Enhance Sustainability

4 Enhance Sustainability

265 stores in Taiwan, with a consolidated revenue of more than $NT 5 billion, post 7% revenue growth Top 5% of the Corporate Governance Evaluation among the TSE listed companies for 4 consecutive years Top Buying Power of the New Product and Service of Social Innova- tion Purchase Reward Program for 2 consecutive years 11th TCSA Top 50 Corporate Sustainability Award, Best Perfor- mance Award of Supply Chain Management, and Corporate Sustain- ability Report Gold Award 2018 CSR Exemplary Practices awarded by Kenting National Park Excellence in Corporate Social Responsibility Little Giant No. 4 awarded by the Commonwealth Magazine Group

Stakeholders ■ Shareholders ■ Government Agencies ■ Suppliers or Contractors ■ Employees 4 Enhance Sustainability 4 Enhance Sustainability Management Approach and Methods

Material Topics Economic Performance/Corporate Governance

Besides improving current stores, An-Shin also has to explore new initiatives, opportunities, and markets. We continue to provide product & Meanings for service innovation, brand value enhancement, reduction of costs & expenses, operation efficiency, foster profit growth and share output with An-Shine employees and shareholders. An-Shin embraces the common good with our society and works towards sustainable development.

Our commitment Workforce diversity & equality, compliance with social and economic regulations

Short term: ‧Open new stores and increase market share, introduce new stores with products that cater to local needs. ‧Focus on corporate governance, promote CSR and achieve sustainability. ‧Help develop MOS Burger in China and Australia, uplift performance and build up networks quickly. ‧ Goals Medium & Intensify internationalization of An-Shin to reinforce performance and fortify localization of China & Australia to cope with Long Term: and local needs. Objectives ‧In a saturated market, An-Shin offers e-commerce and food delivery service to cater customers outside of in-store orders and accelerate economic performance. ‧An-Shin obtains reliable supply sources in advance and seeks new investments to cope with climate change, which allows An-Shin provides safe and non-toxic materials, and integrates the supply chain vertically. ‧We support local agriculture and traceability, but think globally to offer international gourmet food.

How to Manage

Investments /Input ‧ Operating cost of $NT 3,894,871 thousand in 2018.

‧Evaluation of BOD performance, assessed by independent 3rd party auditors ( i.e. professionals or instititions) once every 3 years, submitted at the next BOD meeting. ‧Besides the Remuneration Committee, the BOD established the Talent Development Committee, New Store Advisory Committee, Pur- Mangement chasing Committee, Management Committee, Financial Management Committee, CSR Committee, and Smart Technology Committee, which consists of experienced and professional directors appointed by the BOD and is responsible to the Board (and ultimately to the Approach shareholders) for carrying out their duties, namely determining and approving related decisions. The New Store Advisory Committee holds and meetings every month, and all other Committees hold meetings at least twice a year. Evaluation ‧Communication meetings for Certified Public Accountants and Corporate Governance Function include suggestions for internal control, Schemes recent regulatory amendments, etc. ‧Various internal meetings, such as business review meetings and project meetings to allow top management to track task statuses, make sure every action plan is delivered on time, and align all projects with our strategic direction. ‧CSR Task Force helps carry out various projects and update progress on CSR Committee meetings. ‧Intensify Industry-Government-Academia Cooperation and external alliance, and facilitate progress of projects.

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4.1 Company Background 4.2 Company Overview Total Stores An-Shin thinks globally and acts locally. We have Company An-Shin Food Services Co.,Ltd. cultivated the Taiwan market for more than 27 265 Employees 5,721 people years and integrated local traits and traditions within our operations. Date of 1990/11/23 establishment Taitung Xinsheng Store had its grand opening in Taipei City Keelung City Chair Chien-Yuan Lin 2017, and we continue to carry out our network 105 stores 2stores strategy to optimize business in every county of CEO Shun-Hsing Kao Taoyuan City Taiwan. Our product price is the same across all 24 stores New Headquarter 8F., No.156-1, Songjiang Rd., Zhongshan Dist., stores and customers can consistently enjoy the Taipei Taipei City 104, Taiwan gourmet food we offer throughout Taiwan. Each Hsinchu City City & County Capital $NT 323,895 thousand store also serves as a local recreation center, which 49 stores allows local residents to get information and meet 11 stores Stores 265 friends, contributing to local development. We aim Miaoli County to open more stores, initiate new types of stores, Yilan 3 stores （Note 1） As of 2018/12/31 and launch special products to meet customer County needs in 2019. Taichung City 3 stores 25 stores

Kinmen County Chughua City & County 1 store Nantou County 4 stores Hualien 2 stores County Yunlin County 1 stores 4 stores

Penghu County Chiayi City 1 store & County Company 4 stores History

http://www.mos.com.tw/invest/history.html Tainan City Taitung County 8 stores Miaoli and Northern 1 stores Taiwan: 194 Kaohsiung City Taichung & Changhua & 15 stores Yunlin: 35

Chiayi and Southern Taiwan: 29 Pingtung County Eastern Taiwan and 2 stores Oﬀshore Islands: 7 Company Background http://www.mos.com.tw/invest/orgStruc.html

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An-Shin participates in various evaluations and certifications for sustainable development, not only to communicate our CSR perfor- 4.3 Awards and Recognition mance with stakeholders, but also to utilize external schemes to improve current operations. Exemplary awards and recognition granted in 2018 were as follows:

Excellence in Corporate Social Re- November Aug. sponsibility Little Giant No. 4 awarded Top Service Award No. 3 11th TCSA Top 50 Corporate by the Commonwealth Magazine 8 stores were awarded Sustainability Award, Best Group Star-class Green Re- Performance Award of Supply cycle Store for 6 con- Chain Management,and the secutive years by New Corporate Sustainability Taipei City Report Gold Award

Love Earth: Local Street Sweeping Please refer to p.108

Feb. Mar. Apr. Jun. Jul. Sep. Oct. Dec.

The Best Service 2018 CSR Exemplary Practices awarded by Hualien Disaster Relief in Taiwan: Gold Medal Service Kenting National Park Please refer to p.107 Staﬀ by Commer- cial Times

We received a dual certification (TAF＆TFDA) making us the first fast food chain company to do so. Top Buying Power of the New Recognized 5th TCFA Best Staff Please refer to p.54 Product and Service of the Social innovation Purchase Reward Pro- gram for 2 consecutive years

MOU with Construction and 4th the Top 5% of Corporate Planning Agency, Ministry of Apr. TCFA Outstanding Store Manger & Governance Evaluation among the Interior Best Oral Speech Award TSE listed companies for 3 Please refer to p.101 Pease refer to p. 48 14 MOS CSR Report consecutive years

Enhance Sustainability 4 4.4 Company Growth Milestones MOS MOS Burger is the second largest fast food chain store in Taiwan. The first store, Xinsheng Store, was established in Burger’s When people mention enterprises, they often have Mascot February 1991, and as of December, 31st,2018, we have a total of 265 stores across Taiwan. Our goal is to ultimately a very rigid and strict impression. To transcend this share MOS’s vision across over 300 stores in Taiwan. image, we designed our own mascot: MOS San. April According to the Cambridge Dictionary, a ‘mascot’ 2018 TSMC 12P7 Store is a person, animal, or object that is believed to Taipei Front Station Store bring good luck, or one that represents an orga- TSMC is located in Hsin- Serving the best gourmet prod- nization. We use MOS San in vari- chu. MOS Burger oﬀers ucts right next to Taipei land- ous occasions, including parties, a variety of food choices mark Shin Kong Mitsukoshi. contests, activities, recruiting, for customer enjoyment. and to communicate with our customers.

Current MOS Burger Mascot Taiwan 1st store: Birth Tokyo Itabashi ku in 1972 Xinsheng Stores Hobbies Travel and cosplay Mascot

May Nickname MOS san Introduction Formal debut in 2009, honest, Mucha Zoo Store humble and middle aged mascot, Located in the zoo’s hippo area, promoting MOS Burger and we are happy and more than greeting customers from his heart willing to serve your family. Since 2010 1991 2016 1997 Taipei Fulin Store, Tianmu 2nd Store 2011 1st MOS Burger in Brisbane, Australia MOS Burger stores in Taipei Veterans General Hospital and the Far Eastern Hospi- 1999 Taipei Neihu Store 2012 Kinmen Store, 1st MOS Burger in tal, offered healthy food for medical staffs. 2001 1st 24-hr MOS Burger-Taipei Linsen Taiwan offshore islands and 1st QSR in THSR Nangang Store opened Store, Taipei Zhongshan 2nd Store Kinmen 2017 Transit hub: Taichung Bus Station Store 2004 Achieved 39 store openings MOS Burger flagship store in CBD, CKS Airport Terminal 1 Store 2009 More than 40 24-hr stores and 90 Australia breakfast takeaway stores MOS Burger Shanghai Honhui Store A5, A7, A9, A21,Taoyuan Metro, Shiding Expressway Store 2013 MOS Burger Penghu Store and Sun There are MOS Burger stores Moon Lake Store 2017 in all counties of Taiwan. 2014 Municipal Wenxin Store cooperated with TECO and Catering Affiliates

2015 CKS Airport Terminal 2 Store THSR (Miaoli、Changhua、Yunlin), 1st restaurant chain to serve at all THSR stations. 1991 Taiwan 1st Store MOS Burger: Xinsheng Store launched the ﬁrst-ever rice burgers in Taiwan

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4.5 Industry Outlook

With the current social change of growing national income and complex multiple brand strategy. In addition to introducing new Upstream prevailing double income families, there has been an increase in brands into the Taiwan market, creating new concepts are popular Materials, commodi- customers dining out as consumers place more value on recre- (including joint name, authorized agency, or in ship), which aim to ties, agricultural prod- ation. As well the average people per household is shrinking in explore consumer needs. An-Shin constantly works to introduce ucts, packaging. Taiwan. As smaller-sized families increasein popularity a glong variety, differentiation, and market segmentation, which distin- with convenient dining out, and booming tourism, these all con- guishes us from other competitors within food services. An-shin tribute to sales within the restaurant industry. According to statis- has strong advantages in the areas of hospitality, fresh-made Midstream tics of MOEA(Ministry of Economic Affairs), restaurant industry food, natural materials, balanced diets, brand prestige, and con- Research and Design sales are $NT 473.1 billion, with a year-over-year growth of sistent company principles, which has lead us towards greater for food and drink 4.6%,making it the highest growth rate seen in recent 7 years. success.

With keen competition and changing consumption trends, the Downstream restaurant industry has shifted from single brand penetration to a QSR chain stores and sales channel

Industry Consumption Trends:

Multiple payment options Health consciousness Smart phone usage exhibits exponential growth with internet mobile devices on the Health conscious consumers in the United States are increasingly concerned with rise. According to research by the MIC (Market Intelligence & Consulting Institute), the quality and health benefits associated with the products they purchase and con- the mobile payment penetration rate has achieved 50.3% in 2018, compared with sume. Restaurants must figure out ways to incorporate healthy foods, improve that of 39.7% in 2017. It is expected that payments made via smartphone will taste, packaging and marketing, by investing in social campaigns promoting the eventually replace credit cards and cash, but not immediately. QSR emphasizes trend and reach customers. Many products claim to be associated with health ben- speed, which incentivizes the build up of multiple payment streams to offer even efits, nutritional value, and special diets (vegetarian, etc.). Approximately 2.5 million more convenience and choice, improve process efficiency and cash management, people practice vegetarianism across Taiwan- close to 10 % of the total population, and ease the burden of store employees. ranking No. 2 in the world. Therefore, vegetarian restaurants are becoming increasingly popular in Taiwan. Professional chefs have also invented a variety of new veg- Localization etarian dishes that can also be enjoyed by meat lovers. Considering these trends People love to share travel and leisure pictures on social media. Catering to cus- and our own company morals, MOS Burger believes in “A balanced diet leads to a tomer trends, chains no longer have the same store appearances, but strive to offer healthy body”, and the lotus root & burdock rice burger were launched. local and special dining experiences, which in turn attract guests to share their Personalized dining experience experience with friends. Other than store appearance, restaurants have also started To cope with consumer needs, restaurants offer services ranging from dine in, to source supplies locally and launch both LTOs(Limited Time Offers) and LSOs take-out, phone orders, drive-through, and delivery, to APP order and curbside meal (Limited Special Offers). For example, MOS burger uses red quinoa from Taitung, pick-up etc. The food delivery market size is $NT 25 billion- approximately 5% of taro from Dajia, and rice from Taiwan to provide specialty cuisine dishes, which cre- the restaurant industry. However, labor-constrained QSRs have to be cautious when ates a win-win for both our company and consumers. facing delivery challenges including issues of further investments, new business models, and cooperation with 3rd party delivery platforms.

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An-Shin operates as a fast food service, offering products including burgers, hotdogs, sandwiches, salads, desserts, drinks, and soups. We are the second largest fast food chain store in Taiwan, with 265 stores, approximately 27.95% of total chain stores in Taiwanaaccording to statis- 2016 2017 2018 tics of MOEA. The restaurant industry has a turnover amount of $NT 246 258 265 473.1 billion, and An-Shin’ s sales are $NT 5.3 billion, making up approxi- (stores) (stores) (stores) mately 1.12% of the total industry market. Market Ranking NO.2 Market Ranking NO.2 Market Ranking NO.2 An-Shin offers food services and believes that all stores should cater to Market Share (stores) 27.95% Market Share (stores) 28.86% Market Share (stores) 27.95% customer needs; all efforts are made to serve guests and ensure customer satisfaction. We serve healthy, fresh, natural, and delicious meals to ener- Market Share (sales) 1.07% Market Share (sales) 1.08% Market Share (sales) 1.12% gize our consumers while providing a comfortable dining environment to relax. Our employees are also happy to serve and have a sense of accom- plishment, aligning with MOS Burger’ s mission: “Contribution to Humanity, Contribution to Society” . In short ,we offer an extensive range of benefits and resources that simply aren't found together anywhere else.

Table 4-1. Short, medium and long term objectives SDGs Short Term objectives SDGs Medium and Long Term Objectives

Strengthen multiple safety checks and enhance traceability to assure quality during supply selections. Differential products and high quality brands.

Deliver high quality products and services to customer tables which will Magnify training center to address future human further distinguish ourselves from other competitors. resources management.

Transform the dining atmosphere into a quiet, cozy and relaxed one Expand our store network and increase market share, emphasizing specific locality to unfold community interaction. Apply smart technology and big data analysis to promote service efficiency and accurate marketing. Launch the MOS Order APP, meal order kiosks, and KD (Kitchen Dis- play) to speed up the ordering process, and allow customers to handle their dining experience in a personalized manner. With rapidly increasing rents and wages, An-Shin accommodates new technology and IOT, tapping into the market with our e-commerce website: MOS LIVING. Continuously promote Mos Burger imultilateral coop- Highlight corporate governance and the annual CSR to ensure sustain- eration and sustainability. able development. Assist the development of MOS Burger in China and Australia to broaden market presence.

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4.5.1 Industry impact on climate change economic development green protection

An-Shin’s Operation smart technology

industry social legal regulation integration change An-Shin operates with integrity, streamlining processes and utilizing technology materials to remold our business model. For instance, MOS launched the new roster management system to better protect employee rights. An-Shin’s market assessment packaging restaurant consumption customers industry and SWOT analysis are as follows: trends other diversity & population crossover & aging international supply & demand

Table 4-2. Strategies to tackle opportunities and threats

SDGs Competitive Advantages Opportunities Threats

With the boost of the internet, instant Social media : Facebook and Enhance the usage of Facebook and live streaming to messaging, social media, and mobile Line engage our audience devices, consumers are more interested Menu board testing We test menu boards to determine production volume in technology, social networking, and MOS card and multiple payment and advertising function entertainment, which push restaurants options Unlimited in payment option innovations to incorporate crossover concepts to enhance customer experience.

