Stock Code: 1259

AN-SHIN FOOD SERVICES CO., LTD. AN-SHIN FOOD SERVICES CO., LTD.

2018 ANNUAL REPORT

This Annual Report may be found at: Market Observation Post System (MOPS) http://mops.twse.com.tw Website of the Company: http://www.mos.com.tw

Printed on March 31, 2019

I. Name, job title, contact telephone and e-mail address of spokesman and deputy spokesman of the Company: Spokesperson Deputy Spokesperson Name: Shih, Chi-Yin Name: Ho, Chi-Yin Title: Assistant Vice President Title: Special Assistant of Chairman Telephone number: (02) 2567-5001 Telephone number: (02) 2567-5001 E-mail address: [email protected] E-mail address: [email protected]

II. Address and telephone number of the head office, branch and factory: Address of the head office: 8F., No.156-1, Songjiang Rd., Zhongshan Dist., Taipei City 104, Taiwan Telephone number: (02) 2567-5001 Address and telephone number of the branch: Kindly refer to A. Principal Business Activities of (1) Scope of Business in Ⅴ. OPERATING HIGHLIGHTS (Page 88) Factory: N/A

III. Name, address, website and telephone number of the stock agency: Name: Registrar Agency Department of Capital Securities Website: https://www.capital.com.tw Corporation Address: B2, No.97, Sec. 2, Dunhua S. Rd., Daan Dist., Telephone number: (02) 2702-3999 Taipei City 10601, Taiwan

IV. Name of certified public accountant (hereinafter referred to as “CPA”) who audited the latest annual financial report and name, address, website and telephone number of this CPA firm: Name of CPA: Chih, Ping-Chun and Wu, Yu-Lung Name of CPA firm: PricewaterhouseCoopers (PwC) Taiwan Website: http://www.pwc.tw Address: 27F., No.333, Sec. 1, Keelung Rd., Xinyi Dist., Telephone number: (02)2729-6666 Taipei City 110, Taiwan

V. Name of the overseas stock exchange where the Company’s overseas securities are listed and inquiry method for information regarding such overseas securities: N/A

VI. Website of the Company: http://www.mos.com.tw

Table of Contents Pages I. LETTER TO SHAREHOLDERS ...... 1 II. COMPANY PROFILE ...... 3 1. Date of Establishment: ...... 3 2. Company Profile ...... 3 III. CORPORATE GOVERNANCE REPORT ...... 10 1.Organization System ...... 10 2.Information about the Directors, Supervisors, President, Vice President, Assistant Vice President, and Head of Department and Branch ...... 13 3.The Remuneration Paid to the Director, Supervisor, President and Vice President in the Prior Year ...... 22 4.Implementation of corporate governance ...... 29 5.Information about the fees for the CPA ...... 73 6.Information about the change of the CPA ...... 74 7.The Company’s Chairman, President, officer in charge of financial or accounting affairs having served in the firm where the CPA serves or its affiliated enterprise in the prior year ...... 74 8.In recent fiscal year and as of the date of this Annual Report, the transfer or pledge of hares by the directors, supervisors, officers and shareholders holding more than 10% of the Company’s total issued and outstanding shares ...... 74 9.Information of the top ten shareholders, being related parties, spouse or relatives within the second degree of kinship among themselves ...... 77 10.The number of shares of an enterprise held by the Company, the Company’s directors, supervisors and officers and the enterprises controlled by the Company directly or indirectly, and the consolidated shareholding percentage ...... 78 IV. STATUS OF FUNDING ...... 79 1. Capital and Shares ...... 79 2. Issuance of corporate bonds ...... 87 3. Issuance of Preferred Stock ...... 87 4. Issuance of Overseas Depository Receipts ...... 87 5. Issuance of Employee Stock Options ...... 87 6. Issuance of Employee Restricted Shares ...... 87 7. Issuance of New Shares for Mergers and Acquisitions ...... 87 8. Implementation of Capital Utilization plan ...... 87 V. OPERATING HIGHLIGHTS ...... 88 1. Business Activities ...... 88 2. Market Profile and Production and Sales ...... 107 3. Employee Statistics ...... 120

Table of Contents Pages 4. Environmental Expenses ...... 121 5. Labour Relations ...... 123 6. Material Contracts ...... 129 VI. FINANCIAL HIGHLIGHTS ...... 130 1.Condensed Balance Sheet and Statement of (Comprehensive) Income in the Most Recent 5 Years ...... 130 2. Financial Analysis in the Most Recent 5 Years ...... 135 3. Supervisors’ Review Report of the Financial Statements in the Most Recent Year ...... 138 4. Financial Statements in the Most Recent Year ...... 138 5. Individual Financial Statements of the Company Audited by the CPA ...... 138 6. Summary of any Financial Difficulty of the Company or Its Affiliates in the Most Recent Year and Impact of such Difficulty on the Company ...... 138 VII. DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND FINANCIAL PERFORMANCE; RISK FACTORS ...... 139 1. Financial Condition ...... 139 2. Financial Performance ...... 141 3. Cash flow ...... 143 4. Impact of Significant Capital Expenditures in the Most Recent Year on the Financial and Operating Conditions of the Company ...... 144 5. Re-investment Policy of the Most Recent Year, Reasons for Profit (Loss), Improvement Plan and Investment Plan for the Following Year ...... 144 6. Analysis and Evaluation of Risk Factors ...... 145 7. Other Material Items ...... 150 VIII. SPECIAL DISCLOSURES ...... 151 1. Group Company Information ...... 151 2. Any Private Placement of Securities within the Latest Fiscal Year and as of the Date of the Annual Report ...... 154 3. Any Share Ownership and Disposal of Shares of the Company by Subsidiaries within the Latest Fiscal Year and as of the Date of the Annual Report ...... 154 4. Additional Information Required to be Disclosed ...... 154 IX. For the most recent year and up to the printing date of the annual report, events having material impact on shareholders' rights and interests or securities prices according to Subparagraph 2 of Paragraph 3 of Article 36 of the Securities and Exchange Act ...... 154

Annex 1: 2018 Consolidated financial report ...... 138 Annex 2: 2018 Unconsolidated financial report ...... 138

I. LETTER TO SHAREHOLDERS

Dear Shareholders:

AN-SHIN FOOD SERVICES CO. is dedicated to contributing to humanity and a sustainable society. It is our responsibility to ensure the safety of the food; in addition to the implementation of three-in-one green policy, we also include our food suppliers to fulfill their social responsibilities by a more comprehensive verification and inspection of raw materials, so that our consumers will be satisfied and enjoy the quality food. Our food inspection center has obtained the certification of the Taiwan Accreditation Foundation (TAF) in 2011. For the purpose of enhancing the credibility of inspection quality and inspection results, the Company has obtained the TFDA certification from the Ministry of Health and Welfare in 2018, which empowers us to be the first and the only company in the fast food industry to obtain two inspection certifications. In addition, we also participated in the FAPAS inspection capability verification of the UK Central Science Laboratory which indicates that our inspection capability is internationally recognized.

With the great efforts contributed by all of our employees, the Company was ranked among the top 5 percentile company in the Taipei Exchange’s “Evaluation of Corporate Governance” for three consecutive years. The social responsibility report of AN-SHIN FOOD SERVICES CO. has won the Taiwan Enterprise Sustainability Award which empowers us to be the only company in the catering industry to win for four consecutive years; we also won the award of Excellence in Corporate Social Responsibility – in the little giant group for two consecutive years; moreover, we also won the award of innovative product and procurement service. Through the persistent control in food inspection, AN-SHIN FOOD SERVICES CO. expects to provide consumers with the safest and most warmhearted meals and services; the Company is well recognized and supported by our consumers and its overall business performance has been growing steadily.

1. The Company’s business performance

The total number of stores in Taiwan in 2018 has increased by 7 stores in comparison with year 2017, as of December 31, 2018. The total number of stores in Taiwan is 265 with a revenue exceeded 5 billion dollars in December of 2018.

Our operating costs have risen due to the changes in labor laws and the increment in basic wages. However, we are still actively investing in the technology and automation development of service workflows, to enhance our service quality and efficiency, including the establishment of self-service vending machine in Taiwan, offering MOS Order APP for the online credit storage of credit cards, to fulfill customer’s needs on order and payment; at the same time, the kitchen monitor is added to enhance the kitchen cooking efficiency; in addition to the existing official website, Facebook fan groups and MOS newspaper, the Line official account was created to enhance our communication with consumers so that we will be able to directly send information to our consumers, to improve the communication efficiency and create more loyal customers.

The results of business implementation in 2018 are as follows: Unit: NTD in thousands (other than the

- 1 - earnings per share in NTD) 2018 2017 Growth rate (%) Consolidated Operating 5,252,104 4,919,312 6.77 Consolidated Net profit 140,649 168,633 (16.59) Basic earnings per share 4.36 5.23 (16.63) Note: The consolidated net profit is contributed to the shareholders of the Parent Company.

2. Business Prospect (1) In addition to continuously providing consumers with “safe, secure, healthy and tasty” catering services with the Company’s 3Q quality innovations (Service Quality, Product Quality and Environment Quality). The local ingredients are used to develop healthy and delicious products and create a better customer experience. At the same time, we also utilize the smart technology to conduct new investment projects, such as: the new investment evaluation of delivery service and plant factory, with the aim of optimizing service efficiency and quality, improving logistics management and support and integration of cross department to generate synergies. (2) Employees are important assets of the companies in the service industry. Other than training and conducting group activities for motivating the employees, we also cooperate with the government in the project of “Constructing a Smart and Healthy City,” with a focus on improving the employees’ safety in the workplace and assisting their health management, to develop a smart and healthy workplace for our employees. With the combination of technology such as wisdom Internet of Things, to continuously promote healthy eating and exercise habits to create a happy and healthy workplace for our employees. (3) As for the business operations of the overseas market, in addition to actively developing the domestic market in Mainland China, we also actively develop products that meet the local tastes of Chin to expand the growth of revenue with local marketing strategies that can fulfill the local consumption habits and enhance the customer relationships. In the Australian market, we offered new products that fulfill the taste of the Australian customer. We also actively created a healthy image of MOS Burger, hired more local management talents and cultivated local employees, for the implementation of localization and achieving a profit and loss balance. In 2019, we will continue our business concept of “3Q Innovation × Smart Technology” in 2018, to further enhance customer experience and prove differentiated services to our customers; we will continue to provide delicious products with the business concept of integrity, sustainability and innovation, to generate greater profits for our shareholders.

Chairman: Lin, Chien-Yuan

- 2 - II COMPANY PROFILE

1. Date of Establishment: November 23, 1990 2. Company Profile: Date Profile November 1990 Established “AN­SHIN FOOD S ERVICES CO., Ltd.” as a joint venture and technical cooperation with MOS Food Services, Inc. Japan in Taiwan, and the paid up capital was NTD 80 million. February 1991 Opened the “Xin Sheng South Road Store,” the first MOS burger store in Taiwan. Launched the first rice burger in Taiwan and set sinks by guest seats area (pioneered in the fast food industry). October 1992 Issuance of common stock for NTD 40 million in cash, NTD 10 per share. Paid up capital after such capital increase was NTD 120 million. February 1994 Translated the book “Be Brave to Dream” written by founder Sakurada Satoshi, and authorized Crown Culture Corporation to publish in Taiwan.

January 1995 Developed new breakfast merchandise – launched bacon and egg burger. June 1996 Newly launched breakfast sandwich, Low­fat high­fiber Konnyaku. March 1997 Opened Store No. 20 Taipei Fulin Store. December 1997 Opened Store No. 30 Taipei Tianmu Second Store. November 1999 Opened Store No. 40 Taipei Neihu Store. July 2000 Official operation of Jilin Training Center. October 2000 Implemented to provide porcelain insulation cup and soup cup for customers eating in store to reduce the usage of paper made product and to make effort to preserve the earth. June 2001 Taipei Linsen Store adjusted its business hours to 24 hours a day and becomes the first store to operate 24 hours a day. November 2001 Opened Store No. 50 Taipei Zhongshan 2nd Store. November 2002 Newly launched afternoon tea series merchandise. January 2003 Established the “Fast Casual” brand image campaign and executed the plan to accelerate expansion (opened 27 stores throughout the year). March 2004 Synchronized with stores in Japan to use natural beef from New Zealand. August 2004 Accomplished the plan to expand to 100 stores, expanded 39 stores throughout the year. October 2004 Launched “Re-employment Happy Career” project, released 500 job opportunities together with 5 other major food service chains.

December 2004 Yearly earning exceeds NTD 1 billion. March 2005 Introduced no­bun burgers (Green cod burger) series.

- 3 - Date Profile March 2005 Full utilization of eco-friendly soy ink to print advertisements to reduce pollution during printing process. July 2005 Signed organic rice cooperation agreement with Counsel of Agriculture, Executive Yuan; upgrade rice burger into “Organic Rice Burger.” January 2006 Incorporated Ingredient Product Traceability System and joined “The Build Up Plan for Demonstrative Model of Overall Process of Buy and Sell of Agricultural Products Buy and Sell Traceability” of the Counsel of Agriculture, commissioned to the Logistics Association. July 2006 Issuance of common stocks for NTD 80 million in cash, NTD 10 per share. Paid up capital after such capital increase was NTD 200 million.

January 2007 Opened stores operating in 6 Taiwan High Speed Rail stations (Taoyuan, Hsinchu, Taichung, Chiayi, Tainan, Zuoying).

March 2007 Initiated the lohas market to deliver fresh and easing products straight from the origin, so customers can enjoy ingredients with the same quality in MOS stores at home. April 2007 Replaced plastic packing and container with PLA products thoroughly. PLA products are made from refined corn that is able to dissolve naturally, does not generate toxic matters and lessens toxic gas during combustion. July 2007 Issued pre-paid non-contact sensory value storage card “MOS CARD” December 2007 Yearly earnings exceed NTD 2 billion. July 2008 Issued new shares through capitalization of earnings for NTD 20 million. Paid up capital after such issuance was NTD 220 million. October 2008 Rice burgers fly into the sky, happy delicacies beyond the clouds - Cooperated with China Airlines, serving MOS rice burgers on international flights. December 2008 Honored with “Excellent Service GSP certification” by the Department of Commerce of the Ministry of Economic Affairs. December 2008 “Flavor phone case” was awarded the Taiwan design Platinum Award and German design IF award. January 2009 Established the “Call 449­2626” phone ordering hotline, trial operations in Tainan, Kaohsiung areas. August 2009 Expanded 24hr branch and breakfast to go branches. 24 hour branches exceeded 40 branches and breakfast to go branches exceeded 90.

November 2009 Awarded first place by in the 7th annual Global Views Monthly Magazine Excellent Service in the fast food industry. November 2009 New launch of MOS Café.

- 4 - Date Profile November 2009 Founded the An­Shin Food Services (Singapore) Pte. Ltd. with other investors. Indirectly invested in Mainland China to develop the MOS burger business, founded the Xiamen An Shin Food Management Co., Ltd. February 2010 Opened the first branch in Xiamen (Siming South store). March 2010 Received the ISO22000 Food Safety Management System and HACCP certificate by the AFAQ­BQR French Standards Association. August 2010 Awarded “Contribution to Job Creation” by the Executive Yuan. December 2010 Completed paperwork for shares public offer. December 2010 “MOS milk adventure series” was awarded a gold medal by the 2010 Taiwan Visual Awards for its packaging design. January 2011 Listed on the Emerging Stocks Board. February 2011 Founded MOS BURGER AUSTRALIA PTY. LTD. with other investors, developed MOS burger business in Australia.

March 2011 Awarded first place for the food services category, in the 2nd annual Green Brands rankings by Digital Era Magazine.

April 2011 Opened the first branch in Australia, Brisbane. It is a milestone in our international progress by establishing a foothold in an English­language country. May 2011 Awarded as a model company in environment protection in the 7th annual CSR Awards by the Global Views Magazine. June 2011 An­Shin food (MOS burger) 20th anniversary and opened the 200th stores. August 2011 Awarded “Product Carbon Footprint label certificate” by the Executive Yuan, became the first fast food company with a carbon footprint certificate. August 2011 The Company’s food inspection center passed the TAF National Accreditation Foundation Certification Evaluation (Lab code 2473) September 2011 Issued new shares through capitalization of earnings for NTD 22 million and through employee bonus for NTD 450,000. Paid up capital after issuance was NTD 242,450,000. December 2011 Issued stock for NTD 52 million in cash to apply for initial public offering on the Taipei Exchange (TPEx). Paid­up capital after issuance was NTD 294,450,000. December 2011 Officially listed on TPEx, on December 15th (stock code 1259). March 2012 Awarded first place for the food services category, in the 3rd annual Green Brands rankings by Digital Era Magazine. March 2012 Opened the Kinmen Minchuan store, which is the first fast food branch in Kinmen island. March 2012 Founded Hong Kong MOS Burger Investment Co., Limited. with other investors, developed the MOS burger business in Guangdong province,

- 5 - Date Profile China. April 2012 Opened the Australia MOS burger flagship store in the Brisbane CBD. May 2012 Opened the first MOS Burger branch in Guangdong province, on Guangzhou City, Beijing Road. June 2012 Launched the mobile APP “MOS Order” and “MOS Wish,” the first fast food chain restaurant to utilize a mobile APP to place orders in the Taiwan fast food industry. July 2012 MOS burger cooperated with Burt’s Bees and promoted a two-year charitable campaign “MOS Burger x Burt’s Bees, a minor revolution in nutritious lunches” September 2012 Issued new shares through capitalization of earnings for NTD 29,445,000. Paid up capital after issuance was NTD 323,895,000. December 2012 Opened the first branch in Shanghai, at Hongwell Square. March 2013 Awarded special recognition for the food services category, in the 4th annual Green Brands rankings by the Digital Era Magazine. June 2013 Awarded the gold medal in the “2013 Taiwan Service Industry Ranking” in the fast food services category by Commercial Times. August 2013 MOS burger established in Penghu and Sun Moon Lake September 2013 The TECO Group Complex Mall “Anyue Life Plaza” opened in the Taipei Ming Yao Shopping District, assembled MOS burger, Royal Host, Xian Lao Man, Ejoy electric, and Mayfull stores. October 2013 Minchuan West branch and Neihu Gangqian branch each received the “Taipei Best Air Pollution Control Equipment in the Catering Industry” 1st and 3rd prize. November 2013 In coordination with government oil testing, all branches installed the “Rapid Detection Of Total Polar Compound Tester” March 2014 Exceptional in the food services category in the 5th annual Green Brands rankings by Digital Era Magazine. April 2014 Passed the “CG6008 Corporate Governance System Evaluation” certification by the Taiwan Corporate Governance Association. April 2014 Awarded 2nd place in the Gold Metal Service Survey fast food chain stores category conducted by Common Wealth Magazine. May 2014 TECO Group’s MOS burger, Royal Host, Xian Lao Man brands jointly opened in Taichung City, Sweeten Plaza. Awarded Editor’s Choice in the Tourism and Catering Category for the June 2014 Digital Service Standard Benchmark Ranking by Digital Magazine. Awarded first place in the 11th annual “Next Magazine Service Award” in October 2014 the catering and coffee chain category. October 2014 Awarded certificate of gratitude for participating in “Land Quality Propaganda” of Environmental Protection Agency, Executive Yuan. November 2014 Awarded certificate of gratitude for participating in “Vehicle Carbon Reduction, Green Life, New Future” (The use of delivery of electric

- 6 - Date Profile vehicles) of Environmental Protection Agency, Executive Yuan. 29 store located in New Taipei City received awards from the New Taipei December 2014 City, Environmental Protection Bureau. March 2015 Ranked A in the 12th Disclosure of Information Evaluation Ranking. Ranked top 20% in the 1st Annual Corporate Governance Evaluation April 2015 System Ranking. Held “Cherry Blossom Season New Product Press Conference” to February 2015 announce new product offerings. TECO Group’s “Xian Lao Man”, “Kouraku” and “FUJIO” brands jointly May 2015 opened in the “Jing Guan Mall”, “Xinzhuang”, New Taipei City. TECO Group’s affiliated company held the Taipei International Food June 2015 Festival at the Taipei World Trade Center and Nangang Trade Center. Awarded the gold medal in the “Taiwan Service Industry Ranking” in the June 2015 fast food services category, ranked by Commercial Times Awarded “Creative Award of Corporate Volunteers” by the Taipei City June 2015 Government, Bureau of Social Affairs. Published the Company’s first Corporate Social Responsibility Report in August 2015 2014. Awarded first place in the “12th annual Next Magazine Service Award” in October 2015 the catering and coffee chain category. Awarded Bronze Medal by the Taiwan Corporate Sustainability Award in November 2015 catering category as the only recipient from the food services industry. Opened stores operated in 3 Taiwan High Speed Rail stations (Miaoli, December 2015 Changhua, Yunlin) Held the 25th anniversary ceremony, launched MOS card (2nd Edition) March 2016 with mobile payment function and optimized MOS Order APP function. Ranked among the top 5% in the 2nd Annual Corporate Governance April 2016 Evaluation System Ranking. May 2016 Awarded 3rd TCFA outstanding service personnel of chain restaurants TECO Group’s affiliated company held the Taipei International Food June 2106 Festival at the Taipei World Trade Center and Nangang Trade Center. July 2016 Awarded Golden award in the Taiwan Best Service. August 2016 Published the Company’s 2015 CSR report. November 2016 Acquired ISO 50001 energy management system. Awarded Bronze Medal by the Taiwan Corporate Sustainability Award in November 2016 catering category two years in a row as the only recipient from the food services industry. Awarded second place in the 13th Top Service Awards from Next November 2016 Magazine. Awarded Green Recycling Shop Award from Environmental Protection November 2016 Department, New Taipei City Government.

- 7 - Date Profile Re-opened MOS burger Linsen store and launched the first MIT November 2016 self-service meal ordering machine in Taiwan. December 2016 Awarded TCFA National Outstanding Store Manager Award. Awarded New Taipei City public toilet golden award and environmental January 2017 self- maintenance outstanding stores award. Awarded model corporate in promoting electric scooter from Industrial February 2017 Development Bureau, Ministry of Economic Affairs. Ranked top 5% in the annual Corporate Governed Evaluation system two April 2017 years in a row. Awarded Service Vanguard Award in Taiwan Service Industry Evaluation June 2017 from Commercial Times. Entered into Taitung County to achieve the target of provision of service in June 2017 every counties and cities in Taiwan. Our Food Safety and Inspection Center was the only one in the industry June 2017 obtaining the FAPAS certification held by the British Central Science Laboratory. Awarded fifth place in the CSR Award in Little Giant Group from August 2017 CommonWealth Magazine. Awarded Excellent Class in Food Service Industry from the Taipei City October 2017 Food Health Grading Plan. Awarded first place in the Food Service Industry in Top Service Awards October 2017 from Next Magazine. Awarded Silver award in the 10th TCSA Corporate Sustainability Report November 2017 three years in a row as the only recipient from the food services industry. November 2017 9 Branches Awarded in the New Taipei City Waste Reduction Evaluation. November 2017 Implemented “Laboratory Biorisk Management System” and awarded. Awarded First Award in Society Innovation Product and Service December 2017 Procurement Award. December 2017 Awarded TCFA National Outstanding Store Manager Award. December 2017 Passed AED Safety Place Certification. Ranked top 5% in the annual Corporate Governed Evaluation system three April 2018 years in a row. Collaborated with Construction and Planning Agency, Ministry of the Interior, the competent authority for national parks, to jointly promote April 2018 ecological environment education, Gezhi Store near the entrance of Yangmin Mountain National Party became the first national park characteristic store. Received the Certificate of Appreciation from Hualien County Government April 2018 for “Charity Donation for 0206 Earthquake.” Ranked top 5% in the annual Corporate Governed Evaluation system three April 2018 years in a row.

- 8 - Date Profile Food Safety and Inspection Center received the honor for the first chain June 2018 fast-food store in Taiwan with the only inspection institution with dual certifications (TAF and TFDA). Awarded “Service Vanguard Award” in Taiwan Service Industry Evaluation July 2018 from Commercial Times. Ranked top 5 in the small giant of “CommonWealth Enterprise Citizen August 2018 Award” to become the only enterprise receiving such award in food industry and catering service industry in Taiwan in 2018. Received the certificate of appreciation for “93rd Armed Forces Day August 2018 Enterprise’s Respect to the Military” from Ministry of Defense. Received the certificate of appreciation for complete disclosure of food August 2018 ingredient information outcome at “Taipei Food Ingredient Registration Platform.” Awarded “Green Circulation Store Award” from New Taipei City September 2018 government for 6 years consecutively and 8 stores in New Taipei City received the star for the award. Awarded the 3rd place for the “Best Service Enterprise Award for Chain October 2018 Fast-food Stores” of the first prize service award from Apple Daily Magazine. Received three awards of “Corporate Sustainability Report Golden Award,” “Comprehensive Performance TOP 50 Award” and “Supply Chain November 2018 Management Award” for the 11th term of Taiwan Corporate Sustainability award from the Taiwan Institute for Sustainable Energy. Awarded Excellent Class in Food Service Industry from the Taipei City November 2018 Food Health Grading Plan. Received the first place award for the “Buying Power Society Innovative December 2018 Product and Service Purchase Reward” from the Small and Medium Enterprise Administration, MOEA. Awarded Taiwan Chain Stores and Franchise Association (TCFA) National December 2018 Outstanding Store Manager Award. December 2018 Yearly earnings exceed NTD 5 billion. Launched the MOS meal service robot celebrating Christmas micro-film December 2018 commercial clip. December 2018 Qualified ISO 27001 information security management certification Ranked top 5% in the annual Corporate Governed Evaluation system four April 2019 years in a row.

- 9 - III. CORPORATE GOVERNANCE REPORT 1. Organization System March31, 2019

General Meeting

Information of the Director members of the Remuneration Committee

Auditing Office Director Legal Affairs Section Chairman Office President’s Office President 3Q Innovation Promotion Business Planning Group Group

Customer Service Section Public Relationship Group

Joint Procurement Quality Human Resource and Financial Management and Assurance Support Center Engineering Marketing Center Operation Center Store Development Center Third Division Fifth Division Fourth Division Procurement Dept. Second Division First Division Management Dept. Operation Trainin Education and Technology Dept. Information Dept. Electronic Commerce Dept. Human Resources Develo Product Marketing Dept. Equipment Dept. Engineering and Management Dept. Finance and Section Safety andHealth De Store DAevelopment p t. t. p g ment De ment De p t. p t . Section Quality Assurance Inspection Center Food safety and Section Overseas Support

- 10 - (2) Major Corporate Functions

Name of the Business conducted by the department department 1. Overall management of the Company’s internal control Internal Audit Office management system and scheduling of the annual audit plan. 2. Execution of routine audits for the Company. Chairman Office 3Q Innovation Assisting the Chairman to promote project and propose strategies. Promotion Group Overall Management of business plan and execution including but Public not limited to the whole Company brand and public relationship Relationship Group strategies. President’s Office 1. Overall management of the Company’s strategic business Business Planning planning. Group 2. Project execution and new business development. Legal Affairs Overall management of contract review and legal affairs. Section 1. Statistical analysis and feedback of customer service comments. Customer Service 2. Promoting the evaluation of service quality and dealing with Section customer complaints. Joint Procurement Quality Assurance Support Center 1. Overall management of the Company’s information technology Information development and information safety. Technology Dept. 2. Promoting the planning and establishment of system automation. Electronic Overall management of the Company’s digital network marketing Commerce Dept. business advancement and maintenance. Procurement Overall management of purchasing and ordering, focusing on Dept. supplier management and cost controls. Safety and Health Overall management of employee health and workplace safety. Section Quality Assurance Providing and maintaining high-quality product assurance. Section 1. Coordinating the planning and execution of the sanitary inspection of the products in store and the monitoring of food safety. Food safety and 2. Coordinating the laboratory management system and maintaining Inspection Center the ISO/IEC 17025, the certification of the international common standard. Overseas Support Execution and support of overseas (China and Australia) business Section development.

- 11 - Name of the Business conducted by the department department Operation Center Education and Overall management of planning and execution of the employee’s Training Dept. education, training and development. 1.Analysis and execution of operational planning project. Operation 2.Coordination and support of the relevant business with branch Management Dept. decoration, maintenance, equipment and lease. Operation 1 - 5 Each operating division is responsible for guidance and support of Depts. their branches Financial Management and Store Development Center 1. Overall financial planning and fund management. 2. Planning and execution of cost management, accounting, and tax related matters. Finance and 3. Execution of stock affairs and maintenance of investor relations. Management Dept. 4. Overall management of the Company’s assets. 5. Overall management of general affairs. 6. Overall management of the Company’s business analysis and budget control. 1. Overall management and maintenance of shop decoration and construction modifications. Store development 2. Overall management and development of branch equipment, Dept. kitchenware supplies, and spare parts. 3. Integration of branch development, setting up, and lease contracts. Human Resource and Engineering Marketing Center Human Resources Overall management of human resources, organization regulations, Dept. employee benefits and labor relations. Product Overall planning and development of main meals, snacks, beverages Development Dept. and any related products. 1. Overall management of advertisement for the Company and products. Develop strategy for distribution and promotion. 2. The planning for marketing cooperation and sales development Marketing Dept. among different industries. 3. Building and maintaining the Company’s image and public relations. Manage the engineering planning and execution for new store Engineering and development, existing store engineering works, water and electricity Equipment Dept. as well as air conditioning works of the entire Company, as well as the fire safety confirmation and declaration.

- 12 - 2. Information about the Directors, Supervisors, President, Vice President, Senior Manager and Head of Department and Branch (1) Information about Directors and Supervisors 1. Basic Information April 7, 2019 Other Chiefs, directors or supervisors that Shares Currently Held by Current Shareholdings Current Shares Registered Under are spouses, or First Elected Spouse and Underaged Nationality Share Share the Name of a Third Party relatives within the second Date Term Date Children Major Experience and Academic Position(s) Held Concurrently in the Company and/or in any Job Title or registered Name Gender degree of kinship Elected (Years) Shareholding Degree Other Company country Shareholdings s at Election Number Shareholdings Number Number Shareholdings Number Shareholdings Job Relati Percentage Name of Shares Percentage (%) of Shares of Shares Percentage (%) of Shares Percentage (%) Title onship (%)

Kuang Yuan Not Supervisor, ADVANCED LITHIUM 2017.6.7 3 years 1990.11.16 8,925,807 27.56 8,925,807 27.56 0 0.00 0 0.00 ELECTROCHEMISTRY CO., LTD. Industrial Co., Ltd. Applicable PhD., Civil Engineering, Representative of Corporate Director, Taiwan Pelican University of Washington Express Co., Ltd. Chairman R.O.C. Professor, Graduate Institute of N/A N/A N/A Representative: Chairman, AN-SHIN FOOD SERVICES building and planning, National Male 2017.6.7 3 years 2011.3.23 0 0.00 5,000 0.02 10,000 0.03 0 0.00 (SINGAPORE) PTE.LTD Lin, Chien-Yuan Taiwan University Chairman, Xiamen An Shin Food Management Co., Ltd.

President of the Company. Kuang Yuan Not 2017.6.7 3 years 1990.11.16 8,925,807 27.56 8,925,807 27.56 0 0.00 0 0.00 Representative of Corporate Director, Royal Host Industrial Co., Ltd. Applicable Taiwan Co., Ltd. Representative of Corporate Director, ABC Cooking Studio Taiwan Co., Ltd. Supervisor, Fujio Food System Taiwan Co., Ltd. Master’s Degree, Graduate Supervisor, Kouraku Co., Ltd. Institute of Technology Representative of Corporate Director, Foremost Management, Kaohsiung Polytechnic Institute International Food & Beverage Co., Ltd. Director R.O.C. N/A N/A N/A Department of Industrial Representative of Corporate Director, Jinglaoman Representative: Engineering, Tunghai University Food&Beverage Co., Ltd. Male 2017.6.7 3 years 2014.6.6 82,740 0.26 80,142 0.25 0 0.00 0 0.00 Representative of Corporate Director, Eurasia Food Kao, Shun-Hsing Executive Vice President, Royal Host Taiwan Co., Ltd Service Co., Ltd. Representative of Corporate Director, MISS CROISSANT FOOD CO., LTD. Representative of Corporate Director, AN-SHIN FOOD SERVICES (SINGAPORE) PTE.LTD Representative of Corporate Director, Xiamen An Shin Food Management Co., Ltd.

- 13 - Other Chiefs, directors or supervisors that Shares Currently Held by Current Shareholdings Current Shares Registered Under are spouses, or First Elected Spouse and Underaged Nationality Share Share the Name of a Third Party relatives within the second Date Term Date Children Major Experience and Academic Position(s) Held Concurrently in the Company and/or in any Job Title or registered Name Gender degree of kinship Elected (Years) Shareholding Degree Other Company country Shareholdings s at Election Number Shareholdings Number Number Shareholdings Number Shareholdings Job Relati Percentage Name of Shares Percentage (%) of Shares of Shares Percentage (%) of Shares Percentage (%) Title onship (%)

Kuang Yuan Not Representative of Corporate Director, Tong Ho Global R.O.C. 2017.6.7 3 years 1990.11.16 8,925,807 27.56 8,925,807 27.56 0 0.00 0 0.00 Investment Co., Ltd. Industrial Co., Ltd. Applicable Representative of Corporate Director, Tong Kuang Investment Co., Ltd. Chairman, Mingfu Co., Ltd. Representative of Corporate Director, MOS Burger Australia Pty. Ltd. Department of Psychology, Representative of Corporate Director, Xiamen An Shin

International Christian University Food Management Co., Ltd. Father Sup Huang, Bachelor, Department of Representative of Corporate Director, Royal Host and Director ervi Mao­ Psychology daugh Representative: Taiwan Co., Ltd. sor Hsiung ter Japan Female 2017.6.7 3 years 2014.6.6 0 0.00 0 0.00 0 0 0 0.00 Chairman, ABC Cooking Studio Chairman, ABC Cooking Studio Taiwan Co., Ltd. Shirley Huang Taiwan Co., Ltd. Director of Fujio Food System Taiwan, co., Ltd Representative of Corporate Director, Kouraku Co., Ltd. Representative of Corporate Director, Tanya Food Co., Ltd. Representative of Corporate Director, Jingloumen Food Co., Ltd. Chairman, MISS CROISSANT FOOD CO., LTD.

MOS Food Not Vice President of the Company. Department of Economics, Soka 2017.6.7 3 years 1990.11.16 8,098,464 25.00 8,098,464 25.00 0 0.00 0 0.00 Services, Inc. Applicable University Representative of Corporate Director, XIAMEN Director Japan Department Manager of AN-SHIN FOOD MANAGEMENT CO. Ltd. N/A N/A N/A Representative: International Division, MOS Food Representative of Corporate Director, MOS Burger Male 2017.6.7 3 years 1999.6.9 0 0.00 0 0.00 0 0.00 0 0.00 Services, Inc. Fukumitsu Akio Australia Pty. Ltd.

Representative of Corporate Director, Magic Food MOS Food Not 2017.6.7 3 years 1990.11.16 8,098,464 25.00 8,098,464 25.00 0 0.00 0 0.00 Co., Ltd. Services, Inc. Applicable General Manager International Representative of Corporate Director, MOS FOOD Director Japan Marketing Division, MOS Food N/A N/A N/A HONG KONG LIMITED Services, Inc. Representative: Representative of Corporate Director, PT.MOG Male 2019.4.1 3 years 2019.4.1 0 0.00 0 0.00 0 0.00 0 0.00 Maehara Hironobu INDONESIA

- 14 - Other Chiefs, directors or supervisors that Shares Currently Held by Current Shareholdings Current Shares Registered Under are spouses, or First Elected Spouse and Underaged Nationality Share Share the Name of a Third Party relatives within the second Date Term Date Children Major Experience and Academic Position(s) Held Concurrently in the Company and/or in any Job Title or registered Name Gender degree of kinship Elected (Years) Shareholding Degree Other Company country Shareholdings s at Election Number Shareholdings Number Number Shareholdings Number Shareholdings Job Relati Percentage Name of Shares Percentage (%) of Shares of Shares Percentage (%) of Shares Percentage (%) Title onship (%)

MOS Food Not Representative of Corporate Director, PT.MOG 2017.6.7 3 years 1990.11.16 8,098,464 25.00 8,098,464 25.00 0 0.00 0 0.00 INDONESIA Services, Inc. Applicable Representative of Corporate Director, MOS Burger Australia Pty. Ltd.

Representative of Corporate Director, AN-SHIN

FOOD SERVICES (SINGAPORE) PTE.LTD Department of Agriculture and Chairman, Magic Food Industry Co., Ltd. Veterinary Medicine, Nihon Representative of Corporate Director, MOS FOODS University Director Japan Executive officer of International SINGAPORE PTE.LTD. N/A N/A N/A Representative: Division. and International Representative of Corporate Director, MOS Food Male 2017.6.7 3 years 2012.11.16 0 0.00 0 0.00 0 0.00 0 0.00 Takifuka Jun Planning Dept., Services (THAILAND) Co., Ltd. MOS Food Services Inc. Representative of Corporate Director, MOS BURGER

KOREA CO., LTD

Representative of Corporate Director, HongKong

MOS Burger Investment Co., Limited

Representative of Corporate Director, Guangdong

MOS Burger Management Ltd.

PhD., Department of Economics, University of Pittsburgh Consultant, Taishin Financial Holding Honorary Consultant, Center of Asian studies,

Co., Ltd. National Taipei University Chairperson and General Manager, Independent Director, Shin Kong Financial Holding Independent The Export-Import Bank of the Co., Ltd. R.O.C. Lii, Sheng­Yann Male 2017.9.26 3 years 2011.3.23 0 0.00 0 0.00 0 0.00 0 0.00 Republic of China N/A N/A N/A Director Independent Director, Tah Kong Chemical Industrial General Manager, Bank of Taiwan Director General of Department of Corporation, Ltd Banking, Central Bank of the Independent Director, Shin Kong Commercial Bank

Republic of China(Taiwan) Co., Ltd. Director General of Department of Economic Research, Central Bank of the Republic of China(Taiwan) - 15 - Other Chiefs, directors or supervisors that Shares Currently Held by Current Shareholdings Current Shares Registered Under are spouses, or First Elected Spouse and Underaged Nationality Share Share the Name of a Third Party relatives within the second Date Term Date Children Major Experience and Academic Position(s) Held Concurrently in the Company and/or in any Job Title or registered Name Gender degree of kinship Elected (Years) Shareholding Degree Other Company country Shareholdings s at Election Number Shareholdings Number Number Shareholdings Number Shareholdings Job Relati Percentage Name of Shares Percentage (%) of Shares of Shares Percentage (%) of Shares Percentage (%) Title onship (%)

PhD of Business Administration, Macau University of Science and Technology Collage of Business, Stanford Director, Digital Transformation Association

Independent University Chairman, Innovative to Industry Co., Ltd. R.O.C. Gong, Reng-Weng Male 2017.6.7 3 years 2017.6.7 0 0.00 0 0.00 0 0.00 0 0.00 Deputy Chief Executive, Institute Corporate Director Representative, Taiwan Depository N/A N/A N/A Director for Information Industry & Clearing Corporation Administrator, Foreseeing Chairman, VAS Creative Co., Ltd. Innovative New Digiservices, Expert at Institute for Information Industry

Master Degree, Department of Management Science, National Chiao Tung University Independent Chairman, Taiwan Tourism Interchange Association. Director-General, Tourism Bureau R.O.C. Lai, Seh-Jen Female 2017.6.7 3 years 2017.6.7 0 0.00 0 0.00 0 0.00 0 0.00 Honorable President, Taiwan Visitors Association N/A N/A N/A Director Chairman, China Pacific Catering Independent Director, Regent Hotels Group Co., Ltd. Services President, Taiwan Visitors Association

Honorary Doctorate, Chang Jung Christian University Father Master’s Degree, University of Huang, Mao­ Pennsylvania Dire Huang, and Supervisor R.O.C. Male 2017.6.7 3 years 1993.11.16 0 0.00 0 0.00 0 0.00 0 0.00 Note Department of Economics, Keio Hsiung ctor Shang-Li daugh University ter Chairman, TECO Electric and

Machinery Co., Ltd.

An Tai Enterprise Economic Research,

International Not University of Cologne Supervisor R.O.C. 2017.6.7 3 years 1990.11.16 3,065,680 9.47 2,755,680 8.51 0 0.00 0 0.00 Department of German Language Director, Taiwan-German Exchange Association Investment Co., Applicable and Culture, Chinese Culture

Ltd. University

- 16 - Other Chiefs, directors or supervisors that Shares Currently Held by Current Shareholdings Current Shares Registered Under are spouses, or First Elected Spouse and Underaged Nationality Share Share the Name of a Third Party relatives within the second Date Term Date Children Major Experience and Academic Position(s) Held Concurrently in the Company and/or in any Job Title or registered Name Gender degree of kinship Elected (Years) Shareholding Degree Other Company country Shareholdings s at Election Number Shareholdings Number Number Shareholdings Number Shareholdings Job Relati Percentage Name of Shares Percentage (%) of Shares of Shares Percentage (%) of Shares Percentage (%) Title onship (%)

Secretary General, Chinese

National

Association of Industry and

Representative: Commerce, Taiwan Male 2017.6.7 3 years 2010.10.22 0 0.00 0 0.00 0 0.00 0 0.00 Consultant, Chief Secretary of the Fritz J. C. Jang Board of Directors, TECO Electric

and Machinery Co., Ltd.

Consultant, Frankfurt office, Bank

of Taiwan

President, Tien-Yeh Accounting Firm Visiting Professor, Department of Accounting, National Chung Hsing University Independent Director, O-Bank Co., Ltd. Master’s Degree, Department of Independent Director, Uni-President Enterprises Co., Accounting, National Chengchi Ltd. Supervisor R.O.C. Yue, Chao-Tang Male 2017.6.7 3 years 2011.3.23 0 0.00 0 0.00 0 0.00 0 0.00 N/A N/A N/A University Independent Director, Johnson Health Tech Co., Ltd. Chairman, Ernst & Young (EY) Independent Director, Feng Hsin Steel Co., Ltd. Supervisor, Depo Auto Parts Ind. Co., Ltd. Supervisor, Great Easter Resins Industrial Co., Ltd. Independent Non-Executive Director, Stella International Holdings Limited Note:Concurrently positions: director of TECO Electric and Machinery Co., Ltd., Chairman of Teco International Investment Co., Chairman of Tong An Assets Management & Development Co., Ltd., Chairman of TECO CAPITAL INVESTMENT CO.,Ltd, director of TECNOS INTERNATIONAL CONSULTING CO,;Ltd, director of Taian (Malaysia) Electric Sdn. Bhd., Chairman of Antai International Investment Co., Ltd., Chairman of E­JOY ELECTRONICS INTERNATIONAL CO., Ltd., director of TAIWAN PELICAN EXPRESS CO., Ltd., Chairman of Teco Australia Pty. Ltd., director of Teco Westinghouse Motor Company, director of Nanchang Teco Electric & Machinery Co., Ltd., director of Qingdao Teco Century Advanced High­tech Mechatronics Co. Ltd., Chairman of An-Sheng Travel Co., Ltd., Independent director of Inotera Memories, Inc., Chairman of ROYAL HOST TAIWAN CO., Ltd., director of MOS FOOD INDUSTRY CORP., Chairman of United Development Corporation, Chairman of MCOM TECHNOLOGY CO., Ltd., director of INOTEC TAIWAN CO., Ltd., director of TAIWAN HIGH SPEED RAIL CORPORATION, Chairman of Xian Lao Man CO., Ltd, director of TUNGPEI INDUSTRIAL CO., Ltd., vice director of TG TECO VACUUM INSULATED GLASS CORP., Chairman of United Development Corporation, director of PK Venture Capital Corp., director of ATETSU INTERNATIONAL INC., director of SHIN­ETSU HANDOTAI TAIWAN CO., Ltd., director of Tecocapital Investment Co., Ltd. , director of TECOCAPITAL INVESTMENT(SAMOA) Co., Ltd.,chairman of MOS Burger Australia Pty Ltd,, chairman of TECO ELEKTRIK TURKEY A.Ş., president of Sankyo Co., Ltd. (TECO JAPAN), director of Asia Innovative Technology Co., Ltd., director of Qingdao TECO Innovation Co., Ltd.

- 17 -

2. Director’s or supervisor’s professional qualifications and independent analysis April 7, 2019 Whether this person has at least five years of working experience Independent requirements (note) and is equipped with the following professional qualifications An instructor or A judge, public Have work above at a prosecutor, attorney, experiences in Number of public/private CPA, or other the area of companies for Criteria university/colleg professional or commerce, adjunct e in the area of technical specialist law, finance, independent Name commerce, law, who has passed a or accounting, directors of other finance, national examination or otherwise 1 2 3 4 5 6 7 8 9 10 public offering accounting or and been awarded a necessary for companies relevant certificate in a the business departments profession necessary of the necessary for the for the business of the Company business of the Company company Lin,  －   －    －    － － Chien-Yuan Kao, Shun­ － －  － －    －    － － Hsing Shirley － －   －  － － －  －  － － Huang Fukumitsu － －  － －   － －    － － Akio Maehara － －  － －   － －    － － Hironobu Takifuka － －  － －   － －    － － Jun Lii, Sheng­ 2 － －            Yann companies Gong, Reng － －            － Weng Lai, Seh Jen － －            1 company Huang, Mao­ － －   －  － － －  －   － Hsiung Fritz J. C. － －           － － Jang Yue, 4              Chao-Tang companies Note: Each director or supervisor who is in conformity with the following conditions in the term of holding office and within 2 years prior to the assumption date, please mark “” in the blank showing the conditions respectively. (1) The member is not an employee of the company or any of its affiliates. (2) Director, supervisor of affiliates not belong to the Company (the same does not apply, however, in cases where the person is an independent director of the company, its parent company, or any subsidiary, as appointed in accordance with the laws of Taiwan or with the laws of the country of the parent company or subsidiary). (3) The member is not a natural-person shareholder who holds shares, together with those held by the person’s spouse, minor children, or held by the person under others’ names, in an aggregate amount of one percent or more of the total number of issued shares of the company or ranks as one of its top ten shareholders.

- 18 - (4) The member is not a spouse, relative within second degree of kinship or direct blood relative within third degree of kinship of personnel listed in the preceding three subparagraphs. (5) The member is not a director, supervisor, or employee of a corporate/institutional shareholder that directly holds five percent or more of the total number of issued shares of the company or ranks as of its top five shareholders. (6) The member is not a director, supervisor, officer, or shareholder holding five percent or more of the shares of a specified company or institution that has a financial or business relationship with the company. (7) The member is not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides commercial, legal, financial, accounting services or consultation to the company or to any affiliate of the company, or a spouse thereof. However, this restriction does not apply to any member of the compensation committee who exercises powers pursuant to Article 7 of the “Regulations Governing the Establishment and Exercise of Powers of Compensation Committees of Companies whose Stock is Listed on the TWSE or Traded at TPEx.” (8) The members are not related as spouse or relative within the second degree of kinship with other directors. (9) The member is not a person subject to any conditions defined in Article 30 of the Company Act. (10) The member is not elected by a government agency, juristic person or their representative acting as shareholders described in Article 27 of the Company Act.

- 19 - (2) Information of President, Vice President, Associate Vice President, Supervisors of Departments and Branches: April 7, 2019 Shares held by Shareholdings by Manager related Date of spouse and minor Nominee spouse or within Share Position children Arrangement second degree of Nationali Assumption Share Main experience (educational kinship Job Title Name Gender Current concurrent company/post ty (Election) Shareho Sharehol Sharehold background) Number Numbe Number Shareholding ldings dings ings Job Relation of r of of Name s at Election percenta percentag percentag Title ship Shares Shares Shares ge (%) e (%) e (%) Representative of Corporate Director, Royal Host Taiwan Co., Ltd. Representative of Corporate Director, ABC Cooking Studio Taiwan Co., Ltd. Supervisor, Fujio Food System Taiwan Co., Ltd. Supervisor, Kouraku Co., Ltd. Master’s Degree, Graduate Institute of Representative of Corporate Director, Foremost Technology Management, Kaohsiung International Food & Beverage Co., Ltd. Polytechnic Institute President’s Kao, Shun­ Representative of Corporate Director, Jinglaoman R.O.C. Male 2014.2.20 80,142 0.25 0 0.00 0 0.00 Department of Industrial Engineering, N/A N/A N/A Office Hsing Tunghai University Food&Beverage Co., Ltd. Executive Vice President, Royal Host Representative of Corporate Director, Eurasia Food Taiwan Co., Ltd Service Co., Ltd. Representative of Corporate Director, MISS CROISSANT FOOD CO., LTD. Representative of Corporate Director, AN-SHIN FOOD SERVICES (SINGAPORE) PTE.LTD Representative of Corporate Director, Xiamen An Shin Food Management Co., Ltd.

