 2018
Financial assets mandatorily
measured at fair value
through profit or loss
Current items:
Beneficiary certificates	$ 1,583,016		$		844,170	$ 1,059,699
Valuation adjustment	231				55	598
	$ 1,583,247		$		844,225	$ 1,060,297

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 of $6,900 and $3,154 in relation to financial assets at fair value through profit or loss for the nine-month periods ended September 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
	September 30, 2019	December 31, 2018	September 30, 2018
Accounts receivable	$ 5,566,477	$ 5,320,037	$ 5,267,673
Less: Allowance for doubtful
accounts	( 55,561) (	55,464 ) (	41,993 )
	$ 5,510,916	$ 5,264,573	$ 5,225,680

~20~

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

	September 30, 2019	December 31, 2018	September 30, 2018
Not past due	$ 5,149,135	$ 5,144,165	$ 5,097,632
Up to 90 days	406,527	149,698	150,856
91 to 180 days	9,910	18,175	13,379
181 to 365 days	905	2,917	5,330
Over 365 days	-	5,082	476
	$ 5,566,477	$ 5,320,037	$ 5,267,673

The above aging analysis was based on past due date.

B. As of September 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 September 30, 2019, December 31, 2018 and September 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 $5,510,916, $5,264,573, and $5,225,680, respectively.
E. Information relating to credit risk is provided in Note 12(2).

(4) Inventories

Inventories
		September 30, 2019
		Allowance for
	Cost	valuation loss	Book value
Raw materials and work in process	$ 66,512	$ -	$ 66,512
Merchandise and finished goods	12,797,694 (	98,058)	12,699,636

	$ 12,864,206 (	$ 98,058)	$ 12,766,148


		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

		September 30, 2018	September 30, 2018
		Allowance for
	Cost	valuation loss	Book value
Raw materials and work in process	$ 66,676	$ -	$ 66,676
Merchandise and finished goods	12,811,328 (	85,912)	12,725,416

	$ 12,878,004 (	$ 85,912)	$ 12,792,092

~21~

The cost of inventories recognized as expenses for the period:

	For the three-month	For the three-month	For the three-month
	period ended		period ended
	September 30, 2019		September 30, 2018
Cost of goods sold	$ 42,750,127 $ 40,832,068
Loss on valuation (Gain on reversal) of inventories	5,632 ( 1,206)
Spoilage	463,529	420,157
Others	72,060	68,890
	$ 43,291,348	$ 41,319,909

	For the nine-month		For the nine-month
	period ended		period ended
	September 30, 2019		September 30, 2018
Cost of goods sold	$ 123,808,172	$ 118,604,022
Loss on valuation (Gain on reversal) of inventories	2,372 ( 49,879)
Spoilage	1,374,506	1,290,943
Others	205,949	196,991
	$ 125,390,999	$ 120,042,077

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 nine-month periods ended September 30, 2018, respectively.

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

	September 30, 2019	December 31, 2018	September 30, 2018
Debt instruments
Government bonds	$ -	$ 199,948	$ 199,921
Valuation adjustment	-	783	1,203
	-	200,731	201,124
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	469,730	374,660	508,647
	739,684	644,614	778,601
	$ 739,684	$ 845,345	$ 979,725

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 $739,684, $644,614 and $778,601 as at September 30, 2019, December 31, 2018 and September 30, 2018, respectively.

~22~

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:

air value through other comprehensive income are listed below:
	For the three-month	For the three-month
	period ended	period ended
	September 30, 2019	September 30, 2018
Equity instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income	($ 33,403)	($ 21,612)

Debt instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income	$ -	($ 210)
Interest income recognized in profit or loss	$ -	$ 590

	For the nine-month	For the nine-month
	period ended	period ended
	September 30, 2019	September 30, 2018
Equity instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income	$ 95,070	($ 9,862)

Debt instruments at fair value through other comprehensive income
Fair value change recognized in other comprehensive income	($ 783)	($ 1,117)
Interest income recognized in profit or loss	$ 1,180	$ 1,769

C. As at September 30, 2019, December 31, 2018 and September 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 $739,684, $845,345, and $979,725, 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

	September 30, 2019	December 31, 2018	September 30, 2018
Associates
PresiCarre Corp.	$ 5,678,150	$ 5,518,380	$ 5,459,859
President Fair Development Corp.	2,013,938	1,984,125	1,971,517
Uni-President Development Corp.	751,128	753,904	741,352
President International Development
Corp.	465,259	461,328	463,287
Tung Ho Development Corp.	108,792	114,755	117,847
Others	57,678	60,209	55,194
	9,074,945	8,892,701	8,809,056
Joint ventures
Mister Donut Taiwan Corp., Ltd.	96,015	$ 107,879	89,784
	$ 9,170,960	$ 9,000,580	$ 8,898,840

~23~

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
	September 30, 2019		September 30, 2018
Total comprehensive income	$ 146,018		$ 111,045

	For the nine-month		For the nine-month
	period ended		period ended
	September 30, 2019		September 30, 2018
Total comprehensive income	$ 381,030		$ 315,339
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
	September 30, 2019		September 30, 2018
Total comprehensive income	$ 2,693	$ 301


	For the nine-month		For the nine-month
	period ended		period ended
	September 30, 2019		September 30, 2018
Total comprehensive income	$ 9,091		$ 5,377

(b) The Group’s share of the operating results in all individually immaterial joint ventures is summarized below:
－
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.
E. In August 2018, the Group disposed 0.02% shares of its investments accounted for using equity method － Grand Bills Finance Corp. to Kai Yu Investment Co., Ltd.. Information about disposal proceeds and
disposal gain or loss are provided in Note 7(3) f.

~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
-	99,820	169,162	1,999,943	1,428,463	1,323,208	5,020,596
-	-	( 20,709)	( 84,911 ) (	69,249 ) (	3,689 ) (	178,558)
( 18,757 )	30,199	84,974	110,127	172,732 (	350,171 )	29,104
- (	152,273 )	( 392,493)	( 1,658,477 ) (	1,384,694 ) (	997,030 ) (	4,584,967)
571 (	2,921)	( 684)	( 12,750)	40,348	52,831	77,395
$ 2,238,564	$ 2,717,931	$ 2,107,667	$ 7,126,914	$ 6,770,603	$ 4,298,421	$ 25,260,100
$ 2,254,930	$ 4,771,041	$ 6,563,496	$ 21,791,858	$ 18,759,192	$ 10,652,783	$ 64,793,300
( 16,366 ) (	2,053,110 )	( 4,455,829)	( 14,664,944)	( 11,988,589) (	6,354,362 ) (	39,533,200)
$ 2,238,564	$ 2,717,931	$ 2,107,667	$ 7,126,914	$ 6,770,603	$ 4,298,421	$ 25,260,100

~25~

Land				2018			Total
		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
-	13,909		239,501	1,379,191	1,427,439	1,579,341	4,639,381
- (	38 ) (		14,804 ) (	22,133 ) (	16,111 ) (	6,487 ) (	59,573)
-	5,742		111,428	149,579	16,394 (	279,438 )	3,705
- (	140,694 ) (		419,216 ) (	1,711,202 ) (	1,287,079 ) (	917,186 ) (	4,475,377)
1,245) (	5,858 ) (		5,459 ) (	17,324) (	70,569) (	126,441) (	226,896)
$ 2,255,973	$ 2,368,613		$ 2,208,912	$ 6,573,934	$ 6,761,377	$ 4,694,773	$ 24,863,582
$ 2,272,339	$ 4,297,135		$ 6,468,910	$ 20,786,304	$ 17,904,068	$ 9,689,631	$ 61,418,387
16,366) (	1,928,522 ) (		4,259,998 ) (	14,212,370 ) (	11,142,691) (	4,994,858) (	36,554,805)
$ 2,255,973	$ 2,368,613		$ 2,208,912	$ 6,573,934	$ 6,761,377	$ 4,694,773	$ 24,863,582

B. Impairment information 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	September 30, 2019 Carryingamount $ 686,130 52,262,572 82,801 345,467 $ 53,376,970	For the three-month period ended September 30, 2019 Depreciation charge $ 35,029 2,926,455 10,239 24,594 $ 2,996,317	For the nine-month period ended September 30, 2019
			Depreciation charge
			$ 102,154 8,661,943 29,411 72,160 $ 8,865,668

C. For the three-month and nine-month periods ended September 30, 2019, the additions to right-of-use assets were $4,471,322 and $10,592,609, 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 September 30, 2019 $ 259,658 435,657 24,700 245,676 179,798	For the nine-month period ended September 30, 2019
		$ 801,325 540,110 52,717 448,494 401,497

E. For the nine-month period ended September 30, 2019, the Group’s total cash outflow for leases was $10,032,209
F. Variable lease payments
(a) Some of the Group’s lease contracts contain variable lease payment terms that are linked to sales generated from a store or department store counter. For the above-mentioned stores, up to 4.19% 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 $4,485.
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 September 30, 2019 is $17,011,846.