Exemplary and ethical business culture Growing positive brand recognition Change of population structure has Excellent customer service Embrace digital technology and smart business initiatives increased the dependency ratio, Effective sanitation management The 1st MIT robot was introduced in April, 2018. With stressed social burden, decreased mar- Variety and flavor-fusion of products continual upgrade and revision, the 2nd version of robots ginal propensity to consumption, and has affected demand for the future labor Detailed operation and curated envi- have started to deliver meals to the table, aiding with staff force. ronment compared with other QSRs tasks and offering a brand new dining experience.

Non-discriminatory and diverse recruiting The New Labor Standard Act is effective Multiple-Stream and diverse Embrace second-career and senior employment since March 1, 2018. This new regulation employee recruiting Hold senior employment forums and invite senior part- impacts working conditions and wage ners to share their experience with prospects. rates of enterprises.

Upgrade HR system and shift towards a paperless process, to reduce paper waste and better protect personal privacy. Restaurants are in need of much labor, and new labor regulations have Excelling HR system Spread and educate staff on regulation changes and launch decreased business operation effi- new roster management, featuring fool-proof system ciency. checks to efficiently provide actual and timely payrolls.

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SDGs Competitive Advantages Opportunities Threats

Starting Jan 1st, 2018, over 7 types of businesses, such as beverage stores, bakeries, pharmacies, and bookstores, plus 80,000 regulated business Increase the usage of certified units, can no longer provide plastic bags for free. Since July of 2019, the Innovative packaging paper and PLA packaging regulation prohibits government units, public and private schools, depart- Design new eco-friendly packaging ment stores, shopping malls and fast food chains from providing single-use plastic straws to people eating meals at the venue. The regulation mentioned above has influenced packaging purchasing decisions greatly.

3-in-1 Green Purchasing Policy Global warming and abnormal climates have threatened agriculture and consolidates “food traceability,” simultaneously affected livestock production, which leads to commodity Meticulous supply selection “local sourcing,” and “contract price fluctuations and shifts in procurement decision. International disputes farming” in our supply chain. Enhance product trace- and trade policy changes also determine inflow and outflow of products and Assure quality and supply sources ability their prices. through twofold sourcing: local & international

Product innovation and Harness and utilize local produce, proposal for new rice explore local specialty, employ con- Consumers love trying new flavors,which push restaurants to constantly products tinual innovation, and generate ideas launch new products and introduce new brands to attract different target Recognized as the big- for new dishes with added interna- customers. gest exhibitor of Food tional flavors Taipei

SDGs Response Strategies

Supply chain

Monitor supply sources, avoid cost increases, explore new supply options, and seek competitive prices. Support local agriculture and invent local specialties while introducing gourmet international flavors into fusion dishes. In response to climate change, we initiated a plant factory project in 2018 to promote vertical integration.

Product

With An-Shin’s food safety policy: “We select safe and high quality materials, offer healthy and delicious food, allowing customers to feel satisfied and assured”, we offer freshly-made delicious food, different to premade food served by other competitors, complemented with our exceptional service gives guests warmth and happiness. The 2018 strategic focus is “3Q innovation × local specialty”. Through innovation for product quality, service quality, and environment quality, An-Shin provides a unique experience. We consolidate efforts from cross functions, insist on a customer-centric attitude and believe in integral management and sustainable development to ensure customer-satisfiction and create a trilateral win for shareholders, employees, and customers. With food safety as our first priority, we source locally and adopt international gourmet flavors as our main focus in product development.

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SDGs SDG Response Strategies

Services An-Shin not only provides food, but also includes meal delivery to gain customer recognition, enhance branding and strengthen our competitive advantages. We introduce multiple ordering platforms including kiosks, phone ordering, online ordering, and APP (MOS ORDER) etc., to reduce customer wait times. To assist customers in meal decisions, we offer bestseller food combinations in stores near transportation hubs during long holidays, and utilize menu boards to display meal recommendations. We provide unique dining experiences with the use of smart technology and new equipment to increase efficiency, save energy,and offer a unique service experience.

Process According to kitchen flow and store design, we adjust equipment to maximize We adjust operation processes efficiency. for peak and low sales periods, To cater to specific local needs, each business district will introduce different and form specialized work sta- product mix. tions during peak hour with In 2018,16 stores employed the KD (Kitchen Display) system, to reduce the assistance of a robot to deliver number of skipped orders and decrease wait times. The goal for 2019 is to meals. install the KD system in an additional 100 stores. The 1st version of the robot was publicized in April, 2018. With consideration of customer needs and the importance of a safe design, the upgraded 2nd Figure 4-1. Figure 4-2. version was available in Novem- 1st version 2nd version ber, 2018. The new robots can meal-delivery meal-delivery detect obstacles and adjust their robot robot Figure 4-3. Beverages Sta- Figure 4-4. Control Station Figure 4-5. Kitchen Screen pace for effective meal delivery. tion Kitchen Display Kitchen Display Display

Human Resources Access new recruiting streams, and increase company employee diversity Emphasize the connection between employees and the company to carry out spcial study Magnify the cooperative education plan to reach more students and allow them to gain more experience Cooperate with the government to recognize returning workers and senior employees Retain and refer potential employees to work in MOS Burger with reward incentives, offer performace bonuses various career plan Employ flexible hours for senior employees with regards to work times

Cost

Due to increased salary wages, maintain cost budgets by enhancing work efficiency, adjusting incentive program and deploying Refrain from opening new stores in high cost areas, and seek competitive long-term rent contracts

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4.6 Our Sustainable Organization

An-Shin encourages company transparency and integrity, with all information disclosed on investor relation links within the website.

Figure 4-6. Organization Chart Organization Investor Shareholders Chart Relations

Remuneration Board of Committee Directors Meeting Department Function:

CSR Committee Auditors’s Office Procurement, ‧ Quality IT , management of overseas office, Chairman Assurance purchasing, health and safety, and and Support President’s Office Chairman’s Office quality assurance Legal Affairs Group 3Q Innovation Promotion Group Public Relations Business Planning Group President Humou ‧ Product launch, marketing planning, Customer Service Group Resource, Engineering and graphic design and Marketing ‧ Interior design, equipment management, and oversees store contracts Procurement, Quality Human Resource , Operation Management Financial Management and Assurance and Support Engineering,and Marketing Store Development Operation ‧ Oversee daily store operations, com- Management munications and management Safety and Health Engineering and First Division Financial Management ‧ Operations management department Group Equipment Dept. Dept. supervises store performance Second Division Procurement Dept. Marketing Dept. Store Development Third Division Financial Dept. ‧ Electronic Commerce Product Development Management Oversees finance and store develop- Fourth Division and Store Dept. Dept. Development ment Fifth Division Information Technology Human Resources Dept. Dept. Education and Train- ‧ ing Dept. Auditor’s Internal control and audit plans Office ‧Implement audits Overseas Support Operation Manage- Group ment Dept. Quality Assurance Chairman’s ‧Public relations Dept. Office ‧Assist Chairman in project promotions Food Safety and Inspection Center President’s ‧Assist the President in project promo- Office tions

(Note 2) The President’s Office is effective starting April, 1st, 2018。

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4.6.1 Company Principles An-Shin values employer-employee relations built on respect and empathy within the workplace, and An-Shin’s seven principles cover: honesty, fairness, strongly encourages partners to follow this workplace mindset as well- behaving with discipline, kind- transparency, and whole-hearted work. ness and humbleness. Education and Training Dept. & HR Dept. actively promotes and teaches these seven principles, and the Auditor’ s Office supervises these workplace guidelines which are reported to the Board of Directors. Work rules and Employee Code of Conduct are effective by legal compliance and moral obligations. We strongly emphasizes these guidelines, and teaches workers about the possible fines and repercussions if workplace rules are not followed.

An-Shin’s Seven Principles

Whole- hearted- I will wholeheartedly work to ness understand you and contribute to offer you the best service. Principles of Ethical Practice Principles of Employee Code Corporate Management Procedures and of Conduct Behavioral Code of HonestyTrue I will maintain open-mindedness Heart Conduct and empathetically work hard to offer quality service. An-Shin does not permit employees to offer or accept bribes from suppliers, contractors, or the Gratitude I will always be grateful for my government. As well, all employees must memo- colleagues and customers. rize the Workplace Code of Conduct and Food Safety Policies. On December, 25th, 2018, a case study training was taught explaining the conse- Empathy I will always remember to treat quences when Code of Conducts are not others with generosity the way respected, and followed up with reminders in they have treated me. meetings, emails, and courses. These are simply some of the procedures An-Shin follows to main- Respon- tain a respectful and pleasant working environ- sibility I will always keep my work promises and never betray my ment. fellow colleagues. In 2018, An-Shin did not have any material viola- Polite- tions, or significantly large fines. There were also ness I will always speak politely and no issues with policies or regulations. Within the respectfully when working. workplace, any violations of employee Code of Conduct will also be investigated by auditors. To maintain and share this achievement, we focus on Humble- ness I will always maintain a humble transparent communication through our auditors attitude when serving others. with stakeholders which can be found on the An- Shin website stakeholder’s page. Contact Us

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4.7 A Sustainable Business Model

4.7.1 Our Business Model Internal Business and Project Meeting The restaurant industry in essence, is a mix of the retail and service industry. In Food Safety and Operations Integrity is the foundation of An-Shin. Besides continu- 1990 TECO Group cooperated with MOS Food Services, Inc. from Japan and ously increasing efficiency, we are always looking for new investments, initiatives, formed a joint venture to establish An-Shin Food Services Ltd., Co.. An-Shin was opportunities and markets. This model has allowed us to profit in a sustainable way. the first fast food chain to be listed on Taiwan Stock Exchange on December 15th, Our periodical internal and external meetings are used to monitor progress, and 2011 (Ticker: 1259). An-Shin is a fast food chain store with no franchises, only direct evaluate new projects as well. In general, we are always working to increase effi- Taiwan stores, with all freshly made food and drinks for dine-in or take-out pur- ciency, reduce costs and expenses, gain synergy, and increase profit. poses. MOS Burger is famous for it’s one-of-a-kind rice burgers, which is a product combining traditional Japanese rice rolls (as burger buns) and western-style ham- burgers. We stand out within the fast food market, with an emphasis on quality ingredients, and fresh made food over speed and price. Customer experience is our selling point and we pay special attention to customer needs and feedback. There- fore, as a service, our employees are our most important asset.

Products and Services Value Chain:

Product Development Food Safety Store Product Product Health Meal and Design Speciﬁcations Training Assembling and Safety Checks Service

MOS CSR Report 23 4 Enhance Sustainability 最高階參與層級 Table 4-3. Internal and External Meetings 4.8 Sustainable Management Strategy Meeting Type Important Meetings Frequency Highest Ranking Attendee An-Shin offers safe, healthy, and delicious food to our customers and are Top Management Meeting weekly Chairman dedicated to quality customer experience within areas of service, product Major Operations Meeting bi-weekly President and environment. An-Shin uses high technology to better our services and headquarter efficiency to operate with synergy. We take special care in Project Efficiency Meeting weekly President training and maintaining our employees, and plan activities for team bond- ing. There is also a big focus on safety and health management which is Business Review Meeting monthly TECO Group Chairman shown through our certifications in a Smart and Healthy Workplace. We Periodical Strategic Meeting annual TECO Group Chairman would like to develop regional headquarters in China, and introduce products that cater to local needs. As there are cultural differences between Operations Division Meeting weekly Vice President Taiwan and China, we would like to adopt Chinese methods in store opera- Other Divisions Meeting monthly Division Head tions there. In Australia, hire local general managers to maintain and run the MOS stores there. In 2018, the focus this year is on the 3Q x local spe- Store Managers Meeting monthly Chairman cialty, allowing us to differentiate ourselves from other competitors. Our long-term goal is to use the three-win (shareholder, employee and cus- Headquarters Meeting monthly Chairman tomer) strategy to increase business value. Operations Plan Meeting monthly Vice President

Food Safety Review Meeting annual Special Assistant to the Chairman

Energy Review Meeting annual President

Customer Service Meeting Chairman

Operation Upgrade Meeting on Chairman Project occasion Project Meeting Chairman

Store Interior Design Meeting Chairman

Table 4-4. Major Internal Communications Meeting

Meeting Type Important Meetings Frequency Highest Ranking Attendee Store Manager Meeting monthly Chairman Periodical Headquarters Meeting monthly Chairman

Figure 4-7、Annual Strategic Meeting

職稱

24 MOS CSR Report Enhance Sustainability 4 4.8.1 Business Perfomance Table 4-5. 2016 to 2018 Annual Performance An-Shin emphasizes health, nutrition, Economic safety and sanitation. Our promise to food safety is constantly monitored by Total Stores Board of Directors Sales ($NT thousands) Gross Profit supplier management and product Attendance Rate (%) ($NT thousands) 265 98.15 5,252,104 1,357,233 traceability, which are enforced by 258 strict audits and inspections. Because 4,919,312 1,273,522 1,276,789 94.91 of our efforts to maintain a safe envi- 246 94.44 4,663,585 ronment allowing our customers to be satisfied, this has allowed our sales to increase annually and achieve finan- 2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018 cial performances steadily. For the last three years, performances have been Net Profit after Tax Earnings per Share ($NT) Cash Dividends per Share Cash Dividend Yield ($NT) stable, and in 2018, the consolidated ($NT thousands) ($NT) sales comparing with 2017, experi- 173,778 168,633 5.37 5.23 3.5 enced a growth of 6.8 percent. In 140,649 4.36 3 3 3.9 3.91 4.03 2018, there was an increase in salary, utilities and rent, however we were still able to see profit of EPS 4.36 while maintaining the steady dividends policy. 2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018

Environment

Electricity Density per Sale Water Density per Sale Greenhouse Gas Emissions Recyclable Waste (tons) (kwh/sales in $NT thousands) (tons/sales in $NT thousands) (tons CO2)e 8.1 0.24 0.24 0.24 20,940 20,859 1,613 7.83 1,256 19,506 7.57 583

2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018

Non-reusable Oil (tons) Investment Expenses ($NT thousands) 529 75,163 63,034 66,198 482 485

2016 2017 2018 2016 2017 2018

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Employees (people) Middle-aged Employees (people) Disabled Employees (people) Covert Customer Audits (scores) Table 4-6. 2018 Total Economic Value Created male female Number of %of total Number of %of total employees employees employees employees 11.76% 87.81 88.95 9.93% 8.80% 3% 3% 3% (Unit: $NT thousands) 3,523 3,742 85.23 3,343 673 151 448 535 153 2018 Economic Value 1,749 1,865 1,979 140 2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018 Net sales, interest, dividends, and rent 5,195,736

Supply Chain Management 2018 Value Allocation New Product Items Long-term Suppliers HACCP Certified Food Purchases (numbers) (numbers) ($NT thousand) 91 70 70 1,193,988 Operation Cost 3,352,385 69 72 1,078,175 1,048,240

65 Employee salary , bonus and compensation: includ- 1,619,021 2016 2017 2018 2016 2017 2018 2016 2017 2018 ing pension and insurance

ISO 22000 Certified FSC Certified Packaging Traceable Food Purchase Traceable Produce Payment to investors: Food Purchases Purchases ($NT thousands) Purchases (kg) interest expenses, divi- 112,954 ($NT thousands) ($NT thousands) dends, and dividend for 57,490 67,110 1,282,519 68,044 760,359 preferred shares 53,851 1,156,863 1,192,985 51,657 654,971 660,3610 63,682 Government expenses: fines, and taxes (not 51,478 including deferred taxes) 2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018 Community expenses: donations, sponsorships, 2,187 Traceable Egg Purchases Third Party Inspection Store Sanitation Checks(%) Store Sanitation Pass Rate(%) and local investments (boxes) Expenses