Department of Economics, Soka Representative of Corporate Director, XIAMEN Vice Fukumitsu University AN-SHIN FOOD MANAGEMENT CO. Ltd. Japan Male 2018.4.1 0 0.00 0 0.00 0 0.00 N/A N/A N/A President Akio Department Manager of International Representative of Corporate Director, MOS Burger Division, MOS Food Services, Inc. Australia Pty. Ltd. Master in Finance, George Washington Representative of Corporate Director/President, E-joy Special University International Co., Ltd. Assistant Bachelor, Department of Accounting, R.O.C. Ho, Chi-Yin Male 2014.2.20 536 0.00 0 0.00 0 0.00 Chairman, Teco Appliance (HK) Co., Ltd. N/A N/A N/A to the National Taiwan University Chairman Director, Marketing and Sales Division, Cooperate Director Representative, Asia Air Tech Teco Electric and Machinery Co., Ltd. Industrial PTE. LTD.(AAT)

- 20 - Shares held by Shareholdings by Manager related Date of spouse and minor Nominee spouse or within Share Position children Arrangement second degree of Nationali Assumption Share Main experience (educational kinship Job Title Name Gender Current concurrent company/post ty (Election) Shareho Sharehol Sharehold background) Number Numbe Number Shareholding ldings dings ings Job Relation of r of of Name s at Election percenta percentag percentag Title ship Shares Shares Shares ge (%) e (%) e (%) Assistant Vice President, General MOS Burger Australia Pty Ltd. Managing Director Management Division, Tsann Kuen Ejoy Australia Pty Ltd. Director Enterprise Co., Ltd. Representative of Corporate Director, FUJIATETSU MULTIMEDIA, INC. Representative of Corporate Director, ATETSU INTERNATIONAL INC.

Accounting, Bachelor, Department of Accounting, Soochow Financial, Corporate Director Representative, MOS Burger University Corporate Shih, Australia Pty Ltd. Governance R.O.C. Male 2011.7.1 352 0.00 0 0.00 0 0.00 Team Leader, PricewaterhouseCoopers Taiwan N/A N/A N/A Chi-Yin Supervisor, Royal Host Taiwan Co., Ltd. Officer/Assi Manager, Accounting Department, Cheng Uei stant Vice Supervisor, Tong Ho Global Investment Co., Ltd. President Precision Industry Co., Ltd. Department of Finance and Taxation, National Internal Chen, Chengchi University Audit R.O.C. Male 2016.4.20 1,000 0.00 0 0.00 0 0.00 N/A N/A N/A Hung-Tao N/A Officer Internal Audit Supervisor, E & E Recycling Co., Ltd.

- 21 - 3. Remuneration paid to directors, supervisors, vice president, and assistant vice presidents for the most recent fiscal year (1) 2018 Remuneration of Directors

Remuneration of Directors (including Independent Directors) Unit: In Thousands of New Taiwan Dollars; Shares; %

Remuneration of directors Percentage of the Relevant compensation received by adjunct employees Total of Whether or Expenses for aggregate amount of A, Salary, bonus and A+B+C+D+E+F+ not the Remuneration Paid Retirement Pension Remuneration of Retirement Pension Execution of B, C and D among net special Employees’ remuneration (G) G as a % of Net compensatio (A) (B) directors (C) income after tax (%) (F)(Note 2) Income n from Job Title Name Business (D) disbursement (E) investees From All From All From All From All From All From All From All From All The Company From All other than The The The The The The Consolidated Entities The Consolidat Consolidat Consolidated Consolidat The Company Consolidat Consolidate Consolidat Consolidat subsidiaries Company Company Company Company Company Company Cash Stock Cash Stock Company ed Entities ed Entities Entities ed Entities ed Entities d Entities ed Entities ed Entities is received amount amount amount amount Kuang Yuan Industrial Co., Ltd. Chairman Representative: Lin, Chien-Yuan Kuang Yuan Industrial Co., Ltd. Director Representative: Kao, Shun-Hsing Kuang Yuan Industrial Co., Ltd. Director Representative: Shirley Huang Representative of MOS Food Director Services, Inc.: Takifuka Jun

Representative of MOS Food Director Services, Inc.: Fukumitsu Akio 8,758 8,758 - - 7,139 7,139 961 961 11.99 11.99 5,182 5,182 108 108 366 - 366 - 16.01 16.01 N/A Representative of MOS Food Director Services, Inc.: Yamaguchi Shinji (Note 1) Representative of MOS Food Director Services, Inc.: Ando Yoshinori (Note 1) Independent Director Gong, Reng-Weng Independent Director Lai, Seh-Jen Independent Director Lii, Sheng­Yann Note 1: The Company's corporate director, MOS Food Services, Inc., assigned Mr. Yamaguchi Shinji as the representative corporate director originally, and changed the representative as Mr. Ando Yoshinori on April 1, 2018. Subsequently, Mr. Maehara Hironobu was appointed to act as director. Note 2: No directors retired in 2018, and this field refers to the value of the setting aside or appropriation of retirement pension expense.

- 22 -

Range of Remunerations Name of Directors Aggregate amount of the preceding Aggregate amount of the preceding four Intervals of remuneration paid to each of seven remuneration items remuneration items (A+B+C+D) the Company’s director (A+B+C+D+E+F+G) All companies in the All companies in the The Company The Company financial report H financial report I Kao, Shun ­ Hsing, Shirley Huang, Ando Kao, Shun­Hsing, Shirley Huang, Ando Yoshinori, Fukumitsu Akio, Takifuka Jun, Yoshinori, Fukumitsu Akio, Takifuka Less than NTD 2,000,000 Yamaguchi Shinji, Gong, Reng Weng, Lai, Jun, Yamaguchi Shinji, Gong, Reng Seh Jen, Lii, Sheng­Yann Weng, Lai, Seh Jen, Lii, Sheng­Yann NTD 2,000,000 (included)～ NTD Lin, Chien-Yuan Lin, Chien-Yuan 5,000,000 (not included) NTD 5,000,000 (included)～NTD － － － － 10,000,000 (not included) NTD 10,000,000 (included)～NTD － － － － 15,000,000 (not included) NTD 15,000,000 (included)～NTD － － － － 30,000,000 (not included) NTD 30,000,000 (included)～NTD － － － － 50,000,000 (not included) NTD 50,000,000 (included)～NTD － － － － 100,000,000 (not included) More than NTD 100,000,000 － － － － Total 10 10 10 10

*The nature of remuneration disclosed above is different from income defined by the Income Tax Act. Therefore, the chart is only intended to be used for disclosure of information and shall not be used for the purpose of taxation.

- 23 - (2) Remuneration paid to Supervisors in 2018 Remuneration Paid to Supervisors Unit: In NTD in thousands Supervisors’ remuneration A、 Total of A+B+C as a Whether or not the Remuneration Paid Fees for conducting % of Net Income (%) Dividends (B) compensation (A) his/her business (C) from Job Title Name From All From All From All From All investees The Consolidated The Consolidated The Consolidated The Consolidated other than Company Entities Company Entities Company Entities Company Entities subsidiaries is received Supervisor Huang, Mao­Hsiung An Tai International Investment Co., Ltd. Supervisor Representative: Fritz J. 2,436 2,436 1,020 1,020 407 407 2.75 2.75 N/A C. Jang Supervisor Yue, Chao-Tang Range of Remunerations Name of Supervisors

Intervals of remuneration paid to the Company’s each Supervisor Aggregate amount of the preceding three remuneration items (A+B+C)

The Company From All Consolidated Entities D Less than NTD 2,000,000 Huang, Mao­Hsiung, Fritz J. C. Jang, Yue, Chao-Tang NTD 2,000,000 (included)～ NTD 5,000,000 (not included) － － NTD 5,000,000 (included)～NTD 10,000,000 (not included) － － NTD 10,000,000 (included)～NTD 15,000,000 (not included) － － NTD 15,000,000 (included)～NTD 30,000,000 (not included) － － NTD 30,000,000 (included)～NTD 50,000,000 (not included) － － NTD 50,000,000 (included)～NTD 100,000,000 (not included) － － More than NTD 100,000,000 － － Total 3 3

- 24 - 3. Remuneration paid to President and Vice President Remuneration paid to President and Vice President Unit: In Thousands New Taiwan Dollars Percentage of the Retirement Pension Salary Bonus and special aggregate amount of A, (B) Employee dividends (D) Whether or not (A) disbursement (C) B, C and D among net (Note 2) the income after tax (%) compensation Job Title Name The Company from investees From All The From All The From All The Company All companies in From All other than The The Consolidate Compan Consolidate Compa Consolidated the financial report Consolidated subsidiaries is Company Company d Entities y d Entities ny Entities Cash Stock Cash Stock Entities received amount amount amount amount Kao, Shun­ General Manager Hsing Fukumitsu Vice President 4,106 4,106 108 108 1,075 1,075 366 - 366 - 4.02 4.02 N/A Akio Takifuka Jun Vice President (Note 1) Note 1: Returned to Japan from April 1,2018, and Mr. Fukumitsu Akio served as the Vice President of the Company. Note 2: No directors retired in 2018, and this field refers to the value of the setting aside or appropriation of retirement pension expense.

Range of Remunerations Name of President and Vice President Range of Remunerations to each President and Vice President of the Company The Company All companies in the financial report E Less than NTD 2,000,000 Takifuka Jun, Fukumitsu Akio NTD 2,000,000 (included)～ NTD 5,000,000 (not included) Kao, Shun­Hsing NTD 5,000,000 (included)～NTD 10,000,000 (not included) － － NTD 10,000,000 (included)～NTD 15,000,000 (not included) － － NTD 15,000,000 (included)～NTD 30,000,000 (not included) － － NTD 30,000,000 (included)～NTD 50,000,000 (not included) － － NTD 50,000,000 (included)～NTD 100,000,000 (not included) － － More than NTD 100,000,000 － － Total 3 3

- 25 -

(4) Name of officers distributing employee dividends and distribution status in 2018 Unit: In Thousands New Taiwan Dollars Percentage of Amount Stock the aggregate of cash Title Name Amount Total amount among Amount of stocks after-tax of stocks earnings (%) General Manager Kao, Shun­Hsing Special Assistant to the Ho, Chi-Yin Chairman Managerial Accounting Officer, - 861 861 0.61 Officer Financial Officer, Shih, Chi-Yin Company secretary /Assistant Vice President Internal Audit Officer Chen, Hung-Tao

(5) The following contents compare and describe, respectively, the analysis of the percentage of the aggregate amount of remuneration paid by the Company and all the companies in the consolidated financial statements to the Company’s directors, supervisors, president and vice president among the net income after tax in the individual financial report in the most recent two years, and describe the policies, standards and composition of remuneration payment, procedures to determine the remuneration and the connection between the remuneration payment and the Company’s performance and future risks.

(1) The percentage of the aggregate amount of remuneration paid by the Company and all the companies in the consolidated financial statements to the Company’s directors, supervisors, president and vice president among the net income after tax in the unconsolidated financial report in the most recent two years. Unit: In Thousands New Taiwan Dollars Items 2018 2017 The consolidated The consolidated Company financial Company financial statements statements Total remuneration amount of directors 16,858 16,858 18,284 18,284 Total remuneration of directors as a 11.99 11.99 10.84 10.84 percentage of the net income after tax (%) Total remuneration amount of supervisor 3,863 3,863 3,790 3,790 Total remuneration of supervisors as a 2.75 2.75 2.25 2.25

- 26 -

Items 2018 2017 The consolidated The consolidated Company financial Company financial statements statements percentage of the net income after tax (%) Total remuneration amount of president and 5,655 5,655 4,716 4,716 vice president Total remuneration of presidents and vice presidents 4.02 4.02 2.80 2.80 as a percentage of the net income after tax (%))

Note: The consolidated net income after tax is defined as the net income attributed to the parent company.

(2) The policies, standards and composition of remuneration payment, procedures to determine the remuneration, and the connection between the remuneration payment and the Company’s performance and future risks ①Directors and Supervisors: The Company’s remuneration paid to the Directors and Supervisors includes salary, fee for conducting business and bonus. The Company’s Articles of Incorporation authorize the Board of Directors to determine such salary and fee for conducting business based on the responsibilities that they assume, their performance in the Company, and with reference to the standards generally adopted by other enterprises in the same industry. The rules for determination of remuneration of the directors and supervisors are referred to the operating results and the directors’ performance evaluation and set forth in Article 20 of the Articles of Incorporation of the Company, and if the Company has annual earnings, 5% of which shall be paid to the directors and supervisors as remuneration. The performance evaluation and rationality of remuneration have been reviewed by the remuneration committee and the Board, and the remuneration system is reviewed from time to time depending on the actual operating conditions to achieve a balance between sustainability and risk control. The ratio of remuneration of the Company’s directors and supervisors to net income after tax in 2018 was higher than that of 2017. Such increase was mainly due to the slight

- 27 -

decrease in the net income after tax in 2018.

②President and Vice President: The remuneration of the president and vice president includes salary, pension, bonus and employee dividends are based on their positions, the responsibilities they assumed, their contribution to the Company, and operating results of the Company, and with reference to the standards generally adopted by other enterprises in the same industry. The performance evaluation and rationality of remuneration have been reviewed by the remuneration committee and the Board, and the remuneration system is reviewed from time to time depending on the actual operating conditions to achieve a balance between sustainability and risk control. The ratio of remuneration of the Company’s president and vice president to net income after tax in 2018 and 2017 was approximately 4.02% and 2.80% respectively, the difference of which was mainly due to the slight decrease in the net income after tax in 2018.

- 28 -

4. Implementation of corporate governance (1) Operations of the Board of Directors

The Board of Directors’ meetings were held for 6 times in the year (2018), in which the

attendance of the directors (including independent directors) were as follows: Number of Number of Percentage of Job Title Name attendance in attendance attendance in Notes person by proxy person (%) Kuang Yuan Industrial Co., Ltd. Chairman Representative: Lin, 6 0 100 Chien-Yuan Kuang Yuan Industrial Co., Ltd. Director Representative: Kao, 6 0 100 Shun-Hsing Kuang Yuan Industrial Co., Ltd. Director 6 0 100 Representative: Shirley Huang MOS Food Services, Inc. Director 6 0 100 Representative: Fukumitsu Akio MOS Food Services, Inc. Dismissal on Director Representative: Yamaguchi 1 0 100 2018/4/1 Shinji MOS Food Services, Inc. New on-board Director Representative: Ando Yoshinori 5 0 100 member on 2018/4/1 MOS Food Services, Inc. Director 6 0 100 Representative: Takifuka Jun

Independent Gong, Reng-Weng 6 0 100 Director

Independent Lai, Seh-Jen 5 1 83 Director

Independent Lii, Sheng­Yann 6 0 100 Director

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Other matters legally required to be specified:

I. One of the following items should be specified: the date and term of the Board of Directors’ meeting, content of the proposal, all independent directors’ opinions and the Company’s response to such opinions: (1).The matter specified under Article 14-3 of the Securities and Exchange Act. (2).Except for the aforementioned matters, other matters adopted at the Board of Directors’ meeting which the independent director(s) disapproved or held in reserve opinions thereto and such disapproval or reserved opinions are recorded or stated in a written statement. II. Recusal of Directors due to conflict of interests in certain proposals (the following items should be specified: name of the director, content of the proposal, reason for the recusal and participation in the voting): 1. Content of the proposal: Appropriation of remuneration of 2017 for individual director and supervisor. Name of directors: Chien-Yuan Lin, Takifuka Jun, Ando Yoshinori, Fukumitsu Akio, Shun-Hsing Kao, Shirley Huang, Supervisor Mao­Hsiung Huang and Supervisor Fritz J. C. Jang. Reason for the recusal: interested in this proposal. Resolutions: After the stakeholders of this proposal recused themselves, the chair (convener of the Remuneration Committee, Independent Director Seh-Jen Lai, entrusted Independent director Reng-Weng Gong to attend as a proxy thereof) inquired other attending directors, and the proposal was approved without objections. 2. Content of the proposal: Distribution of bonus of 2017 to individual managerial officers and employees. Recused Directors: Takifuka Jun, Akio Fukumitsu and Shun­Hsing Kao. Reason for the recusal: interested in this proposal. Participation in the voting: unanimous approval passed by other directors upon recusal of interested directors pursuant to paragraph 2 of Article 206 of the Company Act.

III. Assessment of the goal and implementation of enhancing the Board of Directors’ duties and responsibilities in the current year and the prior year: 1. To implement the corporate governance, enhance the functions of the Board of Directors, establish the performance goal, and improve the efficiency of operation of the Board of Directors, the Company has stipulated “Rules for Evaluation of Performance of the Board of Directors” on November 7, 2014. Subsequently, the “Rules for Evaluation of Performance of the Board of Directors” were amended on December 21, 2018. Relevant rules of evaluation and procedures can be found on the website of the Company. The result of the evaluation of the Board of Directors of 2018 can be found on the “III. Has the Company established methodology for evaluating the performance of its board of directors?”

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on page38 under this Annual Report. 2. The Company arranges for directors and supervisors to attend continuing education courses to facilitate or directors and supervisors to obtain relevant information in order to maintain his/her core values, professional advantages and abilities.

IV. Communication between Independent Directors, internal audit officers and the CPA: 1. Independent directors have direct channels to communicate with internal audit officers, and CPAs, review the conditions of the financials and business of the Company regularly and communicate directly with the management and governance department. 2. In addition to receipt of internal audit report and provision of feedbacks by independent directors monthly, internal audit officers submit business reports solely or hold a meeting to discuss amendment of rules for internal audit under requirements of Independent directors. In 2018, a total of 4 audit meetings were convened to sufficiently understand the operating status and audited status of the Company. Furthermore, the internal audit officer also presents an internal audit report at each quarterly meetings of the Board of Directors (including in the rehearsal meeting), so that, the internal audit implementation and its performance are well communicated. 3. Upon completion of the audit/review of financial report of the Company by the CPAs, a total of 2 meetings (Communication between CPA & Governance Department) to report the audit/review results, other requirements from the relevant laws, and brief of the audit report of new accountant and critical audit issue.

V. Communication between independent directors and the management of the Company: The Company has established “Human Resource Committee,” “Procurement Committee,” “Review of Opening Stores Committee,” “Management Committee,” “CSR Committee” and “Financial Management Committee” and “Smart tech Committee” and independent directors attended such committee to provide opinions, and reported operations of such functional committees in each meetings of the Board of Directors.

VI. The detail of attendance of the independent directors in each Board meeting in 2018 is as follows: Term 6th Meeting 7th Meeting 8th Meeting 9th Meeting 10th Meeting 11th Meeting of Tenth of Tenth of Tenth of Tenth of Tenth of Tenth Term Term Term Term Term Term Name (2018/2/7) (2018/4/20) (2018/6/5) (2018/8/8) (2018/11/9) (2018/12/21) Number of Attendance in Attendance in Attendance in Attendance in Attendance in Lai, Seh-Jen attendance by person person person person person proxy Gong, Attendance in Attendance in Attendance in Attendance in Attendance in Attendance in Reng-Weng person person person person person person Lii, Sheng­ Attendance in Attendance in Attendance in Attendance in Attendance in Attendance in Yann person person person person person person

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(2) Operating status of the Supervisors’ participation in the Board of Directors’ meeting: The Board of Directors’ meeting has been called for 6 times in the most recent year (2018), in which the attendance of the supervisors is as follows: Number of Attendance Job Title Name Notes attendance Rate (%) Supervisor Huang, Mao­Hsiung 6 6 An Tai International Investment Co., Ltd. Supervisor 6 6 Representative: Fritz J. C. Jang Supervisor Yue, Chao-Tang 6 6

Other matters legally required to be specified: I. Formation and duties of Supervisors: The supervisors of the Company are elected at the general meeting of shareholders, pursuant to the Company Act, to supervise the execution of business. 1. Communications between the Supervisors and the Company’s employees and shareholders: The Communications between the supervisors and the Company’s employees and shareholders are good and effective. The Company has established the supervisor’s email address: [email protected], and the supervisors also participate in the annual general meeting of shareholders and answer questions raised by the Company’s shareholders directly. 2. Communications between the supervisors and internal audit officers and the CPA: The supervisors understand and provide feedback about the status of the Company’s operations and internal audit through the quarterly internal audit report provided by the internal audit department. A total of 4 audit meetings were convened in 2018 to sufficiently understand the operation status and audit status of the Company. In addition, the internal audit officers present an internal audit report in specific meetings demand by the supervisors and each meetings of the Board of Directors (including in the rehearsal meeting), so that, the internal audit implementation and its performance are well understood and communicated. 3. Upon completion of audit/review of financial report of the Company by the CPAs, a total of 2 meetings (Communication between CPA and Governance Department) were convened in 2018 and the main content of such meetings included: report of the audit/review results, other requirements from relevant laws and brief of the audit report of the new accountant and critical audit issue.

II. In the event that the Supervisors stated their opinions in the Board of Directors’ meeting, the following information shall be specified: date and term of the meeting,

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content of the proposal, results of the voting and how the Company deals with the supervisors’ opinions: N/A

III. The Company has established the “Human Resource Committee,” “Procurement Committee,” “Review of Opening Stores Committee,” “Management Committee,” “CSR Committee” and “Financial Management Committee” and supervisors attended such committee to provide opinions and reported such functional committees in the meetings of the Board of Directors.

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(3) The Company’s operating status of corporate governance and the discrepancy with “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” and the reasons Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons I. Has the Company enacted and disclosed the  The Company has enacted its “Corporate Governance Best No Significant corporate governance best practice principles in Practice Principles” in accordance with the “Corporate Discrepancy accordance with “Corporate Governance Best Governance Best Practice Principles for TWSE/TPEx Listed Practice Principles for TWSE/TPEx Listed Companies” and disclosed such rules on MOPS and the Companies?”? Company’s website. (In order to meet the changes of the “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” updated by Financial Supervisory Commission, the Company has amended its “Corporate Governance Best Practice Principles” on February 26, 2019.) II. Shareholding structure and shareholders’ rights (i). Has the Company enacted the internal operating  i. In addition to the appointment of professional securities No Significant procedures to respond to shareholders’ agent for relevant matters, the Company has enacted an Discrepancy suggestions, questions, disputes and litigations, operation management of securities matters, and well and has the Company implemented such established the position of spokesperson for handling procedures accordingly? shareholder matters. (ii). Does the Company have the list of the major ii. The Company files changes of directors, officers, and major No Significant shareholders and the ultimate beneficiaries of shareholders’ (the shareholders holding more than 10% of Discrepancy major shareholders who are actually controlling  the Company’s total issued and outstanding shares) the Company? shareholding in a monthly basis pursuant to Article 25 of the

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons Security Exchange Act, and the list of ultimate beneficiary of major shareholders are under control as well. (iii). Has the Company established and  iii. The Company has enacted its “Rules Governing Financial No Significant implemented the risk control and fire wall and Business Matters Between this Corporation and its Discrepancy mechanism between the Company and its Affiliated Enterprises,” pursuant to the “Regulations affiliates? Governing Establishment of Internal Control Systems by Public Companies” and with which the Company has implemented the risk control and fire wall mechanism with its subsidiaries (iv). Has the Company enacted internal rules to  iv. In order to prohibit the insiders in the Company to transact No Significant prevent its insider from using the information the Company’s securities, the Company has enacted its Discrepancy unknown to the market to buy or sell its “Procedures for the prevention of Insider Trading” and securities? “Procedures for Handling Material Inside Information.”

III. Organization and duties of the Board of Directors (i). Has the Board of Directors enacted diversified  (i). The Company has enacted the diversity guidelines of the No Significant guidelines regarding the organization of its members of the Board of Directors pursuant to the Discrepancy members and implemented such guidelines “Corporate Governance Best­Practice Principles for the accordingly? TSEC/TPEx Listed Companies.” which determines the operating status, marketing strategy, the demand of

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons development and the professional knowledge with which the Company implemented it. In the tenth term of the Board of Directors, there are two female directors (including one independent director) and four Japanese directors, experienced in business management, operating business, industry, crisis handling and leadership. The decision makers include Chairman Chien-Yuan Lin, Director Shun-Hsing Kao, Director Shirley Huang, including Director Takifuka Jun with international market perspective, Director Fukumitsu Akio, Director Maehara Hironobu, Independent Director Sheng­Yan Lii experienced in financial industry and once acted as the President of the Bank of Taiwan, Independent Director Reng-Weng Gong once acted as the Vice President of the Institute for Information Industry and experienced in Information IT, Independent Director Seh-Jen Lai also once acted as the Director General of the Tourism Bureau with exceptional experience in catering and tourism. All members of the board of directors are elites in different industries and business operations. All members of the board of directors have backgrounds in industries, academic field and diverse knowledge, such that they are able to

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons provide expert opinions in different aspects, in order to facilitate and improve the business management operation of the Company. The number of directors of the Company equipped with the identity of employee accounts for 32% of all directors, and the number of independent directors’ accounts for 33% of all directors, and the number of female directors (including independent directors) accounts for 22% of all directors. 2 independent directors have the term of office under 3 years, 1 independent director has the term of office under 9 years. 1 director with the age above 70 years old, and 3 directors with the age between 60~69 years old, and 5 directors under the age of 60 years old. (ii). In addition to the establishment of the  (ii). In addition to the establishment of the remuneration No Significant Remuneration Committee and the Audit committee in the 4th meeting of the Company’s Board of Discrepancy Committee in accordance with the laws, does Directors’ on its 9th term on August 11, 2011, the Company the Company also establish other types of has set up various functional committees in the aspects of functional committee(s) by choice? corporate social responsibility, operation of opening stores, procurement, human resources, and corporate governance (management), finance, and smart tech and has invited independent directors or supervisors to attend and provide their opinions.

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons (iii). Has the Company established the methodology  (iii) To implement the corporate governance and to enhance the No Significant for evaluating the performance of its Board of functions of the Board of Directors, the Company has Discrepancy Directors, and conducted such evaluation on an stipulated the Rules for the Evaluation of Performance of annual basis? the Board of Directors based on the approval of board directors. According to the Rules, by the end of 2018, the evaluation subjects include the whole operations of the Board of Directors and functional committees (including Remuneration Committee), and members of the board of directors have also conducted self-evaluation. The remuneration committee integrated the evaluation results and presented a review report in the meeting of Board of Directors on February, 2019. The items to be assessed in the evaluation include five aspects: 1. Attendance in business operation; 2. Enhancement of quality of Board resolutions; 3. Composition and structure of the Board of Directors; 4. Elections of Directors and advanced studying; 5. Internal control. The items to be assessed in the evaluation of performance for the directors include six aspects: 1. Handling of the Company’s object and missions; 2.

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons Understanding of directors’ duty; 3. Attendance in business operations; 4. Engagement and communication of internal relationship; 5. Professionalism of directors and advanced studying; 6. Internal control. The board of directors also submitted proposals on the areas requiring improvement based on the evaluation results, including the Japanese version of the Meeting Handbook provided timely prior to the meeting and such proposals were improved. The evaluation results according to the Rules was clearly surpassing the standards. External evaluation status and results: In March 2018, the Company entrusted the independent Taiwan Corporate Governance Association to perform the “Evaluation of Performance of the Board of Directors” for evaluations on the eight main aspects of composition, guidance, authorization, supervision, communication, internal control and risk management, self-discipline of the Board of Directors, and others, such as Board of Directors’ meeting and supporting system etc. The evaluation consisted of the content of 38 indicators, and the online questionnaire with the methods of self-evaluation and field survey evaluation

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons (two-way interview with directors and supervisors) were performed to evaluate the performance of the board of directors. Evaluation conclusion: The Company is the only OTC listed company in the chain catering business that received the top 5% in the corporate governance evaluation results for three years, consecutively, and the Company sufficiently considers the business and development requirements. According to the business needs, the board of directors establishes 9 functional committees, and directors and supervisors also participated in such committees. All committees periodically reported on the operating status to the Board of Directors, and the responsibility allocation and authorization as well as feedback mechanisms have been established in order to allow job functions to be executed thoroughly. The Board of Directors and management departments interact with each other closely with smooth communication channels. The plans for senior management succession planning were further proposed. The internal audit communicated the audit plans and work execution status. In addition to the supervisor hosting meetings, independent directors were

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons recommended to be invited to attend meetings. It was recommended that for new on-board directors, an initial lecture system was to be established in order to assist new directors to understand the current status of the industry of the Company, financial status and responsibilities/obligations, thereby sufficiently achieving their job functions. For the key proposals submitted, improvements were made in 2018: The internal audit communicated audit plans and work execution status, and independent directors were invited to attend the meetings. (iv). Does the Company evaluate the  (iv). The Company pursuant to “Rules for election and No Significant independence of its CPAs regularly? evaluation of Certified Public Accountant” reviews the Discrepancy independence, eligibility and professionalism of the CPA of the Company once every year and obtained the “Certified Public Accountant Independent Declaration” proposed by the CPA confirming that the CPA has no other business relationship with the Company except for audit and tax cases; and no breach of independence for the family members of the CPA. With the items mentioned above, the CV of the CPA, and the evaluation result have been submitted to and been approved by the Board of Directors.

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons The independence and eligibility of the CPA of the Company for the year of 2018 have been reviewed by the 12th meeting of the tenth term of Company’s Board of Directors (February 26, 2019).

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons IV. Has the Company established the full (or part) time  According to the approval through the resolution of the Board of No Significant unit or personnel responsible for corporate Directors’ meeting of the Company on February 26, 2018, Discrepancy governance matters (including but not limited to, Assistant Vice President, Chi-Yin Shih of the Financial providing the required documents for execution of Management and Store Development Center to act as the business to the directors and supervisors, corporate governance officer in charge of corporate administering matters regarding the meeting of the governance related affairs and protecting the rights and interests Board of Directors and general meeting of of shareholders as well as strengthening the functions of board shareholders pursuant to the laws, conducting and of directors. The officer has equipped with the experience in changing the registry of the Company, and supervisory positions related to legal, financial, stock affairs or preparation of minutes of the Board of Directors and corporate governance related service unit for more than 3 years. general meeting of shareholders)? The main responsibilities include the handling of matters related to board of directors’ meetings and shareholders’ meetings according to the laws, prepare meeting minutes for the board of directors’ meetings and shareholders’ meetings, provide assistance to directors and supervisors for their on-board of new positions and continuing education, provide information and materials necessary for directors and supervisors to perform their duties, provide assistance to directors and supervisors in compliance with the laws etc.

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons The corporate governance officer was approved through the resolution of the board of Directors’ meeting on February 26, 2019. For its relevant continuing education status, please refer to the Company’s website. 2018 Primary Duties and Job Functions were as follows: 1. Handle directors’ alternate registration. 2. Handle matters related to Board of Directors’ meetings, shareholders’ meetings and meetings of each functional committees, and to assist the Company to comply with the relevant laws and decrees and regulations of the Board of Directors and the board of shareholders. 3. Prepare minutes of Board meetings and shareholders' meetings. 4. Arrange the continuing education for directors and supervisors as well as the personal continuing education courses. 5. Perform assessment on the liability insurance for directors, supervisors and important employees as well as apply for insurances. 6. Convening communication meetings with the CPA, independent directors, supervisors and audit officers before the regular Board meetings. For the details of communication meetings, please refer to page 30~31 of the Annual Report and the official website of the Company.

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons 7. To provide directors and supervisors with the information required to perform their business and the most recent development of laws in relation to company operation to assist directors and supervisors in complying with the law. 9. Complete the evaluation of the Board of Directors’ performance 9. Handle various public announcements, material information reporting etc. after the Board of Directors’ meetings and shareholders’ meetings. 10. Amend the latest regulatory rules and regulations (Rules for Evaluation of Performance of the Board of Directors) related to corporate governance and submit the amendment thereof to the board of directors for discussion.

V. Has the Company established a communication  The Company has established a channel communicating with No Significant channel for its stakeholders (including but not limited stakeholders, and a special investors’ zone on the Company’s Discrepancy to shareholders, employees, clients, and suppliers) and website, to provide an appropriate communication channel with created a stakeholders’ section on its website? Does the Company to the public, banks and other creditors, the Company respond properly to stakeholders’ employees, suppliers, communities, government, medias, concerns about material CSR issues? shareholders, and other related stakeholders and respond to queries duly and timely. VI. Has the Company engaged a professional stock  The Company has designated Capital Securities Corp. to act as No Significant agency to handle matters about the shareholders’ the Company’s stock agency to handle shareholder matters and Discrepancy

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons meeting? stipulated the “Procedures for Shareholder Services Operations and Management” providing such relevant matters. VII. Information disclosure (i). Has the Company built a website to disclose  (i). The Company has set up its website (address: No Significant financial, business and corporate governance http://www.mos.com.tw) to disclose its financial, business information? and corporate governance information and such relevant Discrepancy information can also be found on the MOPS website in accordance with relevant laws as well. (ii). Has the Company adopted other information  (ii). The Company has established a spokesperson and No Significant disclosure methods (e.g., building an English [email protected] as a contact window and has set up an Discrepancy website, appointing specific persons to be English website. responsible for collecting and disclosing the The finance, business and corporate governance conditions Company’s information, implementing the of the Company can be found on the Company’s website spokesperson mechanism, placing the process and MOPS of the investor conference on the Company’s website, etc.)? VIII. Whether or not there are other important  (i). Employees’ rights and employee wellness: The Company No Significant information to better understand the corporate treats employees with honor and provides employees a safe Discrepancy governance (e.g., employees’ rights, care for staff, and healthy working environment pursuant to laws and relationship with investors, relationship with internal regulations. For assignments, promotions, rewards suppliers, stakeholders’ rights, continuing and penalties, employee welfare, allowances, training etc. education for Directors and Supervisors, are all complying with specific principles, and the implementation of risk management policies and Company provides a fair opportunity and rules of behavior. risk evaluation standards, implementation of The Company has also established an Employees’ Welfare customer policies, liability insurance purchased by Committee and an Employees’ Retirement Fund Audit

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons the Company for its Directors and Supervisors, Committee to protect employees’ rights. etc.)? (ii). Investor relations: The Company discloses the Company’s information in accordance with laws and regulations to protect the rights and fulfill the responsibility to shareholders. (iii). Supplier relations: Communication channels between the Company and suppliers are quite good and maintained in good interactions. (iv). Stakeholder rights: The Company respects and assists in protecting the legal rights of relevant stakeholders. (v). Continuous education of the Directors and Supervisors: The continued education and training for directors and supervisors are in compliance with the “Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies” and the details for continued education for directors and supervisors can be found on page 66 of “2018 Directors and Supervisors Continuing Education.” (vi). Implementation of risk management policies and risk evaluation standards: The Company has established related operating methods to evaluate risk management. (vii). Customer relations policies: The Company has established a customer feedback system to judge the problems and responsibilities of complaints and assigned related departments to improve interaction in order to protect the

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Operational status Discrepancy with “Corporate Governance Best Practice Principles Items to be assessed Yes No Summaries for TWSE/TPEx Listed Companies” and the reasons rights of the customers and investigate customers’ satisfaction regularly to make sure of the provision of the best services to customers. (viii). Purchased liability insurance for Directors and Supervisors: The Company has applied liability insurance for directors and supervisors pursuant to Article 12­2 of Articles of Incorporation, and the main content of such D&O liability insurance, including insured amount, insurance coverage, and premium rates, were report in the meeting of the Company’s Board of Directors (August 8, 2018) pursuant to “Corporate Governance Best­Practice Principles.” IX. Explanation for the improvement compared to the  1. According to the fifth term of corporate governance No Significant results of the Corporation Governance Evaluation evaluation result announced in the most recent year Discrepancy System in the most recent year, and for unimproved (2018), the evaluation result of the Company was at top matters, the prior measures for improvements. 5% among the TPEx listed companies, indicating that the performance of the Company was superior over the business operators in its industry. 2. In addition, regarding the evaluation indicator of “Whether the company is invited to or (self) convenes at least two investor conferences?”, it will be assessed for implementation and improvement in 2019.

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(4) Organization, duties and operating status of the Remuneration Committee Information of the members of the Remuneration Committee Criteria Whether or not this person has at least

five years of working experiences, Notes Independence requirements (note 1) and is equipped with the following professional qualifications Number of An instructor or A judge, public Have work public higher in a prosecutor, experiences in companies in department of attorney, CPA, or the area of which the commerce, law, other professional commerce, person holds Identity finance, accounting, or technical law, finance, a concurrent or other academic specialist who has or accounting, position as a department related passed a national or otherwise 1 2 3 4 5 6 7 8 member of to the business examination and necessary for the needs of the been awarded a the business remuneration Company in a public certificate in a of the committee or private junior profession Company college, college, or necessary for the

Name university business of the Company

Independent Gong, － －          - Director Reng-Weng

Independent Lai, － －          1 company Director Seh-Jen

Independent Lii, Sheng­ － －          3 companies Director Yann Note1: All members who are in conformity with the following conditions in the term of holding office and within 2 years prior to the assumption date, please mark “ ” in the blank showing the conditions, respectively.

(1) The member is not an employee of the company or any of its affiliates.

(2). Not a director or supervisor of the Company or any of the Company’s affiliates, provided that, the independent

directors of the Company, the Company’s parent company and the Company’s subsidiary elected in accordance with

applicable laws are excluded.

(3) The member is not a natural-person shareholder who holds shares, together with those held by the person’s spouse,

minor children, or held by the person under others’ names, in an aggregate amount of one percent or more of the total

number of issued shares of the company or ranks as one of its top ten shareholders.

(4).Not a spouse, relative within the second degree of kinship or lineal relative within the third degree of kinship of any

of the persons in the preceding three subparagraphs.

(5) The member is not a director, supervisor, or employee of a corporate/institutional shareholder that directly holds five

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percent or more of the total number of issued shares of the company or ranks as of its top five shareholders.

(6).Not a director, supervisor, officer, or shareholder holding 5% or more of the shares of a specified company or

institution that has a financial or business relationship with the Company.

(7).Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship,

partnership, company, or institution that, provides commercial, legal, financial, accounting services or consultation to

the Company or to any affiliate of the Company, or a spouse thereof.

(8).No circumstances specified in Article 30 of the Company Act.

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Operational status of the Remuneration Committee

1. There are three members in the Company’s Remuneration Committee. 2. The term of the current Remuneration Committee members: from June 7, 2017 to June 6, 2020. The Remuneration Committee’s meeting was held for three times in the mos recent year (2018). The qualifications and attendance of the members of the Remuneration Committee are as follows:

Number of Number of Attendance Job Title Name Notes actual attendance attendance by proxy Rate (%) Convener Lai, Seh-Jen 3 - 100 Committee Gong, Reng-Weng 3 - 100 member Committee Lii, Sheng­Yann 3 - 100 member

Other matters legally required to be specified:

I. If the Board of Directors refuses or modifies the suggestions provided by the remuneration committee, the

meeting date, session, proposal content, results resolved by the Board of Directors and the measures taken

by the Company in response to the Remuneration Committee’s opinions shall be elaborated (if the Board of

Directors approved a remuneration plan better than that suggested by the Remuneration Committee, the

reasons and the difference shall be elaborated): N/A.

II. If any member has any opposite opinions or reservations against the resolution of the Remuneration

Committee and such opinion or reservation has been recorded or declared in writing, the meeting date,

session, proposal content, the opinions of all members of the Remuneration Committee and the measure

taken in response to the members’ opinions shall be elaborated: N/A.

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(5) Performance of corporate social responsibility Operational status Discrepancy with the “Corporate Social

Responsibility Best Practice Items to be assessed Yes No Summaries Principles for TWSE/TPEx Listed Companies” and the

reasons I. Implementation of Corporate Governance (i). Has the Company enacted the CSR policy or  (i). The Company has established its “Corporate Social No Significant system, and evaluate the results of its Responsibility Best Practice Principles and approved its Discrepancy implementation? amendment on December 21, 2016.” Each department of the Company, pursuant to business concept and food safety policy, focused on the balance between the economy, environment, social issues and sustainable development. In fiscal year of 2018, the Company held the CSR Committee meetings for a total of 3 times to discuss and review the effectiveness of its implementation and its direction to improve in the future. (ii). Does the Company hold CSR trainings  (ii). The Company promoted CSR concepts through No Significant regularly? miscellaneous training courses and meetings and invited Discrepancy external experts to share successful experience regularly. (iii). Has the Company established a unit solely (or  (iii). The Company has established a “Corporate Social No Significant concurrently) responsible for promoting CSR Responsibility Committee” on August 13, 2014, and Discrepancy matters, which is led by high-level management under which the Company established a CSR project who is authorized by and shall report relevant team. The general manager acts as the Convener in such situations to the Board of Directors? team, and the representatives from each department fulfilled the CSR within the scope of their functional

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Operational status Discrepancy with the “Corporate Social

Responsibility Best Practice Items to be assessed Yes No Summaries Principles for TWSE/TPEx Listed Companies” and the

reasons units, and convened the meeting of CSR committee for a total of 3 times in 2018, and reported to the Board in the latest Board meeting. (iv). Has the Company enacted reasonable  (iv). The Company has enacted the rules and regulations for No Significant compensation policies, integrated employee remunerations, performance evaluation system, incentive Discrepancy performance evaluation system with the CSR plans to specify the regulation and standard for policies, and set clear and effective incentive and remunerations; each employee's performance assessment disciplinary policies? is a reference for promotion, transfer, compensation, bonus, education and training, and career planning. And through the remuneration committee regularly reviews the remuneration and promotion system and conducts an objective review with the human resources review meeting. Article 20 of the Articles of the Company also states that “If the Company is profitable for the year, it shall pay 1% to 2% for employee compensation.” II. Developing a sustainable environment (i). Is the Company committed to improving  (i). The Company focuses on developing sustainable No Significant resource efficiency and to the use of renewable environment, including promoting the use of reusable Discrepancy materials with low environmental impact? tableware, establishing recycling points, printing with soy ink, using newsprint paper without fluorescent brighteners on all tray paper, and using packaging

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Operational status Discrepancy with the “Corporate Social

Responsibility Best Practice Items to be assessed Yes No Summaries Principles for TWSE/TPEx Listed Companies” and the

reasons materials with FSC certification in priority (hot and cold drinks container, bags of French fries and fried chicken, container for hot dog burger, etc.), using electricity­ saving lights and energy­efficient equipment, using PLA cups instead of plastic cups and salad container, providing customer with cup a discount, and using the reusable non­  woven materials for production of bags to reduce the use No Significant of plastic materials, and using the provincial water mark Discrepancy toilet. (ii). Has the Company set up an environmental (ii). The Company, pursuant to the nature of the industry, management system according to its industry started to apply to the ISO22000 and the HACCP food characteristics? safety management system, and acquired the certification. The Company started to apply to the ISO50001 energy management system and checked substantial items of use of energy to improve the efficiency of use of energy from  headstream and to reduce wastes, and to be as basis of the No Significant goal of energy saving and carbon reduction and specific Discrepancy gas reduction. (iii). Does the Company pay attention to the impact of (iii). The Company extensively used environment-friendly climate change on its operations, carry out packaging materials and cutlery, reduced the use of greenhouse gas inventories, and set up energy plastic materials, and set up resource recovery stations in

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Operational status Discrepancy with the “Corporate Social

Responsibility Best Practice Items to be assessed Yes No Summaries Principles for TWSE/TPEx Listed Companies” and the

reasons conservation and greenhouse gas reduction stores to reduce the adverse impact of Company’s strategies? operations on the natural environment. Motor vehicles were used for delivery services to reduce  carbon emissions during the sales and transportation phase, and the introduction of 50 e-moving which can No Significant effectively reduce carbon emissions and air pollution. Discrepancy Based on a calculation that daily delivery mileage is approximately 20 kilometers and a month includes 25 days with riding, a reduction of approximately 2.4 tons of carbon emissions can be achieved each year.

III. Protecting public interests  (i). In order to fulfill its corporate social responsibility, the (i). Has the Company established relevant Company protected the basic human rights of all its management policies and procedures in employees and stakeholders, followed the “United compliance with relevant regulations and  Nations Universal Declaration of Human Rights” and international human rights conventions? other international conventions and norms, and pursuant to the spirit and principles of these norms promoted human rights maintenance, including prohibition of any kind sexual harassment, discrimination, threat of No Significant violence; ensured that employment policies do not Discrepancy

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Operational status Discrepancy with the “Corporate Social

Responsibility Best Practice Items to be assessed Yes No Summaries Principles for TWSE/TPEx Listed Companies” and the

reasons discriminate, and child labor is prohibited, assisted the disadvantaged and disable to employ; implemented fair and reasonable remuneration system; respected freedom of association, encouraged employees to establish or join associations; provided security and healthy working environment, the implemented protection of human rights, and adhered to applicable local laws and regulations related to labors. (ii). Has the Company established the employee  (ii). The Company has established “employee suggestion No Significant complaint mechanism and channel, and handled boxes ([email protected])” on its website to let all Discrepancy such complaints properly? staff communicate with the management directly and express their opinions. (iii). Does the Company provide its employees with a  (iii). The Company provides employees annual health safe and healthy working environment, and hold examinations and has established the “safety and hygiene safety and health trainings regularly? group” as a dedicated units to plan and hold the safety and hygiene speeches for labors, provide a safe and healthy working environment for employees. Such dedicated unit plans and holds safety and hygiene courses regularly and annually (there were a total of 38 such  courses held in 2018, including unlawful infringement, prevention of overwork, promotion of health, prevention

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Operational status Discrepancy with the “Corporate Social

Responsibility Best Practice Items to be assessed Yes No Summaries Principles for TWSE/TPEx Listed Companies” and the

reasons of occupational injuries, and first aid treatment training in 2018, which were attended by over 2,700 people). The labor health spot services had been provided 108 times in 2018. The Company conducted monthly safety inspections at each stores (assessed accident hazard and risk in advance for each operations items, and proposed preventive and control measures for hazards to ensure workplace safe), implemented office health exercise, and started a healthy workplace plan to establish health awareness, and promote health. The Company engaged the institute of supervision of working environment certified by the Ministry of Labor to implement the supervision of working environment (CO2) once in half of year regularly pursuant to the Occupational Safety and Health Act in order to ensure thickness of CO2 is within the limitation of laws and protect health of employees. Above mentions were to ensure the safety, hygiene and care of the working environment, to prevent the occurrence of personal injury, illness and occupational disasters, and to provide employees with appropriate

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Operational status Discrepancy with the “Corporate Social

Responsibility Best Practice Items to be assessed Yes No Summaries Principles for TWSE/TPEx Listed Companies” and the

reasons workplaces, and to implement responsibilities of all level officers for safety and health management and caring for employees. (iv). Has the Company established a mechanism to  (iv). The Company collects internal employee satisfaction No Significant hold regular communications with its employees surveys to understand employees and their knowledge of Discrepancy and used reasonable measures to notify the Company’s strategy, and announces the Company’s employees of operational changes which may business guideline and operation strategy, and change of result in significant impact on employees? substantial laws in regular monthly meetings. The staff in the headquarters provided suitable courses on general knowledge and management functions. (v). Has the Company established effective career  (v). In addition to operating principles and strategies, food No Significant development training plans for its employees? safety knowledge, merchandise production and sales Discrepancy processes, the operation units arranged practical exercises related to store operations management at different stages. The Company established the An-Shin College in Tamsui in 2013, offers an efficient and multivariate career development plan for operation office and back up office employees respectively. (vi). Has the Company set up relevant consumer  (vi). The Company provides its customers a free line 0800­ No Significant protection polices and consumer complaint 208128 for claims and (020)449­2626 for services, and Discrepancy

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Operational status Discrepancy with the “Corporate Social

Responsibility Best Practice Items to be assessed Yes No Summaries Principles for TWSE/TPEx Listed Companies” and the

reasons procedures in its R&D, purchasing, production, established customer service departments to handle operations, and service processes? related problems. (vii).Does the Company comply with relevant  (vii). The Company has enacted related rules to protect No Significant regulations and international standards in the customers’ safety for food in accordance with the Act Discrepancy marketing and labelling of its products and Governing Food Safety and Sanitation and related services? regulations. (viii). Does the Company evaluate environmental and  (viii).The Company evaluates its new supplier pursuant to the No Significant social track records of suppliers before entering a factory evaluation table before entering a business Discrepancy business relationship with such suppliers? relationship, and visits supplier’s factory to evaluate its adaptability regularly. The environment evaluation of the Company has included whether or not the raw materials can be possibly damaged due to the environment, whether or not the industrial sewage and waste produced during production process and produced from hygiene facilities are well dealt with and prior emission with maintenance records to be checked, whether or not there are specific plans for prevention of pollution, reduction of waste, and saving energy, and whether or not to well accomplish them for CSR. (ix). Does the Company’s contract with its major  (ix). The contracts between the Company and its suppliers No Significant

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Operational status Discrepancy with the “Corporate Social

Responsibility Best Practice Items to be assessed Yes No Summaries Principles for TWSE/TPEx Listed Companies” and the

reasons supplier include the termination clause entitling provide the duty to comply with the “Consumer Discrepancy the Company to terminate such contract in the Protection Act,” “Act Governing Food Safety and event of the supplier’s violation of CSR policies Sanitation,” “Commodity Labeling Act” and other related which would cause significant environmental and laws. social impact? IV. Enhancing information disclosure The Company has disclosed its CSR information on its Does the Company disclose relevant and reliable  website, annual report and MOPS, and has established the No Significant CSR information on its website and the MOPS CSR website: http://csr.mos.com.tw/index.html. Discrepancy website? I. If the Company has enacted its corporate social responsibility best practice principles according to the “Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies,” please describe the operating status and discrepancy: N/A. VI. Other important information to facilitate a better understanding of the Company’s implementation of CSR. The Company has disclosed its CSR information on its website and prepared the “Corporate Social Responsibility Report” from 2015. VII. If the Company’s “Corporate Social Responsibility Report” is verified by certifying institution(s), the relevant information shall be illustrated: The Company released its Corporate Social Responsibility Report on August, 2018, in accordance with the letter Cheng-Kuei-Chien-Zi No. 10300326901 announced by TPEx on December 4, 2014, and received a certification report submitted by a CPA pursuant to applicable standard.