~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 35 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
B. Information on profit or loss in relation to lease contracts is as follows:

Rental revenue Rental revenue from variable lease payments Rental revenue Rental revenue from variable lease payments	For the three-month period ended September 30, 2019 $ 403,267 $ 316,409 For the nine-month period ended September 30, 2019 $ 1,140,762 $ 876,429	For the three-month period ended September 30, 2018 $ 372,399 $ 340,492
		For the nine-month period ended September 30, 2018 $ 1,066,911 $ 967,360

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	September30,2019
	$ 178,210 326,796 263,478 206,337 146,460 107,595 293,089 $ 1,521,965

~28~

(10) Investment property

nvestment property
January 1 Depreciation charge Reclassifications September 30 January 1 Depreciation charge September 30		2019
	Land Buildings Total $ 1,059,538 $ 442,621 $ 1,502,159 - ( 12,773) ( 12,773) 18,757 2,913 21,670 $ 1,078,295 $ 432,761 $ 1,511,056 2018		Total
			$ 1,511,056
	Land $ 1,059,538 - ( $ 1,059,538	Buildings $ 459,577 12,717) ( $ 446,860	Total
			$ 1,519,115 12,717) $ 1,506,398

The fair value of the investment property held by the Group ranged from $3,774,921 to $4,113,899 at September 30, 2019, December 31, 2018, and September 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

Intangible assets
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 39,761 Reclassifications 41,785 Amortization expenses ( 176,291 ) Net exchange differences ( 1,372 ) Closing net book amount as of September 30 $ 388,130 At September 30 Cost $ 1,715,582 Accumulated amortization and impairment (1,327,452 ) $ 388,130	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
	39,761	-	-		6,710	46,471
	41,785	-	-		5,259	47,044
		-	( 145,619)	( 33,471 ) ( 355,381 )
	1,372 )	601	-		127	644)
	$ 388,130	$ 2,204,885	$ 7,185,111		$ 353,244	$ 10,131,370
	$ 1,715,582	$ 2,204,885	$ 7,524,890		$ 479,850	$ 11,925,207

	1,327,452 )	-	(339,779)	(	126,606) (	1,793,837)
	$ 388,130	$ 2,204,885	$ 7,185,111		$ 353,244	$ 10,131,370

~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
101,546	-	-		22,606	124,152
	-	-	( 686 ) ( 989 )
	- ( 145,620 )		( 22,712 ) ( 353,037 )
920	1,414	-		54	2,388
$ 509,684	$ 2,203,933	$ 7,379,270		$ 336,340	$ 10,429,227
$ 1,588,354	$ 2,203,933	$ 7,524,890		$ 422,480	$ 11,739,657

1,078,670 )	- (	145,620)	(	86,140) (	1,310,430)
$ 509,684	$ 2,203,933	$ 7,379,270		$ 336,340	$ 10,429,227

Amortization expenses on intangible assets are recognized as operating expenses.

(12) Other non-current assets

Guarantee deposits paid Others	September 30, 2019 $ 2,903,597 390,716 $ 3,294,313	December,31, 2018 $ 2,766,913 437,846 $ 3,204,759	September 30, 2018
			$ 2,698,348 479,620 $ 3,177,968

(13) Impairment of non-financial assets

A. There were no impairment loss nor reversal of impairment loss recognized for the nine-month periods ended September 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	September 30, 2019 $ 5,948,113 December 31, 2018 $ 7,237,785 September 30, 2018 $ 7,111,486	Interest rate range 0.65%~6.00% Interest rate range 0.65%~7.00% Interest rate range 0.67%~4.75%	Collateral
			None Collateral
			None Collateral
			None

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

(15) Other payables

Store collections Wages, salaries and bonus payable Sales receipt on behalf of others Incentive bonus payable to franchisees Payables for acquisition of property, plant and equipment Employees’ compensation and remuneration for directors and supervisors Payables for labor and health insurance Rent payable Others	September 30, 2019 $ 14,305,792 5,001,371 989,538 964,824 829,229 671,964 238,796 59,068 4,216,297 $ 27,276,879	December 31, 2018 $ 12,750,758 5,033,232 1,176,154 1,047,674 914,557 879,671 238,255 848,049 5,065,831 $ 27,954,181	September 30, 2018
			$ 12,853,999 4,982,193 883,571 951,915 374,747 685,271 240,450 831,416 4,323,289 $ 26,126,851

(16) Other current liabilities

Advance receipts for gift certificates Advance receipts of deposits in icash cards Current portion of long-term liabilities Others	September 30, 2019 $ 1,293,164 1,254,428 315,429 244,151 $ 3,107,172	December 31, 2018 $ 1,338,984 1,199,455 335,860 386,239 $ 3,260,538	September 30, 2018
			$ - 1,166,675 298,772 301,668 $ 1,767,115

~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 4.88%~6.69% 1.72%~1.96% Interest rate range 0.80%~6.298% 1.75%~1.96% Interest rate range 0.84%~4.44% 1.79%~1.96%	Collateral None Property, plant and equipment ( Collateral None Property, plant and equipment ( Collateral None Property, plant and equipment (	September 30, 2019 $ 414,938 419,495 834,433 315,429) $ 519,004 December 31, 2018 $ 741,157 441,743 1,182,900 335,860) $ 847,040 September 30, 2018 $ 874,987 428,765 1,303,752 298,772) $ 1,004,980

There was no capitalization of borrowing costs for the nine-month periods ended September 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 employer contributes the same amount as employees’ to the employee’s individual pension accounts.

~32~

For the aforementioned pension plan, the Group recognized pension costs of $35,298, $42,262, $105,707, and $120,369 for the three-month and nine-month periods ended September 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 nine-month periods ended September 30, 2019 and 2018 were 14%~20%. 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 nine-month periods ended September 30, 2019 and 2018 were $238,040, $231,124, $714,478 and $691,341, respectively.

(19) Other non-current liabilities

Guarantee deposit received Decommissioning liability Others	September 30, 2019 $ 3,510,895 498,996 296,018 $ 4,305,909	December 31, 2018 $ 3,413,265 421,966 521,758 $ 4,356,989	September 30, 2018 $ 3,385,268 412,680 351,648 $ 4,149,596

(20) Share capital

As of September 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 September 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 Revaluation: –Group –Associates Revaluation-tax Currency translation differences: –Group –Associates At September 30			2019
		Exchange differences from translation of foreign operations ($ 279,829) - - - 255,449 2,211 ($ 22,169)	Unrealized gains/(losses) on valuation of financial assets at fair value through other comprehensive income $ 333,434 94,287 2,132 ( 7,930) - - $ 421,923	Total $ 53,605 94,287 2,132 ( 7,930) 255,449 2,211 $ 399,754

~34~

2018

		2018
At January 1 Adjustments under new standards Adjusted beginning balance Revaluation: –Group –Associates Revaluation-tax Currency translation differences: –Group –Associates At September 30	Exchange differences from translation of foreign operations ($ 906,308) - ( 906,308) - - - 412,160 5,062 $ 489,086)	Unrealized gains/(losses) on valuation of financial assets at fair value through other comprehensive income $ - 477,996 477,996 ( 10,979) ( 1,615) ( 963) - - $ 464,439	Unrealized gains/(losses) on available- for-sale financial assets $ 507,449 ( 507,449) - - - - - - $ -	Total ($ 398,859) (29,453) ( 428,312) ( 10,979) ( 1,615) ( 963) 412,160 5,062 ($ 24,647)

(24) Operating revenue

Revenue from contracts with customers Revenue from contracts with customers	For the three-month period ended September 30, 2019 $ 66,088,666 For the nine-month period ended September 30, 2019 $ 191,121,985	For the three-month period ended September 30, 2018 $ 63,003,871 For the nine-month period ended September 30, 2018 $ 183,181,122

A. Disaggregation of revenue from contracts with customers

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

For the three-month period ended September 30, 2019 Timing of revenue recognition –At a point in time –Over time	Convenience stores $ 40,816,692 134,122 $ 40,950,814	Retail business group $ 15,810,313 3,288,669 $ 19,098,982	Logistics business group $ 293,658 222,170 $ 515,828	Others $ 5,279,012 244,030 $ 5,523,042	Total
					$ 62,199,675 3,888,991
					$ 66,088,666