($NT thousands) 2,274 36,187 100 100 100 100 57,711 35,721 35,758 Retained Economic Value 1,482 99.2 1,317 98.1

2016 2017 2018 2016 2017 2018 2016 2017 2018 2016 2017 2018

26 MOS CSR Report Enhance Sustainability 4

4.9 Corporate Governance An-Shin has a profound BOD system, including corporate gover- Internal For An-Shin, information transparency is essential, nance, internal audits, and independent directors. Independent Control Company Participation and we work hard to ensure our stakeholders have directors, internal auditors and third-party accountants have for the sufficient information and are regularly updated. direct communication with our management, allowing for efficient BOD audits and monitoring. Independent directors receive monthly BOD BOD Transparency is the foundation of sustainable devel- Election opment and therefore to enhance risk management audit reports, and provide feedback for management. They also and Evaluations BOD and corporate governance, we have applied integrity Corporate hold their own private meetings which occurred four times in Continuous Decision Training Making principles, which are proactively used to disclose governance 2018. As such, they are able to fully understand company opera- Quality financial performances, BOD operations, manage- practice tions and audits. Our company auditors also form reports at every BOD Constitution ment systems, and business strategy. and principles BOD Meeting. As shown with An-Shin’ s detailed BOD system, and Structure allowing for efficient communication, our independent directors 4.9.1. Board of Directors are constantly updated and can provide viable feedback. An-Shin’ s third-party accountants hold meetings with corporate Company An-Shin has nine members forming the Board of Directors, including 3 governance unit to discuss finances and new financial rule Goals and Influential Director independent directors and 3 supervisors, as well as 4 Japanese direc- updates or regulations. In 2018, all 53 indicators within the func- Power Responsibilities tors. To promote gender equality in our company, we also have 2 female tional committee achieved highly satisfactory performances in directors, including one independent director (Note: the BOD holds evaluations, and several rules were updated such as: acquisition Internal Individual re-elections every three years). Chairman Lin, President Kao, and Direc- Control Company and disposal of assets, BOD performance evaluations, and top Directors Participation tor Shirley Huang, hold professions in business planning and risk management performance evaluations, which enhanced the cor- Evaluations for the BOD management. Director Takifuka and Director Fukumitsu are both porate governance. BOD Evaluations apply not only during meet- professionals in international business. Director Lee has an extensive ings, but to individual directors as well. After evaluations, in Feb- Continuous Internal background in finance and banking, as the former president of the Bank Director Relations and ruary of 2019, a report will be submitted by the compensation Training Communications of Taiwan. Independent Director Gong is the former vice-CEO of the committee to the BOD. Institute for Information Industry, with a background in IT. Finally, Independent Director Lai, was the former Head of Bureau of Tourism Taipei, and highly knowledgeable on the topic of tourism. This brief When an evaluation is submitted, the BOD also provides their own suggestions for improvement, and through introduction demonstrates that our BOD comes from a variety of this evaluation, results showed our directors’ performances were all highly satisfactory. The 2017, results of professional fields and can use their experiences to advise our third-party evaluations by the Taiwan Corporate Governance Association were released in March 2018. The 38 company and enhance our performance. The BOD Meeting is held at evaluation questions are highly structured and rigid to perform fair testing, and utilize online self-assessments least once per annual quarter, and is the highest decision-making meet- and interviews. After BOD Members provide feedback, we will offer suggestions in Japanese and forward to ing within the company. All BOD Meetings must follow “Management of our Japanese Directors promoting inclusivity. For three consecutive years, our corporate governance has been Operation of Board Meeting for Listed Companies” convention rules, ranked within the top five percent according to TSE (Taiwan Stock Exchange). Overall, our nine functional regarding conflict of interest prevention. In 2018, a total of six BOD committees are all engaged and willing to participate within meetings-working efficiently and achieving high Meetings were held, with attendance rates of 98.15% for all directors, results. At the end of the meetings, the functional committees suggest a plan for corporate movement and a and 94.44% for international directors. system for new directors to quickly adapt and learn within new positions. In 2018, our internal audits were also improved based on their suggestions.

Director and Evaluation 2018 Resolution Supervisor of BOD of BOD Articles of Internal Audit election rules performance Meetings Corporate Charters System MOS CSR Report 27 4 Enhance Sustainability

Table 4-7. Board of Directors

Nationality Job Title Name Gender Major Experience and Education

PhD., Civil Engineering, University of Washington Professor, Graduate Institute of building and planning, Chairman Lin, Chien-Yuan Male National Taiwan University

Master’s Degree, Graduate Institute of Technology Management, Kaohsiung Polytechnic Institute Director Kao, Shun-Hsing Male Bachelor Department of Industrial Engineering, Tunghai University Executive Vice President, Royal Host Taiwan Co., Ltd

Baachlor, Department of Psychology, Inter- Chairman, ABC Cooking Studio Taiwan Co., Ltd. Director Huang, Shirley Female national Christian University

Bachelor of Business, Aoyama Gakuin University Director Ando Yoshinori Male Advanced Managment Program, Harvard Business School 株式会社モスフードサービス執行役員国際本部副本部長

Bachelor of Economics, Soka University Director Fukumitsu Akio Male 株式会社モスフードサービス国際営業部長

Bachelor of Food Business, Department of Agriculture and Veterinary Medicine, Nihon University Director Takifuka Jun Male 株式会社モスフードサービス執行役員国際本部長兼国際営業部長

PhD., Department of Economics, University of Pittsburgh Consultant, Taishin Financial Holding Co., Ltd. Independent Director Li, Sheng-Yan Male Chairman and President, The Export-Import Bank of the Republic of China President, Bank of Taiwan Director General of Department of Economic Research, Central Bank of the Republic of China(Taiwan) PhD. of Business Administration, Macau University of Science and Technology . Collage of Business, Stanford University Independent Gong, Reng-Weng Male Deputy Chief Executive, Institute. for Information Industry. Administrator, Foreseeing Innovative New Digiservices, Director Expert at Institute for Information Industry

Master Degree, Department of Management Science, National Chiao Tung University Independent Lai, Seh-Jen Female Director-General, Tourism Bureau Chairman, China Pacific Catering Services President, Taiwan Visitors Director Association

Honorary Doctorate, Chang Jung Christian University Department of Economics, Keio University Supervisor Male Huang, Mao-Hsiung Master’s Degree, University of Pennsylvania Chairman, TECO Electric and Machinery Co., Ltd.

Enterprise Economic Research, University of Cologne Association of Industry and Commerce, Taiwan Supervisor Department of German Language and Culture, Chinese Consultant, Chief Secretary of the Board of Directors, Jang, Fritz J. C Male Culture University TECO Electric and Machinery Co., Ltd. Secretary General, Chinese National Consultant, Frankfurt office, Bank of Taiwan

Master’s Degree, Department of Accounting, National Chengchi University Supervisor Yue, Chao-Tang Male Chairman, Ernst & Young (EY)

28 MOS CSR Report Enhance Sustainability 4 Remuneration Committee Director and Supervisor Training An-Shin has a salary bonus system with incentives and work rules that clearly standardizes Although An-Shin has a diverse Board of Directors and Supervisors, reward and punishment guidelines. Each employee's performance is the reference basis for training is still required by law to allow these officials to remain compe- promotions, department transfers, remunerations, bonus distributions, and determined train- tent and updated on industry advancements and new changes to regula- ings. The remuneration and promotion system will be reviewed regularly through the Remunera- tions. In 2018, a total of 12 officials attended the training with a total of tion Committee, and an objective review will be conducted in conjunction with the People's Ap- 100 hours, and an average of 8.33 hours per person. praisal Committee. Article 20 of An-Shin Articles of Association also stipulates that “if there is profit in the company's annual year, 1~2% should be paid for employees” . In 2018, the Remu- neration Committee elected the independent director Lai She-Jen as the chairman, and directors Gong Reng-Weng and Li Sheng-Yan as independent members. In 2018, the committee . held 3 meetings, with average personal attendance rates of 100%, and a total of 10 proposals Figure 4-7 Annual Strategic Meeting on salary and compensation were discussed. 2018 Position Names Training hours Table 4-8. Director Compensation Categories Chairman Lin Chien-Yuan 9 Director Compensation Categories Names Independent Gong Reng-Weng 12 Kao Shun-Hsing, Huang Shirley, Ando Yoshinori Director (Note 3), Fukumitsu Akio, Takifuka Jun, Yamaguchi Independent Below $NT 2,000,000 Lai Seh-Jen 6 Sinji (Note 3), Gong Reng-Weng, Lai Seh-Jen, Li Director Sheng-Yan Independent Director Li Sheng-Yan 12 $NT 2,000,000 to 5,000,000 Lin Chien-Yuan Ando Yoshinori 12 Director (Note 3)

Compensation for Directors and Supervisors Yamaguchi Sinji - Director (Note 3) Compensation for directors and supervisors include the items listed below. The compensation PhD. of Business Administration, Macau University of Science and Technology . Collage of Business, Stanford University package is authorized according to the article which outlines responsibilities and roles. Other Director Fukumitsu Akio 6 Deputy Chief Executive, Institute. for Information Industry. Administrator, Foreseeing Innovative New Digiservices, company compensations were also taken into consideration when developing An-Shin’ s com- Expert at Institute for Information Industry pensation rates. Article #20 states that when there is profit, 5% must be reserved for compen- Director Takifuka Jun 6 sation. Other than Director Kao and Director Takifuka (top management officials), all other directors without salary, receive compensation. The compensation for the President and Vice- Director Huang Shirley 6 President include salaries, pensions, bonuses, and employee rewards. Compensations are decided based on position, responsibilities, contributions with regerence to industry averages. Director Kao Shun-Hsing 6

Table 4-9. Supervisor Compensation Categories Supervisor Huang Mao-Hsiung 9

Supervisor Compensation Categorie Name Supervisor Yao Chao-Tang 10

Below $NT2,000,000 Huang Mao-Hsiung, Jang J.C. Fitz, Yue Chao-Tang Supervisor Jang J.C. Fitz 6

(Note 3) Effective April 1st, 2018: Mr. Ando has replaced Mr. Yamaguchi as the Japanese Director representative.

MOS CSR Report 29 4 Enhance Sustainability

CSR Committee Task Force Function

According to CSR regulations issued by the government legislation, An-Shin formed the Supplier CSR Committee in 2014. In 2018, Director Gong was elected as the head, including Management All issues concerning food safety and supply chain management Huang Mao-Hsiung, Yao Chao-Tang, and Jang J.C. Fitz whom make up the CSR including planning and operations committee. They supervise An-Shin’s sustainable performance and review future Corporate prospects for the company. In 2018 there were 3 CSR committee meetings, with high Governance All issues concerning corporate governance attendance rates of 90.91%. The CSR Task Force executes CSR strategy and submits periodical reports to the BOD. The CSR Task Force are comprised of: supplier manage- Branding ment, corporate governance, brand marketing, environmental protection, employee Management Company branding and marketing wellness, and social welfare. On An-Shin’s website, we have a page dedicated to the CSR to communicate related information to our stakeholders. In addition to our internal Employee audit system, our drafted CSR report is approved by the committee, and further audited Wellness Employee benefits and human rights training, and work place by third party accountants. In 2018, An-Shin was ranked 4th by the Common Wealth health and safety. Magazine as a ‘Little Giant’ company, and TCSA recognized An-Shin with 3 awards Environmental including: one of the top 50 companies in CSR performance, a gold prize for the CSR Protection Sustainable environment, saving energy and reducing carbon report, and an outstanding supply chain achievement. Our corporate governance is footprint. within the top 5% of the TSE Listed Companies. Social Welfare Social welfare projects (donations, contribution to education, etc.)

Figure 4-8. CSR Committee Organization Chart

Board of Directors

An-Shin CSR Committee Director: Gong Reng-Weng Corporate Social Independent Director Responsibility Practice and Principles CSR Task Force Director: President Kao General Manager Secretary

Supplier Corporate Brand Environmental Employee Social CSR Website: Management Governance Management Sustainability Wellness Welfare http://csr.mos.com.tw/ Group Group Group Group Group Group

30 MOS CSR Report Enhance Sustainability 4 4.9.2 Functional Committee As mentioned above, the 53 indicators of BOD and Committee performance were highly recognized. As the industry evolves, these committees monitor our strategy in alignment to new trends, while analyzing risk management, and evaluating performance. Table 4-11. Functional Committee Meeting Attendance Aspect Committees Risk Type Risk Management times rate New Store Operations Risk Store New store plan evaluations, or New Store Development Location and Operations Man- approve discontinuing store 11 96% agement (number of stores) operations Operations and Management Assist management, opera- Management Committee Risk (Operation Performance and tions and audits of the com- 5 94% Economy System Improvement) mittee Investment risks on financial instru- Help to build financial plans Finance Committee ments, real estate, and cash man- and evaluate costs and ben- 3 100% agement efits Smart Technology Unable to keep up with techno- Monitor new IT systems, and 3 91% Committee logical advancements new tech audits

Remuneration Assist the BOD to review new Salary and Benefit Policy 3 100% Committee policies and our salary schemes Society Cope with future operation Human Resources Devel- Lack of Labor growth by including automa- 3 89% opment tions and machine equipment Assist in operation risk evalua- Environment CSR Committee Operation and Management Risk tions and propose strategies to 3 94% cope with future risk Climate change, market fluctuations Pre-evaluate suppliers and Supply Chain Purchasing Committee （Efficient and high-quality purchas- 6 94% material price quotations ing of materials with low costs）

Aside from these committees, we have internal control schemes to face emergencies or major issues. Aside from risk management units, depending on major issues, we have different department employees specializing in effective solutions. The three key steps in solving major issues are as follows: 1 2 3

Prevention Emergency Post Review Management Problem-solving Meeting Source management Meeting and Record and Report of raw materials, Response within 12 the incident for the enhancement of hours of incident BOD Acquisition Cash loans Endorsement Prevention Publicize product processes, or disposal management guarantees of insider important and strengthening of of assets rules trading internal supplier evaluation information

MOS CSR Report 31 4 Enhance Sustainability External Associations List An-Shin also participates in various external associations to promote industry development showing our integrity in corporate responsibilities. Chairman Lin, who is also highly involved in external associations, is a thirty-year veteran for the Urban Development and Environmental Education, as well as the Chairman for TSCA since 2015. Chairman Lin has an extensive background in city development due to experience within the municipal government, and former role as an architecture professor at the National Taiwan University. (Note: An-Shin only participates actively in these associations with membership fees, and does not act as a sponsor.)

Table 4-12. 2018 Participation in External Associations Number of Committee Presence Strategic Association Articles and regulations Members: (Yes/No) Membership Upholding the philosophy that “peers aren’t your enemies, and you can TCFA (Taiwan Chain Stores learn from different industries.” Regardless of your industry, if any member 2 No No and Franchise Association) has the same mindset, you can join TCFA.

Promote academic research in internal audits and strengthen connections The Institute of Internal with international internal audit associations. As well, assist enterprises to Auditors-Chinese Taiwan 1 No No improve business management.

Promoting the professionalism of purchasing practices, assisting and Supply Management establishing the standard operations procedures for public/private sectors, Institute, Taiwan and fostering academic research within global purchasing/supply disci- 1 No No plines.

Assist Taiwan's industrial and commercial organizations and corporate Chinese East Asia Economic members to establish a platform for cooperation, and enhance relations 1 (Chairman) Yes Chairman Huang Association between Taiwan, Japan, and other East Asian countries.