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(6) Implementation of ethical corporate management Operational status Discrepancies with the Ethical Corporate Management Best Items to be assessed Practice Principles for Yes No Summaries TWSE/TPEx Listed Companies

and Reasons I. Enacting ethical corporate management policies and plans  (i). The Company has enacted its “Ethical Corporate No Significant (i). Does the Company have its bylaws and publicly Management Best Practice Principles” and the Discrepancy available documents addressing its policies and human resources unit is the dedicated unit to measures on ethical corporate management, as well promote integrity management, and such matter is as the Board of Directors’ and the management supervised and conducted by the internal audit team’s commitment to implementing such policies? department and reported to the Company’s Board regularly.

(ii). Has the Company enacted relevant policies to  (ii). The Company has established “Procedures for No Significant prevent unethical conducts, provided operating Ethical Corporate Management and Conduct Discrepancy procedures, conduct guidelines, consequences of Guidelines” providing related operating violation and complaint mechanism in such policies, procedures for implementation. and implemented such policies accordingly? (iii). Has the Company established appropriate preventive  (iii). To ensure the fulfillment of ethical corporate No Significant measures to prevent business activities prescribed in management, the Company has established Discrepancy Article 7, Paragraph 2 of the “Ethical Corporate accounting systems and an internal control system. Management Best Practice Principles for Internal auditing personnel review the compliance TWSE/TPEx Listed Companies” and other activities condition of aforementioned system regularly. within its business scope with higher risk of unethical conducts?

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Operational status Discrepancies with the Ethical Corporate Management Best Items to be assessed Practice Principles for Yes No Summaries TWSE/TPEx Listed Companies

and Reasons II. Implementing ethical corporate management (i). Does the Company assess the ethics records of whom  (i). The Company has enacted “Work Rules” and No Significant it has business relationship with and does their “Employees Conducts Code” providing that all Discrepancy business contract expressly include the ethical employees shall not provide or receive any direct conduct clauses? or indirect appropriate gifts, hospitality or any other inappropriate interests in order to avoid the conflict between the employees’ personal interests and the Company’s interests. (ii). Has the Company established a unit solely (or  (ii).The human resources department of the Company No Significant concurrently) responsible for promoting ethical is responsible for promotion of ethical corporate Discrepancy corporate management matters, which is subordinate management, and such matter is supervised and to and shall report its implementation status to the conducted by the internal audit department and Board of Directors regularly? reported to the Company’s Board regularly. (iii). Has the Company established policies to prevent  (iii). The Company has established “Employees Code No Significant conflict of interests, provided appropriate of Conduct” providing policies for ethical Discrepancy communication and complaint channels and corporate management and specific reward and implemented such policies accordingly? penalties and claiming system for the implementation. (iv). To implement ethical corporate management, has the  (iv). To ensure the fulfillment of ethical corporate No Significant Company established effective accounting and management, the Company has established Discrepancy internal control systems that are audited by internal accounting systems and an internal control system.

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Operational status Discrepancies with the Ethical Corporate Management Best Items to be assessed Practice Principles for Yes No Summaries TWSE/TPEx Listed Companies

and Reasons auditors periodically or by a CPA? Internal auditing personnel review the compliance of aforementioned system regularly. (v). Does the Company provide internal and external  (v). On 2018/12/25, the Company organized the course No Significant ethical corporate management training programs on a of “Employee Disciplinary Handling Process and Discrepancy regular basis? Case Study Sharing” through internal educational training. The Company also promoted the ethical management concept in various meetings during normal times. In addition, the Company also sent letters to all employees and suppliers before each annual holidays to promote the ethical management policies. III. Operating status of the Company’s complaint mechanism (i). Has the Company established specific complaint and  (i). The Company has established an actual mailbox in No Significant reward procedures, set up conveniently accessible the Chairman’s office and the “Supervisors’ Discrepancy complaint channels, and designated appropriate Contact Mailbox,” “Internal Audit Department individuals to be responsible for handling the Mailbox” and “Employees Opinion Mailbox” on complaint received? the Company’s website, and a dedicated unit to conduct such matters. (ii). Has the Company established standard operating  (ii). The Company’s “Ethical Corporate Management No Significant procedures for investigating the complaints received Best Practice Principles” and rules for opinions, Discrepancy and relevant confidentiality mechanism? communications, and reactions provide confidentiality system for reporter and content of - 63 -

Operational status Discrepancies with the Ethical Corporate Management Best Items to be assessed Practice Principles for Yes No Summaries TWSE/TPEx Listed Companies

and Reasons report, as such, any opinions could be noticed and in confidentiality. (iii). Has the Company adopted appropriate measures to  (iii). The reporting process of the Company could No Significant protect a complainant from improper treatment for maintain such reporter in confidence with which Discrepancy his/her complaint? the reporter won’t be subject to any punishment. IV. Enhancing information disclosure Has the Company disclosed the Procedures for Ethical  The Company’s website and MPOS has announced the No Significant Corporate Management it enacted as well as information Company’s “Ethical Corporate Management Best Discrepancy about implementation of such rules on its website and the Practice Principles” and related information. MOPS website? V. If the Company has enacted its ethical corporate management best practice principles according to the “Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies,” please describe the operating status and discrepancy: N/A. VI. Other important information to facilitate the understanding of the Company’s implementation of ethical corporate management: 1. As a preliminary condition to perform the ethical corporate management, the Company complies with the Company Act, the Securities and Exchange Act, the Business Entity Accounting Act, the Political Donations Act, the Anti-Corruption Act, the Government Procurement Act, the Act on Recusal of Public Servants Due to Conflict of Interest, relevant regulations governing TWSE/TPEx listed companies or other related laws governing business acts. 2. The Company’s “Management Procedures for the Operation of Board of Directors’ Meeting” has provided the conflict of interest system for Directors. For the proposal proposed in the Board of Directors’ meeting, the Director with personal interest or the corporate shareholder’s interest therein, which may harm the Company’s interest, may state his/her opinions and reply to enquiries, shall not participate in the

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Operational status Discrepancies with the Ethical Corporate Management Best Items to be assessed Practice Principles for Yes No Summaries TWSE/TPEx Listed Companies

and Reasons discussion and resolution, shall recuse himself/herself from the discussion and resolution, and shall not vote on behalf of other director as his/her proxy. 3. The Company has enacted “Management Procedures to Prevent Insider Trading” and “Procedures for Handling Material Inside Information” and announced to Directors, Supervisors, officers and other all employees of the Company to comply with related rules, procedures, and guidelines which could be found on the Company’s website. (7) If the Company has enacted corporate governance best practice principles and relevant rules, please disclose the method for inquiry: The Company has enacted its “Corporate Governance Best Practice Principles” and which can be found on the Company’s website, http://www.mos.com.tw., under “Major Internal Policies” of “Investor Relations” tab, or MOPS, http://mops.twse.com.tw.

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(8) Other important information to facilitate the understanding of the Company’s implementation of corporate governance:

Directors and Supervisors Further Training for 2018 were all completed as follows:

Whether or not the training

complies with the “Directions for Training the Implementation of Continuing Job Title Name Organizer Training Course Hours Education for Directors and

Supervisors of TWSE Listed and TPEx Listed Companies” Taiwan Corporate Governance Association Evaluation of performance of board of directors Lin, Chairman Taipei Exchange (TPEx) OTC Company’s New Corporate Governance Roadmap Forum 9 Yes Chien-Yuan Taiwan Corporate Governance Association New trend and analysis of amendment of Company Act Obligation and responsibility of directors and supervisors Director Takifuka Jun Taiwan Corporate Governance Association 6 Yes Impact of amendment of Company Act on Japanese enterprises Obligation and responsibility of directors and supervisors Ando Impact of amendment of Company Act on Japanese enterprises Director Taiwan Corporate Governance Association 12 Yes Yoshinori Labor Law and Intellectual Property Insider Trading and Summary of Investment Regulations in Taiwan Fukumitsu Evaluation of performance of board of directors Director Taiwan Corporate Governance Association 6 Yes Akio Labor Law and Intellectual Property Kao, Shun ­ Taiwan Corporate Governance Association Evaluation of performance of board of directors Director 6 Yes Hsing Financial Supervisory Commission 12th term of Taipei Corporate Governance Forum

Shirley Evaluation of performance of board of directors Director Taiwan Corporate Governance Association 6 Yes Huang Obligation and responsibility of directors and supervisors

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Whether or not the training

complies with the “Directions for Training the Implementation of Continuing Job Title Name Organizer Training Course Hours Education for Directors and

Supervisors of TWSE Listed and TPEx Listed Companies” Corporate major economic crime case study and analysis and Chinese National Association of Industry and relevant legal liabilities Commerce Corporate governance and corporate social responsibility Independen Gong, development trend and role model in practice. 12 Yes Director Reng-Weng Taiwan Corporate Governance Association Evaluation of performance of board of directors OTC companies and companies with stocks traded at emerging Taipei Exchange (TPEx) stock markets insider equity promotion seminar Independen Taiwan Corporate Governance Association Evaluation of performance of board of directors Lai, Seh-Jen 6 Yes Director Taipei Exchange (TPEx) OTC Company’s New Corporate Governance Roadmap Forum Sustainable development and strategies for financial and service Taiwan Institute for Sustainable Energy industries Independen Lii, Sheng ­ Taiwan Corporate Governance Association Evaluation of performance of board of directors 12 Yes Director Yann Anti-money laundering and counter terrorism financing study Insurance Anti-Fraud Institute course Taiwan Corporate Governance Association Audit Committee Operation in Practice

Evaluation of performance of board of directors Yue, Taiwan Corporate Governance Association Supervisor Introduction of new corporate governance roadmap 10 Yes Chao-Tang CPA Assignations R.O.C. Taiwan Required compliance in practice after amendment of Money - 67 -

Whether or not the training

complies with the “Directions for Training the Implementation of Continuing Job Title Name Organizer Training Course Hours Education for Directors and

Supervisors of TWSE Listed and TPEx Listed Companies” Laundering Control Act

2018 Amendment to Company Act Key Summary (2)

Taiwan Corporate Governance Association Evaluation of performance of board of directors

Huang, Mao­ Securities and Futures Institute R.O.C. Trend and challenge for information security governance Supervisor 9 Yes Hsiung Business Council for Sustainable Corporate sustainable development and non-financial information Development of Taiwan disclosure current status explanation Taiwan Corporate Governance Association Evaluation of performance of board of directors Fritz J. C. Supervisor Chinese National Association of Industry and 6 Yes Jang Develop response measures to corporate governance evaluation Commerce

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(9) Internal control system implementation status A. Statement of Internal Control System AN-SHIN FOOD SERVICES CO., LTD. Statement of Internal Control System Date: February 26, 2019 Based on the findings of its self-assessment, the Company states the following with regard to its internal control system during the year 2018: I. The Company acknowledges that it is the Company’s Board of Directors’ and officers’ responsibility to establish, implement, and maintain an adequate internal control system. Our internal control system is a process designed to provide reasonable assurance over the effectiveness and efficiency of our operations (including profitability, performance, and safeguarding of assets), reliability, timeliness and transparency of our reporting, compliance with applicable rules, laws and regulations, and achievement of other goals. II. The internal control system has inherent limitations. No matter how perfectly designed, an effective internal control system can provide only reasonable assurance of accomplishing its three stated objectives. Moreover, the effectiveness of an internal control system may be subject to changes in environment and circumstances. Nevertheless, the Company’s internal control system has self-monitoring mechanisms, and the Company takes immediate remedial actions in response to any identified deficiencies. III. The Company evaluates the design and operating effectiveness of its internal control system based on the criteria provided in the “Regulations Governing the Establishment of Internal Control Systems by Public Companies” (hereinafter referred to as the “Regulations”). The criteria adopted by the Regulations identify five key components of the managerial control processes: (1) control environment, (2) risk assessment, (3) control activities, (4) information and communication, and (5) monitoring. Each of the five components has several items respectively. Please refer to the Regulations for such items. IV. The Company has evaluated the effectiveness of the design and operation of its internal control system based on the aforementioned criteria. V. Based on the findings of the evaluation, the Company believes that on December 31, 2018, it has maintained an effective internal control system (including the supervision and management of its subsidiaries) in order to understand the extent that its operations have reached effectiveness and efficiency; the reliability, timeliness and transparency of the reports; compliance with applicable rules, laws and regulations; and to provide reasonable assurance over achieving the aforementioned goals. VI. This Statement will constitute a major part of the Company’s 2017 Annual Report and prospectus and will be made public. Any falsehood, concealment, or other illegality in the content made public will entail legal liabilities under Article 20, Article 32, Article 171, and Article 174 of the Securities and Exchange Act. VII. It is hereby declared that this Statement is adopted at the Board of Directors’ meeting on February 26, 2019, with all nine attending directors approving the content of this Statement. AN-SHIN FOOD SERVICES CO., LTD. - 69 -

B. In the event of engaging CPA to review the internal control system, the auditor review report shall be disclosed: N/A.

(10) In the recent fiscal year and as of the date of this Annual Report, facts about penalties imposed upon the Company and its internal personnel for their violation of the internal control system, major defects and the corrective actions taken: N/A.

(11) A. In the recent fiscal year and as of the date of this Annual Report, the material resolutions resolved in the shareholders’ meeting and Board of Directors: Date: March 31, 2019 General meetings of shareholders or Date Material resolutions meetings of Board of Directors 1. Adopted the 2017 performance evaluation of the Board of Directors. 2. Adopted the amount of the Company’s distribution for Chairman remuneration and employee dividends. 3. Adopted the amount of the Company’s 2017 distribution for Directors and Supervisors remuneration and employee dividends. 4. Adopted the Company’s 2017 Financial Statements. Meeting of the 5. Adopted the Company’s 2017 profit distribution. Board of the 2018/2/7 6. Adopted the Company’s 2017 Statement of Internal Directors Control System. 7. Review to independence and eligibility of the CPA of the Company. 8. Convening and holding 2018 annual general meeting of shareholders 9. Adopted the review for submission of proposal of shareholders holding 1% of shares of the Company. 10. Adopted the dissolution of a branch of the Company. 1. Adopted the capital increase of MOS BURGER AUSTRALIA PTY. LTD. Meeting of the 2. Adopted the amount of the Company’s 2017 remuneration Board of the 2018/4/20 distribution for individual Director and Supervisor. Directors 3. Adopted the amount of the Company’s 2017 remuneration distribution for individual officer and employee. 4. Appointment and change of officers.

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General meetings of shareholders or Date Material resolutions meetings of Board of Directors 5. Proposal to release the non-compete restrictions of directors. 6. Adopted the Company’s 2017 earnings appropriation adjustment.

Report: 1. 2017 Business Report. 2. 2017 Supervisors’ Review Report, 3. 2017 Report on the allocation of the compensation of Directors, Supervisors, and employees. 4. Report on the amendment to the “Rules of Procedure Ordinary for Board of Directors Meetings” shareholders’ 2018/6/5 Ratifications: meeting 1. Ratification of the Company’s 2017 Business Report and Financial Statements. 2. Ratification of the Company’s 2017 earnings appropriation plan. Discussion: 1. Proposal to release the non-competing restrictions of directors. 1. MOS card bank performance guarantee limit increase proposal. Meeting of the 2. Adopted the base date of distribution of cash and share Board of the 2018/6/5 dividend. Directors 3. Proposal on adjustment of each functional committee members. Board of Directors’ Adopted 2017 CSR report. 2018/8/8 Meeting Board of Directors’ N/A 2018/11/9 Meeting 1. Adopted the proposal of investment of Xiamen An Shin Food Management Co., Ltd. through AN-SHIN FOOD Board of Directors’ SERVICES (SINGAPORE) PTE. LTD. 2018/12/21 Meeting 2. Proposal for investment in catering delivery company establishment. 3. Proposal for investment in plant factory. - 71 -

General meetings of shareholders or Date Material resolutions meetings of Board of Directors 4. Adopted the Company’s 2019 operation proposal (budget). 5.Adopted the Company’s 2019 internal audit plan. 6. Proposal for amendment of “Rules for Evaluation of Performance of Board of Directors”. 7. Amendment of "Procedures for Acquisition or Disposal of Assets". 8. Adopted the “Rules for Evaluation of Performance of Officers”. 1. Adopted the amount of the Company’s 2018 distribution for Directors and Supervisors remuneration and employees’ compensation. 2. Adopted the Company’s 2018 Financial Statements and consolidated financial statements review. 3. Adopted the Company’s 2018 earnings appropriation. 4. Adopted the Chairman performance and salary structure discussion. 5. Adopted the Company’s 2018 Statement of Internal Board of Control System. Directors’ 2019/2/26 6. Review to independence and eligibility of the CPA of the Meeting Company. 7. Proposal for amendment to “Corporate Governance Best Practice Principles”. 8. Proposal for appointment of corporate governance officer. 9. Matters related to convention of 2019 ordinary shareholders’ meeting. 10. Adopted the review for acceptance period for the submission of proposal of shareholders holding more than 1% of shares of the Company. 11. Personnel employment proposal.

B. Execution of resolutions of the Company’s 2018 annual general meeting of shareholders (2018/6/5) a. Resolution: Ratification of the Company’s 2017 Business Report and Financial Statements. b. Resolution: Ratification of the Company’s 2017 earnings appropriation plan.

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Execution status: Dividends of 2017 to be distributed to shareholders were in the amount of NT$112,953,750 in cash (NT$3.5 per share). Ex-dividend date is July 2, 2018, and cash dividends was distributed on July 25, 2018.

(12) In recent fiscal year and as of the date of this Annual Report, major contents of the record or written statements made by any director or supervisor dissenting to important resolutions adopted by the Board of Directors: N/A.

(13) In recent fiscal year and as of the date of this Annual Report, circumstances regarding resignation and discharge of the chairman, president, accounting officer, financial officer, internal audit officer and officer of the research and development department: March 31, 2018 ASSUMPTIO RESIGNAT TITLE NAME CAUSE N DATE ION DATE Vice President Jun Takifuka 2012/11/16 2018/3/31 Return to Japan

5.Information about the fees for the CPA

Name of the accounting Name of the CPA CPA’s audit Notes firm period

PricewaterhouseCoopers Chih, Wu, 2018/1~2018/12 Taiwan Ping-Chun Yu-Lung

Fee item Range of fee Audit fees Non-audit fees Total

1 Less than NT$2,000,000   NT$2,000,000 2 (included)~NT$4,000,000 NT$4,000,000 3   (included)~NT$6,000,000 NT$6,000,000 4 (included)~NT$8,000,000 NT$8,000,000 5 (included)~NT$10,000,000

6 NT$10,000,000 (included) or more

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Note: NT$ 1,050,000 of non-audit fees is for audit and certification of transfer pricing report, and translation of documents related to Board of Directors’ meetings and general meetings of shareholders. Non audit fees did not reach a quarter of audit fees.

(1) Non­audit fees paid to the CPA, CPA firm and their affiliates are or more than one-fourth of the aggregate audit fees: N/A.

(2) The facts of changing the CPA Firm and the CPA fee paid in the year of change decreased from the preceding year: N/A.

(3) Decrease of the CPA fee by more than 15% compared with that in the preceding year: N/A.

6. Information about the change of the CPA: N/A.

7. The information about the Company’s chairman, President, officers in charge of financial or accounting affairs having served in the firm where the CPA serves or its affiliated enterprise in the prior year: N/A. 8. In recent fiscal year and as of the date of this Annual Report, the transfer or pledge of shares by the directors, supervisors, officers and shareholders holding more than 10% of the Company’s total issued and outstanding shares: (1) the transfer of shares by the directors, supervisors, officers and shareholders holding more than 10% of the Company’s total issued and outstanding shares: Unit: shares 2019 2018 Up to April 6 Job Title Name of the shares under Share of the shares under Share pledge Increase/ pledge Increase/Decrease Increase/Decrease Decrease Increase/Decrease Kuang Yuan Industrial Co., Ltd. - - - - Director Representative Lin, Chien-Yuan 5,000 - - Kuang Yuan Industrial Co., Ltd. - - - - Director Representative Kao, Shun-Hsing - - -

Kuang Yuan Industrial Co., Ltd. - - - - Director Representative Shirley Huang - - - - MOS Food Services, Inc. - - - - Director Representative Takifuka Jun - - - - MOS Food Services, Inc. - - - - Director Representative Fukumitsu Akio - - - - MOS Food Services, Inc. - - - - Representative Yamaguchi Shinji, Director Ando Yoshinori, Maehara Hironobu - - - - (Note 1)

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2019 2018 Up to April 6 Job Title Name of the shares under Share of the shares under Share pledge Increase/ pledge Increase/Decrease Increase/Decrease Decrease Increase/Decrease Independent Gong, Reng-Weng - - - - Director Independent Lai, Seh-Jen - - - - Director Independent Lii, Sheng­Yan - - - - Director An Tai International Investment Co., - - - - Supervisor Ltd. - - - - Representative: Fritz J. C. Jang Supervisor Huang, Mao­Hsiung - - - - Supervisor Yue, Chao-Tang - - - - President’s Kao, Shun­Hsing - - - - Office Vice Takifuka Jun (Note 2) President Vice Fukumitsu Akio President Special Assistant to Ho, Chi-Yin 1,000 - - - the Chairman Financial and Accounting Shih, Chi-Yin Officer Internal Chen, Hung-Tao Audit Officer Note1: The Company's corporate director, MOS Food Services, Inc., assigned Mr. Yamaguchi Shinji as the representative corporate director originally, and changed the representative as Mr. Ando Yoshinori on April 1, 2018. Subsequently, Mr. Maehara Hironobu was appointed to act as the director. Note 2: Dismissal on March 31, 2018 and returned to Japan.

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(2) The counterparty of the share transfer by the directors, supervisors, officers and shareholders holding more than 10% of the Company’s total issued and outstanding shares is a related party. The information about such share transfer is as follows: N/A (3) The counterparty of the share pledge by the Directors, Supervisors, officers and shareholders holding more than 10% of the Company’s total issued and outstanding shares is a related party. The information about such share pledge is as follows: Unit: shares Relationship of transaction party Reason with the Company, Sharehold Cumulativ of Date of Transaction directors, supervisors Number of ings e pledge Name change change counterparty and shareholders Shares Percentag Percentag of with shareholding e (%) e (%) pledge percentage exceeding 10% Pledge 2013/8/28 763,000 27.56 8.55 Pledge 2013/12/16 First 316,000 27.56 12.09 Kuang Commercial Yuan Pledge 2015/6/16 Bank, N/A 1,200,000 27.56 25.53 Industrial Nangang Co., Ltd. Pledge 2015/7/2 4,313,000 27.56 73.85 Redeem Branch 2015/8/5 (2,192,000) 27.56 49.29 ed

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9. Information of the top ten shareholders, being related parties, spouse or relatives within the second degree of kinship among themselves. April 7, 2019; Unit: Shares Name and relationship of the top ten Shares held by the Shares held by Shares held in the shareholders, being related parties, spouse or spouse or underage him/her/itself name of others relatives within the second degree of kinship Name children Note among themselves Number of Number Number % % % Name Relations shares of shares of shares Tong Ho Tong Ho Global Investment Kuang Yuang Global Co., Ltd is the corporate 1 Enterprise 8,925,807 27.56 0 0.00 0 0.00 N/A Investment supervisor of Kuang Yuang Co.,Ltd Co., Ltd Enterprise Co., Ltd.

MOS Food 2 8,098,464 25.00 0 00.00 0 0.00 N/A N/A N/A Services, Inc.

The chairpersons of Antai Antai Teco Capital International 3 International 2,755,680 8.51 0 0.00 0 0.00 Investment N/A Investment Co., Ltd and Investment Co., Co., Ltd. Teco Capital Investment Ltd Co., Ltd are the same. Kuang Yuang Enterprise Kuang Tong Ho Global Co., Ltd. is corporate Yuang 4 Investment 833,500 2.57 0 0.00 0 0.00 director of Tong Ho Global N/A Enterprise Co., Ltd Investment Co., Ltd Co., Ltd

Employee

Shareholding 5 814,856 2.52 0 0.00 0 0.00 N/A N/A N/A Committee

Trust Account

6 Li, Yuan-Kai 580,000 1.79 0 0.00 0 0.00 N/A N/A N/A The Chairpersons of Teco Capital Investment Co, Ltd. and An Tai International An Tai Teco Investment Co, Ltd. are the International 7 546,940 1.69 0 0.00 0 0.00 same. N/A International Investment An Tai International Investment Co., Co., Ltd. Investment Co, Ltd. is corporate supervisor of Teco Capital Investment Co., Ltd.

8 Lin, Chao-Fa 460,752 1.42 0 0.00 0 0.00 N/A N/A N/A

ATHENA 9 CAPITAL 346,000 1.07 0 0.00 0 0.00 N/A N/A N/A Management Anqing 10 Innovation Co., 307,000 0.95 0 0.00 0 0.00 N/A N/A N/A Ltd.

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10. The number of shares of an enterprise held by the Company, the Company’s directors, supervisors, officers, and the enterprises controlled by the Company directly or indirectly, and the consolidated shareholding percentage: December 31, 2017; Unit: Thousand Shares; % Investment by the directors, supervisors, officers, and the The Company’s enterprises controlled by the Aggregate investment investment Company directly or Businesses invested by the Company indirectly

Number Shareholding Number Shareholding Number Shareholding of Shares ratio (%) of Shares ratio (%) of Shares ratio (%) An-Shin Food Services (Singapore) Pte. Ltd. 7,607 40.35 9,599 50.92 17,206 91.27

Xiamen An Shin Food Management Co., － 40.35 － 50.92 － 91.27 Ltd.

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IV. STATUS OF FUNDING 1. Capital and Shares (1) Sources of Share Capital A. Types of Shares April 7, 2019; Units: Share Authorized Capital Types of Shares Issued and Notes Outstanding Shares Unissued Shares Total (Note) Common Shares 32,389,500 7,610,500 40,000,000 － Note: including 117,000 shares of treasury shares

B. Sources of share capital Units: NT$/Share

Authorized Capital Paid-in Capital Remarks

Issua Paid-in Year. nce Number of Amount of Number of Amount of properties Othe Month Sources of share capital Price Shares stocks Shares stocks other than rs cash Incorporation by Note 1990.11 10 16,000,000 160,000,000 8,000,000 80,000,000 N/A solicitation 1 Capital increase by cash of Note 1992.11 10 16,000,000 160,000,000 12,000,000 120,000,000 N/A NT$40,000 thousand 2 Capital increase by cash of Note 2006.08 10 40,000,000 400,000,000 20,000,000 200,000,000 N/A NT$80,000 thousand 3 Capitalization of earnings Note 2008.07 10 40,000,000 400,000,000 22,000,000 220,000,000 N/A of NT$20,000 thousand 4 Capitalization of earnings of NT$22,000 thousand Note 2011.09 10 40,000,000 400,000,000 24,245,000 242,450,000 Capitalization of N/A employee bonus of NT$ 5 450 thousand Capital increase by cash of Note 2012.01 166 40,000,000 400,000,000 29,445,000 294,450,000 N/A NT$52,000 thousand 6 Capitalization of earnings Note 2012.09 10 40,000,000 400,000,000 32,389,500 323,895,000 N/A of NT$29,445 thousand 7 Note 1: Date and reference number of approval for registration: The 23 November 1990 Ministry of Economics Affair Letter, Gong-Shang-Zi No. 7879. Note 2: Date and reference number of approval for registration: The 16 November 1992 Ministry of Economics Affair Letter, Gong-Shang-Zi No. 7890. Note 3: Date and reference number of approval for registration: The 16 August 2006 Taipei City Hall - 79 -

Letter, Fu-Jian-Shang-Zi No. 09582146300. Note 4: Date and reference number of approval for registration: The 15 July 2008 Taipei City Hall Letter, Fu-Chan-Ye-Shang-Zi No. 09786829200. Note 5: Date and reference number of approval for registration: The 15 September 2011 Taipei City Hall Letter, Fu-Chan-Ye-Shang-Zi No. 10087719800. Note 6: Date and reference number of approval for registration: The 10 January 2012 Taipei City Hall Letter, Fu-Chan-Ye-Shang-Zi No. 10091079810. Note 7: Date and reference number of approval for registration: The 20 September 2012 Taipei City Hall Letter, Fu-Chan-Ye-Shang-Zi No. 10187615210.

(2) Shareholding Structure

April 7, 2019 Shareholding Governm Other Foreign Financial Structure ent judicial Individual institution Total institution Quantity agency persons and foreigner Number of - - 161 14,474 28 14,663 shareholders Shareholding - - 15,415,248 8,340,760 8,633,492 32,389,500 (shares) Shareholding - - 47.59 25.75 26.66 100.00 percentage (%)

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(3)Shareholding Distribution Status 1. Common Stocks: April 7, 2019 Number of Shareholding Class of shareholding Share shareholders ratio (%) 1 to 999 13,144 86,723 0.27 1,000 to 5,000 1,277 2,102,459 6.49 5,001 to 10,000 100 749,594 2.31 10,001 to 15,000 35 435,561 1.34 15,001 to 20,000 22 401,600 1.24 20,001 to 30,000 24 594,301 1.84 30,001 to 50,000 18 728,135 2.25 50,001 to 100,000 19 1,410,056 4.35 100,001 to 200,000 11 1,496,184 4.62 200,001 to 400,000 6 1,829,640 5.65 400,001 to 600,000 2 1,126,940 3.48 600,001 to 800,000 - - - 800,001 to 1,000,000 2 1,648,356 5.09 Above 1,000,000 3 19,779,951 61.07 Total 16,663 32,389,500 100.00

2. Preferred stocks: None.

(4) List of major shareholders: The information of the top 10 shareholders and the shareholders holding 5% or more of the total number of outstanding shares: April 7, 2019 Shares Number of Shareholdin Name of major shareholders shares held g ratio (%) Kuang Yuan Industrial Co., Ltd. 8,925,807 27.56 MOS Food Services, Inc. 8,098,464 25.00 An Tai International Investment Co., Ltd. 2,755,680 8.51 Tong Ho Global Investment Co., Ltd 833,500 2.57 Employee Shareholding Committee Trust Account 814,856 2.52 Li, Yuan-Kai 580,000 1.79 Teco International Investment Co., 546,940 1.69 Lin, Chao-Fa 389,752 1.20 ATHENA CAPITAL Management 346,000 1.07 Anqing Innovation Co., Ltd. 307,000 0.95

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(5) Market price, net value, earnings, dividends per share and other relevant information for the most recent 2 years Units: NT$; Thousand Shares

Year Current year up to Item 2017 2018 March 31, 2019 (Note 5) Highest 109 89.90 72.6 Price per Lowest 75 64.50 63.9 share Average 89.47 74.49 67.66 Net asset Before distribution 53.61 54.47 － value per After distribution 50.12 Note 1 － share Weighted Before 32,273 32,273 32,273 average shares adjustment Earnings Before 5.23 4.36 － per share Earnings per adjustment share After 5.22 Note 1 － adjustment Cash dividends 3.5 3.0 － Dividends from － － － Stock retained earnings Dividends grants Dividends from per share － － － capital surplus Accumulated undistributed － － － dividends Price-to-Earnings Ratio 17.11 17.08 － (Note 2) Return on Price-to-Dividends Ratio investmen 25.56 24.83 － (Note 3) t analysis Cash dividends yield rate 3.91 4.03 － (Note 4) Note 1: The 2018 Profit Allocation Proposal has not yet be resolved at this general meeting. Note 2: Price-earnings ratio ＝ Average closing price per share in the year／Earnings per share. Note 3: Price-dividend ratio ＝ Average closing price per share in the year／Cash dividend per share. Note 4: Cash dividend yield ＝ Cash dividends per share／Average closing price per share in the year. - 82 -

Note 5: The fields of net value and earnings per share set forth are the information audited/reviewed by CPA for the most recent quarter as of the date of this Annual Report and the rest of the fields set forth are the information in the year as of the date of this Annual Report.

(6) The Company’s dividends policy and implementation A. Current Dividends policy set forth under Article 21 of the Company’s Articles of Incorporation: The dividends policy of the Company is adopted and set forth in Article 21 of the Company’s Articles of Incorporation. Should the Company have a net income for the year, the Company shall first pay taxes and then offset accumulative deficit. After offsetting the deficits, the Company shall set aside 10% of the remaining net income as legal reserve if the amount of legal reserve is not yet equivalent to the Company’s paid-up capital. Subject to the needs for business operation and relevant laws and regulations, the Company may set aside special reserve. After all the appropriations mentioned above, the Company may use the remaining to pay dividends and the board of directors may propose a profit allocation plan and submit such plan to the general meeting for approval. The Company is in the catering industry and is still in its growth phase and have a consummate financial structure. As a result, the allocation of profit not only base on “The Company Act” and “Article of Incorporation” but also depend on the Company’s capital plan and operation performance. Basically, adopt a stable and balance dividend policy. The Board of Directors drafts the profit allocation plan before the annual general meeting of shareholders regarding operation performance, financial status and capital plan. (Profits may be distributed in the form of cash dividends or stock dividends). In principle, the distribution of cash dividends should not be lower than 30% of the amount of profits for the year. Under the condition where there are no other special considerations, cash dividends should be distributed in principle, and stock dividends are not to be distributed. The distribution of cash dividends should not be lower than 50% of the earnings after tax of the current period in principle.

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B. Distribution of dividends proposed for resolution in the shareholders’ meeting of the current year: AN-SHIN FOOD SERVICES CO., LTD. Earnings distribution table 2018 Units: NT$ Item Amount Beginning undistributed earnings 359,877,289 Plus: retroactive impact 16,199,128 The determined actuarial profit and loss of the welfare plan for the current period 1,321,100 Minus: the impact of rights on the cash increment of related companies that is not (931,688) according to the shareholding ratio Sub-total 376,465,829 Net income after tax for 2017 140,649,235 Less 10% legal reserve (14,064,924) Special reserve (Note 1) (16,362,106) Retained earnings available for distribution 486,688,034 Distribution items: Shareholders dividends - cash dividends (NT$3.0/share) (96,817,500) Shareholders dividends - stock dividends - Balance of retained earnings of 2017 389,870,534 Note: 1. The reversal is made in accordance with the 16 April 2012 Financial Supervisory Commission Letter, Jin-Guan-Zheng-Fa-Zi No. 1010012865. 2. According to Taiwan Finance and Taxation No. 871941343 on April 30, 1998, the distribution of surplus should be individually conducted; the earnings in 2018 will be fully distributed as the company's 2018 annual earnings.

Note: The cash dividends are calculated on the basis of the number of shares issued and outstanding as of February 28, 2019, which is 32,272,500 shares. The actual distribution of cash dividends will be based on the shareholders and their shareholding ratios on the Company’s register of shareholders as - 84 -

of the record date.

(7) The impact of the issuance of bonus shares proposed in this general meeting upon the Company’s business performance and earnings per share (EPS): N/A.

(8) Remuneration for Employees, Directors and Supervisors: A. The percentage or scope of remuneration for employees, directors and supervisors as set forth under the Articles of Incorporation: According to Article 20 of the Company’s Articles of Incorporation, the Company shall set aside 1% to 2% of the annual profit of the year as the employee bonus, and no more than 5% as directors’ and supervisors’ remuneration. In the event of any accumulative loss incurred by the Company, loss shall be covered by the profit before employee bonus and directors’ and supervisors’ remuneration may be set aside in accordance with the percentage determined under the preceding provision. Bonus recipients may include the employees of the Company’s subsidiaries that meet certain conditions. The “annual profit” shall be the amount equal to profit before tax in the year deducting the profit made before remuneration for employees, directors and supervisors. B. The basis of estimated remuneration for employee, Directors and Supervisors in this fiscal period, the calculation basis of the remuneration for employees in the form of shares, and the accounting policy of addressing any discrepancy between the amount of actual allocation and the estimated amount. In the event any significant change happens to the distributed amount determined by the Board of Directors after the end of the year, the fees recognized for that year shall be adjusted accordingly. If the distributed amount is also changed on or before the date of the general meeting of the shareholders in the following year, such change shall be addressed as changes in accounting estimates and be recognized in the following year.

C. Information of distribution of remuneration resolved at the Board of Directors’ meeting: (A) The amount of the remuneration for employees in the form of cash or shares and that of the remuneration for Directors and Supervisors; if there is discrepancy between the estimated amount and actual distributed amount of such remuneration, the amount and reason for such discrepancy and status of addressing such discrepancy: The Company’s Board of Directors has resolved on February 26, 2019 to

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distribute NT$4,079,315 for employee remuneration and NT$8,158,631 for directors’ and supervisors’ remuneration; there’s no discrepancy from the actual distributed amount and the estimated amount of 2018. (B) The amount of remuneration for employee in the form of shares and its percentage among the aggregate amount of after-tax net income in the individual financial report and the amount of remuneration for employee: N/A. D. The remuneration actually distributed to employees, directors and supervisors in the preceding year (including number, amount and price of shares distributed); if there is discrepancy between the actual distributed remuneration and the remuneration recognized, the amount and reason for such discrepancy and status of addressing such discrepancy: Units: NT$ Cause of Estimated 2018 Shareholders’ difference Items amount for Difference 2017 meeting explanation and handling Employees’ 4,587,021 4,587,021 - N/A Remuneration Remuneration 9,174,044 9,174,044 - N/A of Directors

(9) Stocks repurchased by the Company: April 7, 2019 Repurchase number First time Purpose of re-purchase Transferred to employees Actual repurchase period August 29, 2016 to October 7, 2016 Repurchase price range NT$57.5 to NT$112.6 per share Quantity and type of shares repurchased Common stocks for 117,000 shares Amount of shares re-purchased NT$10,123,229 Quantity of shares cancelled and Not Applicable transferred Accumulated number of company’s Common stocks for 117,000 shares shares held Ratio of accumulated number of company’s shares held over 0.36% total number of outstanding shares (%)

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2. Issuance of corporate bonds: N/A. 3. Issuance of preferred stock: N/A. 4. Issuance of overseas depository receipts: N/A 5. Issuance of employee stock options: N/A 6. Issuance of employee restricted shares: N/A. 7. Issuance of new shares for mergers and acquisitions: N/A. 8. Implementation of capital utilization plan: The Company has no pending capital utilization plan or capital utilization plan completed in the past three years whose benefit has not yet materialized.

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V. OPERATING HIGHLIGHTS 1. Business Activities (I) Scope of Business A. Principal Business Activities Our principal business activities are fast food restaurant chains operations with an established brand name “MOS BURGER” (Chinese brand name: 摩斯漢堡). The chains located in every appropriate district are all directly owned and operated by the Company. Each chain provides all kinds of products, including hamburgers, desserts, soup, drinks, etc., for dine-in or takeout services. B. Information of Branches Name Address Telephone: The Company 8F, No.156­1, Sung Chiang Road, Taipei,104, Taiwan, (02) 2567-5001 (headquarter) (R.O.C.) Xin-sheng S. Rd. F., No.161­1&2, Sec. 1, Xin-sheng S. Rd., Da-an Dist., (02) 2755-6440 Branch Taipei City 106, Taiwan (R.O.C.) Jin-shan S. Rd. 1F., No.121, Sec. 2, Jin-shan S. Rd., Da-an Dist., Taipei (02) 2394-5709 Branch City 106, Taiwan (R.O.C.) 1F., No.85, Tian-mu N. Rd., Shi-lin Dist., Taipei City Tian-mu Branch (02) 2871-1462 111, Taiwan (R.O.C.) Min-sheng E. Rd. 1F., No.114, Sec. 4, Min-sheng E. Rd., Song-shan Dist., (02)2718-6375 Branch Taipei City 105, Taiwan (R.O.C.) 1&2 F., No.44, Sec. 3, Xinglong Rd., Wenshan Dist., Xinglong Branch (02) 2930-6977 Taipei City 116, Taiwan (R.O.C.) 2F., No.123, Sec. 3, Bade Rd., Songshan Dist., Taipei Bade Branch (02) 2579-3650 City 105, Taiwan (R.O.C.) 1F., No.70, Sec. 1, Anhe Rd., Daan Dist., Taipei City Anhe Branch (02)2705-6427 106, Taiwan (R.O.C.) Changan W. Rd. 1 & 2F., No.219, Changan W. Rd., Datong Dist., Taipei (02) 2549-2749 Branch City 103, Taiwan (R.O.C.) 1F., No.237, Sec. 1, Daan Rd., Daan Dist., Taipei City Daan Branch (02) 2703-9611 106, Taiwan (R.O.C.) Kaohsiung 1F., No.293, Zhongshan 1st Rd., Xinxing Dist., (07) 287-5800 Zhongshan Branch Kaohsiung City 800, Taiwan (R.O.C.) 1F, No. 258, Section 2, Beixin Road, Xindian District, Beixin Branch (02) 8665-9030 New Taipei City 1F and 2F, No. 11, No. 37, Section 4, Renai Road, Daan Renai Branch (02) 2771-9370 District, Taipei City Zhongshan North 1F, No. 9 and 1F, No. 9-1, Section 2, Zhongshan North (02) 2581-4070 Road Branch Road, Zhongshan District, Taipei City Zhongcheng Branch 1F, Zhongcheng Road, Shilin District, Taipei City (02) 2833-5867 1st Floor, No. 27, Jilin Road, Zhongshan District, Taipei Jilin Branch (02) 2531-3938 City 1F, No. 42-1, Zhongyang North Road, Beitou District, Zhongyang Branch (02) 2896-0937 Taipei CIty 1F and 2F, No. 140, Linsen North Road, Zhongshan Linsen Branch (02) 2581-8390 District, Taipei City

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Name Address Telephone: 1F, No. 552, Guangfu South Road, Daan District, Taipei Guangfu Branch (02) 2701-3321 City 1F, No. 202, Section 4, Chenggong Road, Neihu Neihu Branch (02) 8792-2570 District, Taipei City 1F, No. 19-8, Sanchong Road, Nangang District, Taipei Nangang Branch (02) 2655-1873 City 1F and 2F, No. 199-1, Zhulin Road, Yonghe District, Zhulin Branch (02) 8927-4351 New Taipei City 1F, No.71 and 73, Zhongcheng Road, Yonghe District, Zhiguang Branch (02) 8668-9580 New Taipei City Keelung Renren 1F and 2F, No. 216, Renren 2nd Road, Yutian, Renai (02) 2429-2723 Branch District, Keelung City 1F, No. 177, Zhengyi North Road, Sanchong District, Zhengyi Branch (02) 2971-4468 New Taipei City Zhongshan North 1F, No. 76, Section 2, Zhongshan North Road, (02) 2531-7881 Road Second Branch Zhongshan District, Taipei City Jixiang Branch 1F, 59 Jixiang Road, Songshan District, Taipei City (02) 2749-2192 1F, No. 586, Beian Road, Zhongshan District, Taipei Beian Branch (02) 8509-7815 City Hsinchu Chinghua 1F and 2F, No. 306, Section 2, Guangfu Road, Jungong (03) 572-5083 Branch Village, Hsinchu City 1F, No. 1, Alley 7, Lane 113, Section 3, Minsheng East Xihua Branch (02) 2546-8362 Road, Songshan District, Taipei City 1F, No. 191, Jingxing Road, Wenshan District, Taipei Jingxing Branch (02)8932-1156 City Zhongxiao Second 1F, No. 132, Section 2, Zhongxiao East Road, (02) 2392-4364 Branch Zhongzheng District, Taipei City 1F, No. 63, Section 5, Chenggong Road, Neihu District, Kanglin Branch (02) 2633-8221 Taipei Kaohsiung Wenhua 1F, No. 1-13, Youth One Road, Lingya District, (07) 715-6147 Branch Kaohsiung City Danshui Zhuwei 1F and 2F, No.1, Zhuwei Minzu Road, Danshui District, (02) 8809-7012 Branch New Taipei City 1F, No. 2, No. 156, Songjiang Road, Zhongshan Songjiang Branch (02) 2562-6855 District, Taipei City Tianmu East Raod 1F, No. 21 Tianmu East Road, Shilin District, Taipei (02) 2874-5970 Branch City 1F, No. 38, Gongyuan Road, Zhongzheng District, Gongyuan Branch (02) 2382-5729 Taipei 1F, No. 120, Zhongshan Road, Zhongshan Village, Zhongli Branch (03) 426-2473 Zhongli District, Taoyuan City 1F, No. 1, Lane 155, Dunhua North Road, Songshan Dunbei Branch (02) 2514-9424 District, Taipei City Taichung Zhonggang 1F, No. 300, Section 1, Zhonggang Road, West District, (04) 2329-6813 Branch Taichung City Tainan Jiankang 1F, No. 173, Section 1, Jiankang Road, South District, (06) 213-4635 Branch Tainan City Tainan Chenggong 1F and 2F, No. 21 and 21-1, Chenggong Road, Zhong (06) 222-3517 Branch District, Tainan City Taichung Daye 1F, No. 182, Daye Road, Nanxun District, Taichung (04) 2310-1593 Branch City Taoyuan Hsinfu No 472, Zhongshan Road, Guangxin Village, Taoyuan (03) 331-5415 Branch District, Taoyuan City Nangang Kuenyang 1F, No. 444, Section 6, Zhongxiao East Road, Nangang (02) 2654-8153 Branch District, Taipei City - 89 -

Name Address Telephone: 1F and 2F, No. 170, Section 3, Muxin Road, Wenshan Muxin Branch (02) 2234-9426 District, Taipei City Minquan East Road 1F, No. 5, Sec. 3, Minquan East Road, Songshan (02) 2515-7086 Branch District, Taipei City 1F, No. 233 and No. 235, Section 3, Roosevelt Road, Roosevelt Branch (02) 3365-2482 Daan District, Taipei City Danshui Wanxi 1st Floor, No. 35 Zhongzheng East Road, Danshui (02) 2626-1487 Branch District, New Taipei City Yonghe Dingxi 1F, No. 2, No. 239, Section 2, Yonghe Road, Yonghe (02) 2926-7265 Branch District, New Taipei City Banqiao Guanqian 1F, No. 60, Guanqian East Road, Banqiao District, New (02) 8964-1324 Branch Taipei City 1F, No. 291 and No. 293, Zhongzheng Road, Luzhu Taoyuan Nankan (03) 312-2306 District, Taoyuan City Fuxing South Road 1F, No. 47, Lane 151, Section 2, Fuxing South Road, (02) 2705-8524 Branch Daan District, Taipei City Xingzhuang Wuquan 1F, No. 42, Wuquan 1st Road, Xinzhuang District, New (02) 2299-2263 Branch Taipei City Kaohsiung Yocheng 1F, No. 612, Youchang Street, Goucheng Village, (07) 364-1361 Branch Nanxun District, Kaohsiung City Taipei Chongqing 1F, No. 271, Section 3, Chongqing North Road, Datong (02) 2598-3446 Branch District, Taipei City Taichung Xueshi 1F, 300 Xueshi Road, North District, Taichung City (04) 2235-6576 Branch 1F, No. 171, Section 1, Xintai 5th Road, Xizhi District, Xizhi Taiwu Branch (02) 2691-9967 New Taipei City Xinzhuang 1F, No. 256, Zhongping Road, Xinzhuang District, New (02) 2996-0737 Zhongping Branch Taipei City Banqiao Xinpu 1F, No. 302, Section 1, Wenhua Road, Banqiao District, (02) 8251-3892 Branch New Taipei City 1F, No. 451-1, Jingguo Road, Taoyuan District, Taoyuan Jingguo (03) 357-9437 Taoyuan City 1F No. 547, Zhongshan Road, Zichi Village, West Chiayi Branch (05) 224-9576 District, Chiayi City 1F, No. 793, Section 1, Zhongshan Road, Zhongshan, Yuanlin Branch (04) 837-0477 Yuanlin Town, Changhua County 1F, No. 1, Kongmen Road, Changhua City, Changhua Changhua Branch (04) 728-8670 County 1F, No. 82, National Road, Pingtung City, Pingtung Pingtung Branch (08) 733-9521 County 1F, No. 629, Section 5, Zhongxiao East Road, Songshan Songshan Branch (02) 8785-2550 District, Taipei City Daliqian Branch 1F, 52 Wufu 3rd Road, Qianjin District, Kaohsiung City (07) 221-2037 Yonghe Yongan 1F, 463 Zhonghe Road, Yonghe District, New Taipei (02) 2921-4334 Branch City Xinzhuang 1F, No. 319 Zhonggang Road, Xinzhuang District, New (02) 2996-6948 Zhonggang Branch Taipei City 1F, No. 44, Section 1, Nanchang Road, Zhongzheng Nanchang Branch (02) 2394-4845 District, Taipei City Taichung Wenxin 1F, No. 310, Section 3, Wenxin Road, Xituan District, (04) 2315-4056 Branch Taichung City Tainan Chongxue 1F, No. 94, Chongxue Road, Chongxue Village, East (06) 335-2882 Branch District, Tainan City 1F, No. 100, Lane 39, Section 1, Shipai Road, Beitou Shipai Park Branch (02) 2820-6646 District, Taipei City - 90 -