~35~

For the three-month period	Convenience	Convenience	Retail business	Retail business		Logistics	Logistics
ended September 30, 2018		stores		group	business group			Others			Total
Timing of revenue
recognition
–At a point in time	$	39,733,764	$	14,514,588	$		501,813	$ 5,158,358			$ 59,908,523
–Over time		135,787		2,857,209			59,697		42,655		3,095,348
	$	39,869,551	$	17,371,797	$		561,510	$ 5,201,013			$ 63,003,871
For the nine-month period	Convenience		Retail business			Logistics
ended September 30, 2019		stores		group	business group				Others		Total
Timing of revenue
recognition
–At a point in time	$	117,789,512	$	46,422,331	$		884,291	$ 14,634,939			$ 179,731,073
–Over time		385,575		9,583,708			686,609		735,020		11,390,912
	$	118,175,087	$	56,006,039	$		1,570,900	$ 15,369,959			$ 191,121,985
For the nine-month period	Convenience		Retail business			Logistics
ended September 30, 2018		stores		group	business group				Others		Total
Timing of revenue
recognition
–At a point in time	$	115,216,740	$	42,667,809	$		1,345,547	$ 14,486,952			$ 173,717,048
–Over time		393,255		8,437,232			173,954		459,633		9,464,074
	$	115,609,995	$	51,105,041	$		1,519,501	$ 14,946,585			$ 183,181,122
B. Contract liabilities
(a) The Group has recognized the following				revenue-related		contract liabilities:
	September 30, 2019			December 31, 2018			September 30,		2018	January 1, 2018
Contract liabilities –
advance receipts
of gift certificates
and gift cards	$	1,869,830		$ 1,392,390			$	2,293,903		$	2,104,769
Contract liabilities –
members’ deposits		801,820			764,782			1,389,884			1,246,600
Contract liabilities –
franchise fee		340,467			230,812			225,511			231,312
Contract liabilities –
customer loyalty
programs		417,274			344,970			307,670			346,011
Contract liabilities –
others		392,314			344,656			271,383			352,677
	$	3,821,705		$ 3,077,610			$	4,488,351		$	4,281,369

~36~

Contract liabilities – current Contract liabilities – non-current	September 30, 2019 $ 3,416,555 405,150 $ 3,821,705	December 31, 2018 $ 2,843,189 234,421 $ 3,077,610	September 30, 2018 $ 4,180,681 307,670 $ 4,488,351	January 1, 2018 $ 3,935,358 346,011
				$ 4,281,369

(b) Revenues recognized that were included in the contract liabilities balance at the beginning were $2,173,785 and $1,211,462 for the nine-month periods ended September 30, 2019 and 2018, respectively.

(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 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 September 30, 2019 $ 38,650,692 6,797,177 5,781,699 4,696,329 1,271,238 706,033 4,779,419 $ 62,682,587 For the nine-month period ended September 30, 2019 $ 111,940,869 19,638,505 16,377,993 13,883,985 3,375,551 1,041,321 14,897,276 $ 181,155,500	For the three-month period ended September 30, 2018 $ 36,999,432 6,333,106 5,453,500 1,659,007 1,207,632 3,097,938 4,898,976 $ 59,649,591 For the nine-month period ended September 30, 2018 $ 107,255,010 19,046,933 15,780,408 4,909,663 3,121,900 9,127,248 14,004,328 $ 173,245,490

~37~

(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 September 30, 2019 $ 5,629,754 496,623 273,338 397,462 $ 6,797,177 For the nine-month period ended September 30, 2019 $ 16,197,470 1,509,699 820,185 1,111,151 $ 19,638,505	For the three-month period ended September 30, 2018
		$ 5,206,845 476,902 273,386 375,973
		$ 6,333,106
		For the nine-month period ended September 30, 2018
		$ 15,705,118 1,466,361 811,710 1,063,744
		$ 19,046,933

A. According to the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall not be lower than 2% for employees’ compensation and shall not be higher than 2% for directors’ and supervisors’ remuneration.
B. For the three-month and nine-month periods ended September 30, 2019 and 2018, employees’ compensation was accrued at $149,580, $152,451, $442,439 and $453,116 respectively; while directors’ and supervisors’ remuneration was accrued at $49,974, $50,933, $147,817 and $151,384, 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 nine-month period ended September 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.

~38~

(27) Other income

Other income
Interest income Grants income Rental revenue Dividend income Others Interest income Grants income Rental revenue Dividend income Others	For the three-month period ended September 30, 2019 $ 205,959 175,366 72,548 257 187,784 $ 641,914 For the nine-month period ended September 30, 2019 $ 616,912 499,090 221,920 47,491 784,308 $ 2,169,721	For the three-month period ended September 30, 2018
		$ 167,144 158,607 32,884 1,961 158,606 $ 519,202 For the nine-month period ended September 30, 2018
		$ 502,011 464,183 100,942 62,629 590,112 $ 1,719,877

(28) Other gains and losses

		For the three-month			For the three-month
		period ended			period ended
		September 30, 2019			September 30, 2018
(Loss) gain on disposal of investments	($	30	)	$	5,026
(Loss) gain on disposal of property, plant and	(	22,287 )			3,502
equipment
Other gains and losses		22,030		(	38,190)
	($	287	)	($	29,662 )
		For the nine-month			For the nine-month
		period ended			period ended
		September 30, 2019			September 30, 2018
(Loss) gain on disposal of investments	($	3,462)		$	8,177
Loss on disposal of property, plant and equipment	(	23,380 )		(	6,537 )
Other losses	(	9,934)		(	23,959)
	($	36,776 )		($	22,319 )

~39~

(29) Finance costs

Interest expense Interest expense	For the three-month period ended September 30, 2019 $ 287,679 For the nine-month period ended September 30, 2019 $ 894,008	For the three-month period ended September 30, 2018 $ 26,773 For the nine-month period ended September 30, 2018 $ 105,631

(30) Income tax

A. Income tax expense

(a) Components of income tax expense:

Current tax:
Current tax on profits for the period
Over provision of prior year’s income tax
Total current tax
Deferred tax:
Origination and reversal of temporary differences
Total deferred tax
Income tax expense

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

For the three-month
period ended
September 30, 2019
For the three-month
period ended
September 30, 2018
$ 778,872
$ 794,850
(
6,289)
(
2,369)
772,583
792,481

4,095
13,089
4,095
13,089
$ 776,678
$ 805,570
For the nine-month
period ended
September 30, 2019
For the nine-month
period ended
September 30, 2018
$ 2,169,569
$ 2,195,664
20,212
135,163
(
5,292)
(
2,369)
2,184,489
2,328,458
44,989 (
115,809)
-
640,304
44,989
524,495
$ 2,229,478
$ 2,852,953

~40~

(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 September 30, 2019 For the three-month period ended September 30, 2018 ($ 947) ($ 883) ($ 947) ($ 883) For the nine-month period ended September 30, 2019 For the nine-month period ended September 30, 2019 $ 7,930 ($ 2,355) - ( 46,977) $ 7,930 ($ 49,332)	For the three-month period ended September 30, 2018
		($ 883) ($ 883) For the nine-month period ended September 30, 2019

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

(31) Earnings per share

Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	For the three-month period ended September 30, 2019 Amount Weighted average number of ordinary shares outstanding Earnings per share after tax (shares in thousands) (in dollars) $ 2,772,206 1,039,622 $ 2.67 $ 2,772,206 1,039,622 - 516 $ 2,772,206 1,040,138 $ 2.67	For the three-month period ended September 30, 2019 Amount Weighted average number of ordinary shares outstanding Earnings per share after tax (shares in thousands) (in dollars) $ 2,772,206 1,039,622 $ 2.67 $ 2,772,206 1,039,622 - 516 $ 2,772,206 1,040,138 $ 2.67
	Amount after tax $ 2,772,206 $ 2,772,206 - $ 2,772,206	Weighted average number of ordinary shares outstanding (shares in thousands) 1,039,622 1,039,622 516 1,040,138

~41~

For the three-month period ended September 30, 2018

Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Amount after tax $ 2,774,097 $ 2,774,097 - $ 2,774,097	Weighted average number of ordinary shares outstanding (shares in thousands) 1,039,622 1,039,622 425 1,040,047	Earnings per share (in dollars) $ 2.67
			$ 2.67