Taiwan India Business To expand economic and trade development between Taiwan and India, 1 (Chairman) Yes Chairman Huang Association and construct the most effective platform for trade relations. Taiwan Turkey Business To enhance trade relations between Taiwan and Turkey. 1 (Chairman) Yes Chairman Huang Association Taiwan Smart City Through the joint efforts of industry, government, and research, we assist 1 (Chairman) and Yes Chairman Lin Association cities in proposing smart city planning and sustainability. Company Membership

Chinese Human Resources To share and promote human resources management, strengthen training Company No No Management Association development, and improve human quality and interaction. Membership

4.9.3 Government Subsidies Table 4-13. Government Subsidies An-Shin accommodates returning workers, ttalent development program, support local produce, and offer maternity workers’ pro- Promote HR Development Support Local Produce tection. The subsidy amount encompassing: Work force Develop- Human Resources Improvement Specialty Rice Product ment Agency- Ministry of Labor, Employment Service Office, Agri- Project Program Training Grant Project Competition Grant culture and Food Agency Council of Agriculture, combined to a total subsidy amount of: $NT 2,555,000. $NT 650,000 $NT 1,905,000

32 MOS CSR Report 5 Enhance Brand Value

TCFA Annual Exemplary Service Award recognized 7 excellent store managers, and 2 outstanding store managers Dedicated to research and innovation demonstrated through 72 new product launches, and selling 6,341 thousand new products Adopted AI technology, employed, and upgraded the service robots in 2018 The usage and sales of multiple orders increased by 24.40% and 21.31% respectively, compared with that of 2017 2 Internal Information Security Announcements made Certified ISO 27001 Information Security Management Systems in 2018 Approximate 100 Covert Customers At least 1 visit/store by covert customers completed every quarter Reduced the number of exceptional handling cases by 17 in 2018, compared to 2017 2 Customer Forums held in 2018 153 stores recognized with Good Hygiene Practices (GHP) and a certificate-holding rate of 100%

Stakeholders: ■ Clients or Customers ■ Suppliers or Contractors ■ Employees 5 Enhance Brand Value 5 Enhance Brand Value Management Approach and Methods

Major topics: Innovation of Product and Services

Our annual media focus is on good ingredients: rice, eggs, and vegetables to convey the Green 3-in-1 Purchasing Policy (local sourcing, traceability, and contract farming) with stakeholders and adapt smart technology (MOS Order APP, Kiosks, etc.) to enhance our ‘safe and delicious’ brand image. We utilize a broad range of agricultural products including sweet potatoes and Taiwanese rice. We work hard to continuously introduce food variety Meanings for An-Shin and upgrade functional materials in 2018 to promote customer health. As AI technology advances, An-Shin launches service robots to deliver meals to customer tables, offering a new dining experience. Overall, An-Shin’ s mission “Contribute to Humanity, Contribute to Society” has outlined our initiatives with integrity and innovation for products & services, and ultimately enhances brand value.

An-Shin is committed to offer “really safe, truly delicious, and beyond satisfactory” services and transcend ourselves to be an industry-leading pio- Our Commitment neer in adapting new technology and changing the customer experience.

‧Employ local agricultural products and environmentally-friendly materials to cope with seasonal changes, customer preferences and Short-term: goals afford LTOs (limited time offers) ‧Adopt current AI technology and invent service robots which will deliver meals and curate a new dining experience ‧Provide customers with a low-carbon, comfortable environment to enjoy the cozy atmosphere, delicious food, and embrace mental and physical relaxation ‧The evolution of technology has led to the explosion of ecommerce. An-Shin launched our own ecommerce website to allow con- Goals and objectives sumers to purchase our variety of MOS Burger products online with just one click ‧Develop differential and quality products, which align with our prestigious brand image Mid- and long term: ‧Upgrade equipment and monitor production to stabilize product quality and reduce wait times goals ‧Integrate online and offline operations into an omni-channel business model to offer innovative, considerate and convenient services for different target customers ‧Assess customer needs through multidimensional product testing (ie. time slot, place, gender, and age) ‧Adhere to our core values and prepare safe, secure and healthy gourmet foods ‧Adapt smart technology and rebuild new services to increase brand recognition and revolve around sustainable development How to Manage

‧132 kiosks in 75 stores (still expanding) ‧Invest $NT 10 million to install kiosk s and KD(Kitchen Display) systems Investrments/Input ‧To reduce wait time and improve efficiency of MOS ORDER App, invest $NT 7.5 million in e-coupons and table orderings ‧In 2018 $NT 6,024 thousand was invested in product innovation ‧Weekly project meetings to promote efficient management and streamline processes to tackle business dynamics ‧ Management Monthly business review meetings to assess progress of operations, the impacts of challenges, and propose countermeasures ‧Other project meetings (operation upgrade projects, complaints analysis meeting, etc.) to track improvements and align with long-term strategy Approach ‧Quarterly audits by mystery shoppers to improve quality and ‧At least 30 customer satisfaction surveys/store were conducted each month. Surveys were analyzed to evaluate store performance. For stores which Evaluation failed to achieve targets will be requested to propose countermeasures according to the feedback forms. All improvements are to be confirmed by Schemes higher management.

34 MOS CSR Report Enhance Brand Value 5

5.1 Creating Product Value In addition to gourmet variety, differentiation, and specialty, An-Shin offers exceptional service to retain competitive advantages and sustainability potential. As of 2018, An-Shin is 27 years old and hopes to continue to introduce nutritious and unique products that meet customer needs for a healthy diet. Mass Adoption of Taiwanese Rice Special Menu Products An-Shin joins the reward plan by the Diﬀerent products were 2018 Rice Innovation Plan of Agriculture launched to cater towards and Food Agency, Council of Agri- local needs (ex. curry rice, culture. We invent rice noodle oyakodon, and ice treats burgers and rice pies to oﬀer introduced for family visit- more product variety using native tors to MOS Burger Taipei ingredients. Zoo Store).

Other Taiwanese Specialty Ingredients Product Preparation Time Drink Options Taiwanese agricultural products (including pork Select in-season fruits New drinks introduced to complement seasonal and sweet potato etc.) were employed in our new and use small packages ﬂavor, health concerns, and social media trends. products. to simplify preparation and ensure stable food quality.

Since 1991 2005 2010 1st rice burger to utilize Lettuce burger wrap introduced Vegetarian menu offered 2016 Tomato burger wrap

quality Taiwanese rice 1st organic rice burger with scallops introduced 2003 Upgraded to wheat germ bread in Taiwan 2012 Low fat, low salt, and low sugar Increased purchasing products catered towards senior of welfare cage-free adults eggs 2013 More salads introduced for health Coinciding with needs 2014 Another Taiwan Rice Emblem Plan Japan’s 2004 Release Grass-fed beef from New by the Agriculture and Food Agency, Council of Agriculture. Zealand with no growth 2017̃ hormones｠and antibiotics LTOs Selection was introduced. Red quinoa and hibiscus grown in Taitung used for quinoa rice burgers, quinoa salads, and hibiscus drinks. 2007 PLA containers employed instead of plastic ones to reduce waste.

MOS CSR Report 35 5 Enhance Brand Value

5.2 Upgrading Service Quality

Artiﬁcial Intelligence 2018 KD (Kitchen Displays) Employment

To increase meal delivery service eﬃciency， The 1st version of the service KD (Kitchen Displays) were adopted to robots was launched in April, ensure deliciousness, product consistency, 2018. Work station and service reduce wait times, and increase customer processes were revised to satisfaction. KDs were installed in 16 stores accomodate robot services in 2018, and will be introduced in 100 more which oﬀer new dining experi- stores in 2019. ences for guests.

To ensure the robots are lightweight, stable speed and safe, a 2nd version of the robots was launched in Novem- ber of 2018, with obstacle censoring and speed adjustments.

Since 2005 2010 2015 1991 Offered fresh made Soy ink printing Food inspection center Ecommerce website offered an online ordering channel meals delivered to adopted for all established 2016 1st inductive membership payment card in QSR of Taiwan your tables. DMs. adopted, with issuance of more than 250 thousand cards. The pioneer restau- 2011 Food inspection center was rant chain to have granted a TAF certification New uniform design an open sink in the (Lab No. 2473) seating area and an 2013 Food Oil Monitor (FOM) open kitchen store was employed in all stores layout. 2014 Electric motorbikes used for food delivery

2004 Allotted 500 jobs for returning workers 2008 Cooperation with China Airlines to 2012 MOS Order APP serve rice burgers on international flights. The ﬁrst fast-food chain 2016 1st MIT kiosks in QSR of Taiwan 2007 Lohas Market restaurant company to Showcasing concise displays and an intuitive design From farm to launch a mobile APP in table, consum- Taiwan. ers are able to 2017 Ideas for service buy the same robots leading to fresh materials further AI robot used in MOS planning. Burgers.

36 MOS CSR Report Enhance Brand Value 5

5.3 New Product Development and Innovation

An-Shin drafts the annual product schedule according to strategic positions, sea- 5.3.2 Initiatives for New Products sonal selections and industry trends to offer food with variety, diversity and fresh- ness. An-Shin attracts consumers with healthy, delicious, and quality food made An-Shin offers hearty service, delicious meals, from seasonal delights and local specialties. We sold 37,740 thousand main and is dedicated to healthy food; blending courses, 26,157 thousand snack dishes, 35,847 thousand drinks and soups, and quality materials and exotic cuisine with sea- 14,068 thousand of our other products in 2018. sonal produce to create fusion-style gourmet dishes.

New Product Development Process: 5.3.1 Develop Healthy and Safe Products Draft plan and budget for next year as well as product Annual Plan An-Shin offers a variety of meal options listed below: propositions

Proposal and New specialty product proposals Materials Survey

Product Testing Product revisions and testings must be satisfactory in order and Revisions for further review and launch

Material Safety Ensure products and suppliers are up to standard in food Check safety and sanitation checks

Purchasing Ensure suppliers satisfy supplier management regulations

Education New product launch processes with new SOPs are composed

Product Launch Product launch manual for Training Department, which is Main Snacks Drinks Other and Sales then passed on to operations Courses and soups Chicken nuggets, Burgers, rice Gifts, souvenirs, Customer fries, salads, Soft drinks, juice, Feedback and Collect feedback from customers and employees burgers, hot dogs, MOS Cards, etc. konnyaku (jello), milk, soup, coffee, Operations sandwiches etc. etc. desserts, etc. Feedback Meeting will be held where sales are discussed, and later Report for Future compiled in a report for future reference Reference

MOS CSR Report 37 5 Enhance Brand Value

5.3.3 Research and Development

Drawing on the tastes of international flavors along with Taiwan’ s local produce, An-Shin creates tailored product Table 5-1. Input for research and development Unit：$NT thousands mixes for each store district. In 2019, we will be commit- 2016 2017 2018 ted to the “farm to tables concept 2.0,” as well as analyze Research and Research and Research and food trends for take-out, dine-in, and vegetarian products, development development development while incorporating new products, technology and service (note) 5,897 (note) 5,765 (note) 6,024 ideas. Each year we set aside a portion of funding for research and development, (i.e. $NT 6, 024 thousand in Consolidated Consolidated Consolidated 2018 and an estimated $NT 6.12 million in 2019). The sales: 4,663,585 sales: 4,919,312 sales: 5,252,104 R&D expenses will grow gradually to differentiate us from As a % of As a % of As a % of other competitors and retain competitive advantages. consolidated consolidated consolidated sales 0.13% sales 0.12% sales 0.11%

(Note 1) R&D expenses including Taiwan (making up 99% of total) and other areas 5.3.4 Sales of New Products

While considering the product schedule in 2018, we take seasonal offerings and we created the rice noodle burger and purple sweet potato & taro pie. We also brand position into account, (ex: launch preferred product choices in the summer launched the Mountain Ocean Sun Rice Burger to celebrate MOS Burger’ s Birth- including chicken and lightly flavored products). Through participation in the Rice day on March 12th, 2018. Innovation Plan of Agriculture and Food Agency of the Council of Agriculture,

Table 5-2. 2016 to 2018 New Products and Performance

2016 2017 2018 New Product Sales volume Sales revenue Sales volume Sales revenue Sales volume Sales revenue Item （％）（％） Item （％）（％） Item （％）（％）（thousands）（$NT thousands）（thousands）（$NT thousands）（thousands）（$NT thousands） Main courses 27 4,034 3.76 338,384 7.26 29 8,426 7.82 593,177 12.06 23 3,328 2.92 247,279 4.71

Snacks 11 188 0.18 10,851 0.23 24 521 0.48 33,400 0.68 15 615 0.54 32,757 0.62

Drinks & soups 12 1,672 1.56 80,556 1.73 25 1,194 1.11 71,136 1.45 22 2,361 2.07 126,388 2.41

Other 19 105 0.10 8,481 0.18 13 62 0.06 7,179 0.15 13 37 0.03 8,345 0.16

Total 69 5,999 5.60 438,272 9.40 91 10,203 9.47 704,892 14.33 72 6,341 5.57 414,769 7.90

Partners of An-shin travel and train frequently to learn industry trends, update cooking techniques, refresh their service mindsets, adopt new technology and undertake market research to gain insight on customer preferences. In addition, MOS Burger Japan will occasionally visit and train along with our staff.

38 MOS CSR Report Enhance Brand Value 5

【Castle Meeting: Employee Communication Meeting】The 【Food Taipei】Assure Food Excellence, Propel Globally Secret to High Quality Service

The Castle Meeting has been an employee communica- More than 100 million rice burgers tion meeting for many years. The Chairman and execu- were sold in Taiwan, almost 10 tives of MOS Burger Japan will travel and visit employ- thousand Taipei 101 buildings high ees to promote two way communication. This year Food Taipei 2018 was held during Jun. (2018) is the 27th anniversary of MOS Burger Taiwan, 27~30th at TWTC Hall 1 and Nangang Exhibi- and Chairman Sakurada visited Taiwan in March to tion Center. An-shin joined the exhibition and attend 2 forums and share his experience with us. had 75 booths with a major focus on “Assure Attendees include frontline staff and store managers. Food Excellence, Propel Globally” . In 2018, Figure 5-1. Castle Meeting Figure 5-3. Group Photo of Through Q&A sessions, all participants were eager to An-shin opened the Taitung Xinsheng Store TECO Catering Affiliates discuss and find out MOS Burger’ s secret to our busi- and achieved the goal to serve people in every ness success and recognize the company’ s dedication county of Taiwan. More than 100 million rice to our society. Chairman Sakurada emphasized that burgers were sold in Taiwan, totaling almost 10 fresh made food, “Japanese culture, ” and “a balanced thousand Taipei 101 buildings high, and an diet leads to a healthy body, ” are three characteristics outstanding MOS Burger record outside of of MOS Burger. He disclosed his stories of success and Japan. An-shin displayed a giant yakiniku rice strategies to differentiate from competitors. A burger (with quinoa- the ruby of grains) which customer-centric mindset and continuously working to had a 100-cm diameter at the event. We con- "make people happy through food, ” are the core values tinuously support our local economy and work Figure 5-2. Group Photo of MOS Burger. of the Castle Meeting to introduce unique rice burgers with new Figure 5-4. Giant Yakiniku flavors to serve our customers. Rice Burger (with quinoa)

【Enhance Healthy Diets】Understanding Fast-Food 【Reduce Physical Burden】A Healthy Diet Life-Style Industry Trends

To learn more about healthy diets, An-shin invited a lecturer from the Graduate An increasing number of individuals are practicing health-consciousness. Institute of Food Culture and Innovation, National Kaohsiung University of Hos- An-Shin promotes this trend by innovating healthier products for our pitality and Tourism. Lecturing topics covered lifestyle, diets, and environmental customers. We also invited the manager from the Department of Dietetics of protection. The purpose is to educate our employees so they can better serve NTU hospital, to speak about the Mediterranean diet which states we should our customers and innovate new ideas for improving our service. consume grains, nuts and vegetables, and increase olive oil consumption, while reducing meat. We promote public health by considering these guidelines when creating our products.