Name Address Telephone: Kaohsiung 1F, No. 122 Zhongzheng 1st Road, Lingya District, (07) 716-0246 Zhongzheng Branch Kaohsiung City Chongqing South 1F, No. 125 and No. 127, Section 1, Chongqing South (02) 2388-7994 Road Branch Road, Zhongzheng District, Taipei City Minsheng Second 1F and 2F, No.184, Section 5, Minsheng East Road, (02) 2765-6127 Branch Songshan District, Taipei City B1, No. 37, Lane 151, Section 4, Renai Road, Taipei Mingyao Branch (02) 2771-2769 City Minquan West Road 1Fr, No. 25, Minquan West Road, Taipei City (02) 2595-8139 Branch 1F, No. 42, Cingnian Road, Wanhua District, Taipei Cingnian Branch (02) 2305-5352 City Nangang Second 2F-9, No. 3, Yuanchu Street, Taipei City (02) 2785-8441 Branch Shuanglian Branch 1F, No.77, Minsheng West Road, Taipei City (02) 2557-4822 Heping East Road No. 278, Section 1, Heping East Road, Taipei City (02) 3365-3341 Branch No. 59, Lane 81, Section 2, Dunhua South Road, Taipei Dunnan Branch (02) 2708-0561 City Fulin Branch 1F, No. 189, Fulin Road, Shilin District, Taipei City (02) 2832-2056 Hsinchu Zhongzheng 1F, No. 92, Zhongzheng Road, Yudong District, (03) 524-6947 Branch Hsinchu City 1F and 2F, No. 80, Section 1, Zhonghua Road, Taipei Zhonghua Branch (02) 2371-1572 City Shimao Branch No. 22, Section 2, Keelung Road, Taipei City (02) 8786-7892 No. 187 and No. 187-1, Section 2, Shuangshi Road, Shuangshi Branch (02) 2254-0992 Banqiao District, New Taipei City Highspeed Rail No. 6, Section 1, Gaotie North Road, Zhongmu District, (03) 261-1200 Taoyuan Branch Taoyuan City Highspeed Rail No. 6, Gaotie 7th Road, Zhubei City, Hsinchu County (03) 611-1600 Hsinchu Branch Highspeed Rail No. 8, Sanlinzhanchu 2nd Road, Sanhe Village, Wun (04) 3600-9039 Taichung Branch District, Taichung City Highspeed Rail No. 168, Gaotie West Road, Taiao Village, Taibao City, (05) 310-6008 Chiayi Branch Chiayi County Highspeed Rail No. 100, Guiren Avenue, Shalun Village, Guiren (06) 600-8805 Tainan Branch District, Tainan City Kaohsiung Zuoying No. 105, Gaotie Road, Zuoying District, Kaohsiung (07) 960-7997 Branch City No. 730, Section 6, Zhongshan North Road, Yulu Shidong Branch (02) 2876-7476 Village, shilin District, Taipei City Donghai Branch No. 1, Xinxing Road, Longjing District, Taichung City (04) 2652-5171 Kaohsiung Ziyou 1F and 2F, No. 351 and 1F, No. 353, Ziyou 2nd Rd., (07) 550-6809 Branch Zuoying Dist., Kaohsiung City Sanchong Chongxin No. 104, Section 1, Chongxin Road, Sanchong District, (04) 2652-5171 Branch New Taipei City Kanghua Branch 1F, No. 274, Songsongjiang Road, Taipei City (02) 2531-0561 Xindian District 1F, No. 131 and No. 131-1, Section 1, Beixin Road, (02) 2917-9642 Office Branch Xindian District, New Taipei City Nangang Exhibition No.1, Jingmao 2nd Road, Nangang District, Taipei City (02) 2783-4138 Hall Branch Zhongli Jiuhe Branch No. 25, 27, 29 and 31, Jiuhe Street, Zhongli District, (03) 280-7942 - 91 -

Name Address Telephone: Taoyuan City

Nandong Branch 1F, No. 116, Section 3, Nanjing East Road, Taipei City (02) 2508-0365 Zhubei Hsinzheng 1F, No. 147, Zhengjiu Road, Zhubei Road, Hsinchu (03) 558-6139 Branch County Linkou Fuxing 1F and 2F, No. 156, Fuxing 1st Road, Guishan District, (03) 318-7214 Branch Taoyuan City 1F, 80 Zhongzheng Road, Fengyuan District, Taichung Fengyuan Branch (04) 2515-8276 City Sandao Temple 1F, No. 178, Section 1, Zhongxiao East Road, (02) 2351-2809 Branch Zhongzheng District, Taipei City Sandao Temple B1, No. 178, Section 1, Zhongxiao East Road, (02) 2351-2809 Second Branch Zhongzheng District, Taipei City Tainan Dongning No. 59, Dongning Road, East District, Tainan City (06) 209-4600 Branch Zhongli Huanzhong No. 286 and 288, Section 2, Huanzhong East Road, (03) 465-8063 Branch Zhongli District, Taoyuan City Gezhi Branch 1F, No. 59 Gezhi Road, Shishilin District, Taipei City (02) 2861-6238 Taoyuan Art and 1F, No. 1121, Zhongzheng Road, Taoyuan District, (03) 356-4005 Cultural Plaza Branch Taoyuan City Taichung Gongyi No. 497, Section 2, Gongyi Road, Weinan District, (04) 2251-4842 Branch Taichung City Naihu Yatai Branch 1F, No. 80, Ruihu Street,i Neihu District, Taipei City (02) 2657-4650 No. 119 and 121, Zhongzheng Road, Neighborhood 5, Longtan Branch (03) 489-9564 Zhongshan Village, Longtan District, Taoyuan City Minquan Linsen 1F and 2F, No. 76, 2F-1, No. 76 and 1F, No. 78, Section (02) 2562-7057 Branch 1, Minquan East Road, Zhongshan District, Taipei City Luzhou Evergreen No. 21, Changrong Road, Luzhou District, New Taipei (02) 2848-8020 Branch City No. 318, 320 and 2F, No. 320, Jingxin Street, Zhonghe Nanshigiao Branch (02) 2940-8956 District, New Taipei City No. 45, Minquan Road, Xindian District, New Taipei Dapinglin Branch (02) 8665-4643 City 1F, No. 102, Section 1, Zhongshan Road, Shulin Shulin Branch (02) 2684-5428 District, New Taipei City No. 712, 716 and 722, Xuecheng Road, Shulin District, Gezhi Branch (02) 2680-0481 New Taipei City Beitou Guangming 1F and 2F, No. 212, Guangming Road, Beitou District, (02) 2892-4254 Branch Taipei City No. 34, Lane 513, Ruiguang Road, Neihu District, Ruiguang Branch (02) 2658-7224 Taipei City Douliu Branch 2F, No. 13, Datong Road, Douliu City, Yunlin County (05) 537-0849 Nanjing Guangfu No. 27, 29 and 27-2, 29-2, Section 5, Nanjing Road, (02) 3765-3436 Branch Songshan District, Taipei City No. 195, Section 4, Zhongxing Road, Zhudong Town, ITRI Branch (03) 591-0438 Hsinchu County Taichung Chongde No. 326, Section 2, Chongde Road, Beibei District, (04) 2241-3850 Second Branch Taichung City Taichung Yongchun 1F and 2F, No. 820, Yongchun East Road, Nanxun (04) 2380-3655 Branch District, Taichung City No. 71, Section 2, Zhinan Road, Wenshan District, NCCU Zhinan Branch (02) 8661-7124 Taipei City Shih Chien University 1F, No. 59, Dazhi Street, Zhongshan District, Taipei (02) 8509-3529 - 92 -

Name Address Telephone: Branch City Hsinchu Guanxin 1F, No. 51, Guanxin Road, Hsinchu City (03) 579-4822 Branch Wuxing Street Branch No. 243, Wuxing Street, Xinyi District, Taipei City (02) 2729-4742 Taichung Fuxing 1F and 2F, No. 439, Section 1, Fuxing Road, Southern (04) 2260-5021 Branch District, Taichung City Xinyi Tonghua 1F, No. 304, Section 4, Xinyi Road, Daan District, (02) 2754-2189 Branch Taipei City Neihu Gangxian 1F and 2F, No. 637, Section 1, Neihu Road, Neihu (02) 2627-8733 Branch District, Taipei City 1F and 2F, No. 31, Zhulin Road, Linkou District, New Linkou Zhulin Branch (02) 2603-2594 Taipei City Tucheng Jincheng 1F, No.58, Section 3, Jincheng Road, Tucheng District, (02) 2264-1152 Branch New Taipei City Fengshan Qingnian No. 317-1, Section 2, Qingnian Road, Fengshan (07) 767-6824 Branch District, Kaohsiung City Tucheng Yongning 1F and 2F, No. 84 and 86, Section 3, Central Road, (02) 2269-2982 Branch Tucheng District, New Taipei City Sanchong Hsuhui 1F and 2F, No. 408, Section 4, Sanhe Road, Sanchong (02) 8287-3250 Branch District, New Taipei City Taichunggang No. 116-5 and 116-6, Section 3, Taichunggang Road, (04) 2463-9753 Chengchin Branch Xitun District, Taichung City

(3) Main products and consolidated operating percentages thereof: Unit: In Thousands New Taiwan Dollars; % 2017 2018 Year Amount of Percentage Amount of Percentage Items stocks (%) stocks (%) Main meals 2,419,962 49.20 2,596,594 49.44 Snacks 1,121,763 22.80 1,193,057 22.72 Soups 1,189,715 24.18 1,260,596 24.00 Others 187,872 3.82 201,857 3.84 Total 4,919,312 100.00 5,252,104 100.00

(4) Present products of the Company: The business model of the Company is to provide various types of meals of hamburgers, hot dogs, sandwiches, salads, desserts and soups, drinks etc. Presently, the product categories and main product items manufactured and provided are as follows: Product type Main product Main meals Hamburger, rice burger, hot dog, sandwich, cakes...etc. Nuggets, fried chicken, fries, salad, konnyaku, deserts, ice Snacks cream ...etc. - 93 -

Soups and Hot drinks, cold drinks, juice, milk, soup, coffee...etc. drinks Others Gift box, souvenir, MOS card...etc.

(5) New products for recent development launch and project development Products are essential criteria to brand image, and the lifetime of products are the keystone of the brand. Each year, the Company establishes meal product development and launch plan, and sequentially launches new products timely and seasonally, in light of maintaining the richness and diversity of meals, such that customers are able to taste fresh flavors. With the effort of the product development team, in 2018, the Company consecutively developed and launched new main meals and breakfast products – bacon pork burger, red curry pork seafood burger, Jilipingan beef burger, coe roe salmon seafood burger, MOS meat and seafood burger, Italian pork seafood burger, lemon fruit chicken burger, yellow curry chicken seafood burger, tuna and squid seafood burger (original, wasabi), peanut roast chicken burger, apple pork burger, mushroom omelet burger; deserts, such as fries with dipping sauce , curry onion rings, Japanese pork yam salad, Hokkaido pumpkin croquette, peach konnyaku, litchi konnyaku, chocolate cake, chocolate brownie, purple yam rice cake; drinks, including island ice tea, island fruit, perilla bubble drink, perilla konnyaku ice tea etc. hand-made drinks, Kagoshima tea, Ceylon red tea, hot cocoa, milk tea, hot brown sugar latte coffee, ice brown sugar konnyaku au lait, caramel popcorn latte coffee, Peru coffee. To cope and satisfy greater expectation of customers, the Company will head toward the following direction to develop new concepts of meals and products: ①Main meals- Select and use current season fresh ingredients, localize traceable product selection, select ingredients with balanced health and nutrients, strengthen Taiwan local ingredients (rice, traceable vegetables and fruits), development of relevant meals and products of Taiwanese or Japanese traditional flavors and integrated with living culture, and the launch period is 1~2 months as one session. ②Snacks - Different fried snacks combination, sweets products, seasonal salads meals etc., and strengthen and cultivate toward the concept of healthy and light burden concept for the development. ③Soups and drinks - development of flavored coffees, ice and flavored summer healthy cold drinks, hot drinks and delicious winter soups. ④Others - Holiday gift box (traditional holidays, including Chinese New Year, Dragon-boat festival, Moon festival, Christmas etc.), general gifts and portable gifts. (II) Industry Overview (1) Industry Current Status and Development Due to the trend and impact of the change of the social environment, increase of general public income, great number of females entering workplaces and consumers’ greater emphasis on recreation, eat-outs have become the main trend for a lot of office workers or students, and some even have their night snacks outside as well. In

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addition, as the population of each household in the region of Taiwan decreases year after year, small families often adopt the method of eat-outs meals for the purpose of convenience. Consequently, the population of eat-outs increases continuously and is indirectly driving the rapid development of the present eat-out market. According to the Department of Statistics, MOEA, the statistical data of the domestic consumption commercial overall revenue in the most recent three years indicates (Table 1), the overall commercial revenue in 2016 was -0.63%, an annual decrease and is relatively slower compared to the previous year; however, the retail and catering industries still showed growth, and especially, the catering industry showed a growth of 3.62%. In 2017, the catering industry revenue was NT$ 452.3 billion, a new high over the past years, and an annual increase of 2.9%. In 2018, the overall commercial revenue average growth was 3.5%. Table 1. Commercial revenue trend statistical table Unit: In Thousand Million New Taiwan Dollars; % Year/Item 2016 2017 2018

Growth Growth Growth Business Revenue Revenue Revenue type rate rate rate Commercial 140,813 -0.63 146,176 3.8 151,284 3.5 Wholesale 95,451 -1.86 100,202 5.0 103,788 3.6 Retail 40,968 1.90 41,451 1.2 42,765 3.2 Catering 4,394 3.62 4,523 2.9 4,731 3.5 Source of information: Department of Statistics, MOEA (2018~2016) In view of the revenue performance of the catering industry over the past decade, according to the statistical data of the Department of Statistics, MOEA (Table 2), since the end of 2007, due to the financial crisis caused by the secondary mortgagee in US, the global economic development as significantly damaged, and Taiwan was also affected such that for five consecutive quarters, the GDP in Taiwan had shown decays. In addition, in 2009, according to the information of the Directorate-General of Budget, Accounting and Statistics, Executive Yuan, the annual average unemployment rate also reached the population of 639 thousand people, a record high from the past, and the main industries being affected directly were related to the domestic demand markets. This was mainly due to the decrease of the consumption willingness of consumers, such that the Taiwanese government once adopted policies and strategies to improve the domestic demand market and issued the consumption coupons and opened the tourism from Mainland China. in order to stimulate the purchases in the domestic demand market. Therefore, from the statistical data, the catering industry benefited from the policies for consumption, and the overall revenue in 2008 demonstrated the growth trend with a continuous increase to reach NT$ 5.7 billion. In recent years, due to the change in the economic structure and living style, the - 95 -

population of eat-outs and the number of tourists visiting Taiwan are increasing gradually, and the general public’s recreation trend is becoming popular, along with the new brands and continuous expansion of stores by the chain catering businesses as well as the food culture marketing, consequently, the revenue of catering industry has demonstrated stable growth trend, and the catering industry revenue in 2018 has reached NT$473.1 billion, a record high from the past years, with an annual increase of 4.6%. Table 2. Catering industry revenue Unit: In Thousand Million New Taiwan Dollars; % Catering Beverage Year Catering Others industry stores 97 3,217 2,713 360 143 98 3,218 2,717 358 143 2010 3,448 2,916 379 152 100 3,721 3,167 397 157 2012 3,855 3,285 409 160 102 3,915 3,308 442 165 103 4,129 3,492 459 179 2015 4,241 3,587 473 181 2016 4,394 3,720 491 183 106 4,523 3,829 509 185 107 4,731 4,004 538 190 Source of information: Department of Statistics, MOEA The Company provides the service of “Fastfood Catering.” In addition to providing a variety of meal selections to customers, the Company also strengthens the development of meal product differentiation and distinction, such that the products of the Company are different from conventional American fast food and eat-out products. To satisfy the customers’ demand for convenient and fast meals, the Company also upholds the principles of freshness, healthy and natural. The Company is devoted to providing a balanced diet to customers in order to implement the spirit and business philosophy sought by the brand. Among the fast food catering industry’s severe competition, the Company is able to establish the brand characteristics of “healthy and Safe,” such that the Company has successfully established the brand competition advantage. In addition, as the consumers’ awareness in healthy diet increases, health catering will have a high development potential in the future.

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(2) Correlation among upstream, midstream and downstream in the industry Upstream Midstream Downstream Food raw material sand Research/development Various fast food ingredients, agricultural and manufacturing of chain sales channels and fishery products, food and drinks packaging material supply Such as: rice cake, bread, Such as: rice, flour, meat, toast, nuggets, various eggs, vegetables, sources, coffee coffee beans, dairy products, relevant packaging materials etc.

(3) Various development trends of products The change of consumption trend is closely related to the strategy of the business development of the industry. After the economic development, people emphasize on the pursuit of natural health and food safety; consequently, the meal product development also heads toward the development direction of health and safety. In recent years, the meal product development of fast food industry and the following trends need to be observed closely: ①Emphasis on food health and safety is the priority: In recent years, the food health and safety issues, including the issues of melamine toxic milk powder, infected pork, mad cow disease, clenbuterol and deteriorated oil and plasticizer, while having the doubts on” where the beef comes from,” “whether or not the pork is safe,” “oil is safe,” etc. , they tend to choose to stop their consumption, such that the food industry suffers from losses due to declining sales. How to overcome the doubts of consumers and to increase their confidence in consumption will be key subjects to catering business operators. ②Natural and health diet are gaining popularity: As the modern people seek fast and convenience, they also tend to focus on the concept of nutrients and health etc., such that the demand for products that are of high fiber, low fat, low salt and organic food as well as vegetarian food increases. Consumers also care about the nutrients of meals more. ③High acceptance to foreign taste products: Under the influence of the factors of international trend, tourism popularity and network information etc., consumers have higher acceptance to foreign cuisine, and the taste of domestic consumers also become more diverse. Fastfood operators launch various meals of foreign taste for consumers’ selection.

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④Closer integration with culture Diet is an important part of living culture, and if the products provided by catering operators match with the living of consumers, feedbacks from consumers can be received. The use the local food ingredients and memorable tastes etc. can all induce resonance from the consumers. Today, to cope with the “service economy” industry ecology of the domestic demand market, in terms of the service value expected by consumers, and from the induced consuming power and increase of consumption willingness, for the future development of the domestic chain fast. food catering industry, the following consumption trends shall be monitored: A. Strong demand for low prices The consumers’ demand for low price shall be continuously considered, and for “diet”, such daily needs, price is a necessary consideration. A lot of discount activities have been generated under such demand, such as the breakfast meal at coin price, lunch set with long-term discount, and long-term discount at any period of time etc. B. Active social network becomes the consumption information platform Due to the rapid development and usage of smartphones, social network has become an important information platform. The fans club of brand management continues to growth, and its importance and readiness have surpassed the traditional company’s website, and the information on consumer have also shiftred to the social network. C. Attention on service detail Due to the demand for speed, service detail may be missed out. To allow consumers to notice the care of the personnel service again, quality service quality can provide such care feel to customers, which also becomes an important lesson to the fastfood catering industry. D. Recognition of brand value In addition to the favorite meals, another focus in the selection of consumer is the “brand recognition”. When the image, demand of the consumption brand match with the ones of the consumers, the distance between the consumers and the brand can be shortened, such that a sense of recognition can be generated, which is further reflected in the consumption choice. The western style fast food catering service industry is facing severe competition from various catering businesses, and it values personnel training, strengthen product competitiveness, focus on food health and safety, fulfilment of corporate citizen responsibility, integration with the society, establishment of brand trust, strengthening of brand image, thereby satisfying the expectation of consumers on the brand, in order to allow an enterprise to be at a leading position.

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(4) Various competitions of products The overall revenue growth of the fast food industry indicates that the meals of competitive price of the fast food industry are still popular under the price consideration of consumers; however, the competition among fast food catering operators is still severe. Facing the severe competition in the market, the Company still upholds the brand spirit without engaging in the market price reduction competition but focuses on the improvement of product quality, development of new products, flexible adjustment in product combination, in order to provide more diverse choices to customers. In addition, the Company is devoted to the control of food ingredient selection and quality in order to allow customers to have secured and safe diet, thereby maintaining the competition advantage. Furthermore, in terms of the management of the dining environment, the Company seeks the “Fast Casual” demand with the use of natural and warm themes to separate from the market. In addition, the stores also provide comfortable sofa, personal seats etc. in order to allow customers to feel relaxed and warmth about the dining environment. The Company provides innovative and care services to satisfy the modern consumption awareness of “Slow diet, Active living” such that the Company is able to successfully gain a market share in the fast food industry. (3) Technology and research and development status (1) Technology level and research and development of business operation The development of products focuses on health, fresh and delicacy, quality selected ingredients, and the commitment in the fresh, healthy and delicious for each taste in order to satisfy the consumer market demands. The use of seasonal ingredients, traceable products and strengthened local ingredients in Taiwan, development of theme or cultural integration related products, in order to attract consumer groups. The Company assigns outstanding employees to participate in overseas training in order to learn relevant products, products or service related knowledge and experience, thereby providing references related to service technology and product development of the Company. In addition, the Company also assigns personnel to conduct domestic and foreign market surveys irregularly in order to survey the market consumption trend, relevant information on the products of the same industry and software/hardware etc., in order to be used as reference for the internal development improvement of the Company. Regarding the research and development process, the Company confirms the research and development directions for next year annually. The product research and development personnel propose the innovative concepts and discuss with relevant suppliers, including product concept, specification, ingredient use, cooking

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method, sanitary quality demand and cost range etc., followed by the suppliers performing sample development for the required food. After the sample is completed, the research and development personnel to perform combination and flavor test, where the concept development product ratio is 9 (the Company): 1 (contractor). The external main assisting units and suppliers, including the Magic-Food industry Corporation, F company (pastry), C company (pastry), D company (pastry), E company (pastry), G company (sources), E company (sources), H company (sources), E company (desert, salads and flavored drinks), V company (soups) and L company (fresh juice and sweets), B company (fresh juice and sweets) (2) Annual research and development expense for the most recent five years Unit: In Thousands New Taiwan Dollars; % Year 2014 2015 2016 2017 2018 Item Research and development 5,550 5,666 5,897 5,765 6,024 expense Consolidated net operating 4,252,752 4,424,550 4,663,585 4,919,312 5,252,104 revenue Percentage of research and development expense to 0.13% 0.13% 0.13% 0.12% 0.11% consolidated revenue

(3) Technology or product developed successfully The specific important product development and outcome of the Company in the most recent five years are as follows: Product Year Item type Hokkaido croquette, smoked beef burger, smoked beef sandwich, Tata source fish burger, Australian beef burger, Main pizza hot dog, Javanese beef seafood burger, tomato beef meals burger, Thai style chicken burger, mango curry chicken burger, Osaka seafood burger, Korean BBQ seafood burger, 2014 fried shrimp seafood burger Coffee chocolate mousse, green tea mousse, pumpkin brulee, MOS Snacks caramel brulee, tiramisu, dakwaz, lemon citronella nuggets, Japanese port salad, strawberry konnyaku Soups and Original sour soda, mango soda, litchi konnyaku ice team, litchi drinks bubble drink, raspberry bubble drink, apple hot tea, fresh flower

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Product Year Item type tea, pork and vegetable soup, hot green tee cappuccino 2015 annual magazine, sharing bag for two, 4 MOS cards, desert Others gift box, insulation cups (red/white) Fried shrimp seafood burger (Chinese deep fried flavor), sakura shrimp seafood burger, Japanese sweet beef burger, sesame pork egg burger, French stew hot dog, Italian pizza hot dog, smoke chicken burger, apple turkey sandwich, fresh fruit beef seafood Main burger, berry bee burger, orange pork burger, Japanese beef egg meals burger, green curry chicken seafood burger, red sasa chicken burger, grilled halibut seafood burger, Osaka seafood burger, fried shrimp burger, cheese pork burger, mushroom beef burger, cheese turkey focaccia, stew mushroom and egg seafood burger Fish nuggets, green tea red beam pie, fired sweet potato, chicken nugget with sweet potato set, strawberry mousse, milk rice pudding, mango mousse, pomegranate konnyaku, Hokkaido sesame sweet 2015 Snacks potato croquette, sausage with bone, MOS peach turkey salad, black/white rick cake, chestnut brownie, Brittany cake, square hashbrown, MOS tiramisu, orange konnyaku Fresh flower tea, floating strawberry milk tea, strawberry red tea, floating coco au lait, floating green tea au lait, mango pineapple Soups and konnyaku ice tea/bubble drink, black currant konnyaku iced drinks tea/bubble drink, MOS orange combinational juice, toffee nut latte, peach hot tea, pork and vegetable soup, cream and clamp soup Corn soup coco house, MOS Card sakura borard, MOS Card hibiscus flower version, Japanese source, MOS peach jam, MOS Others pillow, MOS notes, MOS coffee beam, coffee mugs, sweet bubble wine Spring beef burger, sweet beef seafood burger, morning chicken burger- cranberry flavor, MOS beef burger, beef spicy MOS burger, beef MOS cheese burger, beef spicy MOS cheese burger, fresh vegetable beef burger, tomato beef burger, curry hot dog-Keema Main source, vegetable hot dog - lemon yogurt flavor, terriyaki plum 2016 meals pork burger, orange chicken focaccia, BBQ chicken seafood burger, vegetable sweet chicken burger, sweet beef burger, bamboo shoot sweet chicken burger, southern Asian chicken burger, Tandoori chicken seafood burger, Tandoori chicken burger, hand-made sandwich (smoked beef), spicy tako burger, orange Osaka seafood

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Product Year Item type burger, orange sesame pork burger, MOS turkey burger, miso chicken burger, Japanese source pork burger. Fried sweet potato, chicken nugget and sweet potato set, strawberry yogurt mousse, MOS pudding, black/white mousse tiramisu, Snacks Mother’s Day cake - MOS tiramisu cake, smoked beef salad, passion fruit konnyaku, red tea dazi sweet, MOS vegetable bar, black sugar soymilk mousse. Strawberry yogurt bubble drink, Taiwanese tea, new MOS milk, passion fruit yogurt bubble drink, combinational berry yogurt Soups and bubble drink, passion fruit lemon konnyaku ice team, drinks combinational berry lemon konnyaku ice team, ice green team latte, Ireland quinoa nut latte (ice/hot), cream and clamp soup, pork and vegetable soup, orange fruit hot tea. MOS Card II, mobile card, spring almond roll gift box, green tea latte powder, Taiwan tea 15x, Japanese juice sherbet (grape, apple, peach), Korean black sugar cake powder, Kumamoto bear seaweed jar, Kumamoto bear fish powder, Kumamoto bear sesame cake, Others Hokkaido caramel brulee cheese cake, black chocolate fresh roll. Chisheng rice cake-pepper flavor, chisheng rice gift box, luye oolong tea bags, pineapple mango ice cream, purple rice green team ice cream, Kumamoto bear notes, Kumamoto handbag Black golden seafood burger, lemon double beef burger, quinoa rice upgraded series, peach yogurt shrimp burger, spicy tomato source fried shrimp burger, passion fruit sasa shrimp burger, lemon tempura chicken burger, lemon orange chicken burger, green curry Main chicken seafood burger, lemon salmon burger, Osaka seafood meals burger, mushroom beef burger, apple chicken burger, garden beef burger, quinoa tuna egg burger, sweet potato pork burger, lohas French brownie, lohas French brunch, breakfast bacon burger, apple 2017 chicken burger, Taitung red quinoa series products, Taitung luoshen sandwich Hokkaido curry croquette, MOS meat source fries, chocolate peanut fries, quinoa sweet potato chicken salad, lemon spicy fries, lemon tata square hashed brown, garlic cheese fries, chocolate crispy pie, Snacks hand-made blueberry nut pudding, green tea babaluya, blueberry cheese, sweet berry mousse, red tea brownie, hazelnut tiramisu, Kumamoto bear tomato konnyaku

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Product Year Item type 100% fresh orange juice, MOS green tea latte/MOS coco latte, grapefruit/pineapple bubble drink, grapefruit/pineapple lemon aloe ice tea, peach/berry bubble drink, berry konnyaku ice team, MOS grape juice, orange fruit hot tea, orange apple berry tea, iced/hot Soups and green tea latte, hot tea latte and ice milk tea, forest crispy au lait drinks coffee, sweet nut latte and sweet nut tea au lait, red berry mocha coffee and red berry tea au lait, pork and vegetable soup, porcini pumpkin soup, Taitung lushen bubble drink, yam purple rice sweet soup Chisheng rice cake-red quinoa flavor, chisheng rice-seaweed flavor, chi-sheng rice-purple rice flavor, Japanese juice sherbet (sweet orange), Hokkaido tiramisu cake, Kumamoto bear certificate cover, MOS sea and mountain notes, MOS sea and mountain canvas bag, Others MOS sea and mountain mugs, Hualien hegang tree organic shaddock, Taitung farmer fish paper, Taitung farmer lushen juice, Taitung farmer lushen jam, Taitung farmer association-red quinoa, Taitung farmer association-millet, Taitung organic rice Bacon pork burger, red curry pork seafood burger, Jili apple beef burger, coe roe salmon seafood burger, MOS Japanese seafood burger, Pizza hot dog, Italian pork burger, quinoa Italian port seafood burger, pork burger, lemon fruit chicken burger, quinoa Main yellow curry chicken seafood burger, tuna and squid seafood burger meals (original/wasabi), quinoa Korean BBQ seafood burger, quinoa Korean ginger seafood burger, turkey burger, chicken burger, MOS sweet beef seafood burger, terriyaki plum pork burger, apple pork burger, mushroom omelet burger, red beam cheese sandwich, sweet potato sandwich, beef sandwich 2018 Jili cheese fries, tomato source cheese fries, MOS meat source fries, Japanese curry chicken nuggets, curry onion ring, chicken and sweet potato salad, Japanese pork and sweet potato salad, Hokkaido Snacks nut and pumpkin croquette, brick sweet potato, peach konnyaku, litchi konnyaku, chocolate cake, sakura mousse, chocolate brownie ball, purple sweet potato pie. Sakura raspberry bubble drink, island fruit ice tea, island fruit soda, Soups and ice quinoa cooc, Taiwanese ice green tea (sugar-free), mango drinks konnyaku ice tea, perilla bubble drink, perilla konnyaku ice team, red quinoa coco, Kagoshima tea, Ceylon red tea, MOS hot fresh

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Product Year Item type fruit tea, hot coco, MOS special red tea au lait, milk tea, caramel popcorn latte coffee, caramel popcorn flower tea au lait, Peru coffee, hot brown sugar latte coffee, ice brown sugar konnyaku tea au lait, purple sweet soup, pork and vegetable soup Taitung red quinoa rod, Taiwan red quinoa sweet potato egg roll, Taiwan red quinoa milk tea cookie, Kaozhi ice cream (grapefruit sherbet), Kaozhi ice cream (tea), Kaozhi ice cream (orange Others sherbet), MOS rice burger pillow, MOS warm blanket, MOS notes, MOS flipper, MOS shopping bag, color pencil drawing book, MOS folder

(IV) Long-term and Short-term business development plans The business model of the Company is a catering service business. The existence of stores is for customers and all operations in the stores are for the purpose of providing the most optimum service to customers. It is our ultimate goal to provide joy and satisfaction to customers. We provide healthy, natural, fresh and delicious products as well as comfortable dining environment with energy to customers. In addition, the Company also provides employment opportunities and makes contribution in the cultivation of catering service industry talents. We allow our partners to obtain happiness during their service and help to others, and also receive their personal pride and satisfaction at work while contributing individual effort to the society. The Company provides sincere service and delicious meals as the foundation of business operation, and the Company is committed to develop fresh meals beneficial to health, selects real and quality ingredients beneficial to body health as well as uses unique oriental flavor recipe in meal preparation, and integrate changes with western hamburgers to add oriental flavor in order to create innovative hamburger flavor. In addition, the Company also places great amount of vegetables into meal in order to achieve balance in healthy and nutrients.

The long-term and short- term business development plans of the Company are described in the following respectively: (1) Short-term development plan ①Continue to expand stores, expand market share, focus on characteristic operation of each store, deepen the communication interaction relationship.

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②Improve meal serving speed, launch APP (MOS ORDER), install self-order machine and kitchen work station with the introduction of KD (Kitchen Display) in order to ensure delicious products and correct meal order, shorten the waiting time of customers and improve customer satisfaction. ③ To cope with the increase in personnel and rental costs, to follow the Internet of Things trend, and to use the network digital technology, the Company crosses into the e-commerce and launches the MOS LIVING in order to quality products to customers. ④Enhance multiple stage safety inspection, careful selection of food ingredients, further promote the production traceability system, in order to ensure quality and safety of food. The quality assurance unit of the Company performs periodic inspection at stores monthly, and also proceeds to the supplier end to perform production line environment survey, strictly execute the source management and autonomous management. In addition, the Company also cooperates with a third unit in inspection in order to ensure the safety of food ingredients and meals. ⑤Stable quality, provide meal product quality and service quality at high level, freshly prepared meals onsite, health and natural delicious food, table serving meal service in order to be distinguished from other fast food catering operators. ⑥ Strengthen consumer comfort space, allow customers to enjoy delicious hamburgers while providing a comfortable and relaxed atmosphere to customers in order to create the stores with the sensation of a relax home to customers. ⑦Focus on corporate governance and fulfill the planning and promotion of corporate social responsibility, further strengthen and stabilize the business operation. ⑧Strengthen the assistance and support for the development in the regions of China and Australia, establish development foundation swiftly.

(2) Long-term development plan ①Develop unique and quality products with differentiation, create high-quality brand image →Vision for leading health and new diet in Taiwan Healthy and natural, fresh and delicious—are the main objectives of the Company for the development of new products, such as the use of high-fiber low-fat burdock, low calorie konnyaku and various natural ingredients etc., along with the ratio of meal vegetables, in order to use a large amount of vegetables to replace starchin bread. In addition, the Company also launches various salads in order to satisfy different demands of customers. For drinks,

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the Company also focuses on freshly made juice in order to use fresh juice to replace conventional concentrated and restored juice, without the addition of preservatives, thereby ensuring the freshness and nature of meals. The Company provides “low calorie” and “high fiber” meals to the market in order to bring the concept of balanced and nutritious meals to customers. The meals are prepared onsite according to customer preferences in order to ensure the most fresh and delicious meals provided to customers. → Expand the use of local food ingredients The Company is the first in the chain catering industry to introduce the production traceability system in order to ensure the process of food ingredients from cultivation, growth to harvest; in other words, the entire process from the farm to the dining table, the record of the food is traceable. The Company also introduces the systematic management system and establishes quality audit system. As the first in the industry, the Company proceeds directly to the production site to collaborate with the production farmers in order to engage in contract method to guarantee the benefits of farmers, to gain support from farmers in order to contribute effort to the promotion of local food ingredient in Taiwan. →Development of delicious products The Company is well-known for providing fresh, healthy and uniquely flavored meals. The rice burgers or vegetable burgers with only 250 calories are meals with great differentiation in the market. The Company continuously provides quality meals and meals with innovative flavors such that MOS Burger has been able to lead the healthy trend of diet in fast food restaurants, and this is also the reason why customer are willing to spend greater price at MOS Burger. The Company is able to completely satisfy customers feels in terms of the psychological aspect and value. ②To cope with the Company’s demand for talents due to future continuous growth, the Company expands the educational training site. In 2012, the Company established the An-Shin College to cultivate domestic operation talents and talents for overseas stationing operation etc., in order to cultivate greater number of senior management and elite staff, thereby achieving corporate sustainable operation. ③Continue international development

→Multiple region expansion in China The Company collaborates with Japanese MOS and develops the basis of six-province-one-city for entering the Chinese market. The short-term planning is to stabilize the development in six province and one city in order to deepen - 106 -

the local market development foundation. In the future, the Company and Japanese MOS will collaborate further to expand to other areas, provinces and municipality in China. →In addition to the vast market in China and the development in Australia, the Company will collaborate with Japanese MOS in the development of new markets in other overseas countries in order to become an international catering group enterprise starting from Asia. ④ Service innovation, online value storage/payment, strengthen membership management Technology innovation with integration of various software, hardware, MOS Order APP payment platform optimization, launch of MOS Card II, virtual card, integrated online value storage and payment, open the value addition and payment functions for credit cards, introduction of KIOSK self-order system, in order to sufficiently demonstrate the resource and advantage in virtual channel, thereby strengthening membership management.

2. Market Profile and Production and Sales (1) Market analysis (1) Sales (providing) regions for main projects (services) of the Company Unit: In Thousands New Taiwan Dollars; % 2017 2018 Year Amount of Amount of Sales region % % stocks stocks Northern Taiwan 3,586,711 72.91 3,822,396 72.78 Central Taiwan 543,354 11.05 658,925 12.54 Southern Taiwan 586,629 11.93 570,774 10.87 Eastern Taiwan 72,179 1.46 79,015 1.50 Offshore island region 37,935 0.77 39,848 0.76 China region 92,504 1.88 81,146 1.55 Total 4,919,312 100.00 5,252,104 100.00

The main business of the Company is the fast food chain catering service, and the business model is to provide hamburger, hot dog, sandwich, salad, sweets and soups/drinks to general consumers, and currently the sales of products is targeted at the domestic consumers. The store opening distribution is as shown in the regions listed in the following table. The northern region accounts for 72.08%, indicating that the average income level and

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consumption power of the general public in the northern Taiwan is relatively higher, which is closely related to the scale of number of stores and revenue. In addition, the living style of the general public in urban areas are likely to accept new things and products. Northern Southern region Central Eastern region region region Offshore Region (Greater (Chiayi/Tainan/ Total (Taichung/Cha (Yilan/Huali island Taipei/Taoyuan/H Kaohsiung/Pingt nghua/Yunlin) en/Taitung) sinchu) ung) Number of 191 38 29 5 2 265 stores Weight (%) 72.08 14.34 10.94 1.89 0.75 100.00

Explanation: Statistical data up to the date of 2018/12/31 (2) Market share According to the “Catering Industry Revenue and Annual Increase Rate” provided by the Department of Statistics, MOEA, the total revenue for catering industry in 2018 is NT$473.1 billion, and the revenue of the Company in 2018 is NT$5.3 billion, accounting for approximately 1.12% of the market share. Statistical analysis on number of stores of western catering chain store operators MOS KFC Burger TKK 21 Century Brand McDonald Burger King Number of 398 265 153 35 71 26 stores Source of Information; Obtained from yearbook of Taiwan Chain Stores and Franchise Association (TCFA). Currently, the total number of western fast food chain stores is approximately 948 stores, and the Company has 265 stores, accounting for 28% in the market. (3) Supply status and growth of future market With the rapid economic growth in Taiwan, the GDP also increases such that the living standard and consumption power of the general public also increases. When consumers are determining the products for purchase, they not only consider the product’s physical quality but also the intangible service quality with greater emphasis. Often, service quality is an important factor for to achieve customer satisfaction. The Company focuses on aspects of “secure and safe, delicious and fresh, healthy and natural” in order to provide products that are healthy, natural, pure/clean and delicious. The Company has been in the business of fast food catering market for a long period of time, and the brand popularity is high. In addition, the meal and service quality have been recognized by consumers greatly. The revenue and profit of the Company has demonstrated stable growth year after year, the single region operating risk has been effectively mitigated, and the revenue and the market share of the Company has been improved. (4) Competitive niche - 108 -

The analysis on the competitive niche of the Company is as follows: ①Selection and use of quality food ingredients

The delicious meals provided by MOS Burger all use the food ingredients rigorously controlled by the Company. The Company uses beef from natural beef in New Zealand, and the characteristic of natural beef is that cows are not being treated with antibiotics or growth hormones but only consumes natural grass with a healthy growth. From the process of feeding to meat cutting, high quality safety management is maintained. In addition, to support the local agriculture in Taiwan, the Company further selects excellent food ingredients locally in Taiwan, such as: seasonal tomatoes, head lettuce and lettuce, etc. from Taichung City and Yulin County, and also introduces vegetable production traceability in order to track the source of food ingredients. In addition, consumers can also inquire the food ingredient cultivation status online. Stores also periodically updates today’s food ingredient status. For the popular rice burgers, local excellent rice in Taiwan is used, and national rice with certification qualification and attached with quality mark etc. is used. MOS Burger is always committed to provide delicacy to consumers with healthy and safe food. ②Implement food and store sanitary management

Since 2012, the Company has established the food safety & inspection center, and the center has obtained the TAF certification. All of the inspection operation process, quality control, inspection management, cleanness in the laboratory as well as the educational training plan of the staff, etc. have been carefully planned and comply with the national laboratory common standard of ISO/IEC 17025 requirements. The food safety and inspection center executes the food safety monitoring plans, and the main testing items can be divided into two main categories: ※Microorganism testing: total aerobic plate count/coliform group/escherichia coli in food and water, and the use of quick testing method certified by AOAC to perform the staphylococcus aureus/salmonella tests. ※Chemical testing: Testing of total pesticide residue in vegetables; testing of clenbuterol in meat, and antibiotic residue testing. In addition, the Company also entrusts a fair third party unit to perform tests on the potential risk substances, such as: preservative, heavy metals, animal chemicals, antibiotics, pesticides and plasticizer etc. in order to ensure the health and safety of the products of MOS Burger. Furthermore, the Company also performs store sanitary management inspection and guidance, such that the - 109 -

dining environment sanitary and cleanness of customers are considered at all time. ③Diverse products, integrated wester and oriental flavors

The rice burger uniquely developed by MOS is made through special processes with rice, to replace the bread traditionally used, and the rice burger is stuffed with special flavor meat or high-fiber burdock as well as special source. The rice burger matches with the rice food culture in Asia and separates from the western fast food flavor market. Over the years, rice burger has gained popularity by the domestic consumers, and it is one of the most popular meals of MOS Burger. In addition, to cope with the consumer market demand and current trend, the Company often launches various new products and meals. The number of types of hamburgers from MOS Burger is the greatest among the fast food providers. The Company provides diverse meals for consumers’ selection in order to satisfy the demands of different consumer age groups. ④Business model and dining environment different from conventional fast food chain stores In the fast food chain store business focusing on the speed of meal, to expedite the service to customers, most of the meals are prepared in advance for customers’ orders. However, at MOS Burger, customers can enjoy another type of dining pace, and the Company emphasizes the “freshly made to order” such that the meals handed over to customers are hot and fresh. In addition to the efforts in meals, the Company also provides a sense of warmth in the dining environment design. Stores use warm lighting and installs wash basins at the seating area for customers’ convenient use. In addition, stores are also installed with newspaper and magazine sections, such that consumers are able to enjoy their meals and cultural reading, thereby creating a comfortable and relaxed feeling, which is clearly different from the fast food chain store operators in the market. (5) Favorable/unfavorable factors for development outlook and countermeasures ①Favorable factors

→Establish excellent brand image, gain consumers’ recognition The Company has always been proud of providing diverse, rich and delicious meal products, and also focuses on food health and safety. In addition to the responsibility of providing trust and security to customers, the Company further provides quality service with the customer-oriented sincere attitude and care service in order to gain customers’ recognition, thereby creating high value-added catering service. Consequently, the Company has received

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numerous excellence evaluation from external surveys. In 2017, the Company also received the award of first place in 2017 Apple Daily Magazine First Prize- fast food chain store business. It is evident that the excellent brand image of MOS burger has been greatly recognized and supported by consumers. →Change of dining habits and implementation of two-day weekend, eat-out market continues to expand With the increase of disposable income of the citizens, simplification of family structure, increasing number of double-career households, under the consideration of pursuit of high quality living and convenience, the eat-out population increases year after year. In addition, with the implementation of two-day weekend, popularity of recreation and tourism, the catering industry is driven to grow rapidly. →Launch of MOS storage card II, heading toward the cloud digitization, and open smart business operation The MOS Card I is a prepay type storage card issued by MOS Burger in Taiwan, and it is the first non-contact storage card in the fast food industry in Taiwan. The card is equipped with the card-holding security and fast checkout functions. On March 28, 2016, the Company launched the “MOS Card II”, which was the first in the fast food industry to provide the registration function and card loss service for new cards in order to secure the card-holding rights and benefits. “MOS Card mobile card” also integrates with the online registration and it is provided as a gift freely during the registration through mobile order APP, which is a pre-paid storage card without a physical card. Consumers can use such mobile cards through mobile device interface to perform value storage, consumption and to add value with a credit card. When the card is registered completely, the record function at the MOS Card section allows the inquiry of card balance, MOS points and consumption record. In addition, it also allows the advanced functions of the online payment, value storage and credit card for value addition/deletion etc., such that the Company has stepped into the cloud digital smart business operation. Up to the end of March 2019, the accumulated number of card issuance of MOS Cards has reached 1.22 million cards. To strengthen the membership management, in addition to the continuous increase of APP use convenience and the launch of special VIP activities. The Company also sends out electronic newspaper and birthdate gifts, etc. royalty solutions, in order to enhance the member attachment to the Company, thereby increasing the frequency of store visits and consumption willingness. - 111 -

→Launch of first MIT “Self-order machine” leading the industry in Taiwan To seek faster and more convenience services to customers, at the end of November 2016, the Company installed two self-order machines with “interactive interface” equipped with “color LCD monitor” at the newly renovated Linsen store in order to implement the service of the latest technology. Different from conventional tablet meal order, the Company introduces the real self-order system, and it uses the simplest UI (User Interface Model) in order to allow customers to select with finger touches in order to order desired products through simple touches. After the expansion of introduction of self-order machines, it is expected that the order and waiting time for customers can be significantly reduced, such that customers can have more time to enjoy delicious meals and to allow store staff to have more sufficient time to provide greater services, satisfying the demands of each consumer. In 2018, the Company further added the personal voice guidance function and the electronic gift voucher exchange convenient functions, in order to further improve the warm experience and convenience of the self-order machines. ②Unfavorable factor and countermeasures

→Entrance barrier low for fast food industry, severe market competition The catering industry entrance barrier is low in Taiwan, and greater number of operators entering into the market, and the competition among operators is severe. To seek customers, there is a trend in price reduction competition. Countermeasures: The Company upholds the fundamental concept of providing sincere services and delicious meals, selects real and quality as well as healthy and natural food ingredients; in addition, allowing customers to have the freshest tastes for their meals. Different from the pre-made meals, the Company adopts the method of “freshly made for order” in order to allow customers to enjoy fresh vegetables, soft breads and readily made hot meat and source. In addition, stores provide comfortable seats with a relaxed dining environment as well as the care service of table delivery of meals. Therefore, when customers are enjoying delicious hamburgers, they can also enjoy the restaurant feel of dining environment. MOS Burger expects to provide high value-added sales service during the offering of delicious products in order to gain the consumers’ recognition, to create recognized value and to achieve excellent brand image and reputation, thereby overcoming the competitive trend. →Cultivation of catering service personnel requires effort, stable staff turnover - 112 -

rate is an important issue For people-oriented catering service, it still relies on the proper execution by personnel. To completely deliver high quality service exceeding customer expectation, the Company focuses on personnel training and treats it as the root for the sustainable operation and strengthening of competitiveness of the Company. However, with the economic development, change of social value and increase of labor awareness, the cultivation and stable turnover rate of catering service personnel are essential. Countermeasures: To cope with the emerging of various domestic relevant service industries, under the condition where the demand for talent is great, the talent recruitment and cultivation in order to create a working environmental respecting the staff with growth for stable employment is, presently, indeed a key factor to the Company. Techniques: 1. Establish talent recruitment new strategies, expand the recruitment channel, cope with the social structure change, increase the employment of diverse talents including new residents, overseas students in Taiwan etc. 2. Expand the specialized training site space and environment, overcome the situation of insufficient space for use at the Jilin training center. Establish Danshui An-Shin College at Danshui, which has been officially started in July 2012. Through neat and spacious learning environment along with the systematic educational trainings and management training system, employees are able to improve and grow. 3. Strengthen the recognition and coherence with the corporate culture. Sufficiently exploit the human resource strategy of “selection, training and retention” in order to attract and stabilize outstanding talents. 4. Deepen the collaboration with schools. In addition to the internship, industry-academic collaboration, industry instructors for lectures, and perform topic/project researches with schools. 5. Cooperate with government agencies, expand the second career recruitment throughout Taiwan and actively participate in relevant lecture courses and seminars. 6. Re-plan the talent referral solution and transfer solution, in order to provide more attractive bonus system and complete cultivation plan. ③Rapid increase of operation and management costs The hourly personnel employment rate in the catering service employees is relatively high. In 2019, the basic hourly wage has been increased from NT$140 per hour to NT$150 per hour. In addition, the price of real properties i urban areas also increases significantly, which drives the rent of store

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expansion to increase or an increase of rent during the renewal of store tenancy contracts. Due to the international economic change and natural disaster factor, the food ingredients are affected and are in shortage such that costs increase significantly. All of the above have gradually caused the operating cost to increase. Countermeasures: The Company has adjusted the wage according to the laws, and also plans to provide employee welfare. Therefore, the Company focuses on the increase of work efficiency in order to balance the personnel cost increase. In addition, the Company also utilizes technology to facilitate the reduction of labor cost. The Company prevents to open stores at locations of high rent and prolongs the tenancy contract period in order to stabilize the rental expense. The Company manages the material source and prevents the increase of cost by expanding the dual supply sources in order to suppress the price. ④Increases meal serving speed Since the Company commits to provide products freshly made products for order to consumers, waiting time can be relatively longer, and the relatively long line-up and meal waiting have always been the issues to be improved by the Company with best effort. Countermeasures: The Company adopts various improvement measures to increase the meal serving speed, and it can be mainly divided into the external process (outside the kitchen) and the internal process (inside the kitchen) to increase the efficiency: 1. External process adjustment: Provide diverse meal order methods to customers, including self-order machines, telephone order, internet order, APP (MOS ORDER) etc. in order to reduce the waiting time at the sore line-up. In addition to accelerate the meal selection time of customers, the Company also adopts the measures, including the launch of popular set products, customer line-up plan, meal ordering, meal waiting moving line and use of store price tags with combination set drawing for presentation etc. 2. internal process improvement: For the manufacturing and operation moving line, the efficiency is increased, in order to accelerate the meal-serving time, including: (1) Work process adjustment: It is divided into peak/off-peak time periods. During the peak time period, dedicated workstation positions are set up, such as a dedicated person is responsible for the

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preparation of meals, saving the time for both the cashier and drink preparation, in order to increase the efficiency. (2) Improvement of kitchen: For the operation moving line in the kitchen, timely improvement is made, and the machine equipment or moving line is adjusted in order to generate greater performance. (3) Branch store type products: According to the property of the business circles of stores, such as for different stores of shopping center stores, school campus stores, station stores, etc., products sold and items are distinguished in order to further satisfy the customer demand of the local area, and the preparation speed of the stores can be increased. (4) Introduction of new equipment: Additional installation of equipment capable of preserving semi-products without losing the flavors and allowing store staff to operate more smoothly. Starting from 2017, parts of kitchens are further installed with the KD (Kitchen Display) at each workstation to accelerate the meal-serving speed. In addition to the aforementioned measures, the Company will also continue to improve the preparation efficiency, increase the meal-serving speed in order to reduce the waiting time of consumers. (2) Key purpose and manufacturing process of main products (1) Key purpose of main products Product item Product purpose Products for sale in fast food chain stores, provide Products of hamburgers, choices of breakfast, lunch, dinner or afternoon snacks, soups and drinks etc. snack, recreation drinks to general consumers.