For the nine-month period ended September 30, 2019

	For the nine-month period ended September 30, 2019	For the nine-month period ended September 30, 2019	er 30, 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) $ 8,269,957 1,039,622 $ 7.95 $ 8,269,957 1,039,622 - 1,930 $ 8,269,957 1,041,552 $ 7.94 For the nine-month period ended September 30, 2018		Earnings per share (in dollars) $ 7.95
			$ 7.94
	Amount after tax $ 7,944,089 $ 7,944,089 - $ 7,944,089	Weighted average number of ordinary shares outstanding (shares in thousands) 1,039,622 1,039,622 2,040 1,041,662	Earnings per share (in dollars) $ 7.64
			$ 7.63

~42~

(32) Operating leases

Lessor 2018

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 noncancellable 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	September 31, 2018 $ 93,273 248,312 25,933
		$ 367,518

Lessee

A. The Group leases business premises for its stores. The lease terms are between one and twenty years, and certain lease agreements are renewable at the end of the lease period. Rents are paid in accordance with the agreements. Some leases incur additional rent expenses based on the operating revenue of stores or changes in local price indices. Rental expenses recognized in profit and loss for the threemonth and nine-month periods ended September 30, 2018 are as follows:

Rental expenses Contingent rents	For the three-month period ended September 30, 2018 $ 3,017,356 $ 80,582	For the nine-month period ended September 30, 2018 $ 8,840,610
		$ 286,638

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	September 30, 2018
		$ 10,036,360 34,992,504 13,208,573
		$ 58,237,437

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

Sublease revenues Contingent rents	For the three-month period ended September 30, 2018 $ 91,966 $ 284,559	For the nine-month period ended September 30, 2018 $ 209,120
		$ 855,611

In accordance with non-cancellable sub-lease agreements as of September 30, 2018, sub-lease payments totalling $390,854 are expected to be collected between 2018 and 2028.

~43~

(33) Supplemental cash flow information

Investing activities with partial cash payments

Purchase of property, plant and equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment Cash paid during the period

For the nine-month period ended September 30, 2019 $ 5,020,596 914,557 ( 829,229) $ 5,105,924	For the nine-month period ended September 30, 2018
	$ 4,639,381 1,071,524 ( 374,747) $ 5,336,158

(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 September 30				2019	2019
	Short-term borrowings $ 7,237,785 ( 1,289,672) - - $ 5,948,113		Long-term borrowings $ 847,040 ( 360,485) ( 12,018 20,431 $ 519,004	Lease liabilities $ 52,938,613 8,189,563) 87,934 9,460,309 $ 54,297,293	Guarantee deposits received $ 3,413,265 97,630 ( - - $ 3,510,895	Other non- current liabilities $ 943,724 225,740) - 77,030 $ 795,014	Liabilities from financing activities- gross $ 65,380,427 ( 9,967,830) 99,952 9,557,770 $ 65,070,319

At January 1 Changes in cash flow from financing activities Impact of changes in foreign exchange rate Changes in other non-cash items At September 30				2018	2018
		Short-term borrowings $ 965,180 6,146,306 - - $ 7,111,486	Short-term notes and bills payable Long-term borrowings $ 250,000 $ 1,105,451 ( 40,000) ( 43,052) - ( 32,401) - ( 25,018) $ 210,000 $ 1,004,980		Guarantee deposits received $ 3,355,172 30,096 - - $ 3,385,268	Other non- current liabilities $ 1,066,559 43,780 - ( ( 346,011) ( $ 764,328	Liabilities from financing activities- gross $ 6,742,362 6,137,130 32,401) 371,029) $ 12,476,062

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 September 30, 2019.

~44~

(2) Names of related parties and relationship

Names of related parties Uni-President Enterprises Corp. Tait Marketing & Distribution Co., Ltd. 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.

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

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

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

Relationship with the Group Ultimate parent company Subsidiaries of ultimate parent company 〃

〃
〃

〃

〃

〃
〃

〃

Investees of the Company accounted for using the equity method 〃〃

Investees of ultimate parent company accounted for using the equity method

〃

〃

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

The Company is a director of Koasa Yamako Corp.

(3) Significant related party transactions and balances

A. Operating revenue

Sales of goods Ultimate parent Associates Sister companies Other related parties Sales of services Ultimate parent Associates Sister companies Other related parties	For the three-month period ended September 30, 2019 $ 143,533 35,320 61,557 18,881 3,120 15,761 4,689 1,677 $ 284,538	For the three-month period ended September 30, 2018 $ 144,231 40,018 84,585 18,690 2,386 9,159 3,006 1,632 $ 303,707

~45~

Sales of goods Ultimate parent Associates Sister companies Other related parties Sales of services Ultimate parent Associates Sister companies Other related parties	For the nine-month period ended September 30, 2019 $ 433,371 105,458 188,245 56,812 9,536 45,607 10,688 4,333 $ 854,050	For the nine-month period ended September 30, 2018 $ 432,424 112,296 221,544 54,847 8,323 28,744 8,331 3,890 $ 870,399

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

B. Purchases

Ultimate parent Associates Sister companies Other related parties	For the three-month period ended September 30, 2019 $ 4,328,793 57,433 1,291,677 698,498 $ 6,376,401	For the three-month period ended September 30, 2018 $ 4,102,705 64,002 1,048,756 547,714 $ 5,763,177

Ultimate parent Associates Sister companies Other related parties	For the nine-month period ended September 30, 2019 $ 12,373,257 190,971 3,273,137 1,832,027 $ 17,669,392	For the nine-month period ended September 30, 2018 $ 11,575,196 216,120 3,004,620 1,595,650 $ 16,391,586

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

C. Receivables from related parties

Accounts receivable Ultimate parent Associates Sister companies Other related parties	September 30, 2019 $ 155,480 88,738 55,004 5,293 $ 304,515	December 31, 2018 $ 201,321 73,101 85,384 4,722 $ 364,528	September 30, 2018 $ 102,639 77,131 52,548 5,964 $ 238,282

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.

~46~

D. Payables to related parties

Payables to related parties
September 30, 2019 Notes payable and accounts payable Ultimate parent $ 2,977,454 Associates 65,609 Sister companies 851,106 Other related parties 517,807 $ 4,411,976	December 31, 2018 $ 1,631,289 63,739 442,907 370,822 $ 2,508,757	September 30, 2018 $ 1,667,232 53,954 489,768 399,671 $ 2,610,625
Ultimate parent Associates Sister companies Other related parties

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 Other related parties	For the nine-month period ended September 30, 2019
	$ 112,002 12,157 12,398 513,952 $ 650,509

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	September 30, 2019
	$ 146,560 646,561 280,228 537,372 $ 1,610,721

F. Property transactions

(a) Acquisition of property, plant and equipment

Accounts

Associates Property, plant and equipment

Accounts Associates Property, plant and equipment

For the three-month period ended September 30, 2019 $ 39,780 For the three-month period ended September 30, 2018 $ 16,944	For the nine-month period ended September 30, 2019
	$ 39,780 For the nine-month period ended September 30, 2018
	$ 16,944

~47~

(b) Disposal of financial assets

(b) Disposal of financial assets
Accounts Sister companies Investments accounted for using equity method Key management compensation Salaries and other short-term employee benefits Salaries and other short-term employee benefits	No. of shares Objects 108,160 Grand Bills Finance Corp. For the three-month period ended September 30, 2019 $ 157,535 For the nine-month period ended September 30, 2019 $ 529,203	For the nine-month period ended September 30, 2018
		Proceeds Gain $ 1,828 $ 59 For the three-month period ended September 30, 2018 $ 164,017 For the nine-month period ended September 30, 2018 $ 513,773	Gain
			$ 59

(4) Key management compensation

8. PLEDGED ASSETS

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

Pledged asset		Book value	September 30, 2018 $ - 128,643 54,059 569,619 40,765 $ 793,086	Purpose
	September 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 46,248 565,016 31,495 $ 771,402	$ 20,000 128,643 50,230 586,353 56,495 $ 841,721		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

SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

None.

~48~

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.