Figure 5-5. Healthy Diet lecture Figure 5-6. Group photo Figure 5-7. NTU Hospital lecture Figure 5-8. Lecture photo

MOS CSR Report 39 5 Enhance Brand Value

5.4 Innovative Ordering Platforms

As technology is evolving, we provide multiple ordering platforms allowing our cus- 2016 2017 2018 tomers to order with more convenience. Phone ordering and website ordering was Transaction counts Transaction counts Transaction counts (thousands) (thousands) (thousands) established in 1998 (449-2626). In 2012, the first MOS Order APP was introduced 3,905 in Taiwan’ s chain stores. As shown below in Figure 5-9, there is an increasing number of customers using MOS Order over the years. In 2016, kiosks were intro- 3,260 duced in our stores, and throughout 2017 and 2018, the kiosks were gradually 3,139 established in every store. The new ordering technologies are implemented to 2,675 reduce wait times, long order lines, and allow cashier staff to better serve our customers. Next, we are looking to establish offline and online credit card payment 2,054 1,780 along with our developed service robots to serve meals. All efforts are considered to improve efficiency within MOS stores.

413 165 212 204 155 109 96 28 0

449 WEB APP KIOSK Total

Figure 5-9. 2016 to 2018 Order Transaction count

In 2018, transaction counts grew 24.4%, and sales revenues increased 21.31% 2016 2017 2018 from the previous year. Sales (millions) Sales (millions) Sales (millions) 735.47 (Excluding KIOSK deposits) 607.01 606.28

502.51

404.04 In 2018, we 335.01 installed 132 kiosks across 76 stores. 67.54 8.95 42.05 54.40 51.97 24.00 26.98 25.38 0

449 WEB APP KIOSK Total

Figure 5-10. 2016 to 2018 Sales Revenue from multiple ordering platforms

40 MOS CSR Report Enhance Brand Value 5

5.5 Internal HDCS Audits Ensuring SOP Compliance： An-Shin works to ensure that all aspects of hospitality, deliciousness, cleanliness and speed are met within our stores. Everyone in the store effectively acts with Individual Continuous goodwill, respect and a positive attitude, creating clean and friendly stores and Store Visits Store Tracking and constantly striving to make our customers feel satisfied. The HDCS acronym is our Evaluations Store Progress company’s core values that we strive to uphold every day: Store Visits Immediate feedback from evaluations and evaluation reports Individual Store Evaluations Work on areas needing improvement, by communicating with store Hospitality Delicious managers and educating store employees alongside the supervisor 真心相待安全高品質又熱情關懷美味的餐點 Continuous Tracking and Store Progress Track store progress, and ensure SOPs are followed. Store H D improvement tracking schemes are also disclosed.

S C The Business Audit Department periodically visits, teaches, and tracks individual Speed Cleanliness stores. Operation supervisors keep constant communication with store managers 迅速敏捷清潔明亮 and educate store employees. Through this plan, we can increase awareness of the 的行動的店 importance of HDCS and how it is an indicator for service quality.

Core Product New Product Enhance Review Review Food Safety The Business Audit Department helps to ensure every partner follows the standard Product Standards SOPs, with evaluations every 2 months. The evaluations check HDCS, and food Core Product Review safety on a rotational basis. Feedback is immediate during the evaluations in-store Food preparation inspection and corrections and corrections are given as they occur. After the evaluation, a formal report is submitted to the manager, supervisor, and division head. Progress has to be announced within the span of a week and records are kept until the next upcoming New Product Review evaluations for review. Every 6 months, if there are 2 unsatisfactory evaluations, the Food preparation procedure Business Audit Department will enter the store with the supervisor to educate employees about store management. For areas with common issues (according to the Enhance Food Safety SOPs), they will be addressed at monthly store manager meetings and action plan Ensure product quality, help investigate customer com- meetings. With constant feedback, we can ensure all store chains are following the plaints, and propose feasible improvements SOPs correctly. We enhance product quality through core product review and new product evaluations. The Business Audit Department not only evaluates store progress, but also teaches procedures for new products, and reviews core product procedures, with the purpose to reinforce consistency of products for our customers.

MOS CSR Report 41 5 Enhance Brand Value

Overseas HDC Award Auditor Feedback The purpose of the annual HDC (Hospitality, Deliciousness, and Cleanli- ness) Award Competitions is to promote teamwork and service quality. MOS Food Services, Inc. Japan sends representatives to global MOS Burger stores to audit the event in multiple countries including Hong Kong, Korea, Singapore, Thailand, GuangDong, XiaMen, and Indonesia. An-Shin always starts with our own competitions (2 rounds), to select top internal candidates. In 2018, we had a total of 35 registered stores, of which 15 were selected to advance to the second round of competitions, with 10 successful candidates. The 15 candidates then undergo intensive training

to enhance ambition and performance during the overseas competition. （Top HDC Awards） Evaluator （Hospitality Award） Evaluator Chiayi WuFeng Store Comments TianMu DongLu Store Comments

When you enter the store, you can This store’ s teamwork is truly impres- Table 5-3. Taiwan HDC Candidates deeply feel MOS Burger’ s values, in a sive, with employees maintaining a friendly face allowing customers to feel Year Total Stores First Round Second Round very friendly atmosphere. Everything Registered Selection Selection from the products, environment, and ser- our company’ s hospitality. The interac- 2017 38 30 10 vice, is of top-quality and aligns with our tions with customers are patient and 2018 35 15 10 mission. This store is completely deserv- warm, which is the way MOS Burger ing of the HDC Award. expects all stores to act. The final 10 candidates will undergo a second round of trainings and visit stores to learn more about product procedure accuracy. After training, these candidates formulate a plan for achieving top results at the event. In 2018, Chiayi WuFeng Store won the top HDC award, XiZhi TaiWu and SongJiang stores won the excellent store awards, and TianMu DongLu store won the Best Hospitality Award.

Table 5-4. 2010 to 2018 Taiwan HDC Awards List Excellent Top Effort Top H D C Year Store Store HDC Award Award Award （Excellent Store Award）（Excellent Store Award） Award Award Award Evaluator Evaluator Comments Comments 2010 1 2 1 XiZhi TaiWu Store SongJiang Store 2011 1 2 0 With a young store manager, although Upon entering the store, you are met without much experience, she shows with a bright, clean atmosphere, with 2012 1 2 0 Since 2018, the Top great ambition and passion allowing her excellent product quality. Everyone 2013 1 2 1 Effort Award was to exert influence on all staff to cooper- works towards the HDC requirements 2014 changed to H, D, 1 2 1 ate and provide the best experience for passionately. This store represents all and C Awards 2015 1 2 0 customers. The operation abilities have the chain stores across Taiwan and their 2016 1 1 0 also experienced great growth of 2-10x. great commitment to customers. 2017 0 2 0 This store won the HDC Award within the 2018 1 2 - 1 0 0 first year of competitions, which is truly inspiring.

42 MOS CSR Report Enhance Brand Value 5

5.6 Covert Customer Evaluation

Since 2015, An-Shin has employed the ‘covert customer evaluation’ as a way to Covert Store Audit check store operations from a customer point-of-view. The covert customers are Customer Occurs at least members from our company staffs, the Operations Department, and affiliate em- Selection once per annual ployees. Items to be evaluated include: speed, friendliness, order processes, prod- Chosen from staffs, quarter, with an uct quality, cleanliness, and feedback. Covert evaluators must physically enter the Operations evaluator stores and order meals for inspection. To ensure consistent evaluations and pro- Department, checklist for fessionalism across all stores, yearly trainings are held, where feedback can be and affiliate scoring. shared. employees. P D

Feedback C A Additional Customer Meal and Specialized Feedback and ordering Improvement Evaluations Suggestions and delivery Customers Service Based on new speed Group analyzes and services/projects, compiles feedback there may be Covert into a store report. additional Product Customer evaluations. Quality Audit Customer System Greeting Figure 5-12. Evaluation Process Store Environment and Ordering Cleanliness Process friendliness operations cleanliness product speed quality 81.64 81.91 79.70 78.49

Figure 5-11. 6 Aspects of Evaluations

In addition, we are constantly recruiting new covert customers to join current coverts in rotating store locations. The purpose is to analyze our customer’ s expe- 32.32 32.26 31.81 33.19 rience and understand areas of satisfaction or improvement. Ultimately, we want to 36.38 36.57 35.75 36.25 enhance service quality, and push stores to continuously improve. Monthly evalua- 17.47 17.60 17.45 17.35 tions will be compiled into a report, and evaluations are related to store KPI (key performance indicators). 0.37 0.50 0.44 0.55

Q1 Q2 Q3 Q4

Figure 5-13. 2018 Covert Customer Evaluation Scores

MOS CSR Report 43 5 Enhance Brand Value

In 2018, all performance scores were improved from 2017 (Figure 5-15), and the Training and Discussion special evaluations were on environment cleanliness, interior design, kiosks, and In June and October of 2018, there were two trainings on the topic of smart tech- air conditioning during summer time. This third party audit can allow us to better nology; specifically kiosk usage forums held at the JingXing store and LuZhou understand our store conditions. ChangRong store. Our Customer Service Group presented and taught basic kiosk usage. We also collected immediate feedback on customer’ s experiences with the x 2016 2017 2018 kiosks. We implement these trainings and collect feedback to allow our customers to feel An-Shin’s advances in customer service.

258 257 257 255 251 250

245 244 Two Trainings x x x x 243 244 243 242

Q1 Q2 Q3 Q4

Figure 5-14. Number of Stores Visited in 2016-2018

x 2016 2017 2018

89.82 89.39 . . 88.21 88.38 Figure 5-16 2018 At the Training Figure 5-17 Kiosk Lesson 88.67 87.68 87.91 86.99 x x 86.42 Order Tags x 85.86 Aside from ensuring quality products, we also pay attention to other aspects in 84.92 x 83.71 meal ordering. The order tags each have positive quotes written at the top to allow customers to read for enjoyment while waiting for their meals. The order Q1 Q2 Q3 Q4 tags also have a QR code for APP pre-ordering as an effort to decrease wait times. Figure 5-15. Average Scores in 2016-2018

Just Under 100 Covert Customers

Store Visits at least once per Annual Quarter

44 MOS CSR Report Enhance Brand Value 5 5.6.1 Customer Feedback

An-Shin’ s mission is “Contribution to Humanity, Contribution to Society,” and our In 2018 our chain added 8 new stores, and Surveys Call center 0.83% food safety policy is in providing safe products, delicious goods and ensuring cus- received 14,348 customer feedback forms, 1.03% tomer satisfaction. Aside from offering customers products, we also offer quality an increase from 2017 where 13,257 forms service and listen to customer feedback to constantly improve (Figure 5-20). There were received (approximately a 10% Toll-free number080 are several ways for us to collect feedback including website, mailbox, MOS Order increase). Customer feedback is catego- 31.59% APP, 0800 Customer Service Hotline, customer survey forms and our call center rized into five major groups, among them Other (in-person/ (Figure 5-19). As our app and through our website surveys are more convenient, including: service process, product quality in-store) our internal team will collect and analyze feedback to quickly resolve any issues and wait times. We focus on and discuss 0.19% E-mail (Figure 5-18). with the Operations Department along with 66.36% training to solve these issues. Since our store clerk staffs are constantly working, we take these measures to enhance service Customer Feedback Flow . quality and later on, these events become Figure 5-20 Feedback Sources in 2018 prevention case studies for employees Customer shared at monthly meetings. (complaint/inquiry/compliment/ feedback etc.) Feedback 5,275 Complaints 4,486

Phone Number Email 080

Suggestions 604 Compliment 454 Feedback record Inquiries 3,529 Survey Feedback Timely response Form Figure 5-21. Categorized Feedback in 2018 Response plan (store number/gift/promotion etc.) Website FB and Situational judgement mailbox Environmental sanitation 346 Various Product quality Significant events platforms 1,718 (assistance from Public Relations/ Service attitude Store Manager Division 1,486 Quality Assurance Toll-free response Head/SV /Legal Compliance Dept.) In-person number Long wait-times Call center 1,640 Final report given to store 02- Service process and case closed 449-2626 1,800

. Figure 5-18 Customer Feedback Flow Chart Figure 5-19. Customer Feedback Platforms Figure 5-22. Categorized Complaints in 2018

In 2018 there was a decrease of 17 major specialized forms received comparing to 2017

MOS CSR Report 45 5 Enhance Brand Value

5.7 Customer Care

An-Shin puts a big focus on customer care and works to ensure all customers are satisfied from the bottom of our hearts. Other than the website, we have customer surveys and Very satisfied Satisfied feedback forms that our clerk can deliver to our customers or from customer requests. 100.00% There is a minimum of 30 forms that need to 90.00% be collected every month from each chain 80.00% 37.66% 39.86% 41.20% 38.17% 38.82% 39.83% 36.02% 36.77% 41.97% 41.69% store. In 2018, a total of 86,409 survey forms 70.00% were collected and analyzed with overall KPI 60.00% goals of at least 84, and in 2018, all goals were 50.00% 46.35% met (Figure 5-24). In the case that a store does not meet standards for three consecutive 40.00% months, a major specialized form will be filled 30.00% out for improvement planning- which are 20.00% 57.91% 57.16% 54.37% 53.55% 54.47% 54.96% 60.79% 59.65% 52.06% 49.82% 27.59% approved by the supervisor, and in 2018, only 10.00% 2 such events occurred (Figure 5-25). In addi- 0.00% tion, all forms are periodically disposed of for Breakfast Burgers Side Desserts Soups Drinks Staff Overall Dine-in Toilet Meal the protection of personal information. For dishes service service environment sanitation service 2019, we aim to move the customer feedback times system online to eliminate paper waste, and Figure 5-23. Customer Feedback Survey Results in 2018 increase efficiency.

2018 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Average

Monthly 86.96 87.6 87.1 87.4 86.99 87.2 87.5 87.23 86.95 86.98 86.71 87.27 87.16 Scores

Figure 5-24. Monthly scores based on Customer Feedback Surveys in 2018

2018 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Average Number of Specialized 0 2 0 0 0 0 0 0 0 0 0 0 2 Forms filed

Figure 5-25. Specialized Forms filed in 2018

46 MOS CSR Report Enhance Brand Value 5 5.7.1 Outstanding Customer Service

We hope our employees can provide warm and helpful services towards all of our customers, going above and beyond the standard SOPs. Every month, customer compliments are selected and individual employees are recognized as service exemplars. Such events are shared and broadcasted through MOS Life and celebrated. In 2018, there was a total of 454 customer compliments given.

er 2018 er 2018 er 2018 er 2018 er 2018 S vic S vic S vic S vic S vic e E e E e E e E e E xem xem xem xem xem plars plars plars plars plars Friendly Empathetic Smiling and Patient and Passionate towards towards Considerate shows Integrity Employee Customers Customers Employee THSRC Tainan store, MingYao store, YongKang ShongLi HuanZhong ZhiGuang store, QunYi Chen BeiChuan Chen ZhongHua store, store, YanYi Lee YiRu Chen JunShen Wu

5.7.2 Smile-Certiﬁed Award To encourage our employees to smile and maintain a positive attitude when dealing with customers, every month we hand out 30 ‘smile cards,’ with rewards such as cash rewards up to $NT 15,000. Headquarter executives and business auditors select outstanding individuals who exemplify H and D within our HDC guidelines and recognize them with the smile cards. Aside from giving out the cards, names are taken down and Human Resources Dept. will reward them with the cash rewards next month. An-Shin will announce and recognize these select employees at monthly store manager meetings.