(2) Production process of main products For the fast food chain store operation of the Company, the process of relevant meals is illustrated in the following flowchart:

Product planning, Food safety In-store trial sale Store Introduction of Trial development and specification and market introduction sales in store making design confirmation survey preparation Cashier Preparation Product POS system Safety and meal order material pickup preparation sales, purchase and health Meal inventory confirmation serving management control - 115 -

(3) Primary raw materials supply status

Primary raw Supply Primary supplier materials status Bread/Rice Magic Food Industry Co., Ltd., A Company Proper Pastry Magic Food Industry Co., Ltd., B Company Proper Sources Magic Food Industry Co., Ltd. Proper Drinks C Company, D Company Proper Milk and eggs C Company Proper products Vegetables E Company, F Company Proper

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(4) Name of customers accounted for more than 10% of total purchase/sales amount of the company in the most recent two years or in any year and the purchase/sales amount and ratio thereof (1) Main suppliers of the Company ※Unconsolidated Unit: In Thousands New Taiwan Dollars; %

2017 2018 2019 up to the previous quarter

Annual net Relationship Annual net Relationship Net purchase Relationship with purchase with issuer purchase with issuer percentage up to the last issuer Item Name Amount Name Amount Name Amount percentage (%) percentage (%) quarter of the current year (%) Magic Food Other Magic Food Other Magic Food Other related 1 Industry Co., 754,144 42.16 related Industry Co., 799,225 41.02 related Industry Co., 202,459 42.70 parties Ltd. parties Ltd. parties Ltd. 9.00 N/A Taiwan Other Taiwan Other related Pelican related Pelican parties 2 H Company 160,900 212,556 10.91 51,472 10.86 Express Co., parties Express Co., Ltd. Ltd. 3 Others 873,603 48.84 N/A Others 936,651 48.07 N/A Others 220,192 46.44 N/A Net purchase 100.00 Net purchase Net purchase 1,788,647 1,948,432 100.00 474,123 100.00 amount amount amount

Explanation for increase/decrease change: The changes in the main suppliers of the Company in 2018 and 2017 were not great, and the purchase amount increased along with the overall revenue increase.

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※Consolidated Unit: In Thousands New Taiwan Dollars; %

2017 2018 2019 up to the previous quarter

Annual net Relationship Annual net Relationship Net purchase Relationship with purchase with issuer purchase with issuer percentage up to the last issuer Item Name Amount Name Amount Name Amount percentage (%) percentage (%) quarter of the current year (%) Magic Food Other Magic Food Other Magic Food Other related 1 Industry Co., 754,144 41.31 related Industry Co., 799,225 40.41 related Industry Co., 202,459 42.05 parties Ltd. parties Ltd. parties Ltd. 8.81 N/A Taiwan Other Taiwan Other related Pelican related Pelican parties 2 H Company 160,900 212,556 10.75 51,472 10.69 Express parties Express Co., Co., Ltd. Ltd. 3 Others 910,755 49.88 N/A Others 966,185 48.84 N/A Others 227,529 47.26 N/A Net purchase Net purchase Net purchase 1,825,799 100.00 1,977,966 100.00 481,460 100.00 amount amount amount

Explanation for increase/decrease change: The changes in the main suppliers of the Company in 2018 and 2017 were not great, and the purchase amount increased along with the overall revenue increase.

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(2) Main customers of the Company The Company operates the business of fast food chain store, and the main customers refer to general consumers; therefore, there is no customer accounting for more than 10% of the total sales.

(V) Production quantity table for the most recent two years: ※Unconsolidated Unit: In Thousands Units; In Thousands New Taiwan Dollars

Year 2017 2018 Production quantity Production Production Production Production Production Production capacity quantity amount capacity quantity amount Main products Main meals 35,662 1,812,915 37,188 1,828,426 Snacks 23,524 879,701 25,124 906,469 N/A Soups and drinks N/A (Note) 35,306 720,172 35,408 745,073 (Note) Others 4,453 142,334 5,144 344,986 Total 98,945 3,555,122 102,864 3,824,954

※ Consolidated Unit: In Thousands Units; In Thousands New Taiwan Dollars

Year 2017 2018 Production quantity

Production Production Production Production Production Production capacity quantity amount capacity quantity amount Main products Main meals 36,549 1,846,992 37,934 1,860,567 Snacks 23,957 896,335 25,488 922,163 N/A Soups and drinks N/A (Note) 35,932 744,270 35,913 766,850 (Note) Others 4,476 143,215 5,151 345,291 Total 100,914 3,630,812 104,486 3,894,871 Note: Due to the characteristics of the business, the production capacity of each product type may be inter-change with each other, such that this item is not applicable.

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(6) Sales quantity table for the most recent two years ※Unconsolidated Unit: In Thousands Units; In Thousands New Taiwan Dollars Year 2017 2018 Sales quantity Domestic sales Export sales Domestic sales Export sales and amount Quanti Amou Quantity Amount Quantity Amount Quantity Amount Main products ty nt Main meals 35,501 2,396,623 － － 36,999 2,541,319 － － Snacks 24,413 1,084,320 － － 25,795 1,176,942 － － Soups and 35,262 1,184,063 35,348 1,247,040 － － － － drinks Others 11,440 161,802 － － 14,061 205,657 － － Total 106,616 4,826,808 － － 112,203 5,170,958 － －

※Consolidated Unit: In Thousands Units; In Thousands New Taiwan Dollars Year 2017 2018 Sales quantity Domestic sales Export sales Domestic sales Export sales and amount

Quantity Amount Quantity Amount Quantity Amount Quantity Amount

Main products Main meals 35,840 2,419,962 － － 37,740 2,596,594 － － Snacks 24,581 1,121,763 － － 26,157 1,193,057 － － Soups and － － － － drinks 35,840 1,189,715 35,847 1,260,596 Others 11,457 187,872 － － 14,068 201,857 － － Total 107,718 4,919,312 － － 113,812 5,252,104 － －

3. Employees: Employee information for the most recent two years and up to the printing date of the annual report Unit: person 2019 Year 2017 2018 Up to March 31 Administrative Number of management 85 2012 102 Employees positions General 76 66 72 employees

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2019 Year 2017 2018 Up to March 31 Operating management 240 243 242 positions Store employees 595 650 597 Temporary 4,392 4,661 4,686 employees Total 5,388 5,721 5,699 Average age 30.33 30.83 30.97 Average years of service 2.39 2.50 2.59 Master 0.91 0.82 0.81 Educational University/Colle 53.27 54.08 51.13 background ge distribution Below senior percentage high school 45.82 45.10 48.06 (%) (inclusive) Total 100.00 100.00 100.00

4. Information on Environmental Protection Expenses The Company does not adopt the factory model, and operates the fast food catering service, which mainly provides the business of “meals’ and “service,” including hamburgers and soups/drinks etc. The relevant operating activities do not generate major pollution events. To maintain quality, competitiveness and professional service value, relevant important raw materials are manufactured by suppliers, and the Company mainly performs the heating and cooking operation only in stores; however, such products are of light meals. In addition, the Company also installs control equipment for pollution drainage and emission for air and water pollution etc. Therefore, there is no likelihood of major environmental pollution. 1. According to the laws and regulations, regarding the application of pollution facility installation permit license or pollution emission permit license or required payment for pollution control fees or requirement on the installation of dedicated unit/personnel for environmental protection, please refer to the following description on the application, payment or establishment status thereof: The Company has declared he enterprise waste disposal plan according to the regulations and has paid the recycling and cleaning handling fees.

2. List of investments in main equipment of the Company related to environmental control pollution and its purpose and possible benefits:

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Unit: In Thousands New Taiwan Dollars

Equipment Acquisition Investment Purpose and expected Quantity name Date cost possible benefits Oil intercepting Isolating the oil and other insoluble tank substances in the drainage water in 256 units 9,076 water According order to prevent contamination of drainage to the gutter due to kitchen waste and oil. equipment establishme Water nt date of cleaning, each store Reduce air pollution due to smoke electrostatic 256 units 60,610 and odor exhaust type exhaust equipment

3. History of environment protection improvement of the Company in the recent two years and up to the printing date of the annual report. If there is any pollution dispute, the detail of such event shall be explained: Except for the following 4 events, the Company has not involved in any major pollution disputes. 4. In the most recent two years and up to the printing date of the annual report, describe the total amount of loss (including indemnification) and penalty due to environmental pollution, and explain future responsive measures (including improvement measures) and possible expenses (including possible loss, penalty and indemnification estimated amount for failure of adopting responsive measures. If the estimation cannot be provided, explanation on the facts for the failure of reasonable estimation shall be provided): In the most recent two years and up to the printing date of annual report of the Company was subject to a small amount of fines from the Environmental Protection Administration due to one single store that erroneously drained water into public sewerage and a new store failed to obtain the waste disposal permit. The total amount of such fines did not exceed NT$xx. Except for such events, there were no other large amounts of fines or penalties. Presently, the Company has improved the drainage pipe design and improved the personnel awareness in order to prevent occurrence of relevant environmental protection pollution events. 5. Current pollution status and impacts of its improvement on the earnings, competition position and capital expense of the Company and the expected major environmental protection capital expense in the next two years: The aforementioned 4. pollution refer to minor human error events, and the Company - 122 -

enhanced the management in order to prevent occurrence of relevant events. Such events did not cause major impacts on the earnings, competition position and capital expense of the Company.

5. Labour Relations (1) Company’s employee welfare measures, continued education, training, retirement system and implementation thereof, and labor management agreement and various employee benefit protection measures status: (1) Employee welfare measures: ①Insurance aspect: In addition to the statutory labor and health insurance, the Company further applies the group insurance (life insurance/casualty insurance/medical insurance/cancer) for employees. ②Health and safety aspect: The Company establishes a dedicated unit of “Safety and Health Team”, and the team member includes labor safety personnel, labor health service nurse; provides a one time subsidized health examination for on-the-job employees, physicians periodically perform store inspection and out-penitent clinics, headquarter staff participate in daily health exercise, installation of AED at the headquarter and Danshui An-Shin College and qualified for the “Safety Place Certificate.” The Company conducts monthly safety and health promotion periodically, and provides various health education notes through the internal contact forms and announcement method in the Company and the topics include occupational psychological health and enjoy work, disease prevention, infectious diseases prevention and occupational work safety etc., in order to provide health information to employees. The Company periodically updates the washroom propaganda announcement monthly and focuses on the health promotion, including weight management, healthy diet, sports knowledge, etc. related drawings and text content articles, such that employees are able to absorb knowledge about health even during toilet time and to improve health knowledge and skills. To promote all staff to establish knowledge and skills in health, to implement the promotion of health, in 2018, the Company qualified the certification of “Healthy workplace promotion logo” issued by the Health Promotion Administration. ③Subsidies:  The Company provides travel expense subsidy of NT$2,000~NT$6,000 per person annually;  Provide social club activity subsidy, each club receives the maximum subsidy of NT$ 20,000 annually;  Foreign language education subsidy: As long as employees qualify the subsidy requirement, each person can receive the incentive amount of NT$ - 123 -

5,000~NT$10,000 and each person receives the language learning subsidy of NT$1,500~2,000.  Others: Marriage and funeral, birth date, dragon boat festival, moon festival cash gifts, year-end bonus, children scholarship compensation, childbirth compensation, maternity allowance etc. ④Others welfares:  Since the stores spread across the entire Taiwan, the Company provides the salary addition regulations and employee housing rental subsidy regulations for remote areas;  To allow employees to grow and develop together with the Company, provide shareholding trust solution to employees with outstanding performance, share subscription with capital increase, performance bonus and various target achievement bonus, participation in employee compensation distribution.  Provide overseas training for outstanding employees selected, employee friend sharing coupons, store staff working meal subsidy, periodic employee gathering events, affiliate company home appliance sharing of employee discount price, organization of all company’s year-end party event.

(2) Employee continuing education and training: The Company establishes the complete employee education and training system, which is divided into orientation training and on-job training. In addition, through internal and external training methods, the foundation of sustainable operation and development of the Company are maintained. Department supervisors and employees may be assigned or can self-apply for the participation in the courses and trainings held by external agencies depending upon the needs, in order to improve the employees’ professional abilities and core competency, as well as strengthen the employees’ complete training and continuing education channels. 2018 Employee continuing education and training actual implementation status as follows: Unit: In Thousands New Taiwan Dollars Number of Total number Total number Item Total cost shifts of employees of hours 1. Training for new 86 590 1,499 1,206 employees 2. Professional 102 779 1,051 1,087 occupational training 3. Supervisor skills 90 1,318 664 2,423 training

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Number of Total number Total number Item Total cost shifts of employees of hours 4. General 27 197 203 95 knowledge training Total 305 2,884 3,417 4,811

(3) Retirement System and Implementation Status: The Company establishes the employee retirement regulations according to the “Labor Standards Act,” and also organizes the labor pension reserve supervisory committee according to regulations in order to set aside pension fund, and the pension fund is deposited at the Trust Department of Bank of Taiwan according to the laws, such that employees qualifying the requirements specified in the regulations are entitled to receive the pension according to the laws. Since the cooperation with the implementation of the Labor Pension Act starting on July 1, 2005, the Company appropriates 6% of monthly wage for new employees and existing employees choosing to adopt the new retirement regulations in order to be deposited at the individual retirement accounts at the Bureau of Labor Insurance. In addition, for the existing employees choose to apply the old retirement pension system and the existing employees choose to apply the new retirement pension system, their years of service are retained continuously, such that the pension reserve of appropriate amounts are calculated according to the pension payment standard specified in the original employee retirement regulations for depositing into the dedicated account in Bank of Taiwan. The Company establishes the employee retirement regulations according to the “Labor Standards Act,” such that when an employee has the intention to apply for retirement, he or she shall submit application through the human resource system, and after the human resource unit confirms the retirement pension regulations selected by such employee, application operation is then handled. The Company has also organized the labor pension reserve supervisory committee according to the regulations in order to set aside pension fund, and to deposit the fund at the Trust Department of Bank of Taiwan according to the laws. Presently, the number of employees choosing the old employee retirement system accounts for approximately 0.13% of the all employees of the Company, and other employees all choose to apply the new employee retirement system.

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(4) Labor management agreement and various employee benefit protection measures status: The labor management relationship of the Company has always been harmonious and proper, and heading toward the team effort with coherence and team work. The Company establishes dedicated unit to handle employees’ recommendations. In addition to the periodic organization of labor management communication meetings, the human resource department also organizes employee seminars for all levels of employees, including new employees, team leaders, store managers etc. Employees can also perform opinion communication through direct telephone and e-mails in order to conduct two-way communications on various issues of system, welfare, policy and working environment etc. In addition, it is able to maintain excellent interaction between the two parties of the labor and management in terms of the administrative management important references.

(5) Employee working environment and personnel safety protection measures: Item Content 1. Installed necessary surveillance equipment at entrance, counter, kitchen, customer seating area, recreation room in Access order to protect the work safety of employees. control 2. Signed security system contracts with security provider in security order to maintain the environmental safety after the business hours of stores at night time, and to guarantee the work safety of staff in the store. 1. According to the fire control regulations, the Company entrusts a professional company to perform store fire prevention inspection twice annually. 2. According to the Regulations Governing Full-Time Electrician Maintenanc and Power Consumption Equipment Inspection and e and Maintenance, for stores with power consumption reaching inspection above 49 kW, a professional company is entrusted to perform of each power consumption safety technician inspection once annually. equipment 3. According to the Regulations Governing Indoor Air Quality, professional company is entrusted to perform the indoor carbon dioxide monitoring and testing at stores semi-annually. 4. According to the Regulations for Inspecting and Reporting

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Item Content Buildings Public Security, where the indoor area reaches the specified criteria, professional company is entrusted to perform public safety inspection annually. 5. For air conditioning equipment, drinking water equipment, ice making machine, cleaning, washing, maintenance and inspection are performed regularly and irregularly each year. Disaster To prevent and protect the safety of construction contractors and prevention construction store employees, the engineering and construction measures section of the headquarter has established the construction site and safety protection rules in order to request the construction responsive contractors to implement and comply with such rules. measures 1. Health examination: on-job personnel perform the periodic health examination annually according to the Occupational Safety and Safety and Health Act. health 2. Working environment sanitary: For the working places, it is prohibited to smoke completely, and the working environment cleaning and disinfection are performed periodically. Item Content 3. Prevention of occupational injuries and various (work injuries) injury records and assistance in the investigation of cause of injuries. 4. Educational training: Perform various professional and management courses necessary for all job ranks and positions, in order to provide psychological adjustment, strengthening of knowledge topic seminars and E-educational trainings. Safety and 5. Opinion expression: Set up employee opinion mailbox, provide health employees, operation forms and various handbook download section, learning area and sharing section, provide employees channels for opinion expression, emotion relief and interactive learnings. 6. Sexual harassment prevention: Establish complaint rules and disciplinary provisions. 7. Field service: Contract physicians and nurses accompany with

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Item Content health and safety personnel to proceed to stores to perform health filed service for employees in stores monthly. 8. Nursery (milk collection) room installation: To cope with the official implementation of female protection plan on October 1, 2015, the Company completed the installation of a nursery room at the headquarter of Songjiang Road, and was officially in operation on October 8, 2015. In October 2017, the Company received the qualification of “Outstanding Nursery Room” certified by the Department of Health. 9. AED “Automated External Defibrillator”: On May 10, 2017, AED was installed at the headquarter at Songjiang Road, and on September 25, 2017, the Company received the “Safety Place’ Certified by the Department of Health. In addition, Danshui An-Shin College was also installed with AED at the end of the same year. 1. The Company applies insurances including labor insurance (including occupational disaster insurance), health insurance, and also provides different commercial insurances (life insurance, casualty insurance, accident medical treatment, Insurance hospitalization medical treatment, cancer insurance, group and welfare insurance etc.) according to identifies of employees. 2. Open employees’ relatives to enroll in casualty insurance, medical insurance, cancer insurance, etc. at a discounted rate. 3. The Company further provides consolation money to employees receiving hospitalization treatment.

(2) For most recent two years and up to the printing date of the annual report, the loss due to labor-management disputes, current and possible future loss estimated amount and countermeasures:

The Company values all welfares of employees, and the labor management relationship is harmonious. In the most recent two years and up the printing date of annual report, there were no major labor management disputes; consequently, there was no likelihood of loss due to labor management dispute.

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6. Important Contracts

Contract Involving Contract Restrictive Main content nature party start and end date clause No major disadvantages Procurement contract YY Company 2018/1/1~2019/12/31 Product supply contract restrictive clause Procurement contract AM Company 2018/1/1~2019/9/31 Product supply contract Same as above Procurement contract H Company 2017/5/1~2020/4/30 Product supply contract Same as above Procurement contract AF Company 2019/1/1~2019/12/31 Product supply contract Same as above Procurement contract AI Company 2019/1/1~2019/12/31 Product supply contract Same as above Procurement contract AN Company 2019/1/1~2019/12/31 Product supply contract Same as above Procurement contract AJ Company 2019/1/1~2019/12/31 Product supply contract Same as above Procurement contract C Company 2018/1/1~2019/12/31 Product supply contract Same as above Procurement contract AO Company 2018/3/1~2019/6/30 Product supply contract Same as above Procurement contract WW Company 2018/1/1~2019/12/31 Product supply contract Same as above Performance MOS performance XX Company 2019/3/1~2021/2/28 Same as above guarantee contract guarantee Technology and Japanese MOS Technology trademark license MOS Food 2011/5/23~2021/5/23 and trademark license Same as above collaboration Services, Inc. collaboration agreement agreement Joint venture to establish Joint venture contract ZZ Company etc. 2010/2/10~ AN-SHIN FOOD SERVICES Same as above (SINGAPORE) PTE.LTD. Joint venture to establish Joint venture contract ZZ Company etc. 2011/2/15~ MOS BURGER Same as above AUSTRALIA PTY. LTD. Xiamen An Shin Food Consultant consultation Consultation contract 2011/8/1~2021/7/31 Same as above Management Co., contract Ltd.

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VI. FINANCIAL HIGHLIGHTS 1.Condensed Balance Sheet and Statement of (Comprehensive) Income in the Most Recent five Years 1. Unconsolidated Condensed Balance Sheet - International Financial Reporting Standards (IFRS) Unit: In Thousands New Taiwan Dollars Current year up to Year Financial information for the latest five years (Note 1) March 31, 2019

Financial 2014 2015 2016 2017 2018 Item Information Current Assets 1,787,417 2,047,772 2,237,948 2,319,231 2,321,595 Property, Plant and Equipment 366,266 320,196 310,699 395,601 418,595 Intangible Assets 7,162 7,238 24,123 20,425 11,555 Other Assets 185,185 161,165 143,965 159,005 161,224 Total Assets 2,346,030 2,536,371 2,716,735 2,894,262 2,912,969 Before 768,378 903,321 1,014,908 1,133,558 1,125,307 distribution Current Liabilities After 842,874 994,012 1,111,726 1,020,604 Note 2 distribution Non-current liabilities 26,013 29,131 28,904 24,430 23,467 Before 794,391 932,452 1,043,812 1,157,988 1,148,774 distribution Total Liabilities After 868,887 1,023,143 1,140,630 1,045,034 Note 2 distribution Equity attributable to stockholders of the parent 1,551,639 1,603,919 1,672,923 1,736,274 1,764,195 Not Applicable company Share Capital 323,895 323,895 323,895 323,895 323,895 Capital Surplus 809,816 809,816 809,816 809,816 809,816 Before 424,599 477,036 556,021 617,583 661,867 distribution Retained Earnings After 350,103 386,345 459,203 504,629 Note 2 distribution Other Equity (6,671) (6,828) (6,686) (4,897) (21,260) Treasury Shares － － (10,123) (10,123) (10,123) Non-controlling Interest － － － － － Before 1,551,639 1,603,919 1,672,923 1,736,274 1,764,195 distribution Total Equity After 1,477,143 1,513,228 1,576,105 1,623,320 Note 2 distribution Note 1: The financial data listed above have been audited and certified by the CPA. Note 2: The 2018 earnings distribution proposal has been approved through the resolution of the board of directors’ meeting but has not been approved by the shareholders’ meeting.

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1. Consolidated Condensed Balance Sheet - International Financial Reporting Standards (IFRS) Unit: In Thousands New Taiwan Dollars Year Financial information for the latest five years (Note 1) Current year up to March 31, 2019 Item Financial 2014 2015 2016 2017 2018 Information (Note 2) Current Assets 1,851,128 2,114,734 2,274,184 2,388,168 2,358,449 2,378,119 Property, Plant and 424,488 352,694 325,314 404,679 424,793 412,121 Equipment Right-of-use assets - - - - - 1,757,837 Intangible Assets 7,238 7,303 24,514 20,936 11,835 13,500 Other Assets 157,327 136,062 136,211 140,056 155,231 144,482 Total Assets 2,440,181 2,610,793 2,760,223 2,953,839 2,950,308 4,706,059 Before Current 795,639 922,735 1,029,112 1,147,051 1,136,192 1,532,318 distribution Liabilities After distribution 870,135 1,013,426 1,125,930 1,034,097 Note 3 Note 3 Non-current liabilities 28,061 30,417 30,203 25,855 25,260 1,323,954 Before Total 823,700 953,152 1,059,315 1,172,906 1,161,452 2,856,272 distribution Liabilities After distribution 898,196 1,043,843 1,156,133 1,059,952 Note 3 Note 3 Equity attributable to stockholders of the parent 1,551,639 1,603,919 1,672,923 1,736,274 1,764,195 1,800,661 company Share Capital 323,895 323,895 323,895 323,895 323,895 323,895 Capital Surplus 809,816 809,816 809,816 809,816 809,816 809,816 Before Retained 424,599 477,036 556,021 617,583 661,867 697,997 distribution Earnings After distribution 350,103 386,345 459,203 504,629 註 3 註 3 Other Equity (6,671) (6,828) (6,686) (4,897) (21,260) (20,924) Treasury Shares － － (10,123) (10,123) (10,123) (10,123) Non-controlling Interest 64,842 53,722 27,985 44,659 24,661 49,126 Before Total 1,616,481 1,657,641 1,700,908 1,780,933 1,788,856 1,849,787 distribution Equity After distribution 1,541,985 1,566,950 1,604,090 1,667,979 Note 3 Note 3

Note 1: The financial data listed above have been audited and certified by the CPA. Note 2: The financial data listed above have been audited and certified by the CPA. Note 3: The 2018 earnings distribution proposal has been approved through the resolution of the board of directors’ meeting but has not been approved by the shareholders’ meeting. - 131 -

(2) 1. Unconsolidated Condensed Comprehensive Income Statement - International Financial Reporting Standards (IFRS) Unit: In Thousands New Taiwan Dollars (other than the earnings per share in NTD) Year Financial information for the latest five years (Note) Current year up to March 31, 2019 Item 2014 2015 2016 2017 2018 Financial Information Operating Revenue 4,087,524 4,276,278 4,553,838 4,826,808 5,170,958 Gross Profit 1,072,408 1,155,124 1,247,962 1,271,686 1,346,003 Operating Income (Loss) 130,499 195,151 220,333 210,727 199,552 Non-operating Income (10,213) (24,125) (6,202) 4,863 (7,824) and Expenses Net income before tax 120,286 171,026 214,131 215,590 191,728 Continuing business unit 92,622 131,234 173,778 168,633 140,649 Net profit (note) Loss of discontinued unit － － － - - Net Income (Loss) 92,622 131,234 173,778 168,633 140,649 Other comprehensive (2,615) (4,458) (3,960) (3,810) 1,158 income (net, after tax) Total Comprehensive 90,007 126,776 169,818 164,823 141,807 Not Applicable Income Net income attributable to shareholders of the 92,622 131,234 173,778 168,633 140,649 parent Net profit attributable to － － － － - non-controlling interests Total comprehensive income (loss) attributable 90,007 126,776 169,818 164,823 141,807 to shareholders of the parent Total comprehensive income (loss) attributable － － － － - to non-controlling interest Earnings per share 2.86 4.05 5.37 5.23 4.36

Note: The financial data listed above have been audited and certified by CPA.

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2. Consolidated Condensed Comprehensive Income Statement - International Financial Reporting Standards (IFRS) Unit: In Thousands New Taiwan Dollars (other than the earnings per share in NTD) Year Financial information for the latest five years (Note 1) Current year up to March 31, 2019 Item Financial 2014 2015 2016 2017 2018 Information (Note 2) Operating Revenue 4,252,752 4,424,550 4,663,585 4,919,312 5,252,104 1,302,091 Gross Profit 1,086,269 1,171,716 1,273,522 1288500 1,357,233 320,495 Operating Income (Loss) 50,234 135,921 180,633 180,641 167,658 27,993 Non-operating Income and 22,519 (9,801) 10,530 15,028 4,441 3,276 Expenses Net income before tax 72,753 126,120 191,163 195,669 172,099 31,269 Continuing business unit 45,089 86,328 150,810 148,712 121,020 23,886 Net profit (note) Loss of discontinued unit － － － － - - Net Income (Loss) 45,089 86,328 150,810 148,712 121,020 23,886 Other comprehensive 33 (4,865) (6,729) (3,545) 789 794 income(net, after tax) Total Comprehensive 45,122 81,463 144,081 145,167 121,809 24,680 Income Net income attributable to 92,622 131,234 173,778 168,633 140,649 28,001 shareholders of the parent Net profit attributable to (47,533) (44,906) (22,968) (19,921) (19,629) (4,115) non-controlling interest Total comprehensive income (loss) attributable 90,007 126,776 169,818 164,823 141,807 28,337 to shareholders of the parent Total comprehensive income (loss) attributable (44,885) (45,313) (25,737) (19,656) (19,998) (3,657) to non-controlling interest Earnings per share 2.86 4.05 5.37 5.23 4.36 0.87 Note 1: The financial data listed above have been audited and certified by the CPA. Note 2: The financial data listed above have been audited and certified by the CPA.

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(3) Names of auditors and audit opinions for the last five years Name of the accounting Year Name of the CPA Audit opinion firm PricewaterhouseCoopers Hui-Chin Tseng, 2014 Unqualified opinion Taiwan Yu-Lung Wu PricewaterhouseCoopers Hui-Chin Tseng, 2015 Unqualified opinion Taiwan Yu-Lung Wu PricewaterhouseCoopers Ping-Chun Chih, 2016 Unqualified opinion Taiwan Yu-Lung Wu PricewaterhouseCoopers Ping-Chun Chih, 106 Unqualified opinion Taiwan Yu-Lung Wu PricewaterhouseCoopers Ping-Chun Chih, 107 Unqualified opinion Taiwan Yu-Lung Wu

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2. Financial Analysis in the Most Recent Five Years (1) Unconsolidated Financial Analysis in the Most Recent Five Years - IFRS Year Financial analysis for the last five years (Note) Current year up to Analysis item 2014 2015 2016 2017 2018 March 31, 2019 Debt to assets ratio (%) 33.86 36.76 38.42 40.00 39.43 Financial Ratio of long-term capital to Structure property, plant and equipment 423.63 500.91 538.43 438.89 421.45 (%) Current ratio (%) 232.62 226.69 220.50 204.59 206.30 Repayment Quick ratio (%) 225.26 221.49 215.27 198.38 201.61 Capability Interest earned ratio (%) 1,125.16 85,514.00 － －－ Accounts receivable turnover 82.14 78.86 66.50 60.97 57.06 (times) Average collection period 4.44 4.62 5.48 5.98 6.39 Inventory turnover (times) 91.02 93.56 93.60 92.47 98.03 Management Accounts payable turnover 15.95 16.27 14.29 12.48 12.06 Capability (times) Average days in sales 4.01 3.90 3.89 3.94 3.72 Not Applicable Property, plant and equipment 9.40 12.45 14.43 13.66 12.70 turnover times) Total asset turnover times) 1.76 1.75 1.73 1.72 1.78 Return on asset (%) 3.99 5.37 6.61 6.01 4.84 Return on equity (%) 6.02 8.31 10.60 9.89 8.03 Profitability Pre-tax income to paid-in 37.16 52.80 66.11 66.56 59.19 capital (%) Net profit margin (%) 2.26 3.06 3.81 3.49 2.71 Earnings per shar (NT$) 2.86 4.05 5.37 5.23 4.36 Cash flow ratio (%) 53.08 48.64 43.80 37.57 36.80 Cash Cash flow adequacy ratio (%) 146.47 168.12 174.02 186.16 168.10 flow Cash reinvestment ratio (%) 0.11 0.11 0.10 0.09 0.08 Operating leverage 2.62 1.92 0.37 1.83 1.90 Leverage Financial leverage 1.00 1.00 1.00 1.00 1.00 Reasons of variance to financial analysis in the most recent 2 years (where the variance is at least 20% or more).

Note: The financial data listed above have been audited and certified by CPA.

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(2) Consolidated Financial Analysis in the Most Recent Five Years - IFRS

YearFinancial analysis for the last five years (Note 1) Current year up to Analysis item March 31, 2019 2014 2015 2016 2017 2018 (Note 2) Debt to assets ratio (%) 33.75 36.50 38.37 39.70 39.36 60.69 Financial Ratio of long-term capital Structure to property, plant and 380.80 469.99 522.85 440.08 421.11 448.84 equipment (%) Debt Current ratio (%) 232.65 229.18 220.98 208.20 207.57 155.19 Servicing Quick ratio (%) 223.01 222.53 214.61 200.56 201.49 150.53 Interest earned ratio (%) 680.93 63,061.00 － 0.00 0.00 26.18 Accounts receivable 84.89 80.98 67.51 61.41 56.50 50.03 turnover (times) Average collection period 4.29 4.5 5.40 5.94 6.46 7.29 Inventory turnover (times) 68.74 73.13 78.59 81.51 87.09 89.43 Management Accounts payable turnover 16.21 16.46 14.43 12.62 12.18 12.12 (times) Average days in sales 5.30 4.99 4.64 4.47 4.19 4.08 Property, plant and 8.44 11.38 13.75 13.47 12.66 12.44 equipment turnover (times) Total asset turnover (times) 1.75 1.75 1.73 1.72 1.77 1.36 Return on asset (%) 1.86 3.41 5.61 5.20 4.09 2.59 Return on shareholders’ 2.78 5.27 8.98 8.54 6.78 5.25 equity (%) Profitability Pre-tax income to paid-in 22.46 38.93 59.02 60.41 53.13 38.61 capital (%) Net profit margin (%) 1.06 1.95 3.23 3.02 2.30 1.83 Earnings per shar (NT$) 2.86 4.05 5.37 5.23 4.36 0.87 Cash flow ratio (%) 45.65 42.80 40.93 34.48 33.98 36.24 Cash flow adequacy ratio Cash 112.81 127.72 137.29 162.75 152.49 152.49 (%) flow Cash reinvestment ratio 0.09 0.09 0.09 0.08 0.07 0.17 (%) Operating leverage 5.76 2.49 2.03 2.02 2.11 7.11 Leverage Financial leverage 1.00 1.00 1.00 1.00 1.00 1.04 Reasons of variance to financial analysis in the most recent 2 years (where the variance is at least 20% or more). Note 1: The financial data listed above have been audited and certified by the CPA. Note 2: The financial data listed above have been audited and certified by the CPA.

- 136 -

※The calculation equations adopting the IFRS are as follows: 1. Financial structure (1) Debt to total assets ratio ＝ Total debt／Total assets. (2) Ratio of long-term capital to property, plant and equipment = (Net shareholders’ equity + Long-term liabilities) / Net worth of property, plant and equipment. 2. Debt servicing capability (1) Current ratio = Current assets / Current liabilities. (2) Quick ratio＝ (Current assets - Inventory - Pre-payment) / Current liabilities. (3) Interest earned ratio = Profit before income tax and interest expense / Interest expense. 3. Management capability (1) Accounts receivable (include receivable amounts and receivable bills from operation) turnover = Net sales / Average accounts receivable in each period (include receivable amounts and receivable bills from operation) balance. (2) Average collection period = 365 / Accounts receivable turnover. (3) Inventory turnover = Sales cost / average inventory amount. (4) Accounts payable (include payable amounts and payable bills from operation) turnover = Sales cost / Average accounts payable in each period (include payable amounts and payable bills from operation) balance. (5) Average days in sales＝365／Inventory turnover. (6) Property, plant and equipment turnover = Net sales /Net worth of property, plant and equipment. (7) Total assets turnover＝Net sales / Total assets. 4. Profitability (1) Return on asset＝ [Earnings after tax＋Interest expense× (1－Interest rate)]／ Average total assets. (2) Return on equity＝Earnings after tax／Average net equity. (3) Profit ratio＝Earnings (loss) after tax／Net sales. (4) Earning per share＝ (Earnings of parent company owner－Preference dividends)／ weighted average number of shares outstanding. 5. Cash flow (1) Cash flow ratio = Net cash flow from operating activities / Current liabilities. (2) Net cash flow adequacy ratio = Net cash flows from operating activities in the last five years / (Capital expenditure ＋Inventory increase + Cash dividends) in the last five years. (3) Cash flow re-investment ratio = (Cash provided by operating activities - Cash dividends)/ (Gross property, plant and equipment + Long-term investments + Other non-current assets + Working capital). 6. Leverage: (1) Operating leverage = (Net sales - Variable cost) / Income from operations. (2) Financial leverage ＝ Income from operations ／ (income from operations－ Interest expense).

- 137 -

3. Supervisors’ Review Report of the Financial Statements in the Most Recent Year: AN-SHIN FOOD SERVICES CO., LTD. Supervisors’ Review Report

To All Shareholders of AN-SHIN FOOD SERVICES CO., LTD.:

The Board of Directors has prepared and submitted the Company’s 2018 Business Report, Individual Financial Statements, Consolidated Financial Statements and Proposal allocating the profit of 2018 to the Company’s Supervisors for his or her review, of which the Individual Financial Statements and Consolidated Financial Statements were audited by independent certified public accountants, Chih, Ping-Chun and Wu, Yu-Lung, of PricewaterhouseCoopers Taiwan, pursuant to which an audit report has been prepared. I have reviewed each of the aforementioned documents and have not found any inaccuracies. Therefore, I hereby submit this report in compliance with Article 219 of the Company Act.

Date: February 26, 2019

AN-SHIN FOOD SERVICES CO., LTD. Supervisor: Huang, Mao­ Hsiung Supervisor: Yue, Chao-Tang Supervisor: Fritz J. C. Jang

4. Financial Statements in the Most Recent Year: 2018 Consolidated Financial Statements, please

refer to page 155 of Appendix 1. 5. Unconsolidated Financial Statements of the Company Audited by the CPA: 2018 Unconsolidated Financial Statements, please refer to page 234 of Appendix 2. 6. Summary of any Financial Difficulty of the Company or Its Affiliates in the Most Recent Year and Impact of such Difficulty on the Company: None.

- 138 - VII. DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND FINANCIAL PERFORMANCE; RISK FACTORS 1. Financial Condition: (1) Unconsolidated financial condition: Describe the main cause and impacts and future responsive plans for assets, liabilities and equity with material changes in the most recent two years. Unit: In Thousands New Taiwan Dollars Year Difference December 31, December 31, 2018 2017 Item Amount %

Current Assets 2,321,595 2,319,231 2,364 0.10 Investment accounted for using the equity 27,407 38,542 (11,135) (28.89) method Property, Plant and 418,595 395,601 22,994 5.81 Equipment Intangible Assets 11,555 20,425 (8,870) (43.43)

Other Assets 133,817 120,463 13,354 11.09

Total Assets 2,912,969 2,894,262 18,707 0.65

Current Liabilities 1,125,307 1,133,558 (8,251) (0.73)

Non-current liabilities 23,467 24,430 (963) (3.94)

Total Liabilities 1,148,774 1,157,988 (9,214) (0.80)

Share Capital 323,895 323,895 0 0.00

Capital Surplus 809,816 809,816 0 0.00

Retained Earnings 661,867 617,583 44,284 7.17

Other Equity (31,383) (15,020) (16,363) 108.94

Total Equity 1,764,195 1,736,274 27,921 1.61

Explanation for items of material change: (where the change before and after the period reaches above 20%, and the change amount reaches NT$ 10 million)

-139- (2) Consolidated financial condition: Describe the main cause and impacts and future responsive plans for assets, liabilities and equity with material changes in the most recent two years. Unit: In Thousands New Taiwan Dollars Year Difference December 31, December 31, 2018 2017 Item Amount %

Current Assets 2,358,449 2,388,168 (29,719) (1.24) Investment accounted for 10,726 8,335 2,391 28.69 using the equity method Property, Plant and 424,793 404,679 20,114 4.97 Equipment Intangible Assets 11,835 20,936 (9,101) (43.47)

Other Assets 144,505 131,721 12,784 9.71

Total Assets 2,950,308 2,953,839 (3,531) (0.12)

Current Liabilities 1,136,192 1,147,051 (10,859) (0.95)

Non-current liabilities 25,260 25,855 (595) (2.30)

Total Liabilities 1,161,452 1,172,906 (11,454) (0.98)

Share Capital 323,895 323,895 0 0.00

Capital Surplus 809,816 809,816 0 0.00

Retained Earnings 661,867 617,583 44,284 7.17

Other Equity (31,383) (15,020) (16,363) 108.94 Equity attributable to stockholders of the parent 1,764,195 1,736,274 27,921 1.61 company Non-controlling Interest 24,661 44,659 (19,998) (44.78)

Total Equity 1,788,856 1,780,933 7,923 0.44

Explanation for items of material change: (where the change before and after the period reaches above 20%, and the change amount reaches NT$ 10 million)

-140- 2. Financial Performance (1) Main cause of material changes for unconsolidated in operating revenue, net operating income and net income before tax: Unit: In Thousands New Taiwan Dollars Year Increase/Decrease Change ratio 2018 2017 Item amount (%)

Net operating 5,170,958 4,826,808 344,150 7.13 Revenue

Operating costs 3,824,955 3,555,122 269,833 7.59

Gross Profit 1,346,003 1,271,686 74,317 5.84 Operating expenses 1,146,451 1,060,959 85,492 8.06 Operating profit 199,552 210,727 (11,175) (5.30) Non-operating Income and (7,824) 4,863 (12,687) (260.89) Expenses Net income before 191,728 215,590 (23,862) (11.07) tax Income tax expense 51,079 46,957 4,122 8.78 Net profit (note) 140,649 168,633 (27,984) (16.59)

Explanation for items of material change: (where the change before and after the period reaches above 20%, and the change amount reaches NT$ 10 million).

-141- (2) Main cause of material changes for consolidated in operating revenue, net operating income and net income before tax: Unit: In Thousands New Taiwan Dollars Year Increase/Decrease Change ratio 2018 2017 Item amount (%)

Net operating Revenue 5,252,104 4,919,312 332,792 6.77

Operating costs 3,894,871 3,630,812 264,059 7.27

Gross Profit 1,357,233 1,288,500 68,733 5.33

Operating expenses 1,189,575 1,107,859 81,716 7.38

Operating profit 167,658 180,641 (12,983) (7.19)

Non-operating Income and 4,441 15,028 (10,587) (70.45) Expenses Net income before tax 172,099 195,669 (23,570) (12.05)

Income tax expense 51,079 46,957 4,122 8.78

Net profit (note) 121,020 148,712 (27,692) (18.62)

Other comprehensive profit 789 (3,545) 4,334 (122.26) (loss) (net, after tax) Total Comprehensive Income 121,809 145,167 (23,358) (16.09)

Net income attributable to 140,649 168,633 (27,984) (16.59) stockholders of the parent Net profit attributable to (19,629) (19,921) 292 (1.47) non-controlling interests Net profit (note) 121,020 148,712 (27,692) (18.62) Comprehensive income attributable to shareholders of 141,807 164,823 (23,016) (13.96) the parent Comprehensive income attributable to non-controlling (19,998) (19,656) (342) 1.74 interests Net comprehensive income 121,809 145,167 (23,358) (16.09) Explanation for items of material change: (where the change before and after the period reaches above 20%, and the change amount reaches NT$ 10 million).

-142- (3) Expected sales quantity and basis thereof, and the possible impact on the future financial business of the Company and responsive plan: The Company will continue to expand store locations according to the store expansion plan, and the annual sales target is established based on the previous business performance. In addition, the Company targets the expansion of market share, and effectively gains the revenue of the Company in order to increase the profit of the Company. The Company’s financial condition is proper.

3. Cash flow 1. Analysis of cash flow change for the most recent year (2018): Unit: In Thousands New Taiwan Dollars Annual net cash flow Annual cash Cash surplus Remedy for cash deficit Cash balance at the from operating flow in (out) (deficit) amount beginning of the year Investment Financial activities (3) (1)+(2)+(3) (1) plan plan (2) Not Not 1,772,857 386,097 (410,571) 1,748,383 Applicable Applicable 2018 Analysis of current year cash flow change:

1. Operating activities: The Company continued to profit and generated cash inflow.

2. Investing activities: Mainly due to payment for the new store opening and store renovation.

3. Financing activities: Mainly due to the issuance of cash dividends.

2. Improvement plan for insufficient liquidity: The Company was not subject to any insufficient liquidity of cash flow in the most recent year. 3. Cash liquidity analysis for the next year (2019): Unit: In Thousands New Taiwan Dollars Expected annual net Expected Cash surplus Remedy for cash deficit Cash balance at the cash flow from operating annual cash (deficit) amount beginning of the year Investment Financial activities flow in (out) (1)+(2)+(3) (1) (2) plan plan (3) Not Not 1,748,383 427,047 (504,552) 1,670,878 Applicable Applicable

(1) Expended cash flow analysis for the next year: A. Operating activities: Mainly due to the net cash flow generated from the continuous growth of expected operating performance continues to

-143- growth for an amount of NT$ 427,047 thousand. B. Investment activities: Mainly due to the expected increase of operating locations with the purchase of fixed assets and increased long-term equity investment, use of intelligent technology related capital expense, generated a new cash outflow of NT$ 407, 734 thousand. C. Financing activities: Mainly due to the expected issuance of 2018 cash dividends, generated a net cash outflow of NT$ 96,818 thousand. (2) Analysis on remedy for estimated cash shortage and liquidity: Not applicable.

4. Impacts on financial operations of any major capital expenditures for the most recent fiscal year: In the most recent year, the Company had no major capital expenditure items; however, to increase the profitability in order to increase the shareholders’ interest, the Company still carefully evaluated the execution of domestic store expansion plans. In addition, the overseas market was also evaluated for the most optimal schedule for investment to cope with the recovery of economy. The sources of capital were all from own funds without any concerns. In case of any major demand of capital such that a capital gap occurs, the Company is able to perform financing with the financial institution depending upon the profitability and capital cost, or may perform capital increase by cash to overcome the situation. 5. Re-investment Policy of the Most Recent Year, Reasons for Profit (Loss), Improvement Plan and Investment Plan for the Next Year: The reinvestment policy of the Company and the investment plan for the next year are all correlated to the core business operated by the Company. After establishing a solid foundation in the market in Taiwan, to continuously duplicate the successful experience and model, the Company evaluates the expansion of stores domestically, and has also entered the overseas market operations in the joint venture model in 2009 for the first time. In addition, in February 2010, the Company started the planning in Xiamen, to be up by March 2019, the Company has opened a total of 12 stores in Xiamen, Fuzhou, Quanzhou, Shanghai, Wuxi and Suzhou etc. In 2018, the Xiamen MOS Burger was still under a state of loss. The Company will continue to correct the operating model, adjust the meal product structure, strengthen employee training, construct operating systems in order to achieve service quality and growth with profit, thereby improving the operating performance as the goal thereof. At the end of 2010, the Company evaluated the market in Australia to be the second

-144- overseas operating area. In April 2011, the Company opened the first store in Brisbane, and as of March 2019, the Company has opened 6 stores in Queensland Province. For the business entering the Asian region, the Company targets at the commercial circles with greater population of Chinese as the priority area for store openings. The Company also continuously corrects the meal product structure according to the local consumption habits, taste, life-style in light of providing quality service, healthy meal products, security and safety of the Company to the consumers in Australia for a completely new dining experience. 6. Analysis and Evaluation of Risk Factors: (1) Impact of interest rate, exchange rate fluctuations and inflation conditions on the profit/loss of the company in the most recent year and up to the printing date of annual report and future countermeasures: (1) Impact of interest rate change: Unit: In Thousands New Taiwan Dollars

Item 2018 2017 Interest income 14,291 13,906 Interest income to net operating revenue ratio (%) 0.27 0.28 Interest income to net income before tax ratio (%) 8.3 7.1 Interest expense 0 0 Interest expense to net operating revenue ratio (%) 0.00 0.00 Interest expense to net income before tax ratio (%) 0.00 0.00 Source of information: Consolidated financial statements audited by CPA. In 2018, the Company hand no loans from banks; therefore, there was no interest expense. In 2018, with the continuous improvement of operating performance over the previous year, the cash balance increased and the time deposit fund position also increased, such that the interest income was slightly increased. The Company has a proper financial structure and its own capital is sufficient and the capital planning is based on conservative and stable principles. Regarding the interest rate, the Company reviews the research reports of various domestic and foreign economy research institutions and banks in order to understand the future trend of the interest rate. In addition, the Company maintains close contact with corresponding banks in order to understand the interest rate changes at all times; therefore, the impact of change of interest rates on the profit/loss of the Company is extremely minor.