(2)Financial instruments

A. Financial instruments by category

ncial instruments Financial instruments by category
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Qualifying equity instrument Financial assets at amortized cost/Loans and receivables Cash and cash equivalents Accounts receivable, net Other receivables Guarantee deposits paid Financial liabilities Financial liabilities at amortized cost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Other payables Long-term borrowings (including current portion) Guarantee deposits received Lease liabilities	September 30, 2019 $ 1,668,812 $ 739,684 - 739,684 $ 52,112,980 5,510,916 2,301,736 2,903,597 62,829,229 $ 65,237,725 $ 5,948,113 - 3,063,910 27,098,561 27,276,879 834,433 3,510,895 67,732,791 $ 54,297,293 $ 122,030,084	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 $ - $ 64,803,424	September 30, 2018
			$ 1,145,980 $ 778,601 201,124 979,725 $ 47,448,483 5,225,680 2,002,468 2,698,348 57,374,979 $ 59,500,684 $ 7,111,486 210,000 2,887,943 23,961,610 26,126,851 1,303,752 3,385,268 64,986,910 $ - $ 64,986,910

~49~

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:

September 30, 2019 Foreign currency amount (In thousands) Exchange rate Book value (NTD) $ 1,175 31.0400 $ 36,472 470 4.3423 2,041 85,528 0.2878 24,615 1,687 3.9597 6,680 $ 835,200 0.2878 $ 240,371 $ 3,722 31.0400 $ 115,531 97,379 0.2878 28,026 834 4.3423 3,621	September 30, 2019 Foreign currency amount (In thousands) Exchange rate Book value (NTD) $ 1,175 31.0400 $ 36,472 470 4.3423 2,041 85,528 0.2878 24,615 1,687 3.9597 6,680 $ 835,200 0.2878 $ 240,371 $ 3,722 31.0400 $ 115,531 97,379 0.2878 28,026 834 4.3423 3,621	December 31, 2018	December 31, 2018
Foreign currency amount (In thousands) $ 1,175 470 85,528 1,687 $ 835,200 $ 3,722 97,379 834	Exchange rate 31.0400 4.3423 0.2878 3.9597 0.2878 31.0400 0.2878 4.3423	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

~50~

September 30, 2018	September 30, 2018	September 30, 2018
Foreign currency amount (In thousands) $ 1,488 1,560 28,540 2,290 $ 831,600 $ 4,997 91,209 1 761	Exchange rate 30.5250 4.4440 0.2692 3.8995 0.2692 30.5250 0.2692 3.8995 35.4800	Book value (NTD)
		$ 45,421 6,933 7,683 8,930 $ 223,867 $ 152,533 24,553 4 27,000

IV. Total exchange gain or loss, including realized and unrealized from significant foreign exchange variations on monetary items held by the Group amounted to ($1,105), ($5,840), ($1,301) and $57,173 for the three-month and nine-month periods ended September 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 September 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 nine-month periods ended September 30, 2019 and 2018 would increase/decrease by $3,953 and $5,356, 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 - non-current and accounts payable denominated in JPY. If the NTD:JPY exchange rate appreciates/depreciates by 5%, with all other factors remaining constant, the Group’s comprehensive income for the nine-month periods ended September 30, 2019 and 2018 would increase/decrease by $11,848 and $10,349, respectively.

Price risk

I. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.
II. The Group’s investments in equity securities comprise shares and open-ended funds issued by the domestic companies. The prices of equity securities would change due to change of the future value of investee companies. If the prices of these equity securities increase/decrease by 5%, and beneficiary certificates increase/decrease by 0.25%, with all other variables held constant, the post-tax profit for the nine-month periods ended September 30, 2019 and 2018 would have increased/decreased by $8,236 and $6,935, 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 $36,984 and $38,930, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

~51~

Cash flow and fair value interest rate risk

I. The Group’s interest rate risk arises from short-term borrowings and long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk, which are partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. During the nine-month periods ended September 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 nine-month periods ended September 30, 2019 and 2018 would have increased/decreased by $2,086 and $2,634, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

(b) Credit risk

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

At January 1 Provision for impairment Reversal of impairment Write-offs Effect of foreign exchange At September 30 At January 1_IAS 39 Adjustments under new standards At January 1_IFRS 9 Provision for impairment Reversal of impairment Write-offs Effect of foreign exchange At September 30	2019 Accounts receivable $ 55,464 6,947 ( 3,746) ( 1,599) ( 1,505) $ 55,561 2018 Accounts receivable $ 48,471 10,889 59,360 2,395 ( 1,908) ( 16,244) ( 1,610) $ 41,993

~52~

IV. The Group’s investment in debt instrument is the government bond, which was issued by R.O.C, the risk of expected credit loss is low. The Group has no unrecognized allowance for investment in debt instrument at fair value through other comprehensive income for the nine-month period ended September 30, 2019 and 2018.
V. The Group has no written-off financial assets that are still under recourse procedures on September 30, 2019, December 31 2018 and September 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 $1,583,247, $844,225 and $1,060,297 as at September 30, 2019, December 31, 2018, and September 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 $13,613,541, $14,006,462 and $14,141,400 as of September 30, 2019, December 31, 2018 and September 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. Except for short-term notes and bills payable, notes payable, accounts payable and other payables, whose contractual undiscounted cash flows are about to book value, maturing within one-year, the amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

September 30, 2019 Short-term borrowings Lease liabilities Long-term borrowings (including current portion) Non-derivative financial liabilities: December 31, 2018 Short-term borrowings Long-term borrowings (including current portion)	Less than 1 year Between 1 and 2 years Between 2 and 3 years Over 3 years $ 5,996,566 $ - $ - $ - 12,123,134 10,960,395 9,942,164 26,927,988 347,151 121,667 96,158 484,552 Less than 1 year Between 1 and 2 years Between 2 and 3 years Over 3 years $ 7,286,725 $ - $ - $ - 372,094 264,270 189,983 407,867	Over 3 years

~53~

Non-derivative financial liabilities: September 30, 2018 Short-term borrowings Long-term borrowings (including current portion)	Less than 1 year Between 1 and 2 years Between 2 and 3 years Over 3 years $ 7,182,700 $ - $ - $ - 329,806 474,874 102,157 465,545	Over 3 years

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

(3)Fair value information

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

	September 30, 2019	September 30, 2019
Book value $ 2,903,597 $ 3,510,895		Fair value
	Level 1 Level 2 $ - $ - $ - $ - December 31, 2018		Level 3 $ 2,880,398 $ 3,482,572 Level 3 $ 2,748,262 $ 3,384,951
Book value $ 2,766,913 $ 3,413,265		Fair value
	Level 1 $ - $ -	Level 2 $ - $ -

~54~

	September 30, 2018	September 30, 2018
Book value $ 2,698,348 $ 3,385,268		Fair value
	Level 1 $ - $ -	Level 2 $ - $ -	Level 3
			$ 2,677,997 $ 3,355,502

(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:

September 30, 2019 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Equity securities Financial assets at fair value through other comprehensive income Equity securities December 31, 2018 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Equity securities Financial assets at fair value through other comprehensive income Equity securities Debt securities	Level 1 $ 1,583,247 - 1,583,247 735,336 735,336 $ 2,318,583 Level 1 $ 844,225 - 844,225 640,266 200,731 840,997 $ 1,685,222	Level 2 $ - - - - - $ - Level 2 $ - - - - - - $ -	Level 3 $ - 85,565 85,565 4,348 4,348 $ 89,913 Level 3 $ - 85,683 85,683 4,348 - 4,348 $ 90,031	Total
				$ 1,583,247 85,565
				1,668,812
				739,684
				739,684
				$ 2,408,496
				Total
				$ 844,225 85,683
				929,908
				644,614 200,731
				845,345
				$ 1,775,253

~55~

September 30, 2018 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Equity securities Financial assets at fair value through other comprehensive income Equity securities Debt securities	Level 1 $ 1,060,297 - 1,060,297 774,253 201,124 975,377 $ 2,035,674	Level 2 $ - - - - - - $ -	Level 3 $ - 85,683 85,683 4,348 - 4,348 $ 90,031	Total
				$ 1,060,297 85,683
				1,145,980
				778,601 201,124
				979,725
				$ 2,125,705

(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 nine-month periods ended September 30, 2019 and 2018, there was no transfer between Level 1 and Level 2.
F. For the nine-month periods ended September 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 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:

~56~

Non-derivative equity instrument: Unlisted shares Non-derivative equity instrument: Unlisted shares Non-derivative equity instrument: Unlisted shares	Fair value at September 30, 2019 $ 89,913 Fair value at December 31, 2018 $ 90,031 Fair value at September 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 valuation assumptions from financial assets and liabilities categorized within Level 3 had increased or decreased by 1%, net income or other comprehensive income would not have been significantly impacted as of September 30, 2019, December 31, 2018, and September 30, 2018.

~57~

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: None.
B. Provision of endorsements and guarantees to others: None.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to Table 1.
D. Acquisition or sale of the same security with the accumulated cost reaching $300 million or 20% of the Company’s paid-in capital: Please refer to Table 2.
E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to Table 3.
H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to Table 4.
I. Trading in derivative instruments undertaken during the reporting periods: None.
J. Significant inter-company transactions during the reporting periods: Please refer to Table 5.