2018 2018 2018 2018 ‘Hospitality’ ‘Hospitality’ ‘Hospitality’ ‘Hospitality’ Award Award Award Award 【XiZhi TaiWu store】 MingZhen Yang 【ZiYou store】 ZhiMing Cao 【ShuangShi store】 Yuxing Wang 【Taichung DaYe store】 ZhenXuan Wu Reason Reason Reason Reason She exemplifies a Very interactive with Passionately Exemplifies perfect iced positive and shining customers and shows creates MOS black tea preparation attitude, always specific attention to products with that is truly delicious. caring for our customer preferences. precision. customers.

MOS CSR Report 47 5 Enhance Brand Value

5.7.3 Excellent Store Manager Competition 5.8 Safe Transactions Internal Training Program The internal training program is intended to educate store managers and teach Won the Information 2 internal trainings skills such as presentation, analysis, data combination, and proper day-to-day 2018 Security Certiﬁcate from occurred operations. This program also allows employees to share experiences and learn ISO 27001 from one another.

In order to ensure the collection, processing, and utilization of personal data External Competition by TCFA required by the Personal Information Protection Act is met and to avoid the viola- Established in 1995, the TCFA Excellent Store Manager competition aims to recog- tion of personal rights and to promote the rational use of data, An-Shin has nize excellent store managers. Later, in 1998, two awards were introduced, the enacted the “Personal Data File Security Maintenance Implementation Measures in Excellent Store Manager Award, and the Outstanding Manager Award. Other than 2013”. Strict management procedures for the collection, processing, utilization and recognizing these store managers, the purpose is to increase the overall quality of security maintenance of customer personal data were established. In addition to the service industry, and it is always an honor for select store managers to earn effectively protecting consumer personal data, the company will carry out store this prize. As such, in 2018, An-Shin chose 11 store managers to compete, of inventory checks and personal data audit at the end of May and November each which 2 were chosen as Outstanding Store Managers: XingZhuangFuDa store- year. This information is all taught and verified at monthly meetings. YiXuan Lin, and THSRC Chiayi store- XinAn Shu. As well, TaiNanJianKang store- According to An-Shin’ s privacy policy, customers need to be informed when their YuPei Zhang won the oral presentation award. Each store has a strong team personal information is collected or used. These procedures must also comply with behind it who work together and receives a lot of influence from An-Shin’ s training government regulations and policies. Therefore we have strict rules when dealing and culture. Internal training and external courses are a way for store managers to with customer’ s personal information. For example, customer surveys need to be improve their ability and mindset. disposed of by outside companies who sign non-disclosure agreements and each disposal made is kept in records. Therefore, we received no complaints on this topic in 2018.

Outstanding store managers Excellent store managers Interview excellence

12 11 11

8 7 6

4 2 2 2 1 1 Figure 5-27. Ceremony Group Photo 0 2016 2017 2018

Figure 5-26. Statistics of Excellent and Outstanding Store Managers Figure 5-28. Privacy Policy Figure 5-29. Non-Disclosure Agreement

48 MOS CSR Report Enhance Brand Value 5

5.8.1 Information Security Certiﬁcation

In 2018, we started conducting ISMS (Information Security Management System), which covers all our operation systems, networks and data centers. Through this process, threats are recognized and security is heightened to decrease hacking risks. This was conducted for half a year, and then an on-site audit is completed. This year, TCIC Global Certi- fication, Ltd. granted An-Shin their certificate (ISO/IEC27001:2013、CNS27001:2014) on January, 19th, 2019. This demonstrates that we comply with ISO standards and can ensure information security of the highest level. We continuously strive to improve, and two trainings were conducted in December 2018, with 80 people attending, taught on information hacking prevention.

Figure 5-31. TCIC Certificate

Figure 5-30. Training Photo ISO/IEC27001:2013 CNS27001:2014

MOS CSR Report 49 5 Enhance Brand Value

Special Report GHP Excellence Recognition in Taipei and New Taipei

An-Shin’s stores in Taipei received recognition as an excellent sanitary chain store New Taipei City ‘s Government Department of Health announced that 489 city res- in 2017, and store in New Taipei City were recognized in 2018 as well. Evaluations taurants received GHP Excellence recognition, and among them were An-Shin’ s are based on information accuracy, material sourcing, store sanitary regulations, total 47 restaurants that received this standing (Figure 5-32). This information is all waste and sewage disposal, food poisoning prevention, and employee hygiene. disclosed on the website and ceremony pictures are shown below (Figure 5-33, In New Taipei City's website, companies which implement food hygiene manage- Figure 5-34). Up to now, 153 restaurants of An-Shin have received the national ment, personal hygiene management, equipment management, and Excellent GHP recognition, among these are: Taipei City, PingDong county, New environment-management programs (such as sanitation maintenance, process Taipei City, JiaYi city, PongHu county stores (Note 2: award recognition is based on and quality control, and food safety information disclosures, etc.) are displayed. the number of stores established at that time). All implement the Good Food Hygiene Code (GHP), and exceeds the goal of high-quality food & beverage and environmental sanitation.

Disclosure of food safety information Material sanitation Figure 5-33. Award Ceremony with An-Shin’s Process Hygiene Representative and and quality Sanitation Personal control Managment sanitation

Environmental Equipment sanitation and instruments

Figure 5-34. Ceremony Group Photo

Figure 5-32. GHP Excellence （Note 2）In 2017, Taipei and PingDong stores established at that time received awards Recognition Certificate

50 MOS CSR Report 6 Strengthen Food Safety and Store Inspections

1st QSR in Taiwan to have a dually-certified food inspection laboratory UK Central Science Laboratory (CSL) FAPAS (Food Analysis Perfor- mance Assessment Scheme) microorganism proficiency tests conducted Enhanced and improved Escherichia Coli O157:H7 testing In 2018, 2,057 microbial tests were performed within our company Pesticide rapid testing results displayed 100% safe results Chemical tests were performed on animal products to ensure no traces of harmful clenbuterol and antibiotics. Water quality checks and in-store product checks within the company for microorganisms conducted, with 100% satisfactory results

Stakeholders: ■ Government Agencies ■ Clients or Customers ■ Suppliers or Contractors ■ Local Residents ■ Employees 6 Strengthen Food Safety and Store Inspections 6Strengthen Food Safety and Store Inspections Management Approach and Methods

Major Topics Customer Health and Safety, and Traceability

Food Safety is our priority along with our commitment to the society. We emphasize the importance of product traceability with strict Meanings for schemes of audits and inspections. An-Shin An-Shin has a 3-in-1 Green Purchasing Policy (local sourcing, traceability, and contract farming), differentiating us from other competitors. We ensure high-quality work at all stages allowing customers to trust our food products. Our All of our products shall be safe, with zero food safety issues (positive listing, government regulations). Commitment

Short term: ‧Continously enhance traceability at all stages- especially from primary materials ‧Carefully select product materials according to our traceability system, with a multi-layered inspection process in place Goals and ‧All products comply with government Food Safety and Health Regulations Objectives Medium & ‧Ensure stable and quality service and products : Long Term ‧Constantly employ the 3-in-1 Green Purchasing Policy and promote the use of local produce through contract farming to support the local economy ‧Ensure customer satisfaction How to Manage

‧ Each year, a manager food safety training is conducted, this year with an average of 16.21 hours (including 7.48 hours of workplace health and safety training, accident prevention, and regulations). ‧ As of December, 31st, 2018, we had a total of 265 stores, aside from special conditions, there is a monthly pesticide inspection conducted, with a total of 2,726 times. ‧ In 2018, the purchase for TAP traceability-certified produce meat & poultry is 67,110 thousand NT, making up 56% of total purchasing for Investments/ meat & poultry and produce. Input ‧ In 2018, we purchased a total of 1,314,144 thousand NT HACCP certified (including BRC (Note7)) food material products, making up 75% of our total purchases. ‧ A total of $1,337,166 thousand NT of ISO22000 certified products were purchased, making up 76% of our total purchase. ‧ A total of $NT 1,337,166 thousand worth of ISO2000 certified products were purchased making up 76% of our total purchasing. ‧ In 2018, $NT 57,490 thousand worth of FSC certified packaging, cups, paper bags, and product cases were purchased, making up 74% of our packaging costs.

‧ Every month, we check each store to inspect and teach operations, as well as visit suppliers to audit factory operations. Management ‧ Approach Thorough inspection is conducted at every food product stage internally, and with third-party inspectors. and ‧ Product quality monitoring is continuous and all (new and current) suppliers will be subject to evaluation. Evaluation ‧ We proactively disclose traceability so our customers are aware of where our food origins are. Schemes ‧ Aside from extreme situations (including weather, re-furnishing, etc.), monthly pesticide controls are conducted.

52 MOS CSR Report Strengthen Food Safety and Store Inspections 6 6.1 Food Safety Task Force

To ensure safety management, we have the Food Safety Task Force with a total of 24 members, and Director Ho as the head in charge of the functioning of the system. The head of the food safety team is responsible for managing all operations, ensuring that members receive relevant training and education, and ensuring the establishment, implementation, maintenance and updating of the food safety management system, as well as reporting to the President in accordance with regulations and existing provisions. The members of the group are composed of employees from various functional fields. The members have developed the food safety management system and with relevant practical experience, complemented the Quality Assurance Department to ensure food safety. To ensure the continuous improvement and effective implementation of the ISO 22000 related food safety management system, we passed the reassessment on March 9, 2018. The goal of the ISO 22000 certification for the Songjiang Store is to become a demonstration store for implementing ISO 22000 food safety management system standards. The rest of the stores also take the Songjiang store as a model standard, and follow the ISO22000 food safety management system and the HACCP for management and product quality control. In 2018, the number of goods sold by the Songjiang Store accounted for 0.68% of the net revenue of the company's standalone statements. With the increasing popoularity of global food trade and a complex global market, companies are constantly facing new food safety standard challenges. A new version of the ISO 22000 Food Safety Management System was announced on June 19, 2018, to help companies Figure 6-1. ISO 22000 Figure 6-2. HACCP improve overall food safety performance, help identify, prevent, and reduce food source hazards, as well as take preventive measures to certificate certificate achieve food safety. It is expected that a new version of the verification will be officially obtained in 2019 to ensure food safety for customers.

Table 6-2. An-Shin Food Safety Management Goals Goals 140 2018 Performance An-Shin would like our employees to Sanitary-related Call Center grow professionally and become more 122 +080 + Email (percentage) Average complaint rate of 0.0004% every month, goal satisfied. knowledgeable, and therefore we train individuals to become teachers who can Store Sampling Inspection From January to March, no inspections were conducted, however from 66 Pass Rate (percentage) April to December; the inspections were completed and proved satis- later share their experiences. These factory results. The average result was 76.93%. teachers undergo external training and return back to An-Shin’ s internal educa- Training Store Inspection 100% Pass rate for all training stores (quarter 1-quarter 3, no inspec- Pass Rate (Note1) tions for quarter 4) tion system to update Food Safety 2016 2017 2018 advancements. Store Manager Food The average training hours was 16.21 (including workplace health regu- Unit：hours Safety Training Hours lation, prevention of acidents was 7.48 hours).

Pesticide Control and As of December, 31st, 2018, we had a total of 265 stores, aside from Table 6-1. 2018 Food Inspection Center External Food Safety Training (hours) Effectiveness Periodical special conditions, there is a monthly pesticide inspection conducted, Inspection Course Partici- totalling 2,726 times (Note 2). 2018 Food Safety External Training hours pants Pesticide In the second quarter, the pesticide effectiveness was unsatisfactory, and Pesticide Quick Test training 16 1 Pesticide Effectiveness Effectiveness the contractors were required to improve. The first, third and fourth quarter Survey all had satisfactory pesticide effectiveness results, with an average of 83% Escherichia Coli Test training 4 1 satisfactory rate. Microbial Preservation training 13 1 Supplier Evaluation Every quarter demonstrated a 100% satisfactory result with all 20 suppliers.

Laboratory Certification training ISO/IEC17025 18 3 Customer Satisfaction We received an average score of 87.17 satisfaction in monthly surveys. 13 1 Laboratory Internal Audit seminar Food Safety Issues There were no such issues in 2018. Food Microbiology Inspection seminar 8 1 Customer Food Safety Education There were no such issues in 2018. ： 32 8 ISO 22000 Food Safety Management system seminar (Note 1) Training stores are responsible for training new employees within the area. (Note 2) Pesticide counts are based on effectiveness. MOS CSR Report 53 6 Strengthen Food Safety and Store Inspections

6.2 The Only Food Chain Store with Dully-Certiﬁed Laboratory

The food inspection center was established in 2010, and we ensure the last stage of food safety, to protect customer health, with our laboratory proving our product trustworthiness and reliability. The dual certification was granted after the 2011 TAF-certification (No. 2473), and 2018 TFDA certification. As such, our laboratories are internationally- recognized and every year we join the international proficiency test.

Food Figure 6-3. Figure 6-4. Figure 6-5. Inspection Center TFDA certification TAF ISO 17025 certification Taiwan Centers for Disease Control (exemplary company)

6.2.1. TAF＆TFDA Laboratory Dual Certiﬁcation We have worked since 2017 to prepare for the TFDA Lab Certification by renewing equipment and hiring a new inspector. The new inspector underwent 122 hours of training. The inspection center staffs have a total of 383 hours a year, with new biosafety protection equipment (class II type A2) in compliance with the National Sanitation Foundation (NSF) and European Union (EN) standards- 2 fume hoods, and 2 infrared electronic sterilizers. The laboratory space was increased and renovated with a cost of $NT 520 thousand. We created a second-level biosafety laboratory that meets the requirements of the Department of Health and Welfare of Taiwan. Through this certification and on-site audits, it ensures that we comply Figure 6-8. Infrared sterilizer with ISO/IEC 17025 standards. After professional review, we received the certification (Certification No.F106) on June, 12th, 2018. Therefore, we are the first laboratory with dual certification within Taiwan’s fast food industry.

Figure 6-7. Figure 6-8. Laboratory space Figure 6-9. Laboratory practice Figure 6-10. Laboratory practice 54 MOS CSR Report Class II type A2 fume hood Strengthen Food Safety and Store Inspections 6

6.2.2. Enhance Food Safety Inspection Ability We strive to ensure our inspections are precise and accurate, so we follow a procedural policy. In 2018 we increased 14 proficiency tests compared to the previous year, including Central Science Laboratory FAPAS, Taiwan Food Industry Research and Development Institute, and Super Laboratory Co. Ltd. Last year, there were 19 tests related to food and water quality including: number of bacteria in 6 food tests, the food Escherichia coli group in 5 tests, 4 E. coli tests, 1 water testing clump count, 1 water testing Escherichia coli group test, 1 Staphylococcus aureus test, and 1 Salmonella test. All tests showed satisfactory results demonstrating that our procedures are internationally recognized. Figure 6-11. Figure 6-12. Figure 6-13. In April of 2018, we joined Super Laboratory’ s proficiency test on food FAPAS- Total microorganisms FAPAS- E.Coli group FAPAS- E.Coli microbes. Escherichia Coli O157H7, and Escherichia Coli had Z-scores of testing in food products 0.00, and -0.72 respectively. Our results are very close to their standard values and we will continue to receive certifications and proficiency tests to increase our inspection abilities.

An-Shin Laboratory Z-score Figure 6-14. Figure 6-15. Quality Policy FAPAS- microorganisms testing in water FAPAS- E.Coli testing in water

The value, also known as the stan- Accurate Technique 1. dard score, is the difference 2. Maintain Quality between the observed value and the mean in units of standard deviation. 3. Fulfill Custumer The smaller the value, the smaller Expectations the difference from the mean. 4. Fair Practice and |Z|≦2 means "satisfactory", 2<|Z|<3 ≧ Confidentiality means "should be noted", |Z| 3 means "unsatisfactory".