-145- (2) Impact of exchange rate change: Unit: In Thousands New Taiwan Dollars Year Item 2018 2017 Exchange gain (loss) 616 (3,495) Exchange gain (loss) to net operating revenue ratio (%) 0.01 0.07 Exchange gain (loss) to net income before tax ratio (%) 0.36 1.79 Source of information: Consolidated financial statements audited by CPA. The purchases and sales of the Company use the New Taiwanese Dollar as the currency for calculation; therefore, the exchange rate has no significant impact on the overall operations of the Company. The Company will still continue to monitor the exchange rate market change information, adjust relevant investment strategy plans and discuss with suppliers the relevant international material sources in order to stabilize the change of profit/loss of the Company. (3) Impact of Inflation: According to the consumer price index for December 2018 announced by the Directorate-General of Budget, Accounting and Statistics, Executive Yuan, it indicated an annual drop of 0.05%. Since the raw materials of meal products of the Company are mainly agricultural, cattle and fishery, the purchase price of such types of raw materials may be affected by such index; however, its characteristics mostly refer to short-term changes that occurred seasonally. In addition, the Company engages in long-term supply contracts and has more than one supplier, in principle, thus, inflation has not caused any material impact on the Company. However, the Company still monitors relevant changes of raw materials prices at all times and adopts a greater appropriate stabilization measures when it is considered necessary in order to reduce its impact on the operations of the Company. (2) Policies on engaging in high risk, high leverage investments, loaning funds to others, endorsements and guarantees as well as derivative transactions, main causes of profit and loss as well as future countermeasures:

(1) Policies on engaging in high risk, high leverage investments, main causes of profit and loss as well as future countermeasures: For the most recent year and up to the printing date of the annual report, the Company did not engage in any investments of high risk or high leverage. (2) Policies on loaning funds to others, endorsements and guarantees as well as derivative transactions, main causes of profit and loss as well as future countermeasures:

-146- The Company has established the “Regulations for Loaning Funds to Others,” “Procedures for Endorsements and Guarantees,” “Procedures for Acquisition and Disposal of Assets,” etc. as the compliance basis for relevant operations, and such regulations and procedures have been approved through the resolution of the shareholders’ meetings. For the most recent year and up to the printing date of the annual report, the Company did not engage in any loaning of funds to others, endorsements, guarantees and derivatives transactions. In case such an event occurs in the future, it will be handled according to the relevant procedures. (3) Future R&D plans and expected investment in R&D budget: (1) Future R&D plans: To cope with the greater consumer demand changes, R&D and innovation are the key focus of the Company. The development of relevant products of the Company is handled by the marketing planning unit and the development unit for the planning and development of products. R&D trial making is performed internally, and food professional contractors are entrusted to provide assistance or relevant product information is obtained from Japanese MOS Burger in order to perform the development. In addition, relevant consumer questionnaire surveys, preparation instructions, trial sales and commercialization introduction are performed in order to ensure the meal quality and diversity of the product content of the Company. For future R&D plans, please refer to the explanation of the Annual Report, “V. Operation Highlights/ 1. Content of Business/(1) Content of Business (5) New products newly launched and planned recently. (2) Expected R&D budget: In 2019, according to the development progress of new meal products, new technologies and new services etc., the Company expects to invest the R&D budget at an amount of approximately NT$ 6.12 million, and will maintain a certain level of growth depending upon the operation status, in order to maintain the market differential strategy of the Company and toe ensure the increase of competitive advantages. (4) Impacts of domestic/foreign important policies and changes of laws on the financial business of the company and countermeasures: The Company closely monitors and understands any policies that may affect the operations of the Company, including food safety related laws and also cooperatively adjusts the internal relevant systems and business operations of the Company. Consequently, such policies and legal changes have not caused

-147- any material impact on the financial business of the Company. (5) Impacts of changes in technology and industry on the financial business of the company and countermeasures: The Company closely monitors the development trend of internet commerce and mobile communication as well as relevant changes and technology development of civil consumption industries. In 2015, the Company was devoted to the development of network business and established the “Network Development Business Office” in order to handle the development of electronic network business sales affairs. In 2016, the Company launched MOS Storage Card II, and also introduced the “self-order machine” at the same time in order to head toward the cloud digitization. Furthermore, the Company also started the smart business model. In 2017, the Company further developed the MOS Storage Card II credit card online value storage function. To cope with the digital era, the Company has recently continuously promoted the digital transformation to increase efficiency. To strengthen the system security and operation niche, the Company established the information security team. Since 2018, the Company has started to introduce the International information security management system (ISMS), and the content covered the activities of main business service system and machine room as well as network management etc. During the implementation process, for possible threats countered, identification and improvement were performed in order to reduce the operating risk. Through half-year of introduction and written inspection as well as field audit etc. verification procedures, in December 2018, the Company officially qualified the global certification institution, TCIC, certification, and obtained the ISO/IEC27001:2013, CNS27001:2014 information security certificates in January 2019, such that the security management goals of “confidentiality,” “integrity” and “availability” were achieved. In addition, the Company also performed educational training on information security for the entire company in order to promote information security-related concept. In view of the change in the most recent year, it had not caused any major impacts on the financial condition of the Company. (6) Impacts of change of cooperate image on the corporate crisis management and countermeasures: Since its establishment, the Company has complied with relevant regulatory requirements, and actively strengthens internal management and increases management quality and performance, as well as maintains harmonious labor management relationship, in order to continuously maintain excellent corporate

-148- image. In addition, the Company is committed to achieve greater business relationship with the external and consumers, and the MOS Burger has gained consumer popularity and has also earned high appraise from consumers up to the present day. In recent years, there have been no events affecting the corporate image requiring corporate crisis handling. (7) Expected benefit, possible risk and countermeasure for merger: For the most recent year and up to the printing date of annual report, the Company was not subject to any merger. In the future, if the Company has any merger plan, the Company will maintain careful assessment attitude to sufficiency consider the synergy of merger in order to ensure the interest of all shareholders. (8) Expected benefit, possible risk and countermeasure for expansion of facilities: The Company operates the business model of chain store, and presently, the Company does not own its factory or facility. However, in the future, if the Company has plans for the construction of a plant, the Company will maintain careful assessment attitude to sufficiency consider the benefit and risk of plant expansion in order to ensure the interest of all shareholders. (9) Risks faced during material incoming and sales centralization as well as countermeasure: (1) Risks faced during incoming materials centralization and countermeasures: The Company is a business operator in chain catering store. Since there is a consideration in the consistency of meal taste and quality, the situation of large raw materials with a centralized purchasing occurs. However, this is a characteristic of the business, and the Company has maintained excellent relationships with suppliers of large raw materials purchases for a long time. Consequently, there is no risk due to the centralization of materials purchases. (2) Risks faced during product sales centralization and countermeasures: The sales targets of the Company are mostly general consumers; therefore, there is no centralization of sales. (10) Impacts, risks and countermeasures of directors, supervisors or shareholders with a shareholding percentage exceeding 10%, large equity transfer or change on the company: For the most recent years and up to the printing date of the annual report of the Company, there were no events of large equity transfer or change on the directors, supervisors or shareholders with shareholding percentage exceeding 10%. (11) Impacts, risks and countermeasures of change in management rights to the Company: The directors and supervisors of the Company have participated in the operations

-149- of the Company for a long period of time with successful achievements in the operations. The shareholders recognize the development directions of the Company; therefore, the Company is not subject to any changes in management rights or any events that may cause impact and risks on the Company. (12) The Company and director, supervisor, president, substantial responsible person of the Company, major shareholders with shareholding percentage exceeding 10% and affiliate of the Company that has received any affirmative ruling or is involved in any pending major litigation, non-contentious case or administrative dispute event, and the result thereof may have a major impact on the shareholders’ rights or stock price; relevant dispute facts, subject matter amount, litigation starting date, main parties involving in the litigation and the handling status up to the printing date of annual report required to be disclosed: None.

(13) Other significant risks and countermeasure: None.

VII. Other material matters: None.

-150- VIII. SPECIAL DISCLOSURES 1. Affiliated enterprise-related information (1) Affiliated enterprise consolidated business report 1. Affiliated enterprise organizational chart: December 31, 2018 AN-SHIN FOOD SERVICES CO., LTD.

40.35%

AN-SHIN FOOD SERVICES (SINGAPORE) PTE. LTD.

100%

XIAMEN AN-SHIN FOOD MANAGEMENT CO. Ltd.

2. Affiliated enterprise basic information Establishment Main business Enterprise name Address Paid-in capital date items AN-SHIN FOOD 47 Tuas Avenue 9 Investment SERVICES (SINGAPORE) 2009.05.19 USD 18,853,401 Singapore 639190 holding PTE. LTD. Rm. 202, No. 16, Xinfeng 3 Road, Huoju Garden, Food and XIAMEN AN-SHIN FOOD 2009.11.17 Torch High-tech USD 18,353,400 Beverage MANAGEMENT CO. Ltd. Industrial Development Management Zone, Xiamen

3. Information on identical shareholders for affiliates inferred to have control and dominant-subordinate relationship: None.

-151- 4.Director and supervisor information of each affiliated enterprise Unit: Shares; % Shareholding Enterprise name Job Title Name or representative Number of Shareholding Shares ratio (%) AN-SHIN FOOD AN-SHIN FOOD SERVICES CO., LTD. Chairman 7,607,000 40.35 SERVICES Representative: Lin, Chien-Yuan (SINGAPORE) Director Yap Choon Shian - - PTE. LTD. Kuang Yuang Enterprise Co., Ltd. Director 1,163,700 6.17 Representative: Kao, Shun-Hsing Teco International Investment Co., Director 2,863,800 15.19 Representative: Chang, May-Yuan MOS Food Services Inc. Director 1,901,800 10.09 Representative: Takifuka Jun Xiamen An Shin An-Shin Food Services (Singapore) Pte. Ltd. Chairman 18,353,400 100.00 Food Management Representative: Lin, Chien-Yuan Co., Ltd. An-Shin Food Services (Singapore) Pte. Ltd. Director 18,353,400 100.00 Representative: Kao, Shun-Hsing An-Shin Food Services (Singapore) Pte. Ltd. Director 18,353,400 100.00 Representative: Shirley Huang An-Shin Food Services (Singapore) Pte. Ltd. Director 18,353,400 100.00 Representative: Chang, May-Yuan An-Shin Food Services (Singapore) Pte. Ltd. Director 18,353,400 100.00 Representative: Yoshida Tetsuhiro Superviso An-Shin Food Services (Singapore) Pte. Ltd. 18,353,400 100.00 r Representative: Ando Yoshinori Superviso An-Shin Food Services (Singapore) Pte. Ltd. 18,353,400 100.00 r Representative: Huang, Mao-Hsiung

5. Operating summary of each affiliated enterprise: Unit: In Thousands New Taiwan Dollars Total Operating Current Paid-in Total Net Operating Enterprise name Liabilities profit profit (loss) capital Assets worth revenue (loss) (after tax) AN-SHIN FOOD SERVICES 571,444 41,495 154 41,341 - (145) (32,906) (SINGAPORE) PTE. LTD. Xiamen An Shin Food 569,926 49,217 12,943 36,274 81,146 (32,087) (32,850) Management Co., Ltd.

-152-

(2) Affiliated Enterprise Consolidated Financial Statements

AN-SHIN FOOD SERVICES CO., LTD.

Affiliated Enterprise Consolidated Financial Statement Declaration

Our Company hereby declares that the companies required to be incorporated into the

preparation of the consolidated financial statement of the affiliates according to the “Criteria

Governing Preparation of Affiliation Reports, Consolidated Business Reports and

Consolidated Financial Statements of Affiliated Enterprises” are identical with the companies required to be incorporated into the preparation of the consolidated financial statement of affiliates and parent company according to the “International Financial

Reporting Standards 10 (IFRS 10)” for the year of 2018 (from January 1 to December 31,

2018); in addition, relevant information required to be disclosed in the consolidated financial statement of the affiliates has been disclosed completely in the consolidated financial statement of affiliates and parent company. Accordingly, no separate consolidated financial statement of the affiliates is further provided.

Declared by

Company Name: AN-SHIN FOOD SERVICES

CO., LTD.

Representative: Lin, Chien-Yuan

February 26, 2019

-153- (3) Affiliated enterprise report: None

2. Any Private Placement of Securities within the Latest Fiscal Year and as of the Date of the Annual Report: None.

3. Any Share Ownership and Disposal of Shares of the Company by Subsidiaries within the Latest Fiscal Year and as of the Date of the Annual Report: None.

4. Additional Information Required to be Disclosed - Company’s TPEx Listing commitments

TPEx listing Date: December 15, 2011

TPEx Listing Commitments Handling Status of

Commitments

The Company commits to further include in the “Procedures for The Company has completed

Acquisition or Disposal of Assets” the following content stating “The the addition of such content in company shall not waive the pre-emptive right to subscribe the new the ordinary shareholders’ shares of adopted the proposal of investment of An-Shin Food Services meeting on June 14, 2012.

(Singapore) Pte. Ltd. (hereinafter referred to as the “An-Shin

(Singapore)”); An-Shin (Singapore) shall not waive the pre-emptive right to subscribe to the new shares of adopted Xiamen An Shin Food

Management Co., Ltd. (Xiamen) for the coming years. If in the future where the Company needs to waive its pre-emptive right or dispose of the shares of aforesaid companies due to strategic alliance considerations or other consent of Taipei Exchange (TPEx), such plan shall be approved by the special resolution of the Board of Directors. “. In addition, in case of any amendments to such regulations, it shall be inputted into the

Market Observation Post System (MOPS) for material information disclosure and shall be reported to TPEx for recordation.

IX. For the most recent year and up to the printing date of the annual report, events having material impact on shareholders' rights and interests or securities prices according to Subparagraph 2 of Paragraph 3 of Article 36 of the Securities and Exchange Act: None.

-154- Appendix I

AN-SHIN FOOD SERVICES CO., LTD. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2018 AND 2017

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

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REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of An-Shin Food Services Co., Ltd.

Opinion We have audited the accompanying consolidated balance sheets of An-Shin Food Services Co., Ltd. and its subsidiaries (the “Group”) as at December 31, 2018 and 2017, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission.

Basis for opinion We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

The key audit matters in relation to the consolidated financial statements for the year ended December 31, 2018 are outlined as follows:

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Audit of POS system and accuracy in recognition of retail sales revenue

Description For accounting policies applied on operating revenue, please refer to Note 4(26). For details of operating revenue accounts, please refer to Note 6(18). An-Shin Food Services Co., Ltd. is primarily engaged in the operation of food chains and beverage service activities in Taiwan and Xiamen. Sales revenue arises mainly through direct retail sales to customers in stores. Sales revenue was $5,252,104 thousand for the year ended December 31, 2018. The Company has a large number of stores which handles significant cash and revenue daily including sales of merchandise, voucher and stored-value card topped-up, etc. The amount of cash receipts rely on POS system to collect and summarise transaction records, and generate information for accounting department to make appropriate accounting entries in the accounting system. Although each transaction is low-valued, we consider the audit of POS system and accuracy in recognition of retail sales revenue a key audit matter, given the voluminous number of retail sales transactions.

How our audit addressed the matter We performed the following audit procedures to address the abovementioned key audit matter: 1. Selected samples and checked whether the merchandise master file data in the POS system are properly maintained and approved. 2. Observed the database setting of sales information in the POS system, and selected samples and checked whether the sales information in POS system are completely transferred to the ERP system. 3. Selected samples and checked whether sales revenue with the POS system in stores are consistent with the POS system in headquarters. 4. Selected samples and checked whether sales revenue vouchers issued manually are consistent with stores’ operating income report generated by the POS system.

Other matter - Parent company only financial reports We have audited and expressed an unmodified opinion on the parent company only financial statements of An-Shin Food Services Co., Ltd. as at and for the years ended December 31, 2018 and 2017.

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Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including independent directors and supervisors, are responsible for overseeing the Group’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ROC GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: 1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from

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error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. 3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. 4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. 5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Chih, Ping-Chiun Wu, Yu-Lung

For and on behalf of PricewaterhouseCoopers, Taiwan February 26, 2019 ------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

-160- AN-SHIN FOOD SERVICES CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan dollars)

December 31, 2018 December 31, 2017 Assets Notes AMOUNT % AMOUNT %

Current assets

1100 Cash and cash equivalents 6(1) $ 1,748,383 59 $ 1,772,857 60

1110 Financial assets at fair value 6(2)

through profit or loss - current 139,136 5 - -

1125 Available-for-sale financial assets 12(4)

- current - - 182,987 6

1170 Accounts receivable, net 6(4) and 12(4) 101,423 3 84,461 3

1200 Other receivables 3,175 - 6,069 -

1210 Other receivables - related parties 7 16,791 1 3,723 -

130X Inventories, net 6(5) 41,932 1 45,853 2

1410 Prepayments 27,174 1 41,756 1

1470 Other current assets 6(1) and 8 280,435 10 250,462 9

11XX Total current assets 2,358,449 80 2,388,168 81

Non-current assets

1550 Investments accounted for using 6(6)

equity method 10,726 - 8,335 -

1600 Property, plant and equipment, net 6(7) and 7 424,793 15 404,679 14

1780 Intangible assets 6(8) and 7 11,835 - 20,936 1

1840 Deferred income tax assets 6(23) 33,469 1 31,813 1

1900 Other non-current assets 6(9) 111,036 4 99,908 3

15XX Total non-current assets 591,859 20 565,671 19

1XXX Total assets $ 2,950,308 100 $ 2,953,839 100

(Continued)

~161~ AN-SHIN FOOD SERVICES CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan dollars)

December 31, 2018 December 31, 2017 Liabilities and Equity Notes AMOUNT % AMOUNT % Current liabilities 2150 Notes payable $ 640 - $ - - 2170 Accounts payable 193,850 6 183,427 6 2180 Accounts payable - related parties 7 135,522 5 125,764 4 2200 Other payables 6(10) 460,486 16 507,917 17 2220 Other payables - related parties 7 34,627 1 45,044 2 2230 Current income tax liabilities 6(23) 29,732 1 31,038 1 2300 Other current liabilities 6(11)(18) 281,335 9 253,861 9 21XX Total current liabilities 1,136,192 38 1,147,051 39 Non-current liabilities 2550 Provisions for liabilities - 6(13) non-current 18,194 1 17,206 1 2570 Deferred income tax liabilities 6(23) 2,375 - 2,077 - 2600 Other non-current liabilities 6(12) 4,691 - 6,572 - 25XX Total non-current liabilities 25,260 1 25,855 1 2XXX Total liabilities 1,161,452 39 1,172,906 40 Equity Equity attributable to owners of parent Share capital 6(14) 3110 Share capital - common stock 323,895 11 323,895 11 Capital surplus 6(15) 3200 Capital surplus 809,816 27 809,816 27 Retained earnings 6(16) 3310 Legal reserve 139,855 5 122,992 4 3320 Special reserve 4,897 - 6,686 - 3350 Unappropriated retained earnings 517,115 18 487,905 17 Other equity interest 6(17) 3400 Other equity interest ( 21,260 ) (1) ( 4,897) - 3500 Treasury stocks 6(14) ( 10,123 ) - ( 10,123) - 31XX Equity attributable to owners of the parent 1,764,195 60 1,736,274 59 36XX Non-controlling interest 24,661 1 44,659 1 3XXX Total equity 1,788,856 61 1,780,933 60 Significant contingent liabilities 7 and 9 and unrecognised contract commitments 3X2X Total liabilities and equity $ 2,950,308 100 $ 2,953,839 100

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

~162~ AN-SHIN FOOD SERVICES CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan dollars, except earnings per share amounts)

Year ended December 31 2018 2017

Items Notes AMOUNT % AMOUNT %

4000 Revenue 6(18) and 7 $ 5,252,104 100 $ 4,919,312 100

5000 Operating costs 6(5)(12)(21)(22)

and 7 ( 3,894,871) ( 74) ( 3,630,812) ( 74)

5900 Net operating margin 1,357,233 26 1,288,500 26

Operating expenses 6(7)(8)(12)(21)(22)

and 7

6100 Selling expenses ( 760,346) ( 15) ( 681,727) ( 14)

6200 Administrative expenses ( 429,229) ( 8) ( 426,132) ( 8)

6000 Total operating expenses ( 1,189,575) ( 23) ( 1,107,859) ( 22)

6900 Operating profit 167,658 3 180,641 4

Non-operating income and

expenses

7010 Other income 6(19) and 7 40,283 1 44,320 1

7020 Other gains and losses 6(2)(20) ( 19,702) ( 1) ( 13,385) -

7060 Share of loss of associates and 6(6)

joint ventures accounted for

using equity method ( 16,140) - ( 15,907) ( 1)

7000 Total non-operating income

and expenses 4,441 - 15,028 -

7900 Profit before income tax 172,099 3 195,669 4

7950 Income tax expense 6(23) ( 51,079) ( 1) ( 46,957) ( 1)

8200 Profit for the year $ 121,020 2 $ 148,712 3

(Continued)

~163~ AN-SHIN FOOD SERVICES CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan dollars, except earnings per share amounts)

Year ended December 31 2018 2017 Items Notes AMOUNT % AMOUNT % Other comprehensive income, net 6(3)(17)(23) Components of other comprehensive income that will not be reclassified to profit or loss 8311 Gains (losses) on remeasurements of defined benefit plans $ 891 - ($ 6,746) - 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 430 - 1,147 - 8310 Components of other comprehensive income that will not be reclassified to profit or loss 1,321 - ( 5,599) - Components of other comprehensive income that will be reclassified to profit or loss 8361 Exchange differences on translation of foreign financial statements ( 856) - ( 112) - 8362 Unrealized gain on valuation of available-for-sale financial assets - - 2,102 - 8399 Income tax relating to the components of other comprehensive income that will be reclassified 324 - 64 - 8360 Components of other comprehensive (loss) income that will be reclassified to profit or loss ( 532) - 2,054 - 8300 Total other comprehensive income (loss), net of tax, for the year $ 789 - ($ 3,545) - 8500 Total comprehensive income for the year $ 121,809 2 $ 145,167 3 Profit (loss) attributable to: 8610 Owners of the parent $ 140,649 3 $ 168,633 3 8620 Non-controlling interest ( 19,629) ( 1) ( 19,921) - $ 121,020 2 $ 148,712 3 Comprehensive income (loss) attributable to: 8710 Owners of the parent $ 141,807 2 $ 164,823 3 8720 Non-controlling interest ( 19,998) - ( 19,656) - $ 121,809 2 $ 145,167 3

Earnings per share (in dollars) 6(24) 9750 Basic earnings per share $ 4.36 $ 5.23 9850 Diluted earnings per share $ 4.35 $ 5.22

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

~164~ AN-SHIN FOOD SERVICES CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan dollars)

Equity attributable to owners of the parent Retained earnings Other equity interest Exchange differences Capital surplus, on translation of Unrealized gain or loss on additional paid-in Unappropriated retained foreign financial available-for-sale financial Notes Common stock capital Legal reserve Special reserve earnings statements assets Treasury stocks Total Non-controlling interest Total equity

2017 Balance at January 1, 2017 6(14)(15)(16) (17) $ 323,895 $ 809,816 $ 105,614 $ 6,828 $ 443,579 ($ 5,947 ) ($ 739 ) ($ 10,123 ) $ 1,672,923 $ 27,985 $ 1,700,908 Profit (loss) 6(24) - - - - 168,633 - - - 168,633 ( 19,921 ) 148,712 Other comprehensive income (loss) for 6(17) the year - - - - ( 5,599 ) ( 313 ) 2,102 - ( 3,810 ) 265 ( 3,545 ) Total comprehensive income - - - - 163,034 ( 313 ) 2,102 - 164,823 ( 19,656 ) 145,167 Changes in non-controlling interests ------36,330 36,330 Changes in equity due to not participating6(6) in the capital increase of associates proportionately - - - - ( 4,654 ) - - - ( 4,654 ) - ( 4,654 ) Appropriations of 2016 earnings 6(16) Legal reserve - - 17,378 - ( 17,378 ) ------Special reserve - - - ( 142 ) 142 ------Cash dividends declaration - - - - ( 96,818 ) - - - ( 96,818 ) - ( 96,818 ) Balance at December 31, 2017 $ 323,895 $ 809,816 $ 122,992 $ 6,686 $ 487,905 ($ 6,260 ) $ 1,363 ($ 10,123 ) $ 1,736,274 $ 44,659 $ 1,780,933 2018 Balance at January 1, 2018 6(14)(15)(16) (17) $ 323,895 $ 809,816 $ 122,992 $ 6,686 $ 487,905 ($ 6,260 ) $ 1,363 ($ 10,123 ) $ 1,736,274 $ 44,659 $ 1,780,933 Effect of retrospective application and 12(4) retrospective adjustment - - - - 16,200 - ( 16,200 ) - --- Balance at 1 January after adjustments 323,895 809,816 122,992 6,686 504,105 ( 6,260 ) ( 14,837 ) ( 10,123 ) 1,736,274 44,659 1,780,933 Profit (loss) for the year 6(24) - - - - 140,649 - - - 140,649 ( 19,629 ) 121,020 Other comprehensive income (loss) for 6(17) the year - - - - 1,321 ( 163 ) - - 1,158 ( 369 ) 789 Total comprehensive income - - - - 141,970 ( 163 ) - - 141,807 ( 19,998 ) 121,809 Changes in equity due to not participating6(6) in the capital increase of associates proportionately - - - - ( 932 ) - - - ( 932 ) - ( 932 ) Appropriations of 2017 earnings 6(16) Legal reserve - - 16,863 - ( 16,863 ) ------Special reserve - - - ( 1,789 ) 1,789 ------Cash dividends declaration - - - - ( 112,954 ) - - - ( 112,954 ) - ( 112,954 ) Balance at December 31, 2018 $ 323,895 $ 809,816 $ 139,855 $ 4,897 $ 517,115 ($ 6,423 ) ($ 14,837 ) ($ 10,123 ) $ 1,764,195 $ 24,661 $ 1,788,856

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

~165~ AN-SHIN FOOD SERVICES CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan dollars)

Notes 2018 2017

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax $ 172,099 $ 195,669 Adjustments Adjustments to reconcile profit (loss) Loss on current financial assets at fair value 6(20) through profit or loss 10,011 - Depreciation 6(7)(21) 173,514 160,807 Amortisation 6(8)(21) 12,978 13,424 Interest income 6(19) ( 14,291 ) ( 13,906 ) Dividend income 6(19) ( 1,310 ) ( 892 ) Impairment loss 6(7)(20) 1,764 4,065 Gain on disposal of investments 6(20) - ( 2,880 ) Loss on disposal of property, plant and 6(20) equipment 1,828 18 Share of loss of associates and joint ventures 6(6) accounted for using equity method 16,140 15,907 Changes in operating assets and liabilities Changes in operating assets Notes receivable, net 6(4) - 1,836 Accounts receivable, net 6(4) ( 16,962 ) ( 10,557 ) Other receivables 3,311 ( 4,431 ) Other receivables - related parties 7 ( 13,068 ) ( 2,214 ) Inventories, net 6(5) 3,921 ( 3,635 ) Prepayments 14,582 ( 20,057 ) Other current assets 27 ( 171 ) Changes in operating liabilities Notes payable 640 ( 264 ) Accounts payable 10,423 ( 4,569 ) Accounts payable - related parties 7 9,758 48,245 Other payables 6(10) 9,456 37,661 Other payables - related parties 7 726 ( 549 ) Other current liabilities 6(11) 27,474 14,392 Provisions for liabilities - non-current 6(13) 988 1,017 Cash inflow generated from operations 424,009 428,916 Interest received 6(19) 13,874 13,762 Income tax paid ( 53,096 ) ( 47,998 ) Dividends received 6(19) 1,310 892 Net cash flows from operating activities 386,097 395,572

(Continued)

-166- AN-SHIN FOOD SERVICES CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan dollars)

Notes 2018 2017

CASH FLOWS FROM INVESTING ACTIVITIES Increase in available-for-sale financial assets - current $ - ($ 317,579 ) Increase in pledged certificate of deposit 8 ( 30,000 ) ( 25,000 ) Proceeds from disposal of available-for-sale financial assets - 285,327 Increase in investments accounted for using the 6(6) equity method ( 19,699 ) ( 19,320 ) Acquisition of property, plant and equipment 6(7)(26) ( 265,518 ) ( 231,855 ) Proceeds from disposal of property, plant and equipment 138 16 Acquisition of intangible assets 6(8) ( 3,883 ) ( 8,427 ) Increase in refundable deposits 6(9) ( 6,690 ) ( 5,498 ) Increase in other non-current assets 6(9) ( 4,438 ) 571 Proceeds from disposal of current financial assets at fair value through profit or loss 89,412 - Increase in current financial assets at fair value through profit or loss ( 55,572 ) - Net cash flows used in investing activities ( 296,250 ) ( 321,765 ) CASH FLOWS FROM FINANCING ACTIVITIES Decrease in other non-current liabilities ( 990 ) ( 92 ) Cash dividends paid 6(16) ( 112,954 ) ( 96,818 ) Change in non-controlling interests - 36,330 Net cash flows used in financing activities ( 113,944 ) ( 60,580 ) Effect of exchange rate changes on cash and cash equivalents ( 377 ) 739 Net (decrease) increase in cash and cash equivalents ( 24,474 ) 13,966 Cash and cash equivalents at beginning of year 1,772,857 1,758,891 Cash and cash equivalents at end of year $ 1,748,383 $ 1,772,857

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

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AN-SHIN FOOD SERVICES CO., LTD. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan dollars,except as otherwise indicated) 1. HISTORY AND ORGANISATION An-Shin Food Services Co., Ltd. (the “Company”) was incorporated on December 4, 1990 under the provisions of the Company Act of the Republic of China (R.O.C.) and Statute For Investment By Foreign Nationals. As of December 31, 2018, the Company’s contributed capital was $323,895. The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in sales and marketing consultancy of hamburgers, managing coffee shops and restaurants. The shares of the Company have been listed in the R.O.C. Over-the-Counter (OTC) market since December 15, 2011. 2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION These consolidated financial statements were reported to the Board of Directors on February 26, 2019. 3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”) New standards, interpretations and amendments as endorsed by the FSC effective from 2018 are as follows: Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendments to IFRS 2, ‘Classification and measurement of share-based payment January 1, 2018 transactions’ Amendments to IFRS 4, ‘Applying IFRS 9 Financial instruments with IFRS 4 January 1, 2018 Insurance contracts’ IFRS 9, ‘Financial instruments’ January 1, 2018 IFRS 15, ‘Revenue from contracts with customers’ January 1, 2018 Amendments to IFRS 15, ‘Clarifications to IFRS 15 Revenue from contracts with January 1, 2018 customers’ Amendments to IAS 7, ‘Disclosure initiative’ January 1, 2017 Amendments to IAS 12, ‘Recognition of deferred tax assets for unrealised losses’ January 1, 2017 Amendments to IAS 40, ‘Transfers of investment property’ January 1, 2018 IFRIC 22, ‘Foreign currency transactions and advance consideration’ January 1, 2018

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Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Annual improvements to IFRSs 2014-2016 cycle- Amendments to IFRS 1, January 1, 2018 ‘First-time adoption of International Financial Reporting Standards’ Annual improvements to IFRSs 2014-2016 cycle - Amendments to IFRS 12, January 1, 2017 ‘Disclosure of interests in other entities’ Annual improvements to IFRSs 2014-2016 cycle - Amendments to IAS 28, January 1, 2018 ‘Investments in associates and joint ventures’ Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. IFRS 9, ‘Financial instruments’ (a) Classification of debt instruments is driven by the entity’s business model and the contractual cash flow characteristics of the financial assets, which would be classified as financial asset at fair value through profit or loss, financial asset measured at fair value through other comprehensive income or financial asset measured at amortised cost. Equity instruments would be classified as financial asset at fair value through profit or loss, unless an entity makes an irrevocable election at inception to present in other comprehensive income subsequent changes in the fair value of an investment in an equity instrument that is not held for trading. (b) The Group has elected not to restate prior period financial statements using the modified retrospective approach under IFRS 9. For details of the significant effect as at January 1, 2018, please refer to Notes 12(4)B and C. (2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Group New standards, interpretations and amendments endorsed by the FSC effective from 2019 are as follows: Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendments to IFRS 9, ‘Prepayment features with negative January 1, 2019 compensation’ IFRS 16, ‘Leases’ January 1, 2019 Amendments to IAS 19, ‘Plan amendment, curtailment or settlement’ January 1, 2019 Amendments to IAS 28, ‘Long-term interests in associates January 1, 2019 and joint ventures’ IFRIC 23, ‘Uncertainty over income tax treatments’ January 1, 2019 Annual improvements to IFRSs 2015-2017 cycle January 1, 2019

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Except for the following, the above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. The quantitative impact will be disclosed when the assessment is complete. IFRS 16, ‘Leases’ IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard requires lessees to recognise a ‘right-of-use asset’ and a lease liability (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors. The Group expects to recognise the lease contract of lessees in line with IFRS 16. However, the Group does not intend to restate the financial statements of prior period (collectively referred herein as the “modified retrospective approach”). On January 1, 2019, it is expected that ‘right-of-use asset’ and lease liability will both be increased by $1,809,249, and retained earnings will be increased by $16,532. (3) IFRSs issued by IASB but not yet endorsed by the FSC New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows: Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendment to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition of January 1, 2020 Material’ Amendments to IFRS 3, ‘Definition of a business’ January 1, 2020 Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets To be determined by between an investor and its associate or joint venture’ International Accounting Standards Board IFRS 17, ‘Insurance contracts’ January 1, 2021 The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. (1) Compliance statement The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC

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Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”). (2) Basis of preparation A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention: (a) Financial assets at fair value through profit or loss. (b) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation. B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5. C. In adopting IFRS 9 and IFRS 15 effective January 1, 2018, the Group has elected to apply modified retrospective approach whereby the cumulative impact of the adoption was recognised as retained earnings or other equity as of January 1, 2018 and the consolidated financial statements for the third quarter of 2017 were not restated. The financial statements for the third quarter of 2017 were prepared in compliance with International Accounting Standard 39 (‘IAS 39’), International Accounting Standard 18 (‘IAS 18’) and related financial reporting interpretations. Please refer to Notes 12(4) and (5) for details of significant accounting policies. (3) Basis of consolidation A. Basis for preparation of consolidated financial statements: (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries. (b) Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group. (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing

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control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity. (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of. B. Subsidiaries included in the consolidated financial statements: Ownership (%) Name of Name of Main business December December investor subsidiary activities 31, 2018 31, 2017 Description An-Shin Food An-Shin Food Investment holdings 40.35 40.35 Note 1 Services Services (Singapore) for overseas Co., Ltd. Pte. Ltd. ventures An-Shin Food Xia Men Restaurant 100 100 Note 2 Services An-Shin Food management: (Singapore) Management Co., restaurant services Pte. Ltd. Ltd. (limited to branches) Note 1: .Although the Company only owns 40.35% of the voting right stocks of An-Shin Food Services (Singapore) Pte. Ltd., it is included in the consolidation as the Company exercises substantial control over it. Note 2: Xia Men An-Shin Food Management Co., Ltd. is a subsidiary of An-Shin Food Services (Singapore) Pte. Ltd. Thus, the Company indirectly invested in the company and has substantial control over it. C. Subsidiaries not included in the consolidated financial statements: None. D. Adjustments for subsidiaries with different balance sheet dates: None. E. Significant restrictions: None.

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F. Subsidiaries that have non-controlling interests that are material to the Group: As of December 31, 2018 and 2017, the non-controlling interest amounted to $24,661 and $44,659, respectively. The information on non-controlling interest and respective subsidiaries is as follows: Non-controlling interest Principal place of December 31, 2018 December 31, 2017 Name of subsidiary business Amount Ownership Amount Ownership An-Shin Food Services (Singapore) Singapore $ 24,661 59.65% $ 44,659 59.65% Pte. Ltd. Xia Men An-Shin Food Management China 21,637 59.65% 41,705 59.65% Co., Ltd. Summarised financial information of the subsidiaries: Balance sheets

An-Shin Food Services (Singapore) Pte. Ltd. December 31, 2018 December 31, 2017 Current assets$ 5,221 $ 5,189 Non-current assets 36,274 69,916 Current liabilities ( 154) ( 239) Total net assets $ 41,341 $ 74,866

Xia Men An-Shin Food Management Co., Ltd. December 31, 2018 December 31, 2017 Current assets$ 32,052 $ 64,029 Non-current assets 17,165 20,848 Current liabilities( 11,151) ( 13,537) Non-current liabilities ( 1,792) ( 1,424) Total net assets $ 36,274 $ 69,916

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Statements of comprehensive income An-Shin Food Services (Singapore) Pte. Ltd. Year ended Year ended December 31, 2018 December 31, 2017 Revenue $ - $ - Loss before income tax ( 32,906) ( 33,396) Income tax expense - - Loss for the period from continuing operations ( 32,906) ( 33,396) Loss from discontinued operations - - Loss for the period ( 32,906) ( 33,396) Other comprehensive income (loss), net of tax ( 621) 444 Total comprehensive loss for the period ($ 33,527) ($ 32,952) Comprehensive loss attributable to ($ 19,998) ($ 19,656) non-controlling interest Dividends paid to non-controlling interest $ - $ -

Xia Men An-Shin Food Management Co., Ltd. Year ended Year ended December 31, 2018 December 31, 2017 Revenue $ 81,146 $ 92,504 Loss before income tax( 32,850) ( 33,281) Income tax expense - - Loss for the period from continuing operations( 32,850) ( 33,281) Loss from discontinued operations - - Loss for the period( 32,850) ( 33,281) Other comprehensive loss, net of tax - - Total comprehensive loss for the period ($ 32,850) ($ 33,281) Comprehensive loss attributable to non- ($ 19,595) ($ 19,852) controlling interest Dividends paid to non-controlling interest $ - $ -

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Statements of cash flows An-Shin Food Services (Singapore) Pte. Ltd. Year ended Year ended December 31, 2018 December 31, 2017 Net cash used in operating activities ($ 133) ($ 8) Net cash used in investing activities - ( 60,864) Net cash provided by financing activities - 60,864 Effect of exchange rates on cash and cash equivalents 163 ( 434) Increase (decrease) in cash and cash equivalents 30 ( 442) Cash and cash equivalents, beginning of period 5,185 5,627 Cash and cash equivalents, end of period $ 5,215 $ 5,185

Xia Men An-Shin Food Management Co., Ltd. Year ended Year ended December 31, 2018 December 31, 2017 Net cash used in operating activities ($ 28,753) ($ 30,334) Net cash used in investing ( 4,326) ( 4,146) activities Net cash provided by financing activities - 60,864 Effect of exchange rates on cash and cash equivalents ( 273) 1,165 (Decrease) increase in cash and cash equivalents ( 33,352) 27,549 Cash and cash equivalents, beginning of period 44,566 17,017 Cash and cash equivalents, end of period $ 11,214 $ 44,566

(4) Foreign currency translation Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency. A. Foreign currency transactions and balances (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise. (b) Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

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(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. (d) All foreign exchange gains and losses based on the nature of those transctions are presented in the statement of comprehensive income within ‘other gains and losses’. B. Translation of foreign operations The operating results and financial position of all the group entities and associates that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

(b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and (c) All resulting exchange differences are recognised in other comprehensive income. (5) Classification of current and non-current items A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets: (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle; (b) Assets held mainly for trading purposes; (c) Assets that are expected to be realised within twelve months from the balance sheet date; (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date. B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities: (a) Liabilities that are expected to be settled within the normal operating cycle; (b) Liabilities arising mainly from trading activities; (c) Liabilities that are to be settled within twelve months from the balance sheet date; (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. (6) Cash equivalents Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value. Time deposits that meet the

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definition above and are held for the purpose of meeting short-term cash commitment in operations are classified as cash equivalents. (7) Financial assets at fair value through profit or loss Effective 2018 A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income. B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting. C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss. D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably. (8) Financial assets at fair value through other comprehensive income Effective 2018 A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income. B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting. C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value. The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably. (9) Accounts and notes receivable A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services. B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial. (10) Impairment of financial assets The Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses for trade receivables that do not contain a significant financing component.

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(11) Derecognition of financial assets The Group derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire. (12) Operating leases (lessor) Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term. (13) Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO) method. The goods comprise raw materials, direct labour, other direct costs and related production overheads. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses. (14) Investments accounted for using equity method/associates A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost. B. The Group’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate. C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognises change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership. D. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group. E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s

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ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of. F. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, then the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach. (15) Property, plant and equipment A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised. B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred. C. Property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately. D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows: Property, plant and equipment Useful lives Kitchen equipment and freezers 1~7 years Leasehold improvements Lease term (1~11 years) or useful lives whichever is shorter Other equipment 3~7 years (16) Operating leases (lessee) Payments made under an operating lease (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the lease term.

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(17) Intangible assets Computer software is stated at cost and amortised using straight-line method over its estimated useful life of 2 to 5 years. (18) Impairment of non-financial assets The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised. (19) Notes and accounts payable A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities. B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial. (20) Derecognition of financial liabilities A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires. (21) Provisions Provisions, mainly decommissioning provisions, etc., are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognised as interest expense. Provisions are not recognised for future operating losses. (22) Employee benefits A. Short-term employee benefits Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service. B. Pensions (a) Defined contribution plans For defined contribution plans, the contributions are recognised as pension expense when

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they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments. (b) Defined benefit plans i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations. ii. Remeasurements arising on defined benefit plans are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings. C. Employees’ compensation and directors’ and supervisors’ remuneration Employees’ compensation and directors’ and supervisors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently acutual distributed amounts is accounted for as changes in estimates. (23) Income tax A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity. B. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional 10% tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings. C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or

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loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed. E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously. (24) Share capital A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds. B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders. (25) Dividends Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities. (26) Revenue recognition A. The Group is primarily engaged in sales of hamburgers, and revenue is recognised when products are sold to customers. B. Payment of the transaction price is due immediately when the customer purchases the products. It is the Group’s policy to sell its certain products to the end customer with a right of return within a certain period. Therefore, a refund liability and a right to the returned goods are recognised for the products expected to be returned. Accumulated experience is used to estimate such returns using the expected value method. Because the number of products returned has been steady for years, it is highly probable that a significant reversal in the

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cumulative revenue recognised will not occur. The validity of this assumption and the estimated amount of returns are reassessed at each reporting date. C. The Group operates a loyalty programme where retail customers accumulate points for purchases made which entitle them to discount on future purchases. The points provide a material right to customers that they would not receive without entering into a contract. Therefore, the promise to provide points to the customer is a separate performance obligation. The transaction price is allocated to the product and the points on a relative stand-alone selling price basis. The stand-alone selling price per point is estimated on the basis of the discount granted when the points are redeemed and on the basis of the likelihood of redemption, based on past experience. The stand-alone selling price of the product sold is estimated on the basis of the retail price. A contract liability is recognised for the transaction price which is allocated to the points and revenue is recognised when the points are redeemed or expire. (27) Government grants Government grants are recognised at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate. (28) Operating segments Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Group’s Chief Operating Decision-Maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions. 5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below: (1) Critical judgements in applying the Group’s accounting policies None. (2) Critical accounting estimates and assumptions None.

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6. DETAILS OF SIGNIFICANT ACCOUNTS (1) Cash and cash equivalents December 31, 2018 December 31, 2017 Cash on hand $ 67,933 $ 57,743 Checking accounts and demand deposits 320,251 336,392 Time deposits 1,360,199 1,378,722 $ 1,748,383 $ 1,772,857

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote. B. As of December 31, 2018 and 2017, cash and cash equivalents amounting to $280,000 and $250,000, respectively, representing performance guarantee for the issuance of Mos cards and gift certificates were pledged to others as collateral, classified as “1470 other current assets”. (2) Financial assets at fair value through profit or loss Effective 2018 Items December 31, 2018 Current items: Financial assets mandatorily measured at fair value through profit or loss Listed stocks$ 63,453 Open-end funds 86,102 149,555 Valuation adjustment( 10,419) $ 139,136

A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below: Year ended December 31, 2018 Financial assets mandatorily measured at fair value through profit or loss ($ 10,011) Equity instruments B. Information relating to credit risk is provided in Note 12(2). C. The information on December 31, 2017 is provided in Note 12(4).

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(3) Financial assets at fair value through other comprehensive income Effective 2018 Items December 31, 2018 Non-current items: Equity instruments Unlisted stocks$ 14,837 Valuation adjustment ( 14,837) $ -

A. The Group has elected to classify investment in Guangdong Mos Burger Management Co., Ltd. which is considered to be a strategic investment as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $0 as at December 31, 2018. B. For the year ended December 31, 2018, the fair value of financial assets at fair value through other comprehensive income is recognised in other comprehensive income in the amount of $0. C. As at December 31, 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group was $0. D. Information relating to credit risk is provided in Note 12(2). E. The information on December 31, 2017 is provided in Note 12(4). (4) Notes and accounts receivable December 31, 2018 December 31, 2017 Accounts receivable$ 101,423 $ 84,461 Less: Allowance for bad debts - - $ 101,423 $ 84,461

A. The ageing analysis of accounts receivable and notes receivable that were past due but not impaired is as follows: December 31, 2018 December 31, 2017 Not past due$ 75,982 $ 70,574 Up to 30 days 23,415 13,733 31 to 90 days 2,005 122 91 to 180 days 21 32 $ 101,423 $ 84,461

The above ageing analysis was based on invoice date. B. The Group had no notes and accounts receivable pledged to others as collateral as of December 31, 2018 and 2017.

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C. As at December 31, 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable was $101,423. D. Information relating to credit risk is provided in Note 12(2). (5) Inventories December 31, 2018 Allowance for Cost valuation loss Book value Food $ 33,848 ($ 386) $ 33,462 Packing materials 6,942 ( 200) 6,742 Others 2,103 ( 375) 1,728 $ 42,893 ($ 961) $ 41,932

December 31, 2017 Allowance for Cost valuation loss Book value Food $ 38,110 ($ 173) $ 37,937 Packing materials 6,622 ( 99) 6,523 Others 1,810 ( 417) 1,393 $ 46,542 ($ 689) $ 45,853

The cost of inventories recognised as expense for the period: Year ended Year ended December 31, 2018 December 31, 2017 Cost of inventories sold $ 1,871,855 $ 1,748,318 Other traveling and dining service costs 2,029,064 1,888,026 Loss on market value decline of inventories 282 369 Loss on abandonment of inventories 2 30 Revenue from sale of scraps ( 6,332) ( 5,931) $ 3,894,871 $ 3,630,812

(6) Investment accounted for using equity method December 31, 2018 December 31, 2017 Associate: $ 10,726 $ 8,335 Mos Burger Australia Pty. Ltd.

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A. The basic information of the associate that is material to the Group is as follows: Principal Company placeShareholding ratio Nature of Method of name of business December 31, 2018 December 31, 2017 relationship measurement Mos Burger Australia 29.19% 28.94% Financial Equity Australia investment method Pty. Ltd. B. The summarised financial information of the associate that is material to the Group is as follows: Balance sheet Mos Burger Australia Pty Ltd. December 31, 2018 December 31, 2017 Current assets $ 34,609 $ 32,610 Non-current assets 15,360 24,383 Current liabilities ( 10,948) ( 25,757) Non-current liabilities ( 2,275) ( 2,434) Total net assets $ 36,746 $ 28,802

Share in associate's net assets $ 10,726 $ 8,335 Goodwill - - Carrying amount of the $ 10,726 $ 8,335 associate

Statement of comprehensive income Mos Burger Australia Pty Ltd. Year ended Year ended December 31, 2018 December 31, 2017 Revenue $ 86,175 $ 99,701 Loss for the period from continuing operations ($ 55,289) ($ 58,272) Total comprehensive loss ($ 55,289) ($ 58,272) $ - $ - Dividends received from associate C. The Group increased capital investment in Mos Burger Australia Pty. Ltd. by $19,320 (AUD800 thousand) as resolved by the Board of Directors on June 7, 2017. As certain shareholders of the associate did not subscribe to the capital increase, the ownership of the Group in the associate increased to 28.94%. The Group recognized the decrease of equity amounting to $4,654 in the third quarter of 2017.