(2) Information on investees

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

(3) Information on investments in Mainland China

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

~58~

14. SEGMENT INFORMATION

(1) General information

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

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

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

The revenue of the Group’s reportable segments is derived from the operations of convenience stores, retail business group and logistics business group. Other operating segments include a restaurant-related business group, 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.

~59~

(3) Segment information

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

	For the nine-month period ended September 30, 2019	For the nine-month period ended September 30, 2019	For the nine-month period ended September 30, 2019
Convenience stores $ 118,175,087 447,427 $ 118,622,514 $ 9,534,216	Retail business group Logistics business group Other operating segments Adjustment and elimination $ 56,006,039 $ 1,570,900 $ 15,369,959 ($ -) 1,676,602 10,067,106 5,316,706 ( 17,507,841) $ 57,682,641 $ 11,638,006 $ 20,686,665 ($ 17,507,841) $ 2,667,276 $ 971,405 $ 2,194,197 ($ 3,775,894) For the nine-month period ended September 30, 2018			Total
				$ 191,121,985 -
				$ 191,121,985
				$ 11,591,200

Convenience stores $ 115,609,995 472,021 $ 116,082,016 $ 9,764,283	Retail business group $ 51,105,041 1,702,175 $ 52,807,216 $ 2,544,598	Logistics business group $ 1,519,501 9,877,959 $ 11,397,460 $ 917,466	Other operating segments Adjustment and elimination $ 14,946,585 ($ -) 4,946,950 ( 16,999,105) $ 19,893,535 ($ 16,999,105) $ 1,632,146 ($ 3,013,674)	Total
				$ 183,181,122 - $ 183,181,122 $ 11,844,819

(4) Reconciliation of segment income (loss)

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

~60~

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) September 30, 2019

Securities held by	Type and name of securities	Relationship with the securities issuer	General ledger account		As of September 30,2019	As of September 30,2019		Footnote
				Number of shares	Book value	Ownership (%)	Fair value
President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. Mech-President Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. Books.com. Co., Ltd. Chieh-Shuen Logistics International Corp. Chieh-Shuen Logistics International Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. Uni-Wonder Corp. President Drugstore Business Corp. President Drugstore Business Corp. President Information Corp. President Information Corp. President Logistics International Corp. President Logistics International Corp. President Pharmaceutical Corp. President Pharmaceutical Corp. Q-ware Systems & Services Corp. Q-ware Systems & Services Corp.	Stock: President Investment Trust Corp. Career Consulting Co. Ltd. Kaohsiung Rapid Transit Corp. PK Venture Capital Corp. Yamay International Development Corp. President Securities Corp. Duskin Co., Ltd. Koasa Yamako Corp. Beneficiary certificates: Jih Sun Money Market Fund Taishin 1699 Money Market Fund UPAMC James Bond Money Market Fund Taishin 1699 Money Market Fund Prudential Financial Money Market Fund FSITC Taiwan Money Market Fund Union Money Market Fund Taishin 1699 Money Market Fund FSITC Taiwan Money Market Fund Prudential Financial Money Market Fund Jih Sun Money Market Fund Taishin 1699 Money Market Fund UPAMC James Bond Money Market Fund Jih Sun Money Market Fund Taishin 1699 Money Market Fund Eastspring Investments Well Pool Money Market Fund Taishin 1699 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 2,693,422 3,096,665 1,969,883 7,373,272 18,304,765 19,567,370 6,805,946 1,843,264 5,215,056 3,369,101 7,802,644 1,806,407 1,402,803 1,145,467 1,603,987 12,980,888 11,063,497	45,298 $ 14,545 25,722 - - 494,965 240,371 4,348 40,012 $ 42,004 33,003 100,000 290,000 300,000 90,000 25,003 80,005 53,429 115,911 24,503 23,503 17,016 21,757 177,031 150,070	7.60 5.37 0.92 6.67 - 2.79 0.56 10.00 - - - - - - - - - - - - - - - - -	45,298 $ 14,545 25,722 - - 494,965 240,371 4,348 40,012 $ 42,004 33,003 100,000 290,000 300,000 90,000 25,003 80,005 53,429 115,911 24,503 23,503 17,016 21,757 177,031 150,070

Table 1  Page 1

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Acquisition or sale of the same security with the accumulated cost reaching $300 million or 20% of the Company's paid-in capital For the nine-month period ended September 30, 2019

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Type and name of securities	General ledger account	Counterparty	Relationship with the investor	Balance January1	as at ,2019	Add	ition		Disposal	Disposal		Other increa	se(decrease)	Balance as at September 30,2019	Balance as at September 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. 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 Corp. President Drugstore Business Corp. President Information Corp. President Information Corp. President Logistics International Corp. President Pharmaceutical Corp. Q-ware Systems & Services Corp.	Beneficiary certificates: Yuanta De-Li Money Market Fund Jih Sun Money Market Fund Taishin 1699 Money Market Fund UPAMC James Bond Money Market Fund Taishin 1699 Money Market Fund Prudential Financial Money Market Fund FSITC Taiwan Money Market Fund Union Money Market Fund Nomura Taiwan Money Market Fund Allianz Global Investors Taiwan Money Market Fund Taishin 1699 Money Market Fund FSITC Taiwan Money Market Fund Prudential Financial Money Market Fund Jih Sun Money Market Fund UPAMC James Bond Money Market Fund Taishin 1699 Money Market Fund Eastspring Investments Well Pool Money Market Fund	Note 1 `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Not applicable `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	Not applicable `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	1,843,148 - - 2,037,832 2,220,988 - - 15,170,478 - 3,996,323 - - 7,643,267 - 3,266,653 3,036,177 16,121,671	30,008 $ - - 34,002 30,000 - - 200,000 - 50,000 - - 120,716 - 54,506 41,011 219,000	43,579,059 43,156,458 34,863,633 23,684,859 86,437,327 27,777,811 75,111,479 29,535,469 26,959,349 61,882 106,129,438 58,646,461 16,042,649 21,779,512 18,390,078 47,776,085 161,637,309	710,000 $ 640,000 472,000 396,000 1,170,000 440,000 1,150,000 390,000 440,000 900,000 1,438,000 898,000 253,900 323,000 307,500 646,800 2,200,000	45,422,207 40,463,036 31,766,968 23,752,808 81,285,043 9,473,046 55,544,109 37,900,001 26,959,349 4,058,205 104,286,174 53,431,405 20,316,815 13,976,868 20,253,928 49,208,275 164,778,092	740,300 $ 600,427 430,135 397,115 1,100,550 150,020 850,576 500,303 440,130 950,722 1,413,215 818,127 321,397 207,300 338,563 666,260 2,242,944	740,000 $ 600,000 430,000 397,000 1,100,000 150,000 850,000 500,000 440,000 950,000 1,413,000 818,000 321,206 207,156 338,500 666,048 2,242,000	300 $ 427 135 115 550 20 576 303 130 722 215 127 191 144 63 212 944	- - - - - - - - - - - - - - - - -	8) ($ 12 4 1 - - - - - - 3 5 19 67 3) ( 6) ( 31	- 2,693,422 3,096,665 1,969,883 7,373,272 18,304,765 19,567,370 6,805,946 - - 1,843,264 5,215,056 3,369,101 7,802,644 1,402,803 1,603,987 12,980,888	- $ 40,012 42,004 33,003 100,000 290,000 300,000 90,000 - - 25,003 80,005 53,429 115,911 23,503 21,757 177,031