Figure 6-16. Figure 6-17. Figure6-18. Super Laboratory’s proficiency Taiwan Food Industry Research Taiwan Food Industry Research test certificate and Development Institute certificate and Development Institute certificate

MOS CSR Report 55 6 Strengthen Food Safety and Store Inspections

6.2.3 An-Shin’s On-Site Laboratory Inspections In 2018, the total inspections testing by the laboratory included products, drinks, ice, water, and materials (Note 3) was 2,537 total, with 2,294 satisfactory results and 90.4% satisfactory rate. These testings include microorganisms (Note 4) and chemicals. The inspection items are as follows:

Rapid Bioassay for Pesticide Residues certified Method Certified by TFDA (recently added in 2018) by the Council of Agriculture Food: Microorganisms, e.coli Groups, e.coli Chemicals: organic phosphorus insecticide and Certified Method by TAF Carbamate Food: Microorganisms, e.coli groups, e.coli Water: Total # of colonies, e.coli groups Antibiotic and Beta-adrenergic agonist Test for Meat, Eggs and Seafood Microor- Method in Accordance to (AOAC) method : Antibiotic Rapid Test using Premi® Test ganisms Food Microorganisms, e.coli groups, e.coli, and staphylococcus Chemicals Reagent Kit of Ractopamine, Reagent Kit of aureus,salmonella, listeria monocytogenes, escherichia coli O157:H7 Clenbuterol, and Reagent Kit of Anitbodies (recently added in 2018)

Chemical Wet and Dry Test (swab): microorganisms, and E.Coli Dry Test: with reference to Tokyo’s Department of Health Wet Test: 3M e.Swab (BPW) Test

(Note 3) Samples are from our Quality Assurance Department, suppliers, and synchronous samples of the government agency, and shopping centres. All results are compared. (Note 4) The regulations are based on the hygiene standards for cooked foods, ready-to-eat foods, food hygiene standards, frozen food hygiene standards, drinking water quality standards, general food hygiene standards, and ice hygiene standards.

56 MOS CSR Report Strengthen Food Safety and Store Inspections 6

The total expenses in 2018 at the food inspection centre were 7,164 thousand NT (Note 5), including third-party inspection fees the total was 2,274 thousand NT. Total, making up 3.59% of operating profit, and 0.14% of sales revenue.

Inspection Expenditures (thousands $NT) Third Party Inspection Expenditures Inspection Expenditures/Operating Profit (%) Inspection Expenditures/Total Sales Revenue (%)

8,000 2,500 4.00% 0.15% 25.53% 0.88% 7,000 53.44% 3.50% 0.14% 2,000 6,000 3.00% 0.14% 5,000 1,500 2.50% 0.02% 0.13% 4,000 2.00% 1,000 0.13% 3,000 1.50% 0.12% 2,000 1.00% 500 1,000 0.50% 0.12% 5,707 7,164 1,482 2,274 2.71% 3.59% 0.12% 0.14% 0.00% 0.11% 2017 2018 2017 2018 2017 2018 2017 2018

Figure 6-19. Figure 6-20. Figure 6-21. Figure 6-22.

(Note 5) The Food Inspection Centre expenses include: third-party inspection fees, laboratory one-time-use test kits, equipment purchase and adjustments, salary, rent, proficiency tests, training and maitenance of equipment, etc.

Microorganism Testing Rapid Bioassay for Pesticide Residues Rapid Test of Veterinary Drug Residues In 2018, inspections including product, water, ice and This method was announced as the standard testing As technology advances, in order to increase our materials with total testing in 2018 were 2,057 times. Of method of chemicals such as organic phosphorus inspection ability, we increase the frequency of our which, 1,814 tests were satisfactory. When there are insecticide and Carbamate. In 2017, we hired a new inspections which include: meat, eggs and seafood with areas needing improvement, a report is submitted by certified inspector in 2017 valid through to 2019. antibiotic, reagent kits, racto pamine, reagent kits and Business Audit Department. clenbuterol tests. The total tests conducted in 2018 In November, 2018 there were cases of 0157:H7 E. Coli were 135, with 100% satisfaction. outbreak in USA, and this disease was categorized by the Taiwan Department of Health as possibly fatal. Rapid Bioassay for Pesticide Residues Rapid Test of Veterinary Drug Residues Therefore, as we use romaine lettuce in our products, （Rapid Test of Antibiotic, Rapid Test of totaling 480 tests, with 100% satisfaction rate we took the products for testing, aligning with our com- Beta-adrenergic agonist）， total 135 tests pany principles. We also tested all our meat and dairy products to ensure no traces in December. conducted with 100% satisfaction Concerning potential risks in our food such as preserva- tives, heavy metals, drugs residues, antibodies, pesticides, and plasticizers, we also use third-party inspectors along with our own tests to ensure there are no risks. In the monthly checks, microorganisms, escherichia coli, staphylococcus aureus, salmonella, listeria monocytogenes, and escherichia coli O157:H7 are all checked for.

MOS CSR Report 57 6 Strengthen Food Safety and Store Inspections

6.3 Supplier Evaluation System Evaluation items:

Every year, An-Shin conducts an evaluation for current and new suppliers on quality, environmental protection plans, and on-time deliveries. We also look to see if our suppliers promote CSR. We hope we can all work together to “Contribute to Humanity, and Contribute to Society.” Others 20% Manufacturing Site 23% 6.3.1 New Supplier and Product Development Evaluation Process Human Resources Document Review Evalvation 11% Equipment Review registration and certification. Breakdown 7% Onsite Evaluation We conduct evaluations according to the GHP through Material Quality Management factory visits including workplace, equipment, material Control 12% management, quality controland and staff management. 27% Only suppliers with a B grade and above can produce our products (possible grades of: A, B, C , or D ). C level suppliers must undergo improvement plans and consulting in order for us to conduct business with them. B grade suppliers refer to companies with a Grade: Score Intervals score of 70% or higher. If you recieve a D grade rating, offers will be rejected. In 2018, we had 17 new suppliers undergoing 33 on-site inspections, which made up 25% of our total suppliers, with 100% satisfaction. In addition, 5 new non-direct trading suppliers and process manufacturers, and a total of 5 factory production A B C D lines were evaluated with 100% satisfactory results. In 2018, the Department of Quality Assurance will continu- satisfaction satisfaction satisfaction satisfaction percentage percentage percentage percentage ously evaluate new suppliers and grade them. We not only grade our suppliers, but also the suppliers’ suppli- 85% and above 70 ̃ 84% 60 ̃ 69% 59% ers and so on (we follow the product chain and evaluate Excellent Supplier Acceptable Supplier Needs-Improvement Rejected Supplier up to third tier suppliers). Supplier

58 MOS CSR Report Strengthen Food Safety and Store Inspections 6

6.3.2 Supplier Evaluation for Current Suppliers “Annual Supplier Evaluation Plan ” is scheduled in accordance with Supplier Man- agement Procedures. Procurement Dept. has statistics on each supplier on trans- Evaluation items： Management Ability action amount, cooperation, and conducts evaluations every year. In 2018, we (technique and innovation) have 70 suppliers of which 35 are ISO 22000 certified, and 27 of which received HACCP certification. Evaluation includes management ability,product quality, ser- Department of Product vices and delivery time. The aspects to be evaluated include: business concept, Development Checks product quality, delivery and service. In 2018, there were 37 suppliers with 47 Service and 20% inspections on agriculture and meat&poultry, which made up 47% of our suppli- delivery time ers. Another 9 suppliers had a total of 12 inspections. As well, our 12 indirect sup- (on-schedule) pliers underwent 12 evaluations. Currently, our evaluations have three levels A Evaluation (70% and above, with priority for increased purchasing), B (60-70%, with accept- Breakdown able purchasing), C (below 60%, needing improvement, or cancel contracts.) 50% Product Quality Department of (quality control) Procurement Checks

Department of Quality 30% Assurance Checks

Grading: Score Interval

A B C

Above 70% 60%-70% Under 60%

priority and maintain same needs increased level of improvement purchasing purchasing or reject and cancel purchasing

MOS CSR Report 59 6 Strengthen Food Safety and Store Inspections

6.4 Material Procurement Management

An-Shin has 27 years of history in providing fresh and Because of the increasing number of environmental disasters and climate healthy dishes. Our CSR website discloses our product change issues, it has increased risk for future agricultural farming. We have traceability which can all be searched online or shown a system that monitors all of our agricultural crop seasons and produce Traceability Period on our MOS blackboards in-store. imports, to continuously ensure our supply and quality is stable. The 3-in-1 Green Purchasing Policy includes: traceability, local sourcing, and contract An-Shin farming which pushes our commitment to continuously improve our supply Produce Import Period chain. The traceability period, import period, and self-managed period are all defined by the Procurement Department to optimize our purusaing. For example, our vegetables are purchased at the seed & sprout level from vari- Self-Managed ous county cooperative associations, and planted in contract farms, using biological pesticides. Before harvesting, a third-party inspection is con- Figure 6-23. An-Shin’s Produce ducted. In the future, all our produce will be from our contract farms with transparent traceability. To ensure the quality of produce and prevent market Traceability fluctuations, we have negotiated fixed prices with the contract farms, providing us with stable costs and the farmers with stable business. Transparency in planting processes Traceability Period Our traceability management changes with the seasons and the process of planting produce is in accordance with Green government agencies and certified standards. Product records can be found on the following website: Local Contract Purchasing (http://taft.coa.gov.tw). Sourcing Policy Farming Support local Guarantee revenue and farmers and Import Period Table 6-3. Imported Product Verification Process product quality reduce our carbon To ensure the source, safety and quality of ootprint 8 stability Origin Food Safety Food Quality our produce, we request origin certification and quantities, as well as their pesticide Offer Product Origin Pesticide test Weekly production tests. Every week, product quality is certificate conducted for informatiom. checked and a form is filled on product Initial Import each shipment of origin information quantity imported goods.

Table 6-4. Self Management Period Self-Managed Period Origin Food Safety Food Quality An-Shin requests contracted farms to conduct water and soil inspections keep, pro- Information on Water and soil Weekly production duction records, and ensures alignment contract farms inspection information with standards of traceability periods. All and farmers Pesticide inspec- Annual chemicals Traceability products were found safe. tion for each ship- inspection by Website Page ment third-party inspec-

http://csr.mos.com.tw/food_trace.html Field records for tors production

60 MOS CSR Report Strengthen Food Safety and Store Inspections 6

6.4.1 Responsible Purchasing We promote responsible consumption and ensure customer health. We are looking for ISO22000 certified material purchase: suppliers with the same mindset for possible cooperations, supported with strict evaluations and audits. In 2018, we had 90 stable suppliers (Note 6) which made up 2016Year 2017Year 2018Year 90% of our materials and meat & poultry purchasing. An-Shin prefers to buy products Purchases Purchases Purchases that are certified (TAP, CAS, GMP, GHP, ISO22000 & HACCP). As such, we will 1,156,863 1,192,985 1,337,166 continue to explore new and acceptable suppliers to increase stability and diversify Thousands NT Thousands NT Thousands NT material risks. Percentage70% Percentage82% Percentage76%

Aside from material purchasing, to protect the forests, An-Shin supports The Suppliers: Forest Stewardship Council by purchasing FSC-certified products (Note 8). We promote environmental protection by practicing green consumption. In 2018, we Produce, Food Material Packaging Meat & Poultry used 24,710 thousand french-fry bags, 3,290 thousand fried chicken bags, 1,660 thousand hotdog containers, 9,639 thousand hot drink cups, 22,110 cold drink Number of Number of Number of cups, 25,722 thousand paper bags, and 5,708 thousand PLA containers. In 70 9 11 2018, $57,490 thousand NT of FSC (trade marked) certified packaging, cups, Percentage Percentage Percentage paper bags, and product cases were purchased, making up 74% of our packag- 78% 10% 12% ing costs. In 2018, the purchase for TAP traceability-certified produce meat & poultry is 67,110 thousand NT, making up 56% of total purchasing for meat & poultry and produce.

(Note 6) Encompassing 2018 Suppliers which have transactions with An-Shin.

HACCP certified material purchase FSC Purchasing:

2016Year 2017Year 2018Year 2016Year 2017Year 2018Year Purchases Purchases Purchases (including BRC) Purchases Purchases Purchases 1,048,240 1,078,175 1,314,144 51,657 53,851 57,490 Thousands NT Thousands NT Thousands NT Thousands NT Thousands NT Thousands NT

Percentage 63% Percentage74% Percentage75% Percentage75% Percentage74% Percentage74%

(Note 7) (Note 7)BRC(British Retail Consortium) is an international trade association whose mem- TM bers include large-scale multinational retail chains, department stores and other retailers. (Note 8) FSC (NGO) was established in 1993, and has members from 25 countries including the Its standards are recognized by the Global Food Safety Initiative (GFSI) and cover HACCP Environmental Protection Association, Local Resident Certification Association, and Lumber system requirements, food safety and quality management systems, factory environmental Association standards, product controls and personnel management.

MOS CSR Report 61 6 Strengthen Food Safety and Store Inspections

We continuously promote local specialty, aside from TAP certified produce Table 6-5.2017~2018 Agricultural Product Usage (kg) (Table 6-10), we also purchase from smaller local farms to help with the local economy and allow them to have more market opportunity and employment 2017 experience. In 2018, we purchased 232,083 kg of traceable sweet potatoes Item Unit Subtotal of Usage Usage Percentage and launched several products such as sweet potato fries and egg roles, 654,971 51% allowing the small farms to branch into a new market and gain access to TAP certified Products kg new revenue streams. In addition, to support smaller farms, we made kg 1,293,179 60,821 5% tomato, lemon, and pomello purchases totalling 130,214 kg. Traceable Produce from smaller farms Traceable Taiwan Sweet Potatoes kg 152,932 12%

TAP certified Eggs Number 8,648,880 78% 11,088,720 Traceable Cage-free Eggs Number 2,403,840 22% Local Materials from Contract Farms An-Shin started the contract farm initiative in 2005, and gradually began to purchase lettuce, cabbage and tomatoes from these farms. An-Shin has 2018 supported these farms for over ten years. During the first quarter of each Item Unit Subtotal of Usage Usage Percentage year which is in-season, we share our fresh produce from farms to our 660,610 47% customers through Lohas Market which is disclosed in our MOS Life Maga- TAP certified Products kg zines. We encourage our customers to enjoy local specialty produce, help kg 1,413,054 130,214 9% farmers increase sales, and reduce our carbon footprint. Aside from that, we Traceable Produce from smaller farms also have the Origin Travel, which occurred on January 30th, 2018. There Traceable Taiwan Sweet Potatoes kg 232,083 16% were a total of 70 staff who travelled to YunLin MaiLiao’s Taiwan Lettuce Village, and experienced the planting, and harvest process of MOS’ lettuce. TAP certified Eggs Number 8,581,920 76% This event also promotes teamwork between headquarters and store staff. 11,231,280 An-Shin truly supports local agriculture and all produce are recorded and Traceable Cage-free Eggs Number 2,649,360 24% monitored at every stage, which is disclosed to customers.