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D. As the Group increased its capital investment in Mos Burger Australia Pty. Ltd. by $19,699 (AUD 868 thousand) as resolved by the Board of Directors on June 5, 2018 and some shareholders of the associate did not subscribe to the capital increase, the Group’s ownership percentage increased to 29.19% after the capital increase and the Group recognised the decrease in equity in the amount of $932 in the third quarter of 2018. E. The Group’s investment in Mos Burger Australia Pty. Ltd. has no quoted market price. (7) Property, plant and equipment Kitchen equipment Leasehold and freezers improvements Others Total At January 1, 2018 Cost$ 445,836 $ 1,483,783 $ 270,801 $ 2,200,420 Accumulated depreciation and impairment ( 364,065) ( 1,231,580) ( 200,096) ( 1,795,741) $ 81,771 $ 252,203 $ 70,705 $ 404,679 2018 Opening net book amount as at January 1 $ 81,771 $ 252,203 $ 70,705 $ 404,679 Additions 69,994 104,776 22,718 197,488 Disposals ( 364) ( 1,476) ( 126) ( 1,966) Depreciation charge ( 37,509) ( 106,402) ( 29,603) ( 173,514) Impairment loss - ( 1,764) - ( 1,764) Net exchange differences ( 49) ( 77) ( 4) ( 130) Closing net book amount as at December 31 $ 113,843 $ 247,260 $ 63,690 $ 424,793

At December 31, 2018 Cost $ 445,960 $ 1,557,421 $ 268,526 $ 2,271,907 Accumulated depreciation and impairment ( 332,117) ( 1,310,161) ( 204,836) ( 1,847,114) $ 113,843 $ 247,260 $ 63,690 $ 424,793

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Kitchen equipment Leasehold and freezers improvements Others Total At January 1, 2017 Cost$ 419,710 $ 1,374,563 $ 235,193 $ 2,029,466 Accumulated depreciation ( 346,355) ( 1,176,633) ( 181,164) ( 1,704,152) $ 73,355 $ 197,930 $ 54,029 $ 325,314 2017 Opening net book amount as at January 1 $ 73,355 $ 197,930 $ 54,029 $ 325,314 Additions 40,724 155,930 47,850 244,504 Disposals - ( 18) ( 16) ( 34) Depreciation charge ( 32,197) ( 97,460) ( 31,150) ( 160,807) Impairment loss - ( 4,065) - ( 4,065) Net exchange differences ( 111) ( 114) ( 8) ( 233) Closing net book amount as $ 81,771 $ 252,203 $ 70,705 $ 404,679 at December 31

At December 31, 2017 Cost$ 445,836 $ 1,483,783 $ 270,801 $ 2,200,420 Accumulated depreciation and impairment ( 364,065) ( 1,231,580) ( 200,096) ( 1,795,741) $ 81,771 $ 252,203 $ 70,705 $ 404,679 For details of impairment on property, plant and equipment, please refer to Note 6(20).

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(8) Intangible assets Computer software Year ended Year ended December 31, 2018 December 31, 2017 At January 1 Cost $ 54,896 $ 45,053 Accumulated amortisation ( 33,960) ( 20,539) $ 20,936 $ 24,514

Opening net book amount as at January 1$ 20,936 $ 24,514 Additions-acquired separately 3,883 8,427 Reclassifications - 1,422 Amortisation charge ( 12,978) ( 13,424) Net exchange differences ( 6) ( 3) Closing net book amount as at $ 11,835 $ 20,936 December 31

At December 31 Cost $ 58,757 $ 54,896 Accumulated amortisation ( 46,922) ( 33,960) $ 11,835 $ 20,936

Details of amortisation on intangible assets are as follows: Year ended Year ended December 31, 2018 December 31, 2017 Selling expenses$ 922 $ 450 Administrative expenses 12,056 2,843 $ 12,978 $ 3,293

(9) Other non-current assets December 31, 2018 December 31, 2017 Refundable deposits Lease deposits $ 101,730 $ 94,509 Natural gas 1,845 1,870 Others 1,172 1,678 Prepayments for business facilities 6,289 1,851 $ 111,036 $ 99,908

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(10) Other payables December 31, 2018 December 31, 2017 Accrued payroll$ 137,722 $ 129,295 Payables on bonus 70,661 88,280 Payables on equipment 21,421 78,308 Payables on labor insurance expenses 30,235 27,311 Payables on utilities expense 21,043 24,569 Payables on repairs and maintenance expense 25,094 27,527 Payables on pension 19,656 17,319 Payables on advertisement 25,009 14,473 Payables on shipping expenses 10,507 5,647 Others 99,138 95,188 $ 460,486 $ 507,917

(11) Other current liabilities December 31, 2018 December 31, 2017 Receipts in advance - prepaid card$ 243,449 $ 221,024 Receipts in advance - business card 17,871 14,049 Receipts in advance - gift voucher 686 1,098 Others 19,329 17,690 $ 281,335 $ 253,861

(12) Pensions A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

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(b) The amounts recognised in the balance sheet are as follows: December 31, 2018 December 31, 2017 Present value of defined benefit ($ 37,993) ($ 38,634) obligation Fair value of plan assets 34,827 33,477 Net defined benefit liability ($ 3,166) ($ 5,157) (c) Movements in net defined benefit liabilities are as follows:

Present value of defined benefit Fair value of Net defined obligation plan assets benefit liability Year ended December 31, 2018 Balance at January 1($ 38,634) $ 33,477 ($ 5,157) Current service cost( 286) - ( 286) Interest (expense) income ( 425) 368 ( 57) ( 39,345) 33,845 ( 5,500) Remeasurements: Return on plan assets - 1,062 1,062 (excluding amounts included in interest income or expense) Change in financial assumptions( 425) - ( 425) Experience adjustments 254 - 254 ( 171) 1,062 891 Pension fund contribution - 1,443 1,443 Paid pension 1,523 ( 1,523) - ($ 37,993) $ 34,827 ($ 3,166) Balance at December 31

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Present value of defined benefit Fair value of Net defined obligation plan assets benefit liability Year ended December 31, 2017 Balance at January 1($ 34,098) $ 34,717 $ 619 Current service cost( 449) - ( 449) Interest (expense) income ( 477) 486 9 ( 35,024) 35,203 179 Remeasurements: Return on plan assets - ( 78) ( 78) (excluding amounts included in interest income or expense) Change in financial assumptions( 1,302) - ( 1,302) Experience adjustments ( 5,366) - ( 5,366) ( 6,668) ( 78) ( 6,746) Pension fund contribution - 1,410 1,410 Paid pension 3,058 ( 3,058) - Balance at December 31 ($ 38,634) $ 33,477 ($ 5,157)

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan asset fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2018 and 2017 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government. (e) The principal actuarial assumptions used were as follows: 2018 2017 Discount rate 1.00% 1.10% 2.25% 2.25% Future salary increases

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Future mortality rate was estimated based on the 5th Taiwan Standard Ordinary Experience Mortality Table. Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

Discount rate Future salary increases Increase 0.25% Decrease 0.25% Increase 0.25% Decrease 0.25% December 31, 2018 Effect on present value of ($ 1,050) $ 1,094 $ 985 ($ 952) defined benefit obligation December 31, 2017 Effect on present value of ($ 1,089) $ 1,135 $ 1,023 ($ 989) defined benefit obligation The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analyzing sensitivity and the method of calculating net pension liability in the balance sheet are the same. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period. (f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2019 amounts to $0. (g) As of December 31, 2018, the weighted average duration of the retirement plan is 12 years. The analysis of timing of the future pension payment was as follows: Not later than one year$ 3,572 Later than one year but not later than five years 5,805 Later than five years 7,698 $ 17,075

B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. (b) The Company’s Mainland China subsidiary, Xiamen An-Shin Food Management Co., Ltd., has a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on a certain percentage of the employees’ monthly salaries and wages. The contribution percentage for the years ended December 31, 2018 and 2017 was 12% ~ 20% for both periods. Other than the monthly contributions, the Group has no further obligations.

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(c) The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2018 and 2017 were $74,150 and $68,502, respectively. (13) Provisions Decommissioning liabilities 2018 At January 1 $ 17,206 Additional provisions 1,798 Used during the period ( 773) Exchange differences ( 37) $ 18,194 At December 31

Decommissioning liabilities 2017 At January 1 $ 16,189 Additional provisions 1,449 Used during the period ( 420) Exchange differences ( 12) $ 17,206 At December 31 Analysis of total provisions:

December 31, 2018 December 31, 2017 $ 18,194 $ 17,206 Non-current Depending on the policies published, applicable agreements or the law/regulation requirements, the Group bears dismantling, removing the asset and restoring the site obligations for certain stores in the future. A provision is recognised for the present value of costs to be incurred for dismantling, removing the asset and restoring the site. (14) Share capital A. As of December 31, 2018, the Company’s authorised capital was $400,000, consisting of 40 million shares of ordinary stock, and the paid-in capital was $323,895 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected. There were no changes in the number of the Company’s issued ordinary shares outstanding for the yaers ended December 31, 2018 and 2017. B. Treasury shares (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

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December 31, 2018 Name of company Reason for holding the shares reacquisition Number of shares Carrying amount The Company To be reissued to 117,000 $ 10,123 employees December 31, 2017 Name of company Reason for holding the shares reacquisition Number of shares Carrying amount The Company To be reissued to 117,000 $ 10,123 employees (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus. (c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued. (d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within three years from the reacquisition date and shares not reissued within the three-year period are to be retired. (15) Capital surplus A. Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Law requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient. B. Capital surplus arise from paid-in capital in excess of par value on issuance of common stocks. There were no changes in the Company’s capital surplus for the years ended December 31, 2018 and 2017. (16) Retained earnings A. Under the Company's Articles of Incorporation, the current year's earnings, if any, shall be appropriated based on the following order: (a) pay all taxes; (b) offset prior years’ operating losses; (c) set aside 10% as legal reserve; (d) set aside or reverse a special reserve in accordance with regulations by the competent authority; (e) The Company is engaged in the catering industry and is in the growth stage, with a stable

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financial structure. Other than the regulations in the Company Act and the Company's Articles, the Company also distributes earnings in line with its capital plan and operating results in deciding how to appropriate dividends. The Company adopts a stable and balanced dividend strategy and appropriates the dividend (including cash dividend or stock dividend) in accordance with operating results, financial position and capital plan during the Board of Directors' meeting before the shareholders' meeting, and the proportion of cash dividend should not be lower than 30% of total dividends. B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital. C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings. D. The Company recognised dividends distributed to owners amounting to $112,954 ($3.5 (in dollars) per share) and $96,818 ($3 (in dollars) per share) for the years ended December 31, 2018 and 2017, respectively. On February 26, 2019, the Board of Directors proposed for the distribution of dividends from 2018 earnings in the amount of $96,818, at $3 (in dollars) per share. E. For information relating to employees’ compensation and directors’ and supervisors’ remuneration, please refer to Note 6(22). (17) Other equity items Available-for-sale Currency translation investment differences Total At January 1, 2018$ 1,363 ($ 6,260) ($ 4,897) Retrospection transferred to ( 1,363) - ( 1,363) retained earnings– gross Retrospection transferred ( 14,837) - ( 14,837) from retained earnings– gross Currency translation differences: –Group - ( 487) ( 487) –Tax on Group - 324 324 ($ 14,837) ($ 6,423) ($ 21,260) At December 31, 2018

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Available-for-sale Currency translation investment differences Total At January 1, 2017 ($ 739) ($ 5,947) ($ 6,686) Revaluation – gross 4,982 - 4,982 Revaluation transfer – gross ( 2,880) - ( 2,880) Currency translation differences: –Group - ( 377) ( 377) –Tax on Group - 64 64 At December 31, 2017 $ 1,363 ($ 6,260) ($ 4,897)

(18) Operating revenue Year ended Year ended December 31, 2018 December 31, 2017 Revenue form contracts with customers Dining service income $ 5,252,104 $ 4,919,312

A. Disaggregation of revenue from contracts with customers The Group derives revenue from the transfer of goods at a point in time, which is dining service revenue, in the following major geographical regions: Restaurant retail Year ended December 31, 2018 Taiwan Mainland China Total Revenue from external customer contracts $ 5,170,958 $ 81,146 $ 5,252,104 Inter-segment revenue - - - Total segment revenue $ 5,170,958 $ 81,146 $ 5,252,104 Restaurant retail Year ended December 31, 2017 Taiwan Mainland China Total Revenue from external customer contracts $ 4,826,808 $ 92,504 $ 4,919,312 Inter-segment revenue - - - $ 4,826,808 $ 92,504 $ 4,919,312 Total segment revenue The aforementioned revenue is recognised at a point in time.

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B. Contract assets and liabilities As of December 31, 2018 and 2017, the Group has no contract assets in relation to contract revenue. In addition, the Group recognised contract liabilities as follows:

December 31, 2018 December 31, 2017 Contract liabilities (shown as other current liabilities) Contract liabilities - customer loyalty $ 12,605 $ 10,355 programmes Contract liabilities - advance receipts 268,730 243,506 $ 281,335 $ 253,861

(a) Significant changes in contract assets and liabilities None. (b) Revenue recognised that was included in the contract liability balance at the beginning of the period Year ended Year ended December 31, 2018 December 31, 2017 Revenue recognised that was included in the contract liability balance at the beginning of the period Customer loyalty programmes$ 12,605 $ 10,355 Advance receipts 237,011 215,476 $ 249,616 $ 225,831

C. Related disclosures on operating revenue for the year ended December 31, 2017 are provided in Note 12(5) B. (19) Other income

Year ended Year ended December 31, 2018 December 31, 2017 Interest income: Interest income from bank deposits$ 14,032 $ 12,964 Other interest income 259 942 Rental revenue 9,434 6,720 Dividend income 1,310 892 Other income - others 15,248 22,802 $ 40,283 $ 44,320

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(20) Other gains and losses Year ended Year ended December 31, 2018 December 31, 2017

Losses on disposals of property, plant and equipment ($ 1,828) ($ 18) Gains on disposals of investments - 2,880 Net currency exchange loss 616 ( 3,495) Losses on financial assets at fair value through profit or loss ( 10,011) - Impairment loss on property, plant and equipment ( 1,764) ( 4,065) Miscellaneous disbursements ( 6,715) ( 8,687) ($ 19,702) ($ 13,385)

The property, plant and equipment incurred impairment loss as the operating performance of certain stores did not meet the expectation; therefore, the Group recognised impairment loss amounting to $1,764 and $4,065 in 2018 and 2017, respectively. (21) Expenses by nature

Year ended Year ended December 31, 2018 December 31, 2017 Raw materials and supplies used$ 1,871,855 $ 1,748,318 Employee benefit expense 1,655,844 1,565,370 Operating lease payments 595,556 551,891 Utilities expenses 209,465 202,916 Depreciation on property, plant and equipment 173,514 160,807 Advertising costs 152,800 109,943 Repairs and maintenance expenses 85,540 91,292 Amortisation on intangible assets 12,978 13,424 Transportation expenses 15,917 12,676 Other expenses 310,977 282,034 $ 5,084,446 $ 4,738,671

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(22) Employee benefit expense Year ended Year ended December 31, 2018 December 31, 2017 Wages and salaries$ 1,370,990 $ 1,301,776 Labor and health insurance fees 152,653 140,752 Pension costs 74,493 68,942 Other personnel expenses 57,708 53,900 $ 1,655,844 $ 1,565,370

A. Under the Companyʾs Articles of Incorporation, the current yearʾs earnings, if any, shall appropriate over 1~2% as employeesʾ compensation, and under 5% as remuneration to directors and supervisors. However, if the Company has accumulated deficit, the earnings shall first be reserved to offset the deficit. B. For the years ended December 31, 2018 and 2017, employees’ compensation was accrued at $4,079 and $4,587, respectively; while directors’ and supervisors’ remuneration was accrued at $8,159 and $9,174, respectively. The aforementioned amounts were recognised in salary expenses. The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 2% and 4% of distributable profit of current year for the years ended December 31, 2018 and 2017. The distributed amounts resolved by the Board of Directors’ were in agreement with estimated amounts, and the employees’ compensation will be distributed in the form of cash. Employees’ compensation and directors’ and supervisors’ remuneration of 2017 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2017 financial statements. Information about employees’ compensation and directors’ and supervisors’ remuneration of the Company as resolved by the Board of Directors and the shareholders at the shareholders’ meeting will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

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(23) Income tax A. Income tax expense (a) Components of income tax expense: Year ended Year ended December 31, 2018 December 31, 2017 Current tax: Current tax on profits for the year$ 47,398 $ 46,617 Tax on undistributed surplus earnings 3,035 5,562 Prior year income tax over estimation 1,353 ( 4,161) Total current tax 51,786 48,018 Deferred tax: Origination and reversal of temporary differences 2,803 ( 1,061) Impact of change in tax rate ( 3,510) - Total deferred tax ( 707) ( 1,061) $ 51,079 $ 46,957 Income tax expense (b) The income tax credit (charge) relating to components of other comprehensive income is as follows: Year ended Year ended December 31, 2018 December 31, 2017 Currency translation differences $ 324 $ 64 Remeasurement of defined benefit $ 430 $ 1,147 obligation

B. Reconciliation between income tax expense and accounting profit: Year ended Year ended December 31, 2018 December 31, 2017 Tax calculated based on profit before tax and statutory tax rate－parent company $ 38,346 $ 36,650 Tax calculated based on profit before tax and statutory tax rate－subsidiary ( 8,212) ( 8,320) Effects from items disallowed by tax regulation 2,364 414 Additional 10% tax on undistributed earnings 3,035 5,562 Prior year income tax over estimation 1,353 ( 4,161) Impact of change in tax rate ( 3,510) - Change in assessment of realisation of deferred tax assets 17,703 16,812 Income tax expense $ 51,079 $ 46,957

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C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows: Year ended December 31, 2018 Recognised Recognised in other in profit comprehensive Translation December January 1 or loss income differences 31 Temporary differences: - Deferred tax assets: Loss on foreign investment recognised by equity method$ 6,463 ($ 2,472) $ - $ - $ 3,991 Unrealised expenses 19,568 3,477 430 - 23,475 Currency translation differences 1,282 - 324 - 1,606 Tax losses 4,500 - - ( 103) 4,397 $ 31,813 $ 1,005 $ 754 ($ 103) $ 33,469 - Deferred tax liabilities: Currency translation differences ($ 650) ($ 115) $ - $ - ($ 765) Unrealised expenses ( 1,427) ( 183) - -( 1,610) ($ 2,077) ($ 298) $ -$ -($ 2,375)

Year ended December 31, 2017 Recognised Recognised in other in profit comprehensive Translation January 1 or loss income differences December 31 Temporary differences: - Deferred tax assets: Loss on foreign investment recognised by equity method$ 7,711 ($ 1,248) $ - $ - $ 6,463 Unrealised expenses 16,187 2,234 1,147 - 19,568 Currency translation differences 1,218 - 64 - 1,282 Tax losses 4,558 - - ( 58) 4,500 $ 29,674 $ 986 $ 1,211 ($ 58) $ 31,813 - Deferred tax liabilities: Currency translation differences ($ 650) $ - $ - $ - ($ 650) Unrealised expenses ( 1,502) 75 - -( 1,427) ($ 2,152) $ 75 $ -$ -($ 2,077)

D. The Company’s income tax returns through 2016 have been assessed and approved by the Tax Authority. E. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China on February 7, 2018, the Company’s applicable income tax rate was raised from 17% to 20% effective from January 1, 2018. The Company has assessed the impact of

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the change in income tax rate. (24) Earnings per share Year ended December 31, 2018 Weighted average number of ordinary Earnings per shares outstanding share Amount after tax (shares in thousands) (in dollars) Basic earnings per share Profit attributable to ordinary shareholders of the parent$ 140,649 32,273 $ 4.36 Diluted earnings per share Profit attributable to ordinary shareholders of the parent$ 140,649 32,273 Assumed conversion of all dilutive potential ordinary shares Employees’ compensation - 63 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares$ 140,649 32,336 $ 4.35

Year ended December 31, 2017 Weighted average number of ordinary Earnings per shares outstanding share Amount after tax (shares in thousands) (in dollars) Basic earnings per share Profit attributable to ordinary shareholders of the parent$ 168,633 32,273 $ 5.23 Diluted earnings per share Profit attributable to ordinary shareholders of the parent$ 168,633 32,273 Assumed conversion of all dilutive potential ordinary shares Employees’ compensation - 51 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares$ 168,633 32,324 $ 5.22

(25) Operating leases The Group leases offices, stores and warehouse assets under non-cancellable operating lease

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agreements. The lease terms are between 1 to 10 years. Rent on certain leases will be adjusted with an agreed upon ratio, taking into consideration the effect of price fluctuations. The Group recognised rental expenses of $595,556 and $551,891 for the years ended December 31, 2018 and 2017, respectively. The future aggregate minimum lease payments under non-cancellable operating leases are as follows: December 31, 2018 December 31, 2017 Not later than one year$ 471,525 $ 373,418 Later than one year but not later than five years 1,045,575 923,378 Later than five years 282,424 164,594 $ 1,799,524 $ 1,461,390 Details of the future minimum lease payments incurred from operating leases with related parties are provided in Note 7(2) H. (26) Supplemental cash flow information Investing activities with paritial cash payments: A. Purchase of property, plant and equitpment Year ended Year ended December 31, 2018 December 31, 2017 Purchase of property, plant and equipment $ 197,488 $ 244,504 Add: Opening balance of payable on equipment 78,308 70,318 Opening balance of payable on equipment - related parties 18,927 14,268 Less: Ending balance of payable on equipment ( 21,421) ( 78,308) Ending balance of payable on equipment - related parties ( 7,784) ( 18,927) Cash paid during the period$ 265,518 $ 231,855

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7. RELATED PARTY TRANSACTIONS (1) Names of related parties and relationship Names of related parties Relationship with the Group Mos Food Services, Inc. (Mos Food Services) Entities with significant influence over the Group Guang-Yuan Industries Co., Ltd (Guang-yuan ) Entities with significant influence over the Group Mos Burger Australia Pty. Ltd. (Mos Burger Australia) Associate TECO Electric & Machinery Co., Ltd. Other related party (TECO Electric & Machinery) Magic-Food Mos Food Industry Co., Ltd. (Magic-Food Mos) Other related party GD Teco Taiwan Co., Ltd. (GD Teco Taiwan) Other related party Yuban & Company (Yuban) Other related party TECNOS International Consultant Co., Ltd. (TECNOS) Other related party Taiwan Pelican Express Co., Ltd (Taiwan Pelican Express) Other related party Information Technology Total Services Corp. Other related party (Information Technology) Jie Zheng Property Service & Management Co., Ltd. (Jie Zheng) Other related party A-Ok Technical Service Co., Ltd. (A-Ok) Other related party E-Joy Electronics International Co., Ltd. (E-Joy Electronics ) Other related party TECO Tour Travel Service Co., Ltd. (TECO Tour) Other related party Royal Host Taiwan Co., Ltd. (Royal Host) Other related party Tong-An Assets Mangement & Development Co., Ltd. Other related party (Tong-An Assets) Kogyoku Foods Co., Ltd. (Kogyoku Foods) Other related party Le-Li Co., Ltd. (Le-Li) Other related party Xianlaoman Food Services Co., Ltd. (Xianlaoman) Other related party ABC Cooking Studio Taiwan Co., Ltd. (ABC Cooking) Other related party Fujio Food System Taiwan Co., Ltd. (Fujio Food) Other related party Century Development Corporation (Century Development) Other related party TECO Nanotech Co., Ltd. (TECO Nanotech) Other related party Tecom Co., Ltd. (Tecom) Other related party TECO Image Systems Co., Ltd. (TECO Image Systems) Other related party Dong Guang Co., Ltd. (Dong Guang) Other related party Wan Yi Educational Foundation (Wan Yi Foundation) Other related party Kogle Foods Co., Ltd. (Kogle Foods) Other related party Tong An Co., Ltd. (Tong An) Other related party

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Names of related parties Relationship with the Group Don Her International Co., Ltd. (Don Her) Other related party Ming Full Ltd. (Ming Full) Other related party Hao Di Foods Co., Ltd. (Hao Di Foods) Other related party An Tai International Co., Ltd. (An Tai) Other related party Foremost International Food & Beverage Co., Ltd. (Foremost Food) Other related party Miss Croissant Food Co., Ltd. (Miss Croissant) Other related party TECO Electro Devices Co., Ltd. (TECO Electro) Other related party Technical Information International Corporation (Technical Information) Other related party (2) Significant related party transactions and balances A. Operating revenue Year ended Year ended December 31, 2018 December 31, 2017 Sale of goods: Entities with significant influence to the Group $ - $ 1 Other related parties 1,126 480 $ 1,126 $ 481

Year ended Year ended December 31, 2018 December 31, 2017 Sale of services (shown as ‘other income’): Other related parties –Royal Host$ 3,686 $ 3,771 –Others 1,752 1,861 $ 5,438 $ 5,632

(a) Service revenue represents revenue from providing consulting services. There is no similar transaction to be compared with for prices, and terms are determined in accordance with mutual agreement. (b) Sales of goods arise from selling commodity coupons and food. Transaction prices and terms for related parties are approximate to those for third parties.

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B. Purchases Year ended Year ended December 31, 2018 December 31, 2017 Purchases of goods: Other related parties －Magic-Food Mos $ 799,225 $ 754,144 －Taiwan Pelican Express 212,556 125,633 －Others 14,953 11,048 $ 1,026,734 $ 890,825

Year ended Year ended December 31, 2018 December 31, 2017 Purchases of services: Associates $ - $ 7 Other related parties －TECNOS 2,998 2,820 －Information Technology 3,240 4,028 －Others 2,309 965 $ 8,547 $ 7,820

(a) No similar transaction can be compared with the above purchases with related parties. Prices and terms are determined in accordance with mutual agreement. (b) Services rendered by related parties are payments for freight and services. Prices and terms for freight payment are approximately the same as those with third parties. Furthermore, no similar transaction can be compared with, and prices and terms are in accordance with mutual agreement and recorded as ‘5000 Operating costs’, ‘6100 Sales and marketing expenses’ and ‘6200 General and administrative expenses’. C. Use of assets

Year ended Year ended December 31, 2018 December 31, 2017 Entities with significant influence to the Group－patent royalties $ 49,061 $ 46,932 Associates－rental expense - 295 Other related parties－rental expense 21,939 21,862 $ 71,000 $ 69,089

The above expenses are payments for contracts of expertise and patent cooperation with related parties and rent paid for shops and offices leased from related parties. Royalties are paid based on a certain percentage of monthly operating net income and rent expenses are paid monthly in accordance with mutual agreement.

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D. Other expenses

Year ended Year ended December 31, 2018 December 31, 2017 Entities with significant influence to the Group $ 458 $ 2,587 Associates 83 120 Other related parties 79,059 60,058 $ 79,600 $ 62,765 E. Receivables from related parties December 31, 2018 December 31, 2017 Other accounts receivable: Entities with significant influence to the Group –Mos Food Services $ 348 $ 216 Associates 150 163 Other related parties –Royal Host 12,660 2,778 –Kogyoku Foods 2,508 - –Others 1,125 566 $ 16,791 $ 3,723

Accounts receivable arise from consulting revenue and prepaid rents and do not have collateral nor bear interests. No provision is appropriated for receivables from related parties. F. Payables to related parties (a) Accounts payable: December 31, 2018 December 31, 2017 Payables to related parties: Other related parties –Magic-Food Mos $ 68,345 $ 68,954 –Taiwan Pelican Express 63,155 56,637 –Others 4,022 173 $ 135,522 $ 125,764

Payables to related parties arise from purchases and services received and do not have collateral nor bear interests.

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(b) Other payables: December 31, 2018 December 31, 2017 Payables to related parties: Entities with significant influence to the Group –Mos Food Services $ 4,153 $ 3,941 –Others 9 9 Other related parties –A-Ok 2,616 4,466 –Jie Zheng 6,022 12,725 –Information Technology 8,998 8,922 –GD Teco Taiwan 1,832 5,257 –Yuban 2,961 4,739 –Tong An Assets 684 469 –Others 7,352 4,516 $ 34,627 $ 45,044

G. Property transactions (a) Acquisition of property, plant and equipment: Year ended Year ended December 31, 2018 December 31, 2017 Other related parties –Jie Zheng $ 20,516 $ 29,588 –Others 12,850 42,357 $ 33,366 $ 71,945

(b) Other payables - related parties - ending balances of acquisition of property, plant and equipment: December 31, 2018 December 31, 2017 Other related parties –Jie Zheng $ 3,110 $ 7,796 –GD Teco Taiwan - 3,106 –Information Technology 3,258 1,824 – A-Ok - 3,134 –Yuban 1,108 3,040 –Others 308 27 $ 7,784 $ 18,927

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(c) Acquisition of other assets: Year ended Year ended December 31, 2018 December 31, 2017 Accounts Consideration Consideration Other related party Intangible assets –GD Teco Taiwan $ - $ 6,290 –Information Technology 799 129 –Technical Information 1,096 549 $ 1,895 $ 6,968

H. Commitments and contingent liabilities (a) Significant commitments of the technology cooperation contracts signed by the Group with entities who have significant influence to the Group are as follows: －Operating and inventory control methods and managing methods are provided by entities with significant impact to the Group. －Registered trademarks and patents provided by entities with significant impact to the Group are rights the Group uses in Taiwan, Singapore and Xiamen region. －The Group shall pay expertise and patent cooperation expenses and royalties with a certain percentage of the Group’s monthly operating net income to the related party. (b) Future rental payments that shall be paid to other related parties which are based on the contracts are as follows: December 31, 2018 December 31, 2017 Total rental payment Total rental payment Not later than one year $ 18,222 $ 13,929 Later than one year but 32,278 not later than five years 28,680 Later than five years 717 - $ 51,217 $ 42,609

(3) Key management compensation Year ended Year ended December 31, 2018 December 31, 2017 Salaries and other short-term employee benefits $ 34,085 $ 35,669 Post-employment benefits 381 451 $ 34,466 $ 36,120

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8. PLEDGED ASSETS The Group’s assets pledged as collateral are as follows: Book value Pledged asset December 31, 2018 December 31, 2017 Purpose Other current assets: Time deposits$ 280,000 $ 250,000 Performance guarantee for issuance of MOS Card and gift certificates 9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS (1) Contingencies None. (2) Commitments A. Operating lease agreements are provided in Notes 6(25) and 7. B. Capital expenditures contracted for at the balance sheet date but not yet incurred are as follows: December 31, 2018 December 31, 2017 Property, plant and equipment $ 27,419 $ 92,020 Intangible assets 5,678 3,305 $ 33,097 95,325

10. SIGNIFICANT DISASTER LOSS None. 11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE None. 12. OTHERS (1) Capital management The capital structure management is based on the Group’s business scale, industry’s future growth and product development plan to determine the target market share. The most appropriate capital structure is determined based on the capital expenditure requirements, operating capital requirements and operating profit and cash flow that may arise from the products’ competitiveness. (2) Financial instruments A. Financial risk management policies (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial position and financial performance.

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(b) Risk management is carried out by a treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides written policies for overall risk management, as well as written policies covering specific areas and matters, such as credit risk and investment of excess liquidity. B. Significant financial risks and degrees of financial risks (a) Market risk Foreign exchange risk i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD, AUD and RMB. Exchange rate risk arises from recognised assets and liabilities. ii. The Group’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD; certain subsidiaries’ functional currency: RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows: December 31, 2018 Foreign currency amount Book value (In thousands) Exchange rate (NTD) Financial assets Monetary items RMB:NTD$ 7,938 4.47$ 35,501 AUD:NTD 3 21.67 66 USD:NTD 1,249 30.72 38,351 USD:RMB 42 6.87 1,294 Non-monetary items USD:NTD 543 30.72 16,681 AUD:NTD 495 21.67 10,726

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December 31, 2017 Foreign currency amount Book value (In thousands) Exchange rate (NTD) Financial assets Monetary items RMB:NTD$ 6,694 4.57$ 30,560 AUD:NTD 2 23.19 38 USD:NTD 1,214 29.76 36,139 USD:RMB 46 6.52 1,358 JPY:RMB 261 0.06 69 Non-monetary items USD:NTD 1,015 29.76 30,207 AUD:NTD 359 23.19 8,335 iii. Please refer to the following table for the details of unrealised exchange gain (loss) arising from significant foreign exchange variation on the monetary items held by the Group. Year ended December 31, 2018 Unrealised exchange gain (loss) Foreign currency amount Book value (In thousands) Exchange rate (NTD) Financial assets Monetary items RMB:NTD $ 7,938 4.91 ($ 3,465) AUD:NTD 3 25.00 ( 9) USD:NTD 1,249 30.04 825 USD:RMB 42 6.86 ( 24) Year ended December 31, 2017 Unrealised exchange gain (loss) Foreign currency amount Book value (In thousands) Exchange rate (NTD) Financial assets Monetary items RMB:NTD $ 6,694 4.99($ 2,823) AUD:NTD 2 21.50( 5) USD:NTD 1,214 30.06( 357) USD:RMB 46 6.519 453 JPY:RMB 261 0.058 -

-214- iv. Analysis of foreign currency market risk arising from significant foreign exchange variation: Year ended December 31, 2018 Sensitivity analysis Effect on other Degree of Effect on comprehensive variation profit or loss income Financial assets Monetary items RMB:NTD 1%$ 355 $ - AUD:NTD 1% 1 - USD:NTD 1% 384 - USD:RMB 1% 13 - Year ended December 31, 2017 Sensitivity analysis Effect on other Degree of Effect on comprehensive variation profit or loss income Financial assets Monetary items RMB:NTD 1%$ 306 $ - AUD:NTD 1% - - USD:NTD 1% 361 - USD:RMB 1% 14 - JPY:RMB 1% 1 - Price risk i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group. ii. The Group’s investments in equity securities comprise share and open-end funds issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2018 and 2017 would have increased/decreased by $1,391 and $0, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $0 and $1,830, respectively, as a result of gains/losses on other comprehensive income classified as financial assets at fair value through other comprehensive income.

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Cash flow and fair value interest rate risk Not applicable. (b) Credit risk i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms. ii. The Group manages their credit risk taking into consideration the entire group’s concern. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored. iii. The Group adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition. iv. The Group classifies customers’ accounts receivable in accordance with credit risk on trade. The Group applies the simplified approach using provision matrix to estimate expected credit loss under the provision matrix basis. v. The Group adjusts historical and timely information to assess the default possibility of accounts receivable. On December 31, 2018 and 2017, the Group’s estimated default possibility of accounts receivable that were past due or were not past due are not material to the Group. vi. Accounts receivable that the Group applies the simplified approach to provide loss allowance are not significant, therefore, no impairment loss was recognised for the years ended December 31, 2018 and 2017. vii. Credit risk information of 2017 is provided in Note 12(4) (c) Liquidity risk i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs. ii. Group treasury invests according to cash flow forecasts surplus cash in interest bearing demand deposits, time deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as

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determined by the abovementioned forecasts. As at December 31, 2018 and 2017, the Group held money market position of $1,680,450 and $1,715,114, respectively, that are expected to readily generate cash inflows for managing liquidity risk. iii. Because the Group’s working capital is sufficient, therefore, the Group does not sign any borrowing agreement with financial institutions. As of December 31, 2018 and 2017, the Group’s undrawn borrowing facility is $0. iv. The table below analyses the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. Non-derivative financial liabilities: Between Between Less than 3 months 1 and 2 Contractual Carrying December 31, 2018 3 months and 1 year years cash flow amount Notes payable$ 640 $ - $ - $ 640 $ 640 Accounts payable 329,372 - - 329,372 329,372 Other payables 386,724 108,389 - 495,113 495,113

Between Between Less than 3 months 1 and 2 Contractual Carrying December 31, 2017 3 months and 1 year years cash flow amount Accounts payable $ 309,191$ - $ - $ 309,191 $ 309,191 Other payables 437,406 108,839 6,716 552,961 552,961 The Group does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different. (3) Fair value information A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and beneficiary certificates is included in Level 1.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.

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B. The carrying amounts of the Group’s financial instruments not measured at fair value (including cash and cash equivalents, notes receivable, accounts receivable, other receivables, notes payable, accounts payable and other payables) are approximate to their fair values. C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows: (a) The related information of the nature of the assets and liabilities is as follows: December 31, 2018 Level 1 Level 2 Level 3 Total Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities $ 139,136 $ - $ - $ 139,136

December 31, 2017 Level 1 Level 2 Level 3 Total Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities $ 182,987 $ - $ - $ 182,987

(b) The methods and assumptions the Group used to measure fair value are as follows: i. The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics: Listed shares Open-end fund Market quoted price Closing price Net asset value ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date (i.e. yield curves on the Taipei Exchange, average commercial paper interest rates quoted from Reuters). iii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes

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adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions. iv. The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group’s credit quality. D. For the years ended December 31, 2018 and 2017, there was no transfer between Level 1 and Level 2. E. For the years ended December 31, 2018 and 2017, the Level 3 financial instruments held by the Group had no change in fair value. F. For the years ended December 31, 2018 and 2017, there was no transfer into or out from Level 3. G. Accounting department is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value. H. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement: Fair value at Significant Range Relationship of December Valuation unobservable (weighted inputs to fair 31, 2018 technique input average) value Non-derivative equity instrument: Unlisted shares$ - Market Price to 1.36%~1.49 The higher the comparable book ratio % net asset value, companies multiple the higher the fair value Discount for 13.24% The higher the lack of discount for lack marketability of marketability, the lower the fair value

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Fair value at Significant Range Relationship of December Valuation unobservable (weighted inputs to fair 31, 2017 technique input average) value Non-derivative equity instrument: Unlisted shares$ - Market Price to 1.36%~1.49 The higher the comparable book ratio % net asset value, companies multiple the higher the fair value Discount for 13.24% The higher the lack of discount for lack marketability of marketability, the lower the fair value I. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets categorized within Level 3 if the inputs used to valuation models have changed:

December 31, 2018 Recognised in profit or Recognised in other loss comprehensive income Favourable Unfavourable Favourable Unfavourable Input Change change change change change Financial assets Equity Discount for instrument lack of ± 5% $ - $ -$ - $ - marketability

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December 31, 2017 Recognised in profit or Recognised in other loss comprehensive income Favourable Unfavourable Favourable Unfavourable Input Change change change change change Financial assets Equity Discount for instrument lack of ± 5% $ - $ -$ - $ - marketability (4) Effects on initial application of IFRS 9 A. Summary of significant accounting policies adopted in the third quarter of 2017: (a) Available-for-sale financial assets i. They are non-derivatives that are either designated in this category or not classified in any of the other categories. ii. On a regular way purchase or sale basis, available-for-sale financial assets are recognised and derecognised using trade date accounting. iii. They are initially recognised at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognised in other comprehensive income. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‘financial assets measured at cost’. (b) Loans and receivables Accounts receivable are loans and receivables originated by the entity. They are created by the entity by selling goods or providing services to customers in the ordinary course of business. They are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. However, short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial. (c) Impairment of financial assets i. The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. ii. The criteria that the Group uses to determine whether there is objective evidence of an

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impairment loss is as follows: (i) Significant financial difficulty of the issuer or debtor; (ii) A breach of contract, such as a default or delinquency in interest or principal payments; (iii) The Group, for economic or legal reasons relating to the borrower’s financial difficulty, granted the borrower a concession that a lender would not otherwise consider; (iv) It becomes probable that the borrower will enter bankruptcy or other financial reorganisation; (v) The disappearance of an active market for that financial asset because of financial difficulties; (vi) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local economic conditions that correlate with defaults on the assets in the group; (vii) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered; (viii) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost. iii. When the Group assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows according to the category of financial assets: (i) Financial assets measured at amortised cost The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate, and is recognised in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset does not exceed its amortised cost that would have been at the date of reversal had the impairment loss not been recognised previously. Impairment loss is recognised and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

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(ii) Available-for-sale financial assets The amount of the impairment loss is measured as the difference between the asset’s acquisition cost (less any principal repayment and amortisation) and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, and is reclassified from ‘other comprehensive income’ to ‘profit or loss’. If, in a subsequent period, the fair value of an investment in a debt instrument increases, and the increase can be related objectively to an event occurring after the impairment loss was recognised, such impairment loss is reversed through profit or loss. Impairment loss of an investment in an equity instrument recognised in profit or loss shall not be reversed through profit or loss. Impairment loss is recognised and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account. B. The reconciliations of carrying amount of financial assets transfered from December 31, 2017, IAS 39, to January 1, 2018, IFRS 9, were as follows:

Available-for- sale-equity Effects Measured at Measured at fair value fair value through other Other through profit comprehensive Retained equity or loss income-equity Total earnings interest IAS 39 $ - $ 182,987 $ 182,987 $ 617,583 ($ 15,020) Transferred into and measured at fair value through profit or loss 182,987 ( 182,987) - 1,363 ( 1,363) Transferred into and measured at fair value through other comprehensive income - - - 14,837 ( 14,837) $ 182,987 $ -$ 182,987 $ 633,783 ($ 31,220) IFRS 9 (a) Under IAS 39, as the equity instruments, which were classified as ‘available-for-sale financial assets’ amounting to $14,837 (an impairment loss in the amount of $14,837 was recognised, thus the fair value is $0), are not held for trading, they were reclassified as "financial assets at fair value through other comprehensive income (equity instruments)" on initial application of IFRS 9. (b) Under IAS 39, the equity instruments, which were classified as ‘available-for-sale

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financial assets’ amounting to $182,987, were reclassified as "financial assets at fair value through profit or loss (equity instruments)" on initial application of IFRS 9. C. The reconciliation of allowance for impairment and provision from December 31, 2017, as these are impaired under IAS 39, to January 1, 2018, as these are expected to be impaired under IFRS 9, are as follows:

Measured at fair value Available-for-sale through profit or loss Total IAS 39 $ 14,837 $ - $ 14,837 Transfer into and measured at fair value through other comprehensive income ( 14,837) 14,837 - $ - $ 14,837 $ 14,837 IFRS 9 D. Available-for-sale financial assets Items December 31, 2017 Current items: Listed stocks$ 30,822 Open-end fund 150,802 181,624 Valuation adjustment 1,363 $ 182,987 Non-current items: Shares of unlisted $ 14,837 companies Accumulated impairment ( 14,837) $ - i. The Group recognised $4,982 in other comprehensive income for fair value change and $2,880 for reclassifications from equity to profit or loss for the year ended December 31, 2017 respectively. ii. As Guangdon Mos Burger Food Management Co., Ltd. held by the Group continued to incur losses, the Company recognised impairment after assessment. As of December 31, 2017, the accumulated impairment loss was $14,837.

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E. Credit risk information as of December 31, 2017 and for the year ended December 31, 2017 are as follows: (a) The ageing analysis of accounts receivable, net that were past due but not impaired is as follows: December 31, 2017 Neither past due nor impairment$ 70,574 Past due but not impaired Up to 30 days 13,733 31 to 90 days 122 91 to 180 days 32 Over 181 days - $ 84,461

The above ageing analysis was based on invoice date. (b) The counterparties are mainly located in department stores or hypermarkets which collect sales on behalf of the Group. The credit quality of the counterparties which is mostly optimal and is neither past due nor impaired, is in the A ranking. The Group’s management assesses and classifies the credit quality of counterparties based on whether the counterparties have any non-performing loans or returned cheque records and on the historical transactions and their operating performances with the Group. The counterparties are ranked A if the counterparties do not have any aforementioned defect, and the historical records and dynamics are optimal. (c) The Group does not hold any collateral as security as of December 31, 2017. (5) Effects of initial application of IFRS 15 A. The significant accounting policies applied on revenue recognition for the year ended December 31, 2017 are set out below. (a) The Group does not hold any collateral as security as of December 31, 2017 and 2016. Revenue is measured at the fair value of the consideration received or receivable taking into account of business tax, returns, rebates and discounts for the sale of goods to external customers in the ordinary course of the Group’s activities. Revenue arising from the sales of goods is recognised when the Group has delivered the goods to the customer, the amount of sales revenue can be measured reliably and it is probable that the future economic benefits associated with the transaction will flow to the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Group retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied.

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(b) The Group has customer loyalty programmes where the Group grants loyalty award credits (such as ‘points’; the award credits can be used to exchange for free or discounted goods) to customers as part of a sales transaction. The fair value of the consideration received or receivable in respect of the initial sale shall be allocated between the initial sale of goods and the award credits. The amount of proceeds allocated to the award credits is measured by reference to the fair value of goods that can be redeemed by using the award credits and the proportion of award credits that are expected to be redeemed by customers. The Group recognises the deferred portion of the proceeds allocated to the award credits as revenue only when it has fulfilled its obligations in respect of the award credits. B. The revenue recognised by using above accounting policies in third quarter of 2017 are as follows: Year ended December 31, 2017 $ 4,919,312 Sales revenue-dining service income C. There was no significant effect on current balance sheets and comprehensive income statements if the Group continues adopting above accounting policies. 13. SUPPLEMENTARY DISCLOSURES (1) Significant transactions information A. Loans to others: None. B. Provision of endorsements and guarantees to others: None. C. Holding of marketable securities at the end of the period: Please refer to table 1. D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None. E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None. F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None. G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 2. H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None. I. Trading in derivative financial instruments undertaken during the reporting periods: None. J. Significant inter-company transactions during the reporting periods: Not applicable because there is no significant transaction between the Company and subsidiaries or among subsidiaries. (2) Information on investees Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 3. (3) Information on investments in Mainland China A. Basic information: Please refer to table 4. B. Significant transactions, either directly or indirectly through a third areas, with investee

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companies in the Mainland China: None 14. SEGMENT INFORMATION (1) General information Management has determined the reportable operating segments based on the reports reviewed by the Chief Operating Decision-Maker that are used to make strategic decisions. The Group’s Chief Operating Decision-Maker manages the business geographically. The Group currently focuses on restaurant services in Taiwan and Mainland China. The revenue of the Group’s disclosed operating segments mainly comes from Taiwan and Mainland China region. (2) Measurement of segment information The accounting policies of the operating segments are in agreement with the significant accounting policies summarized in Note 2. The management measures operating segment profit or loss based on segment pre-tax income (not including non-recurring profit and loss) as a basis for performance assessment. The Group considers the inter-segment sales and transfers as transactions with third parties. The external revenue is reported by the Group to the Chief Operating Decision-Maker, and is measured using the same method as revenue recognised in statements of comprehensive income. (3) Information about segment profit or loss and assets The segment information provided to the Chief Operating Decision-Maker for the reportable segments is as follows: A.Year ended December 31, 2018 Adjustment Mainland and Taiwan China elimination Total Revenue from external customers $ 5,170,958 $ 81,146 $ -$ 5,252,104 Segment revenue $ 5,170,958 $ 81,146 $ -$ 5,252,104 Segment profit (loss) $ 191,728 ($ 32,906) $ 13,277 $ 172,099 Segment profit (loss) including: Interest income $ 14,034 $ 257 $ - $ 14,291 Depreciation and amortisation ( 180,697) ( 5,795) - ( 186,492) Loss on investments accounted for using equity method ( 29,417) - 13,277 ( 16,140) Income tax expense ( 51,079) - - ( 51,079) Segment assets $ 2,912,969 $ 54,438 ($ 17,099) $ 2,950,308 Segment assets including: Investments accounted for using equity method $ 27,407 $ -($ 16,681) $ 10,726 Capital expenditures - non-current assets 193,180 4,308 - 197,488 Segment liabilities ($ 1,148,774) ($ 13,096) $ 418 ($ 1,161,452)

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B. Year ended December 31, 2017 Adjustment Mainland and Taiwan China elimination Total Revenue from external customers $ 4,826,808 $ 92,504 $ -$ 4,919,312 Segment revenue $ 4,826,808 $ 92,504 $ -$ 4,919,312 Segment profit (loss) $ 215,590 ($ 33,396) $ 13,475 $ 195,669 Segment profit (loss) including: Interest income $ 13,794 $ 112 $ - $ 13,906 Depreciation and amortisation ( 165,148) ( 9,083) - ( 174,231) Loss on investments accounted for using equity method ( 29,382) - 13,475 ( 15,907) Income tax expense ( 46,957) - - ( 46,957) Segment assets $ 2,894,262 $ 90,065 ($ 30,488) $ 2,953,839 Segment assets including: Investments accounted for using equity method $ 38,542 $ -($ 30,207) $ 8,335 Capital expenditures - non-current assets 240,380 3,674 - 244,054 Segment liabilities ($ 1,157,988) ($ 15,199) $ 281 ($ 1,172,906)

(4) Geographical information Geographical information for the years ended December 31, 2018 and 2017 is as follows: Year ended December 31, 2018 Year ended December 31, 2017 Non-current Non-current Revenue assets Revenue assets Taiwan $ 5,170,958 $ 535,515 $ 4,826,808 $ 509,796 Mainland China 81,146 12,149 92,504 15,727 $ 5,252,104 $ 547,664 $ 4,919,312 $ 525,523

(5) Major customer information Revenue from external customers that accounted for at least 10% of enterprise income and the department it belongs to: None.