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 nine-month period ended September 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	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
President Chain Store Corp. Capital Inventory Services 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. Mister Donut Taiwan Corp., Ltd. President Pharmaceutical Corp. Kai Ya Food Co., Ltd. Q-ware Systems & Services Corp. President Chain Store Corp. President Transnet Corp. President Logistics International Corp. Chieh-Shuen Logistics International Corp. President Chain Store Corp. Uni-President Enterprises Corp. Tung Chan Enterprise Corp. Retail Support International Corp. President Chain Store Corp.	Ultimate parent company Subsidiary Sister company `〃` `〃` `〃` Subsidiary Other related party `〃` Subsidiary Associate Subsidiary Other related party Subsidiary Parent company Subsidiary of President Chain Store Corp. Parent company Subsidiary of President Chain Store Corp. Parent company Ultimate parent company Other related party Subsidiary of President Chain Store Corp. Parent company	Purchases `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` Service revenue Delivery revenue `〃` Service cost Sales revenue Purchases `〃` `〃` Service revenue	11,942,067 $ 2,883,007 1,516,582 515,596 292,300 310,116 237,790 459,060 223,699 253,430 109,261 138,171 117,323 466,558 146,193) ( 505,035) ( 766,312) ( 505,035 237,790) ( 249,466 811,897 158,133 610,204) (	15 4 2 1 - - - 1 - - - - - 1 66) ( 38) ( 58) ( 7 55) ( 8 25 5 67) (	Net 30~40 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 10~54 days from the end of the month when invoice is issued Net 20~70 days from the end of the month when invoice is issued Net 15~60 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 30~65 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 55~60 days from the end of the month when invoice is issued Net 60~70 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 45~60 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 25 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` 〃 `〃` 〃〃 `〃` `〃` `〃` `〃`	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` 〃〃〃〃 `〃` `〃` `〃` `〃`	2,155,968) ($ 726,533) ( 401,254) ( 135,403) ( 88,744) ( 57,717) ( 25,052) ( 183,692) ( 76,509) ( 38,999) ( 21,360) ( 74,169) ( 69,559) ( 100,601) ( 36,921 123,906 93,829 123,906) ( 25,052 61,537) ( 118,158) ( 23,454) ( 260,898	12) ( 4) ( 2) ( 1) ( - - - 1) ( - - - - - 1) ( 56 55 42 7) ( 2 7) ( 14) ( 3) ( 73

Table 3  Page 1

Expressed in thousands of NTD (Except as otherwise indicated)

Table 3

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more For the nine-month period ended September 30, 2019

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in t compared t transa	ransaction terms o third party ctions	Notes/accounts	receivable(payable)	Footnote
			Purchases(sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
President Logistics International Corp. Retail Support International Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. Q-ware Systems & Services Corp. President Drugstore Business Corp. President Pharmaceutical Corp. 21 Century 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. Uni-Wonder Corp. President Logistics International Corp. President Logistics International Corp. Books.com. Co., Ltd. President Chain Store Corp. President Pharmaceutical Corp. President Drugstore Business Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. Retail Support International Corp. Shanghai President Logistic Co., Ltd. Zhejiang Uni-Champion Logistics Development Co., Ltd. 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 `〃` Delivery revenue Service cost `〃` Service revenue `〃` Purchases Sales revenue `〃` `〃` `〃` Delivery revenue 〃 Service cost Service revenue	766,312 $ 583,135) ( 802,320) ( 779,600) ( 235,556 583,135 158,133) ( 802,320 779,600 216,088) ( 466,558) ( 489,452 489,452) ( 138,171) ( 253,430) ( 2,883,007) ( 235,556) ( 137,113) ( 137,113 206,810) (	34 24) ( 34) ( 33) ( 20 48 7) ( 37 44 10) ( 67) ( 6 39) ( 11) ( 35) ( 97) ( 86) ( 32) ( 27 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 30 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 20 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 70 days from the end of the month when invoice is issued Net 70 days from the end of the month when invoice is issued Net 60~70 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 15~20 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 15~60 days from the end of the month when invoice is issued	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	No significant differences `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃` `〃`	93,829) ($ 67,626 101,299 95,026 26,733) ( 67,626) ( 23,454 101,299) ( 95,026) ( 50,276 100,601 39,930) ( 39,930 74,169 38,999 726,533 26,733 38,394 38,394) ( 54,822	33) ( 23 34 32 18) ( 46) ( 4 2) ( 37) ( 5 73 2) ( 9 16 32 100 70 45 38) ( 27

Table 3  Page 2

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES Receivables from related parties reaching $100 million or 20% of paid-in capital or more September 30, 2019

Creditor	Counterparty	Relationship with the counterparty	Balance as of September 30,2019	Turnover rate	Overdue r	eceivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful accounts
					Amount	Action taken
Chieh-Shuen Logistics International Corp. President Information Corp. President Logistics International Corp. Uni-President Superior Commissary Corp. Q-ware Systems & Services Corp.	President Transnet Corp. President Chain Store Corp. Uni-President Cold-Chain Corp. President Chain Store Corp. President Chain Store Corp.	Subsidiary of President Chain Store Corp. Parent company Subsidiary of President Chain Store Corp. Parent company `〃`	123,906 $ 260,898 101,299 726,533 100,601	5.32 3.23 11.20 5.70 5.99	- $ - - - -	none `〃` `〃` `〃` `〃`	55,137 $ 109,284 - 439,638 34,086	- $ - - - -

Table 4  Page 1

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

Significant inter-company transactions during the reporting periods

For the nine-month period ended September 30, 2019

Table 5 Number	Companyname	Counterparty	Relationship			Transaction Expressed in thousands of NTD (Except as otherwise indicated)	Transaction Expressed in thousands of NTD (Except as otherwise indicated)
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets
`1` `1` `2` `2` `3` `3` `4` `4` `5` `6` `6` `6` `7` `7` `7` `7` `8` `9` `10` `11` `12` `13` `14`	President Information Corp. President Information Corp. Q-ware Systems & Services Corp. Q-ware Systems & Services Corp. Uni-President Superior Commissary Corp. Uni-President Superior Commissary Corp. President Pharmaceutical Corp. President Pharmaceutical Corp. President Transnet Corp. Chieh-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. Retail Support 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. Capital Inventory Services Corp.	President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Chain Store Corp. President Drugstore Business Corp. President Chain Store Corp. President Chain Store Corp. President Transnet Corp. President Transnet Corp. President Logistics International Corp. Uni-President Cold-Chain Corp. Uni-President Cold-Chain Corp. Retail Support International Corp. Wisdom Distribution Service Corp. Uni-Wonder Corp. President Chain Store Corp. President Chain Store Corp. Books.com. Co., Ltd. Retail Support International Corp. Shanghai President Logistic Co., Ltd. President Chain Store Corp.	Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to parent company Subsidiary to subsidiary Subsidiary to parent company Subsidiary to parent company Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to parent company Subsidiary to parent company Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to subsidiary Subsidiary to parent company	Accounts receivable Service revenue Accounts receivable Service revenue Accounts receivable Sales revenue Sales revenue Sales revenue Sales revenue Accounts receivable Delivery revenue Delivery revenue Accounts receivable Delivery revenue Delivery revenue Delivery revenue Delivery revenue Service revenue Sales revenue Service revenue Delivery revenue Delivery revenue Service revenue	260,898 $ 610,204) ( 100,601 466,558) ( 726,533 2,883,007) ( 489,452) ( 138,171) ( 237,790) ( 123,906 505,035) ( 766,312) ( 101,299 802,320) ( 583,135) ( 779,600) ( 158,133) ( 206,810) ( 253,430) ( 216,088) ( 235,556) ( 137,113) ( `146,193)` `(`	Net 45 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 40 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 45 days from the end of the month when invoice is issued Net 70 days from the end of the month when invoice is issued Net 60~70 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 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 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 15~60 days from the end of the month when invoice is issued Net 30~60 days from the end of the month when invoice is issued Net 30 days from the end of the month when invoice is issued Net 15~20 days from the end of the month when invoice is issued Net 60 days from the end of the month when invoice is issued Net 45~60 days from the end of the month when invoice is issued	0.14 0.32 0.06 0.24 0.40 1.51 0.26 0.07 0.12 0.07 0.26 0.40 0.06 0.42 0.31 0.41 0.08 0.11 0.13 0.11 0.12 0.07 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 nine-month period ended September 30, 2019

Investor	Investee	Location	Mainbusinessactivities	Initial invest	ment amount	Sharesheld	asatSeptember 30,2019	asatSeptember 30,2019	Net profit (loss) of the investee for the nine- month period ended September 30,2019	Investment income (loss) recognized by the Company for the nine- month period ended September 30,2019	Footnote
				Balance as at September 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	26,935,877 $ 1,424,637 1,545,970 676,839 718,215 493,387 471,099 646,872 485,200 363,296 378,119 352,904 25,203 184,221 589,394 751,128 5,101,449 157,846 5,678,150 2,013,938 465,259 108,792 81,721 61,767 64,129 27,423 4,585 32,369) (	827,882 $ 309,845 457,321 66,735 158,553 195,288 3,822 301,873 63,870 57,846 197,150 289,705 203 111,217 34,104 90,876 482,290 158,456 1,574,901 156,913 648,217 47,721) ( 6,800 30,516 1,019 10,601 14,039 10,361	827,882 $ 309,845 320,116 53,970 116,274 136,702 3,440 181,355 54,928 50,187 197,150 144,918 203 56,721 34,103 18,175 219,476 39,600 303,484 29,813 22,267 5,963) ( 6,799 30,517 940 10,601 14,039 10,362	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Note 1 Subsidiary Subsidiary Note 1 Note 1 Note 1 Note 1 Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary

Table 6  Page 1

Table 6

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

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

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Mainbusinessactivities	Initial invest	ment amount	Sharesheld	asatSeptember 30,2019	asatSeptember 30,2019	Net profit (loss) of the investee for the nine- month period ended September 30,2019	Investment income (loss) recognized by the Company for the nine- month period ended September 30,2019	Footnote
				Balance as at September 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.	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 Limited 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.	Taiwan Japan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Cayman Islands British Virgin Islands Malaysia Hong Kong Philippines Taiwan Hong Kong Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Operation of chain restaurants Enterprise management consultancy Bread and pastry retailer Collection agent Operation of restaurants Bakery retailer Health care products and organic food Software development and call center service Professional investment Gas station Professional investment Professional investment Professional investment Professional investment Operation of chain stores Trucking Sales of various health care products, cosmetics, and pharmaceuticals Retail business without shop Department stores Gas station, installment and maintenance of elevators Enterprise information management and consultancy Delivery service Information software services Cleaning instruments leasing and selling	160,680 $ 35,648 391,300 10,500 - 200,000 47,190 7,500 1,478 9,600 - 22,970 905,230 4,834,694 904,360 180,000 178,024 - - - - - - -	160,680 $ 35,648 391,300 10,500 147,900 200,000 47,190 7,500 1,478 9,600 161,659 22,970 905,230 4,834,694 904,360 180,000 178,024 - - - - - - -	10,000,000 9,800 6,511,963 1,049,999 - 7,500,049 1,833,333 750,000 500 960,000 - 740,000 29,163,337 134,603,354 394,970,516 26,670,000 5,935,900 1 1 1 1 1 1 1	100.00 100.00 100.00 70.00 - 50.00 36.67 15.00 100.00 60.00 - 7.80 100.00 100.00 52.22 100.00 100.00 - - - - - - -	71,913 $ 80,898 37,894) ( 66,354 - 96,014 39,338 18,341 592 23,592 - 5,425 2,454,987 4,319,227 2,355,103 316,235 62,098 - - - - - - -	37,390 $ 1,917 8,454) ( 66,669 - 20,425 20,667 8,581 - 10,687 3,271) ( 1,019 187,989 130,851 415,772 23,323 11,519) ( 289,705 195,288 66,735 63,870 457,321 57,846 111,217	37,390 $ 1,914 8,456) ( 46,668 - 9,091 7,568 1,343 - 6,412 3,271) ( 79 187,989 162,756 208,817 23,323 11,519) ( - - - - - - -	Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Note 1 Note 1 Note 1 Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary

Table 6  Page 2

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

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

Investor	Investee	Location	Mainbusinessactivities	Initial invest	ment amount	Sharesheld	asatSeptember 30,2019	asatSeptember 30,2019	Net profit (loss) of the investee for the nine- month period ended September 30,2019	Investment income (loss) recognized by the Company for the nine- month period ended September 30,2019	Footnote
				Balance as at September 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. Ren-Hui Investment Corp. Retail Support International Corp. Retail Support International Corp. Retail Support Taiwan Corp. Uni-President Cold-Chain Corp. Uni-President Cold-Chain Corp. Wisdom Distribution Service Corp. Wisdom Distribution Service Corp. Philippine Seven Corp. Philippine Seven Corp.	President Pharmaceutical Corp. Mister Donut Taiwan Corp., Ltd. Uni-President Superior Commissary Corp. Uni-President Cold-Chain Corp. Retail Support International Corp. President Collect 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 Taiwan British Virgin Islands Taiwan Taiwan Taiwan Taiwan British Virgin Islands Taiwan Taiwan Philippines Philippines	Sales of various health care products, cosmetics, and pharmaceuticals Bakery retailer Fresh food manufacture Low-temperature logistics and warehousing Room-temperature logistics and warehousing Collection agent Operation of restaurants Professional investment Room-temperature logistics and warehousing Trucking Trucking Trucking Professional investment Trucking Publishing Industry Logistics and warehousing Professional investment	- $ - - - - - - 60,374 15,300 44,975 5,425 23,850 87,994 18,850 - 26,942 29,183	- $ - - - - - - 60,374 15,300 44,975 5,425 23,850 87,994 18,850 - 26,942 29,183	1 1 1 1 1 1 - 2,000,000 2,871,300 9,481,500 1,161,000 4,837,500 2,990 3,870,000 - 4,500,000 40,000	- - - - - - - 100.00 51.00 49.00 6.00 25.00 100.00 20.00 - 100.00 100.00	- $ - - - - - - 72,380 70,833 156,571 19,172 79,883 98,129 63,852 - 26,942 29,183	158,553 $ 20,425 3,822 301,873 158,456 66,669 - 3,298 33,953 59,521 59,521 59,521 10,901 59,521 - 16,120 712	- $ - - - - - - 3,298 17,316 29,165 3,571 14,880 10,636 11,850 - - -	Subsidiary of a subsidiary Note 1 Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary Subsidiary of a subsidiary

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

Table 6  Page 3

Table 7

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

For the nine-month period ended September 30, 2019

Expressed in thousands of NTD (Except as otherwise indicated)

Investeein Mainland China	Mainbusiness activities	Paid-incapital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as ofJanuary1,2019	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine-month period ended September30,2019	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the nine-month period ended September30,2019	Accumulated amount of remittance from Taiwan to Mainland China as of September 30, 2019	Net income of investee for the nine-month period ended September 30,2019	Ownership held by the Company (direct or indirect)	Investment income (loss) recognized by the Company for the nine- month period ended September30,2019	Book value of investments in Mainland China as of September30,2019	Accumulated amount of investment income remitted back to Taiwan as of September 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. Beijing 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	- $ 434,229 2,171,145 62,080 966,349 - 260,537 170,032 173,692 466 260,537 217,115 607,921 130,269	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	160,495 $ 292,312 2,398,693 62,080 1,016,219 551,778 126,592 170,032 173,317 - 260,537 217,115 607,921 130,269	- $ - - - - - - - - - - - - -	- $ - - - - - - - - - - - - -	160,495 $ 292,312 2,398,693 62,080 1,016,219 551,778 126,592 170,032 173,317 - 260,537 217,115 607,921 130,269	11) ($ 1,101 85,459 63,604 78) ( 572) ( 315) ( 9,122) ( 22,926 2) ( 27,584 25 76,347) ( 24,232) (	- 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) ($ 1,086 83,192 63,602 78) ( 585) ( 13,112 6,726) ( 18,273 1) ( 27,584 478 75,915) ( 24,206) (	- $ 68,844 146,189 470,131 46,242 - 190,593 21,586 157,310 16 348,443 195,720 328,686 87,271	- $ - - - - - - 57,416 26,586 - - - - -	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 September30,2019	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commissionof MOEA
President Chain Store Corp. President Pharmaceutical Corp. Uni-President Cold-Chain Corp. Ren-Hui Investment Corp.	4,784,445 $ 170,032 92,109 53,491	92,109 53,491 170,032 8,578,646 $	25,972,601 $ 455,703 634,316 80,000

Table 7  Page 1

AI assistant

PCSC — Interim / Quarterly Report 2019

52232_rns_2019-11-22_57db4b11-59b3-46e8-a084-67443ce32a65.pdf

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES

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

PRESIDENT CHAIN STORE CORP. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REVIEW REPORT OF INDEPENDENT ACCOUNTANTS SEPTEMBER 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

SEPTEMBER 30, 2019 AND 2018

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

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1) Compliance statement

(2) Basis of preparation

(4) Employee benefits

(5) Income tax

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

6. DETAILS OF SIGNIFICANT ACCOUNTS

(4) Inventories

(6) Investments accounted for using the equity method

(7) Property, plant and equipment

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

－ (8) 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

(16) Other current liabilities

- (17) Long term borrowings

(18) Pensions

(20) Share capital

(21) Capital surplus

(22) Retained earnings

(24) Operating revenue

A. Disaggregation of revenue from contracts with customers

(26) Employee benefit expense

(27) Other income

(28) Other gains and losses

(29) Finance costs

(30) Income tax

A. Income tax expense

(31) Earnings per share

For the three-month period ended September 30, 2018

(32) Operating leases

Lessor 2018

Lessee

(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

－ E. Leasing arrangements lessee

F. Property transactions

Accounts

(b) Disposal of financial assets

PCSC Interim / Quarterly Report 2019

`－` (8) Leasing arrangements lessee

`－` E. Leasing arrangements lessee