Figure 6-24. Origin travel photo Figure 6-25. Lohas Market Figure 6-26. Customers enjoying Lohas Market

62 MOS CSR Report 6.5 Legal Compliances Strengthen Food Safety and Store Inspections 6 An-Shin’ s Quality Assurance Department regularly announces updates and discloses related information. In 2018, the government agency publicly declared 122 announcements, of which related information was disclosed right away to our staff (noted in their internal records). In 2018, we complied with “Act Governing Food Safety and Sanitation” , “The Regu- lations on Good Hygiene Practice for Food, GHP ” , “Enforcement Rules of the Act Governing Food Safety and Sanitation” , “Standards for Pesticide Residue Limits in Foods” , and related food safety regulations and therefore had no violations or fines (Note9). Food Safety Regulations can be referenced in the following website: https://www.fda.gov.tw/TC/law.aspx?cid=62&pn=2 Table 6-6. Regulation Articles 【Proactive Compliance】Eﬀective 2020.07.01

Food allergen labeling regulations: (1) In order to strengthen the disclosure of food allergen labeling information, refering to international regulations and clinical investigation data on food allergies for the Taiwan- ese population, the Ministry of Health and Welfare announced the "Food Allergen Labeling Regulations"on August, 21, 2018. The 6 current items include shrimp, crab, mango, peanut, milk, egg and their related products are adjusted to: 1. Crustaceans and their products. 9. Soybeans and their products. However, the soybean oil (fat) obtained by the highly 2. Mango and its products. refined or purified soybean, the tocopherol and its derivatives in a mixed form, the 3. Peanuts and its products. phytosterol, and the phytosterol ester are not incorporated within these guidelines. 4. Milk, goat milk, and their products. However, lactitol obtained from milk and goat 10. Fish and their products. However, gelatin obtained from fish is not included as a milk is not subject to this. carrier for the preparation of vitamins or carotenoid preparations or as a clarifying 5. Eggs and their products. use of alcohol. 6. Nuts and their products. 11. Use of sulfites, etc., whose final product is more than ten milligrams per kilogram of 7. Sesame and its products. sulfur dioxide residue 8. Gluten-containing cereals and their products. However, glucose syrup, maltodextrin and alcohol produced from cereals are not incorporated within these guidelines .

(2) The method of labeling allergens such as: “This product contains ○○” , is not suitable for those who are allergic to it, and therefore the specific allergenic content contained in it should all be stated in the product name. (3) Suggested labeling items for food allergens should include: Commercially available foods in containers or packages containing crustaceans, mangoes, peanuts, sesame seeds, milk and goat's milk, eggs, nuts, gluten-containing grains, soybeans, fish, etc., as specified in the second paragraph of the Food Allergen Labeling Regulations. Use of sulfites and other products such as sulfur dioxide residues of more than 10 milligrams per kilogram, etc. The contents and their products that are subject to special allergies must be marked on the container or on the outer packaging, and should be completely visible. 1. Cephalopods and its products: including cuttlefish, neritic squid, octopus, squid, etc., its products include octopus, squid and so on. 2. Snail shellfish and its products: including snails, oysters, clams, oysters, scallops, mussels, clams, abalone, etc., the products include scallop sauce, dried shell sugar, snail XO sauce and so on. 3. Seeds and their products: including pine nuts, sunflower seeds, melon seeds, etc., but do not contain sunflower oil obtained by highly refined or purified sunflower seeds. 4. Kiwifruit and its products: including exotic jams, dried kiwis, etc. (4) Control measures to avoid cross-contamination of food should be in place during the food production process. If the food production process does not use the allergenic contents or food additives, but the other foods produced by the plant, equipment or production pipelines are employed together, the use of allergenic contents and food additives (although unintended) may be incorporated into food. Therefore, it is recommended that the label indicates “the production process of the product, the equipment or production pipeline has been treated by ○○” or any equivalent. (5) An-Shin Food has conducted internal communication within the regulations in August 2018, and updated the allergen information and regulatory announcements of original material quality specifications to remind manufacturers to list allergen products on August 21, 2018. The regulatory requirements were fully revised and the new version of the allergen labeling quality specification was fully tested. By the end of 2018, 11 allergen items of 21 ingredient labels and avoidance of food crossovers were completed. Infor- mation such as pollution control measures is disclosed.

Active Cooperation with the Government Food and Beverage Hygiene Evaluation

In 2018, An-Shin participated in the evaluation of food and beverage hygiene organized by the Department of Health of New Taipei City, Chiayi City and Ponghu County, and all of them achieved excellent results: (1) New Taipei City: On November 1, 2018, Department of Health of New Taipei City announced that 489 food and beverage stores had obtained an excellent grade. Among them, all of An-Shin’s 47 stores in New Taipei City were awarded with the “Excellent” grade. (2) Chiayi City: Department of Health of Chiayi City onsite inspected 180 food and beverage stores within its jurisdiction. A total of 160 stores have passed the assessment and 82 of them got the excellent grade. All An-Shin’s stores in Chiayi City were awarded with the “Excellent” grade, the certification rate is 100%. (3) Ponghu County: Department of Health of Ponghu County onsite inspected food and beverage stores within Ponghu. A total of 21 stores got the excellent grade. All An-Shin’s stores in Ponghu were awarded “Excellent” grade, the certificate rate is 100%. MOS CSR Report 63 6 Strengthen Food Safety and Store Inspections

【Proactive Compliance】2018.11.28 Pre-announced 6.5.1 Traceability Management According to Article 9 of the Food Safety and Health Management Law, Pre-announcement of the Breakfast and Western-style Fast Food Business (in the city's direct-sale stores, franchise stores or counters, there are 5 (inclusive) business bases, on-site engaged in conditioning meals, providing the mandatory disclosure of the traceability system should be estab- customers with internal or external use. Meal service, with Chinese and Western styles as the main commodities), lished. An-Shin has been committed to maintaining the food safety of is the applicable category of Article 7 of the Municipal Food Safety and Autonomy Ordinance: customers and improving the management of food hygiene. Although not [1] According to Article 7 of the Taipei Food Safety and Autonomy Regulations. mandatory; An-Shin proactively includes traceability within our product [2] The notice content is as follows: management. As well there is a product quality management database, through which the food sources are safely managed to ensure that the 1. The Taipei City Health Bureau announces the chain breakfast and the Western-style fast food industry (in the city, there are 5 or more business bases in direct sales stores, franchised stores or counters, and the site is source of the goods and raw materials is clear. In the future, we will con- engaged in serving meals (dine-in or take-out)), should establish a food source tracking system, and should join tinue to strengthen the traceability management of ingredients and pro- the city's food material registration platform to disclose the source of food. vide safer products to our customers. 2. The item to be registered: (1) Sandwiches, burgers, toasts, egg pancakes and drinks for sale at breakfast time (at least 3 products per item) (direct store, if there is no direct store, log in by affiliate store or counter). Table 6-7. Traceability Management System Focus and Implementation (2) Eggs and cooking oils in the above items (direct stores and franchised stores or counters should be registered). Product Specification Content Checks 3.Records should be established: including the Chinese name of the product and ingredients, the brand, the source of each ingredient, the source of the package (manufacturer's information or import report), the Focus Implementation manufacturer's information (company name, address, contact person, phone number, etc.), allergy relevant Proactively cooperate with regu- Although An-Shin is not a manu- records of original, product features, nutrition labeling, and self-inspection reports. lations to revise food allergen facturer that was required to have 4.Storage time and other things to be observed: labeling, voluntary labeling, and the traceability system as defined (1) The above records shall be kept recorded in detail in the form of documents, elec require suppliers to disclose in Article 9 of the Food Safety and tronic files or databases, and shall be kept at least 5 years from the date of pur- complete allergen information on Health Administration Law, in order chase. the product packaging. to strengthen food safety manage- (2) The head office shall be responsible for informing and counseling the franchise store Investigate the logistics indus- ment, we voluntarily check the [3] An-Shin Foods has actively cooperated with the Taipei Municipal Health Bureau in try's on-site inspection project self-developed new ingredients 2018 to provide information on the ingredients, suppliers, and packaging materials of the for the packaging label of (Note 10) (Note 11). In 2018, a total of “Food Chain Breakfast Zone” and “Western Chain Fast Food Zone” . On August 29, 2018, imported goods. 71 food quality specifications were An-Shin was invited to attend the "2018 Taipei Food Ingredients Platform Presentation Supplier traceability is anayzed reviewed. According to its food Conference" and was awarded the Certificate of Appreciation. Records should be estab- and disclosed until third-tier sup- quality specifications, 70 materials lished: including the Chinese name of the product and ingredients, the brand, the source pliers. were traceable to third-tier suppli- of each ingredient, the source of the package (manufacturer's information or import ers, with a rate of 98.59%. report), the manufacturer's information (company name, address, contact person, phone- . number, etc.), allergies relevant records of original, product features, nutrition labeling, and Figure 6-27 self-inspection reports. Certificate Imported Materials Check

Focus Implementation [Proactively disclose company-inspection report] Transparency and Trustworthiness Certificate of Origin (Import Of the 71 self-developed new License/Customs Declaration ingredients in the 2018 review, 61 In order to provide customers with safe and delicious products, An-Shin is committed to the Form) (Note 12). items contained foreign raw mate- traceability and safety of raw materials and ingredients. In addition to ingredients inspection Proof of radiation inspection rials (Note 12), and 61 certificates by third-party verification units, the relevant inspection results are in compliance with the (specific foods in a specific area) related to the raw materials have Food and Drug Administration regulations. An-Shin also cooperates with the private inspec- (certified by a radiation inspec- been completed, accounting for tion unit-SGS to set up an exclusive platform for inspection reports. All inspection reports of tion agency officially published 100% of the items containing ingredients will immediately be disclosed, and customers can verify food sourcing at any- or certified by Japan). foreign raw materials. time, to ensure personal safety. SGS Information Platform

64 MOS CSR Report Strengthen Food Safety and Store Inspections 6

(Note 10) At present, the traceability of raw materials is graded according to the ingredients. Each ingredient has a quality specification. Each specification is aimed at exposure until third-tier supplier information. For example, An-Shin 6.6 Store Sanitary Checks Food's ingredients include tomatoes, meat, bread, etc. (first tier), which will be traced back to the suppliers of meat (second tier) and upstream of suppliers (third tier). Some agricultural raw materials (such as rice and carrots) The An-Shin Quality Assurance Department continues to conduct sam- (Note 11) The self-developed new food inspection will review the first use of new products, the re-sale of old raw materials pling inspections for MOS stores throughout the year (Note 15), and to (food ingredients), formula change, and provisions of product quality specifications (excluding limited store sales). Non- MOS brand products are also sold and used in stores, including as ingredients for fruits and vegetables. inspect the hygiene quality, water quality, conditioning equipment, surface application, temperature and each of the foods sold by each store. The (Note 12) The relevant certificate of origin may include an import declaration, import permit, additive license or an inspection certificate/report. However, in a small number of early-issued additive licenses (still valid), it is not mandatory to methods of sampling inspection follow the Food Safety and Health Man- note the manufacturing country. We use on-site or field audits to check labelling. agement Law and the Good Food Hygiene Standards, and carry out the sampling inspection of sanitary operations with reference to the food safety management system and the important control point procedures for hazard analysis. Except for the first quarter water quality inspection (including ice, filtered Ingredients Monitoring water, tap water), the total number of shops in the second department quarter to the fourth quarter that met expectations (Note 16) was 96.6%. Focus Implementation The second qualification rate of re-examination reached 100%. If the store Bulk materials, flour products, oil products, man- For the 2018 annual risk-hazard substances does not reach satisfactory levels (Note 17), the Quality Assurance Dept. datory inspection targets. outsourcing test (Note 13) a total of 158, the will immediately ask the store to perform the missing improvement and Aquatic heavy metal, volatile salt ground state number of qualified pieces 158, the pass rate of nitrogen test. 100%。 environmental cleaning and disinfection operations, and notify the opera- Pesticide residues of agricultural products and tion supervisor to confirm store improvements. The Quality Assurance test indicators for mycotoxins. Dept. will then enter the store for re-inspection within 72 hours, and will Animal drug residues and antibiotic test labels for issue a special visit report and improvement suggestions, and continue to processed meat products. track progress until the inspection is satisfactory. The plasticizer for the dessert and beverage In response to the inspection results, in addition to regularly tracking the products is inspected. The standard for the testing of glycogen alkaloids improvement progress of the store, we will also conduct small seminars, in frozen French fries. and highlight the key points of food safety and hygiene. It will also provide auxiliary tools through the cloud system to provide understanding for shop partners and review standard operating procedures (SOP) to improve food General/frozen food hygiene standards: total For the 2018 food ingredients, a total of 300 preservation and product process safety. Through the course discussion bacterial count, E. coli population, E. coli. self-administration inspections were carried out, and the product qualification rate after and the cloud system assistance, the effectiveness of the annual health re-inspection was 100%. sampling inspection will be more effectively improved.

Implementation of compulsory inspection and A total of 162 self-inspection reports for 2018 self-management requires independent testing annual regular food suppliers were obtained. by aquatic products, dairy products, meat processing, edible oils and fats, and regularly provides ( ) Including the first season water quality sanitation inspection and the second to fourth safety independent inspection reports (Note 13). Note 15 season comprehensive sanitation sampling, except for some shops to arrange operations due to suspension of business, withdrawal or new store opening. (Note 16) The results of the random inspection are divided into 4 levels: perfect, excellent, (Note 13) Risk-hazardous substances refer to the inspections in accordance with the hygiene standards items in the products good, and to be improved. The shop to be improved will also open a special visit announced by the Food and Drug Administration of the Ministry of Health and Welfare. report and strengthen the counseling until the re-examination. (Note 17) Shops that have not reached the level of good quality shall not prepare a large (Note 14) Edible oils and fats, meat processing, dairy processing, and aquaculture processing industries are required to be number of orders before the re-examination, in order to maintain food hygiene and carried out quarterly or semi-annually or batch inspection of raw materials according to law. safety.

MOS CSR Report 65 6 Strengthen Food Safety and Store Inspections

Food Hygiene Stamp Project ‒ Hygiene Monitoring Program

Enter Material In order to provide customers with safe and delicious products, An-Shin introduced an innovative strategy in 2018 Manage- stores ment adding to the existing store health management audit team – Hygiene Monitoring program (hereinafter referred to as HM) and the third verification unit – SGS Taiwan, cooperating with third-party notary auditors to enter the store Environ- Equipment Personal mental and Sanitation for sanitation audits and commodity inspections. Those who meet the Food Hygiene Regulations (i.e.GHP) and Water and product quality inspection Sanitation Instrument internal operating procedures, etc., will be awarded the internationally recognized HM Food Hygiene Seal and will (must meet satisfactory standards) within 72 hours Reinspection be shown on the SGS An-Shin Information Platform website. Equipment and RReply with improvement An-Shin has participated in HM project planning within 40 stores. After counseling and evaluation, stores obtained Instrument the HM Food Hygiene Standard Award and were disdosed on the SGS An-Shin information platform website.

within 2 weeks Unsatis- Adhering to rigorous internal education and continuous implementation of store hygiene management, as well as factory Stores complying with the government's food safety regulations, this demonstrates our the company's commitment to Quality Assurance Dept. food safety and safety. Reply within 2 weeks

Food Inspection Center on progress Food Safety Seminar - Guidelines for Good Food Hygiene Report to Evaluation and Consistent internal education, trainings, and implementation of store hygiene management complying with the Unsatisfactory proposals product for improvement government's food and health regulations safety , is the commitment of An-Shin to adhere to the food safety and drinks quality of customers. Since 2018, An-Shin has strengthened the professional training courses for employees, and Notice hired training institutions approved by the health authorities to conduct special lectures on food safety, and hygiene management regulations and food safety standards,where a total of 256 people participated in 5 semi- Pathogens nars. Improve- Improve- Through courses and professional lectures, store managers can better understand the meaning behind the ment improvement ment notice within management focus of the food production, such as food preparation, appliance cleaning, personnel health 24 hours management, and environmental sanitation requirements, leading store managers to extend this spirit to the actual store operation. Among them, we firmly believe that through third-party certified professional teachers and Figure 6-28. Store inspection process teaching materials, the employees of An-Shin can truly grasp the latest food regulations, deepen the food risk management ability of the management of the store, improve the knowledge of food hygiene and safety, and thus effectively manage food safety risks.

Figure 6-30. HM employee training Figure 6-31. HM employee training Figure 6-32. HM Food Hygiene Lecture Figure 6-29. SGS Hygiene monitoring program

66 MOS CSR Report