-228- An-Shin Food Services Co., Ltd. Holding of marketable securities at the end of the period Year ended December 31, 2018 Table 1 Expressed in thousands of NTD (Except as otherwise indicated)

As of December 31, 2018

Number of shares Relationship with the (thousand shares Securities held by Marketable securities securities issuer General ledger account /thousand units) Book value Ownership Fair value Footnote An-Shin Food Services Co., Ltd. Stock 1 None Financial assets at fair value through profit or 75 $ 5,663 - $ 75.50 None loss-current 〃 Stock 2 Associates 〃 20 349 - 17.45 〃 〃 Stock 3 None 〃 45 3,591 - 79.80 〃 〃 Stock 4 〃〃 32 2,248 - 70.80 〃 〃 Stock 5 〃〃 10 2,210 - 210.50 〃 〃 Stock 6 〃〃 15 1,808 - 120.50 〃 〃 Stock 7 〃〃 35 7,893 - 225.50 〃 〃 Stock 8 〃〃 23 1,888 - 82.10 〃 〃 Stock 9 〃〃 70 1,676 - 23.94 〃

-229- 〃 Stock 10 〃〃 13 2,784 - 221.00 〃 〃 Stock 11 〃〃 5 216 - 43.25 〃 〃 Stock 12 〃〃 63 1,268 - 20.10 〃 〃 Stock 13 〃〃 20 804 - 40.20 〃 〃 Stock 14 〃〃 12 1,416 - 118.00 〃 〃 Stock 15 〃〃 - 16 - 67.00 〃 〃 Stock 16 〃〃 60 3,720 - 62.00 〃 〃 Stock 17 〃〃 3 675 - 225.00 〃 〃 Stock 18 〃〃 20 2,130 - 106.50 〃 〃 Stock 19 〃〃 100 1,651 - 16.51 〃 〃 Stock 20 〃〃 11 392 - 35.60 〃 〃 Stock 21 〃〃 13 1,086 - 83.50 〃 〃 Stock 22 〃〃 2 286 - 143.00 〃 〃 Stock 23 〃〃 30 1,296 - 43.20 〃 〃 Stock 24 〃〃 30 669 - 22.30 〃 〃 Stock 25 〃〃 - - - - 〃 〃 Stock 26 〃〃 200 10,017 - 50.00 〃

Table 1 Page 1 As of December 31, 2018

Number of shares Relationship with the (thousand shares Securities held by Marketable securities securities issuer General ledger account /thousand units) Book value Ownership Fair value Footnote 〃 None Financial assets at fair value through profit or 367$ 4,402 - $ 12.01 〃 Fund 1 loss-current 〃 Fund 2 〃〃 393 4,772 - 12.15 〃 〃 Fund 3 〃〃 1,436 14,619 - 10.18 〃 〃 Fund 4 〃〃 803 10,053 - 12.52 〃 〃 Fund 5 〃〃 926 15,091 - 16.29 〃 〃 Fund 6 〃〃 1,110 14,298 - 12.88 〃 〃 Fund 7 〃〃 742 10,079 - 13.58 〃 〃 Fund 8 〃〃 724 10,070 - 13.90 〃 〃 Stock 27 〃 Financial assets at fair value through other 3,850 - 4.21% - 〃 comprehensive income-non current $ 139,136 -230-

Table 1 Page 2 An-Shin Food Services Co., Ltd. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more Year ended December 31, 2018 Table 2 Expressed in thousands of NTD (Except as otherwise indicated)

Differences in transction terms compared to third party Transaction transactions Notes/accounts receivable (payable) Relationship with the Purchases Percentage of Percentage of total notes/accounts Purchaser/seller Counterparty counterparty (sales) Amount total purchases (sales) Credit term Unit price Credit term Balance receivable (payable) Footnote An-Shin Food Magic-Food Mos Other related party Purchases 799,225$ 41% Note Not applicable Not applicable 68,345$ 21% None Services Co., Ltd. Food Industry Co., Ltd. An-Shin Food Taiwan Pelican Other related party Purchases 212,556$ 11% 〃〃 〃 63,155$ 19% None Services Co., Ltd. Express

Note: Credit terms are in accordance with mutual agreement. -231-

Table 2 Page 3 An-Shin Food Services Co., Ltd. Information on investees (not including investees in Mainland China) Year ended December 31, 2018 Table 3 Expressed in thousands of NTD (Except as otherwise indicated)

Initial investment amount Shares held as at December 31, 2018 Net profit (loss) of the Investment income (loss) Balance at Balance at investee for the year recognised by the Company December 31, December 31, Number of ended December 31, for the year ended Investor Investee Location Main business activities 2018 2017 shares Ownership Book value 2018 December 31, 2018 Footnote An-Shin Food Services An-Shin Food Services Singapore Foreign investment$ 230,381 $ 230,381 7,607 40.35% 16,681$ ($ 32,906) ($ 13,277) The Company's Co., Ltd. (Singapore) Pte. Ltd. subsidiary 〃 Mos Burger Australia Australia Restaurant management: 82,880 63,181 3,071 29.19% 10,726 ( 55,289) ( 16,140) The Company's Pty. Ltd. restaurant services investee accounted for using equity method -232-

Table 3 Page 4 An-Shin Food Services Co., Ltd. Information on investments in Mainland China Year ended December 31, 2018 Table 4 Expressed in thousands of NTD (Except as otherwise indicated)

Amount remitted from Taiwan to Mainland China/ Amount remitted back Accumulated Accumulated to Taiwan for the year ended amount of Book value of amount of Accumulated amount December 31, 2018 remittance from Net income Ownership Investment income investments in investment of remittance from Taiwan to of investee held by the (loss) recognised by Mainland income remitted Taiwan to Mainland Remitted to Mainland China as of Company the Company for the China as of back to Taiwan as Investee in Main business Investment China as of Mainland Remitted back as of December December (direct or year ended December December 31, of December 31, Mainland China activities Paid-in capital method January 1, 2018 China to Taiwan 31, 2018 31, 2018 indirect) 31, 2018 2018 2018 Footnote Xia Men An-Shin Restaurant $ 569,926 Note 1 $ 230,381 $ - $ - $ 230,381 ($ 32,850) 40.35% ($ 13,255) $ 36,274 $ - Notes 3 and Food Management management: 5 Co., Ltd. restaurant services (limited to branches)

-233- Guangdong Mos Restaurant 353,245 Note 2 14,837 - - 14,837 ( 27,595) 4.21% - - - Notes 5 and Burger Management management: 6 Co., Ltd. restaurant services (limited to branches)

Investment amount approved by Ceiling on investments in Accumulated amount of remittance the Investment Commission of the Mainland China imposed by from Taiwan to Mainland China as Ministry of Economic Affairs the Investment Commission of Company name of December 31, 2018 (MOEA) MOEA Xia Men An-Shin $ 230,381 $ 247,685 $ 1,073,314 Food Management Co., Ltd. Guangdong Mos 14,837 Burger Management Co., Ltd.

Note 1: Through investing in an existing company in the third area, which then invested in the investee in Mainland China : Invest through An-Shin Food Service (Singapore) Pte. Ltd. Note 2: Through investing in an existing company in the third area, which then invested in the investee in Mainland China : Invest through H.K. Mos Burger Investment co., Ltd. Note 3: The financial statements were audited by R.O.C. parent company’s CPA. Note 4: In accordance with ‘Regulations Governing the Approval of Investment or Technical Cooperation in Mainland China’ and ‘Regulations Governing the Permission of Investment or Technical Cooperation in Mainland Area’ amended on August 29, 2008 by Investment Commission of Ministry of Economic Affairs, the limit on accumulated investment amount in Mainland China for investors (not including individuals and small and medium enterprices) is 60% of net assets or consolidated net assets, whichever is higher. Note 5: The amounts in this table are expressed in New Taiwan Dollars. Note 6: Recorded as financial assets at fair value through other comprehensive income.

Table 4 Page 5 Appendix II

AN-SHIN FOOD SERVICES CO., LTD.

PARENT COMPANY ONLY FINANCIAL STATEMENTS AND REPORT OF INDEPENDENT ACCOUNTANTS DECEMBER 31, 2018 AND 2017

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

-234-

REPORT OF INDEPENDENT ACCOUNTANTS TRANSLATED FROM CHINESE

To the Board of Directors and Stockholders of An-Shin Food Services Co., Ltd.

Opinion We have audited the accompanying parent company only balance sheets of An-Shin Food Services Co., Ltd. as at December 31, 2018 and 2017, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as at December 31, 2018 and 2017, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

Basis for opinion We conducted our audits in accordance with the “Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants” and generally accepted auditing standards in the Republic of China (ROC GAAS). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Code of Professional Ethics for Certified Public Accountants in the Republic of China (the “Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters. The key audit matters in relation to the parent company only financial statements for the year ended December 31, 2018 are outlined as follows: Audit of POS system and accuracy in recognition of retail sales revenue

-235-

Description For accounting policies applied on operating revenue, please refer to Note 4(25). For details of operating revenue accounts, please refer to Note 6(18). An-Shin Food Services Co., Ltd. is primarily engaged in the operation of food chains and beverage service activities in Taiwan. Sales revenue arises mainly through direct retail sales to customers in stores. Sales revenue was $5,170,958 thousand for the year ended December 31, 2018. The Company has a large number of stores which handles significant cash and revenue daily including sales of merchandise, vouchers and stored-value card topped-up, etc. The amount of the cash receipts rely on POS system to collect and summarise transaction records, and generate information for the accounting department to make appropriate accounting entries in the accounting system. Although each transaction is low-valued, we consider the audit of POS system and accuracy in recognition of retail sales revenue a key audit matter, given the voluminous number of retail sales transactions.

How our audit addressed the matter We performed the following audit procedures to address the abovementioned key audit matter: 1. Selected samples and checked whether the merchandise master file data in the POS system are properly maintained and approved. 2. Observed the database setting of sales information in the POS system, and selected samples and checked whether the sales information in POS system are completely transferred to the ERP system. 3. Selected samples and checked whether sales revenue in the POS system in stores are consistent with the POS system in headquarters. 4. Selected samples and checked whether sales revenue vouchers issued manually are consistent with stores’ operating income report generated by the POS system.

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error. -236-

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including independent directors and supervisors, are responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the parent company only financial statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ROC GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with ROC GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: 1. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. 3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. 4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or -237-

conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern. 5. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the parent company only audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Chih, Ping-Chiun Wu, Yu-Lung

For and on behalf of PricewaterhouseCoopers, Taiwan February 26, 2019 ------The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

-239- AN-SHIN FOOD SERVICES CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31,2018 AND 2017 (Expressed in thousands of New Taiwan dollars)

December 31, 2018 December 31, 2017 Assets Notes AMOUNT % AMOUNT %

Current assets

1100 Cash and cash equivalents 6(1) $ 1,731,954 59 $ 1,723,107 60

1110 Financial assets at fair value 6(2)

through profit or loss - current 139,136 5 - -

1125 Available-for-sale financial assets 12(4)

- current - - 182,987 6

1170 Accounts receivable, net 6(4) and 12(4) 97,992 3 83,246 3

1200 Other receivables 2,885 - 5,523 -

1210 Other receivables - related parties 7 16,426 1 3,485 -

130X Inventories, net 6(5) 37,793 1 39,384 1

1410 Prepayments 14,974 1 31,037 1

1470 Other current assets 6(1) and 8 280,435 10 250,462 9

11XX Total current assets 2,321,595 80 2,319,231 80

Non-current assets

1550 Investments accounted for using 6(6)

equity method 27,407 1 38,542 1

1600 Property, plant and equipment, net 6(7) and 7 418,595 14 395,601 14

1780 Intangible assets 6(8) and 7 11,555 - 20,425 1

1840 Deferred income tax assets 6(23) 28,452 1 26,693 1

1900 Other non-current assets 6(9) 105,365 4 93,770 3

15XX Total non-current assets 591,374 20 575,031 20

1XXX Total assets $ 2,912,969 100 $ 2,894,262 100

(Continued)

-240- AN-SHIN FOOD SERVICES CO., LTD. PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31,2018 AND 2017 (Expressed in thousands of New Taiwan dollars)

December 31, 2018 December 31, 2017 Liabilities and Equity Notes AMOUNT % AMOUNT % Current liabilities 2150 Notes payable $ 640 - $ - - 2170 Accounts payable 191,124 6 181,079 6 2180 Accounts payable - related parties 7 135,522 5 125,764 4 2200 Other payables 6(10) 452,633 15 497,692 17 2220 Other payables - related parties 7 34,781 1 44,748 2 2230 Current income tax liabilities 6(23) 29,731 1 31,038 1 2300 Other current liabilities 6(11)(18) 280,876 10 253,237 9 21XX Total current liabilities 1,125,307 38 1,133,558 39 Non-current liabilities 2550 Provisions for liabilities - 6(13) non-current 16,401 1 15,781 1 2570 Deferred income tax liabilities 6(23) 2,375 - 2,077 - 2600 Other non-current liabilities 6(12) 4,691 - 6,572 - 25XX Total non-current liabilities 23,467 1 24,430 1 2XXX Total liabilities 1,148,774 39 1,157,988 40 Equity Share capital 6(14) 3110 Common stock 323,895 11 323,895 11 Capital surplus 6(15) 3200 Capital surplus 809,816 28 809,816 28 Retained earnings 6(16) 3310 Legal reserve 139,855 5 122,992 4 3320 Special reserve 4,897 - 6,686 - 3350 Unappropriated retained earnings 517,115 18 487,905 17 Other equity interest 6(17) 3400 Other equity interest ( 21,260 ) (1) ( 4,897) - 3500 Treasury stocks 6(14) ( 10,123 ) - ( 10,123) - 3XXX Total equity 1,764,195 61 1,736,274 60 Significant contingent liabilities 7 and 9 and unrecognised contract commitments 3X2X Total liabilities and equity $ 2,912,969 100 $ 2,894,262 100

The accompanying notes are an integral part of these parent company only financial statements.

-241- AN-SHIN FOOD SERVICES CO., LTD. PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan dollars, except earnings per share amounts)

Year ended December 31 2018 2017 Items Notes AMOUNT % AMOUNT % 4000 Sales revenue 6(18) and 7 $ 5,170,958 100 $ 4,826,808 100 5000 Operating costs 6(5)(12)(21)(22) and 7 ( 3,824,955) ( 74) ( 3,555,122) ( 74) 5900 Net operating margin 1,346,003 26 1,271,686 26 Operating expenses 6(7)(8)(12)(21)(22) and 7 6100 Selling expenses ( 724,934) ( 14) ( 643,563) ( 13) 6200 General and administrative expenses ( 421,517) ( 8) ( 417,396) ( 9) 6000 Total operating expenses ( 1,146,451) ( 22) ( 1,060,959) ( 22) 6900 Operating profit 199,552 4 210,727 4 Non-operating income and expenses 7010 Other income 6(19) and 7 39,842 1 44,403 1 7020 Other gains and losses 6(2)(20) ( 18,249) - ( 10,158) - 7070 Share of loss of subsidiaries, 6(6) associates and joint ventures accounted for using equity method ( 29,417) ( 1) ( 29,382) ( 1) 7000 Total non-operating income and expenses ( 7,824) - 4,863 - 7900 Profit before income tax 191,728 4 215,590 4 7950 Income tax expense 6(23) ( 51,079) ( 1) ( 46,957) ( 1) 8200 Profit for the year $ 140,649 3 $ 168,633 3 Other comprehensive income 6(3)(17)(23) Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 Losses on remeasurements of defined benefit plan $ 891 - ( $ 6,746) - 8349 Income tax relating to components of other comprehensive income that will not be reclassified to profit or loss 430 - 1,147 - 8310 Components of other comprehensive income (loss) that will not be reclassified to profit or loss 1,321 - ( 5,599) - Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Currency translation differences of foreign operations ( 487) - ( 377) - 8362 Unrealised gain on valuation of available-for-sale financial assets - - 2,102 - 8399 Income tax relating to components of other comprehensive income that will be reclassified to profit or loss 324 - 64 - 8360 Components of other comprehensive income that will be reclassified to profit or loss ( 163) - 1,789 - 8300 Total other comprehensive income (loss) for the year $ 1,158 - ( $ 3,810) - 8500 Total comprehensive income for the year $ 141,807 3 $ 164,823 3

9750 Basic earnings per share 6(24) $ 4.36 $ 5.23

9850 Diluted earnings per share 6(24) $ 4.35 $ 5.22

The accompanying notes are an integral part of these parent company only financial statements.

-242- AN-SHIN FOOD SERVICES CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan dollars)

Retained earnings Other equity interest Cumulative Unrealized gain or Capital surplus, translation loss on Share capital - additional Unappropriated differences of available-for-sale Notes common stock paid-in capital Legal reserve Special reserve retained earnings foreign operations financial assets Treasury stocks Total

2017 Balance at January 1, 2017 6(14)(15)( 16)(17) $ 323,895 $ 809,816 $ 105,614 $ 6,828 $ 443,579 ($ 5,947 ) ($ 739 ) ($ 10,123 ) $ 1,672,923 Profit for the year 6(24) -- - - 168,633 - - - 168,633 Other comprehensive income (loss) for the year 6(17) -- - -( 5,599 ) ( 313 ) 2,102 - ( 3,810 ) Total comprehensive income -- - - 163,034 ( 313 ) 2,102 - 164,823 Changes in equity due to not participating in the capital 6(6) increase of associates proportionately -- - -( 4,654 ) - - - ( 4,654 ) Appropriations of 2016 earnings (Note 1) 6(16) Legal reserve -- 17,378 -( 17,378)- --- Special reserve -- - ( 142 ) 142 - - - - Cash dividends -- - -( 96,818 ) - - - ( 96,818 ) Balance at December 31, 2017 $ 323,895 $ 809,816 $ 122,992 $ 6,686 $ 487,905 ($ 6,260 ) $ 1,363 ($ 10,123 ) $ 1,736,274 2018 Balance at January 1, 2018 6(14)(15)( 16)(17) $ 323,895 $ 809,816 $ 122,992 $ 6,686 $ 487,905 ($ 6,260 ) $ 1,363 ($ 10,123 ) $ 1,736,274 Effect of retrospective application and retrospective 12(4) adjustment -- - -16,200 - ( 16,200 ) - - Balance at 1 January after adjustments 323,895 809,816 122,992 6,686 504,105 ( 6,260 ) ( 14,837 ) ( 10,123 ) 1,736,274 Profit for the year 6(24) -- - - 140,649 - - - 140,649 Other comprehensive income (loss) for the year 6(17) -- - -1,321 ( 163 ) - - 1,158 Total comprehensive income -- - - 141,970 ( 163 ) - - 141,807 Changes in equity due to not participating in the capital 6(6) increase of associates proportionately -- - - ( 932 ) - - - ( 932 ) Appropriations of 2017 earnings (Note 2) 6(16) Legal reserve -- 16,863 -( 16,863)- --- Special reserve -- - ( 1,789 ) 1,789- --- Cash dividends -- - - ( 112,954 ) - - - ( 112,954 ) Balance at December 31, 2018 $ 323,895 $ 809,816 $ 139,855 $ 4,897 $ 517,115 ($ 6,423 ) ($ 14,837 ) ($ 10,123 ) $ 1,764,195

Note 1:The directors' and supervisors' remuneration of $9,112 and employees' remuneration of $4,556 have been deducted from the statement of comprehensive income. Note 2:The directors' and supervisors' remuneration of $9,174 and employees' remuneration of $4,587have been deducted from the statement of comprehensive income.

The accompanying notes are an integral part of these parent company only financial statements.

-243- AN-SHIN FOOD SERVICES CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan dollars)

Notes 2018 2017

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax $ 191,728 $ 215,590 Adjustments Adjustments to reconcile profit (loss) Loss on current financial assets at fair value through profit or 6(20) loss 10,011 - Impairment loss 6(20) 333 4,065 Depreciation 6(7)(21) 167,944 151,863 Amortisation 6(8)(21) 12,753 13,285 Interest income 6(19) ( 14,034 ) ( 13,794 ) Dividend income 6(19) ( 1,310 ) ( 892 ) Gain on disposal of investments 6(20) - ( 2,880 ) Loss on disposal of property, plant and equipment 6(20) 1,771 - Share of loss of subsidiaries, associates and joint ventures 6(6) accounted for using equity method 29,417 29,382 Changes in operating assets and liabilities Changes in operating assets Notes receivable, net 6(4) - 1,836 Accounts receivable, net 6(4) ( 14,746 ) ( 10,005 ) Other receivables 2,673 ( 4,212 ) Other receivables - related parties 7 ( 12,941 ) ( 2,185 ) Inventories, net 6(5) 1,591 ( 1,876 ) Prepayments 16,063 ( 17,020 ) Other current assets 28 ( 171 ) Changes in operating liabilities Notes payable 640 ( 264 ) Accounts payable 10,045 ( 3,643 ) Accounts payable - related parties 7 9,758 48,245 Other payables 6(10) 11,745 37,459 Other payables - related parties 7 1,176 ( 565 ) Other current liabilities 6(11) 27,639 14,371 Provisions for liabilities - non-current 6(13) 620 891 Other non-current liabilities ( 990 ) ( 92 ) Cash inflow generated from operations 451,914 459,388 Interest received 6(19) 13,999 13,649 Income tax paid ( 53,096 ) ( 47,999 ) Dividends received 6(19) 1,310 892 Net cash flows from operating activities 414,127 425,930 CASH FLOWS FROM INVESTING ACTIVITIES Increase in available-for-sale financial assets - current - ( 317,579 ) Decrease in pledged time deposits 8 ( 30,000 ) ( 25,000 ) Proceeds from disposal of available-for-sale financial assets - current - 285,327 Increase in investments accounted for using the equity method 6(6) ( 19,699 ) ( 43,892 ) Acquisition of property, plant and equipment 6(7)(26) ( 261,127 ) ( 228,157 ) Proceeds from disposal of property, plant and equipment 138 - Acquisition of intangible assets 6(8) ( 3,883 ) ( 8,165 ) Increase in refundable deposits 6(9) ( 7,157 ) ( 5,357 ) Decrease in other non-current assets 6(9) ( 4,438 ) 571 Proceeds from disposal of current financial assets at fair value through profit or loss 89,412 - Increase in current financial assets at fair value through profit or loss ( 55,572 ) - Net cash flows used in investing activities ( 292,326 ) ( 342,252 ) CASH FLOWS FROM FINANCING ACTIVITIES Cash dividends paid 6(16) ( 112,954 ) ( 96,818 ) Net cash flows used in financing activities ( 112,954 ) ( 96,818 ) Net increase (decrease) in cash and cash equivalents 8,847 ( 13,140 ) Cash and cash equivalents at beginning of year 1,723,107 1,736,247 Cash and cash equivalents at end of year $ 1,731,954 $ 1,723,107

The accompanying notes are an integral part of these parent company only financial statements.

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AN-SHIN FOOD SERVICES CO., LTD. NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS DECEMBER 31, 2018 AND 2017 (Expressed in thousands of New Taiwan Dollars, except as otherwise indicated) 1. HISTORY AND ORGANISATION An-Shin Food Services Co., Ltd. (the “Company”) was incorporated on December 4, 1990 under the provisions of the Company Act of the Republic of China (R.O.C.) and Statute For Investment By Foreign Nationals. The Company is primarily engaged in sales and marketing consultancy of hamburgers, managing coffee shops and restaurants. After several capital increases, as of December 31, 2018, the paid-in capital was $323,895. The shares of the Company have been listed in the R.O.C. Over-the-Counter (OTC) market since December 15, 2011. 2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION These parent company only financial statements were authorised for issuance by the Board of Directors on February 26, 2019. 3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”) New standards, interpretations and amendments endorsed by FSC effective from 2018 are as follows: Effective date by Accounting New Standards, Interpretations and Amendments Standards Board Amendments to IFRS 2, ‘Classification and measurement of share-based January 1, 2018 payment transactions’ Amendments to IFRS 4, ‘Applying IFRS 9, Financial instruments with January 1, 2018 IFRS 4, Insurance contracts’ IFRS 9, ‘Financial instruments’ January 1, 2018 IFRS 15, ‘Revenue from contracts with customers’ January 1, 2018 Amendments to IFRS 15, ‘Clarifications to IFRS 15 Revenue from January 1, 2018 contracts with customers’ Amendments to IAS 7, ‘Disclosure initiative’ January 1, 2017 Amendments to IAS 12, ‘Recognition of deferred tax assets for January 1, 2017 unrealised losses’ Amendments to IAS 40, ‘Transfers of investment property’ January 1, 2018

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Effective date by Accounting New Standards, Interpretations and Amendments Standards Board

IFRIC 22, ‘Foreign currency transactions and advance consideration’ January 1, 2018 Annual improvements to IFRSs 2014-2016 cycle- Amendments to January 1, 2018 IFRS 1, ‘First-time adoption of International Financial Reporting Standards’ Annual improvements to IFRSs 2014-2016 cycle- Amendments to January 1, 2017 IFRS 12, ‘Disclosure of interests in other entities’ Annual improvements to IFRSs 2014-2016 cycle- Amendments to January 1, 2018 IAS 28, ‘Investments in associates and joint ventures' Except for the following, the above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment. The quantitative impact will be disclosed when the assessment is complete. IFRS 9, ‘Financial instruments’ (a) Classification of debt instruments is driven by the entity’s business model and the contractual cash flow characteristics of the financial assets, which would be classified as financial asset at fair value through profit or loss, financial asset measured at fair value through other comprehensive income or financial asset at amortised cost. Equity instruments would be classified as financial asset at fair value through profit or loss, unless an entity makes an irrevocable election at inception to present subsequent changes in the fair value of an investment in an equity instrument that is not held for trading in other comprehensive income. (b) The Company has elected not to restate prior period financial statements using the modified retrospective approach under IFRS 9. For details of the significant effect as at January 1, 2018, please refer to Notes 12(4) B and C. (2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company New standards, interpretations and amendments endorsed by the FSC effective from 2019 are as follows:

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

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Except for the following, the above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment. The quantitative impact will be disclosed when the assessment is complete. IFRS 16, ‘Leases’ IFRS 16, ‘Leases’, replaces IAS 17, ‘Leases’ and related interpretations and SICs. The standard requires lessees to recognise a ‘right-of-use asset’ and a lease liability (except for those leases with terms of 12 months or less and leases of low-value assets). The accounting stays the same for lessors, which is to classify their leases as either finance leases or operating leases and account for those two types of leases differently. IFRS 16 only requires enhanced disclosures to be provided by lessors. The Company expects to recognise the lease contract of lessees in line with IFRS 16. However, the Company does not intend to restate the financial statements of prior period (collectively referred herein as the “modified retrospective approach”). On January 1, 2019, it is expected that ‘right-of-use asset’ and lease liability will be both increased by $1,790,379, and retained earnings will be increased by $16,532. (3) IFRSs issued by IASB but not yet endorsed by the FSC New standards, interpretations and amendments issued by IASB but not yet included in the IFRSs as endorsed by the FSC are as follows: Effective date by International Accounting New Standards, Interpretations and Amendments Standards Board Amendment to IAS 1 and IAS 8, ‘Disclosure Initiative-Definition January 1, 2020 of Material’ Amendments to IFRS 3, ‘Definition of a business’ January 1, 2020 Sale or contribution of assets between an investor and its associate or To be determined by joint venture (amendments to IFRS 10 and IAS 28) International Accounting Standards Board IFRS 17, ‘Insurance contracts’ January 1, 2021

The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment. 4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these parent company only financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated. (1) Compliance statement The parent company only financial statements of the Company have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

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(2) Basis of preparation A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention: (a) Financial assets at fair value through profit or loss measured at fair value. (b) Defined benefit liabilities recognised based on the net amount of pension fund assets less present value of defined benefit obligation. B. The preparation of financial statements in conformity with International Financial Reporting Standards, International Acccounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the “IFRS”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5. C. In adopting IFRS 9 and IFRS 15 effective January 1, 2018, the Company has elected to apply modified retrospective approach whereby the cumulative impact of the adoption was recognised as retained earnings or other equity as of January 1, 2018 and the financial statements for the year ended December 31, 2017 was not restated. The financial statements for the year ended December 31, 2017 were prepared in compliance with International Accounting Standard 39 (‘IAS 39’), International Accounting Standard 18 (‘IAS 18’) and related financial reporting interpretations. Please refer to Notes 12(4) and (5) for details of significant accounting policies. (3) Foreign currency translation Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The non-consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and presentation currency. A. Foreign currency transactions and balances (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise. (b) Monetary assets and liabilities denominated in foreign currencies at the period end are re-translated at the closing exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss. (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. (d) All foreign exchange gains and losses based on the nature of those transactions are presented

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in the statement of comprehensive income within ‘other gains and losses’. B. Translation of foreign operations The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows: (a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet; (b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and (c) All resulting exchange differences are recognised in other comprehensive income. (4) Classification of current and non-current items A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets: (a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle; (b) Assets held mainly for trading purposes; (c) Assets that are expected to be realised within twelve months from the balance sheet date; (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date. B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities: (a) Liabilities that are expected to be settled within the normal operating cycle; (b) Liabilities arising mainly from trading activities; (c) Liabilities that are to be settled within twelve months from the balance sheet date; (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification. (5) Cash equivalents Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitment in operations are classified as cash equivalents. (6) Financial assets at fair value through profit or loss Effective 2018 A. Financial assets at fair value through profit or loss are financial assets that are not measured at

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amortised cost or fair value through other comprehensive income. B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using trade date accounting. C. At initial recognition, the Company measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Company subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss. D. The Company recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably. (7) Financial assets at fair value through other comprehensive income Effective 2018 A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income. B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting. C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value: The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably. (8) Loans and receivables A. Accounts and notes receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services. B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial. (9) Impairment of financial assets The Company shall always measure the loss allowance at an amount equal to lifetime expected credit losses for accounts receivable or contract assets that do not contain a significant financing component at each balance sheets date. (10) Derecognition of financial assets The Company derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire. (11) Leases (lessor) Lease income from an operating lease (net of any incentives given to the lessee) is recognised in

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profit or loss on a straight-line basis over the lease term. (12) Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted-average method. The goods comprise raw materials, direct labour, other direct costs and related production overheads. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses. (13) Investments accounted for using equity method/subsidiaries and associates A. Subsidiaries are all entities controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. B. Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Company are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise losses proportionate to its ownership. D. Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity. E. Associates are all entities over which the Company has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.

F. The Company’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

G. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not effect the Company’s ownership percentage of the associate, the Company recognises the Company’s share of change in equity of the

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associate in ‘capital surplus’ in proportion to its ownership. H. Unrealised gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company. I. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, then the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach. J. Pursuant to the “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the non-consolidated financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners’ equity in the non-consolidated financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation. (14) Property, plant and equipment A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised. B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

C. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately. D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant

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and equipment are as follows: Property, plant and equipment Useful lives Kitchen equipment and freezers 1~7 years Leasehold improvements Lease term (1~11years) or useful lives whichever is shorter Other equipment 3~7 years (15) Leased assets/ leases (lessee) Payments made under an operating lease (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the lease term. (16) Intangible assets Computer software is stated at cost and amortised using the straight-line method over its estimated useful life of 2 to 5 years. (17) Impairment of non-financial assets The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated and amortised historical cost would have been if the impairment had not been recognised or diminish. (18) Notes and accounts payable A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities. B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial. (19) Derecognition of financial liabilities A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires. (20) Provisions Provisions mainly decommissioning provisions, etc. are recognised when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognised as interest expense. Provisions are not recognised for future operating losses.

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(21) Employee benefits A. Short-term employee benefits Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognised as expense in that period when the employees render service. B. Pensions (a) Defined contribution plan For defined contribution plan, the contributions are recognised as pension expenses when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments. (b) Defined benefit plan i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Company in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plan is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.

ii. Remeasurements arising on defined benefit plan are recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings. C. Employees’, directors’ and supervisors’ remuneration Employees’ remuneration and directors’ and supervisors’ remuneration are recognised as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. The difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. (22) Income tax A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity. B. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is

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levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings. C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed. E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously. (23) Share capital A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds. B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders. (24) Dividends Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities. (25) Revenue recognition A. The Company is primarily engaged in sales of hamburgers, and revenue is recognised when

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products are sold to customers. B. Payment of the transaction price is due immediately when the customer purchases the products. It is the Company’s policy to sell its certain products to the end customer with a right of return within a certain period. Therefore, a refund liability and a right to the returned goods are recognised for the products expected to be returned. Accumulated experience is used to estimate such returns using the expected value method. Because the number of products returned has been steady for years, it is highly probable that a significant reversal in the cumulative revenue recognised will not occur. The validity of this assumption and the estimated amount of returns are reassessed at each reporting date. C. The Company operates a loyalty programme where retail customers accumulate points for purchases made which entitle them to discount on future purchases. The points provide a material right to customers that they would not receive without entering into a contract. Therefore, the promise to provide points to the customer is a separate performance obligation. The transaction price is allocated to the product and the points on a relative stand-alone selling price basis. The stand-alone selling price per point is estimated on the basis of the discount granted when the points are redeemed and on the basis of the likelihood of redemption, based on past experience. The stand-alone selling price of the product sold is estimated on the basis of the retail price. A contract liability is recognised for the transaction price which is allocated to the points and revenue is recognised when the points are redeemed or expire. (26) Government grants Government grants are recognised at their fair value only when there is reasonable assurance that the Company will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises expenses for the related costs for which the grants are intended to compensate. 5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below: (27) Critical judgements in applying the Company’s accounting policies None. (28) Critical accounting estimates and assumptions None.

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6. DETAILS OF SIGNIFICANT ACCOUNTS (1) Cash and cash equivalents December 31, 2018 December 31, 2017 Cash on hand $ 67,550 $ 57,310 Checking accounts and demand deposits 309,337 301,266 Time deposits 1,355,067 1,364,531 $ 1,731,954 $ 1,723,107

A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote. B. As of December 31, 2018 and 2017, cash and cash equivalents amounting to $280,000 and $250,000, respectively, representing performance guarantee for the issuance of Mos cards and gift certificates were pledged to others as collateral, classified as “1470 other current assets”. (2) Financial assets at fair value through profit or loss Effective 2018 December 31, 2018 Items Current items: Financial assets mandatorily measured at fair value through profit or loss Listed stocks$ 63,453 Open-end fund 86,102 149,555 Valuation adjustment ( 10,419) $ 139,136

A. Amounts recognised in profit or loss in relation to financial assets at fair value through profit or loss are listed below: Year ended December 31, 2018 Financial assets mandatorily measured at fair value through profit or loss ($ 10,011) Equity instruments B. Information relating to credit risk is provided in Note 12(2). C. The information on December 31, 2017 is provided in Note 12(4).

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(3) Financial assets at fair value through other comprehensive income Effective 2018 December 31, 2018 Items Non-current items： Equity instruments Unlisted stocks$ 14,837 Valuation adjustment ( 14,837) $ - A. The Company has elected to classify investment in Guangdong Mos Burger Management Co., Ltd. which is considered to be a strategic investment as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $0 as at December 31, 2018. B. For the year ended December 31, 2018, the fair value of financial assets at fair value through other comprehensive income is recognised in other comprehensive income in the amount of $0. C. As of December 31, 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Company was $0. D. Information relating to credit risk is provided in Note 12(2). E. The information on December 31, 2017 is provided in Note 12(4). (4) Accounts receivable December 31, 2018 December 31, 2017 Accounts receivable$ 97,992 $ 83,246 Less: Allowance for uncollectible accounts - - $ 97,992 $ 83,246

A. The ageing analysis of accounts receivable that were past due but not impaired is as follows: December 31, 2018 December 31, 2017 Not past due$ 72,684 $ 69,372 Up to 30 days 23,281 13,721 31 to 90 days 2,006 121 91 to 180 days 21 32 $ 97,992 $ 83,246

The above ageing analysis was based on invoice date. B. The Company had no accounts receivable pledged to others as collateral as of December 31, 2018 and 2017.

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C. As at December 31, 2018, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Company’s accounts receivable was $97,992. D. Information relating to credit risk is provided in Note 12(2). (5) Inventories December 31, 2018 Allowance for Cost valuation loss Book value Food$ 30,226 ($ 63) $ 30,163 Packing materials 6,055 ( 150) 5,905 Others 1,960 ( 235) 1,725 $ 38,241 ($ 448) $ 37,793

December 31, 2017 Allowance for Cost valuation loss Book value Food$ 32,354 ($ 104) $ 32,250 Packing materials 5,797 ( 43) 5,754 Others 1,638 ( 258) 1,380 $ 39,789 ($ 405) $ 39,384

The cost of inventories recognised as expense for the year :

Year ended Year ended December 31, 2018 December 31, 2017 Cost of inventories sold$ 1,840,700 $ 1,713,080 Other traveling and dining service costs 1,990,448 1,847,454 Loss on abandonment of inventories - 23 Inventory valuation loss 42 405 Revenue from sale of scraps ( 6,235) ( 5,840) $ 3,824,955 $ 3,555,122

(6) Investments accounted for using equity method December 31, 2018 December 31, 2017 Subsidiaries: An-Shin Food Services (Singapore) Pte. Ltd.$ 16,681 $ 30,207 Associates: Mos Burger Australia Pty. Ltd. 10,726 8,335 $ 27,407 $ 38,542

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A. The basic information of the associate that is material to the Company is as follows: Principal Company placeShareholding ratio Nature of Method of name of business December 31, 2018 December 31, 2017 relationship measurement Mos Burger Australia 29.19% 28.94% Financial Equity Australia investment method Pty. Ltd.

B. The summarised financial information of the associate that is material to the Company is as follows: Balance sheet Mos Burger Australia Pty Ltd. December 31, 2018 December 31, 2017 Current assets $ 34,609 $ 32,610 Non-current assets 15,360 24,383 Current liabilities ( 10,948) ( 25,757) Non-current liabilities ( 2,275) ( 2,434) Total net assets $ 36,746 $ 28,802

Share in associate's net assets $ 10,726 $ 8,335 Goodwill - - Carrying amount of the associate $ 10,726 $ 8,335

Statement of comprehensive income Mos Burger Australia Pty Ltd. Year ended Year ended December 31, 2018 December 31, 2017 Revenue $ 86,175 $ 99,701 Loss for the year from continuing operation ($ 55,289) ($ 58,272) Total comprehensive loss ($ 55,289) ($ 58,272) $ - $ - Dividends received from associate C. The Company increased capital investment in Mos Burger Australia Pty. Ltd. by $19,320 (AUD 800 thousand) as resolved by the Board of Directors on June 7, 2017. As certain shareholders of the associate did not subscribe to the capital increase, the ownership of the Company in the associate increased to 28.94%. The Company recognised the decrease of equity amounting to $4,654 in the third quarter of 2017. D. The Company increased capital investment in Mos Burger Australia Pty. Ltd. by $19,699 (AUD 868 thousand) as resolved by the Board of Directors on June 5, 2018. As certain shareholders of

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the associate did not subscribe to the capital increase, the ownership of the Company in the associate increased to 29.19%. The Company recognised the decrease of equity amounting to $932 in the third quarter of 2018. E. The Company’s investment in Mos Burger Australia Pty. Ltd. has no quoted market price. F. For information of the Company’s subsidiaries, please refer to Note 4(3) in the consolidated financial statements for the year ended December 31, 2018. (7) Property, plant and equipment Kitchen equipment Leasehold and freezers improvements Others Total At January 1, 2018 Cost$ 396,996 $ 1,444,321 $ 262,926 $ 2,104,243 Accumulated depreciation and impairment ( 318,583) ( 1,197,489) ( 192,570) ( 1,708,642) $ 78,413 $ 246,832 $ 70,356 $ 395,601 2018 Opening net book amount $ 78,413 $ 246,832 $ 70,356 $ 395,601 Additions 69,202 101,290 22,688 193,180 Disposals ( 318) ( 1,472) ( 119) ( 1,909) Depreciation charge ( 35,760) ( 102,708) ( 29,476) ( 167,944) Impairment loss - ( 333) - ( 333) Closing net book amount $ 111,537 $ 243,609 $ 63,449 $ 418,595

At December 31, 2018 Cost $ 398,105 $ 1,520,676 $ 261,016 $ 2,179,797 Accumulated depreciation and impairment ( 286,568) ( 1,277,067) ( 197,567) ( 1,761,202) $ 111,537 $ 243,609 $ 63,449 $ 418,595

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Kitchen equipment Leasehold and freezers improvements Others Total At January 1, 2017 Cost$ 370,947 $ 1,331,753 $ 227,409 $ 1,930,109 Accumulated depreciation ( 304,025) ( 1,141,462) ( 173,923) ( 1,619,410) $ 66,922 $ 190,291 $ 53,486 $ 310,699 2017 Opening net book amount $ 66,922 $ 190,291 $ 53,486 $ 310,699 Additions 40,106 153,074 47,650 240,830 Depreciation charge ( 28,615) ( 92,468) ( 30,780) ( 151,863) Impairment loss - ( 4,065) -( 4,065) Closing net book amount $ 78,413 $ 246,832 $ 70,356 $ 395,601

At December 31, 2017 Cost $ 396,996 $ 1,444,321 $ 262,926 $ 2,104,243 Accumulated depreciation and impairment ( 318,583) ( 1,197,489) ( 192,570) ( 1,708,642) $ 78,413 $ 246,832 $ 70,356 $ 395,601

Impairment information about the property, plant and equipment is provided in Note 6(20). (8) Intangible assets Computer software Year ended Year ended December 31, 2018 December 31, 2017 At January 1 Cost $ 53,777 $ 44,190 Accumulated amortisation ( 33,352) ( 20,067) $ 20,425 $ 24,123 Opening net book amount $ 20,425 $ 24,123 Additions-acquired separately 3,883 8,165 Reclassifications - 1,422 Amortisation charge ( 12,753) ( 13,285) Closing net book amount $ 11,555 $ 20,425 At December 31 Cost $ 57,660 $ 53,777 Accumulated amortisation ( 46,105) ( 33,352) $ 11,555 $ 20,425

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Details of amortisation on intangible assets are as follows: Year ended Year ended December 31, 2018 December 31, 2017 Selling expenses$ 701 $ 1,678 Administrative expenses 12,052 11,607 $ 12,753 $ 13,285 (9) Other non-current assets

December 31, 2018 December 31, 2017 Refundable deposits Lease deposits $ 96,203 $ 88,654 Natural gas 1,845 1,869 Others 1,028 1,396 Payment for equipment 6,289 1,851 $ 105,365 $ 93,770

(10) Other payables

December 31, 2018 December 31, 2017 Payables on bonus$ 69,686 $ 87,357 Accrued payroll 135,922 127,406 Payables on equipment 21,421 78,225 Payables on repairs and maintenance 25,094 27,527 expense Payables on utilities expense 20,300 23,768 Payables on labor insurance expenses 30,235 27,311 Payables on pension 19,656 17,319 Payables on advertisement 25,009 14,473 Payables on shipping expenses 10,507 5,647 Others 94,803 88,659 $ 452,633 $ 497,692

(11) Other current liabilities

December 31, 2018 December 31, 2017 Contract liabilities - prepaid card $ 243,449 $ 221,024 Contract liabilities - business card 17,871 14,049 Contract liabilities - gift voucher 686 1,098 Others 18,870 17,066 $ 280,876 $ 253,237

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(12) Pensions A. (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March. (b) The amounts recognised in the balance sheet are as follows: December 31, 2018 December 31, 2017 Present value of defined benefit ($ 37,993) ($ 38,634) obligation Fair value of plan assets 34,827 33,477 Net defined benefit liability ($ 3,166) ($ 5,157) (c) Movements in net defined benefit liabilities are as follows:

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Present value of defined benefit Fair value of Net defined obligation plan assets benefit liability Year ended December 31, 2018 Balance at January 1($ 38,634) $ 33,477 ($ 5,157) Current service cost( 286) - ( 286) Interest (expense) income ( 425) 368 ( 57) ( 39,345) 33,845 ( 5,500) Remeasurements: Return on plan assets - 1,062 1,062 (excluding amounts included in interest income or expense) Change in financial assumptions( 425) - ( 425) Experience adjustments 254 - 254 ( 171) 1,062 891 Pension fund contribution - 1,443 1,443 Paid pension 1,523 ( 1,523) - ($ 37,993) $ 34,827 ($ 3,166) Balance at December 31

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Present value of defined benefit Fair value of Net defined obligation plan assets benefit liability Year ended December 31, 2017 Balance at January 1($ 34,098) $ 34,717 $ 619 Current service cost( 449) - ( 449) Interest (expense) income ( 477) 486 9 ( 35,024) 35,203 179 Remeasurements: Return on plan assets - ( 78) ( 78) (excluding amounts included in interest income or expense) Change in financial assumptions( 1,302) - ( 1,302) Experience adjustments ( 5,366) - ( 5,366) ( 6,668) ( 78) ( 6,746) Pension fund contribution - 1,410 1,410 Paid pension 3,058 ( 3,058) - Balance at December 31 ($ 38,634) $ 33,477 ($ 5,157)

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan asset fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2018 and 2017 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government. (e) The principal actuarial assumptions used were as follows: 2018 2017 Discount rate 1.00% 1.10% 2.25% 2.25% Future salary increases

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Future mortality rate was estimated based on the 5th Taiwan Standard Ordinary Experience Mortality Table. Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

Discount rate Future salary increases Increase 0.25% Decrease 0.25% Increase 0.25% Decrease 0.25% December 31, 2018 Effect on present value of ($ 1,050) $ 1,094 $ 985 ($ 952) defined benefit obligation December 31, 2017 Effect on present value of ($ 1,089) $ 1,135 $ 1,023 ($ 989) defined benefit obligation The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period. (f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2019 amounts to $0. (g) As of December 31, 2018, the weighted average duration of the retirement plan is 12 years. The analysis of timing of the future pension payment was as follows: Not later than one year$ 3,572 Later than one year but not later than five years 5,805 Later than five years 7,698 $ 17,075

B. (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment. (b) The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2018 and 2017 were $72,622 and $67,094, respectively.

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(13) Provisions Decommissioning liabilities 2018 At January 1 $ 15,781 Additional provisions 1,174 Used during the year ( 554) At December 31 $ 16,401 Decommissioning liabilities 2017 At January 1 $ 14,890 Additional provisions 1,311 Used during the year ( 420) $ 15,781 At December 31 Analysis of total provisions: December 31, 2018 December 31, 2017 $ 16,401 $ 15,781 Non-current Depending on the policies published, applicable agreements or the law/regulation requirements, the Company bears dismantling, removing the asset and restoring the site obligations for certain stores in the future. A provision is recognised for the present value of costs to be incurred for dismantling, removing the asset and restoring the site. (14) Share capital A. As of December 31, 2018, the Company’s authorised capital was $400,000, consisting of 40 million shares of ordinary stock, and the paid-in capital was $323,895 with a par value of $10 (in dollars) per share. All proceeds from shares issued have been collected. There were no changes in the number of the Company’s issued ordinary shares outstanding as of December 31, 2018 and 2017. B. Treasury shares (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

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December 31, 2018 Name of company Reason for holding the shares reacquisition Number of shares Carrying amount The Company To be reissued to 117,000 $ 10,123 employees December 31, 2017 Name of company Reason for holding the shares reacquisition Number of shares Carrying amount The Company To be reissued to 117,000 $ 10,123 employees

(b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus. (c) Pursuant to the R.O.C. Securities and Exchange Act treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued. (d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within three years from the reacquisition date and shares not reissued within the three-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition. (15) Capital surplus A. Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paid-in capital each year. Capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient. B. Capital surplus arise from paid-in capital in excess of par value on issuance of common stocks. There were no changes in the Company’s capital surplus as of December 31, 2018 and 2017. (16) Retained earnings A. Under the Company's Articles of Incorporation, the current year's earnings, if any, shall be appropriated based on the following order: (a) pay all taxes; (b) offset prior years’ operating losses; (c) set aside 10% as legal reserve; (d) set aside or reverse a special reserve in accordance with regulations by the competent

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authority; (e) The Company is engaged in the catering industry and is in the growth stage, with a stable financial structure. Other than the regulations in Company Act and the Company's Article, the Company also distributes earnings in line with its capital plan and operating result to decide how to appropriate dividend. The Company adopts a stable and balanced dividend strategy and appropriates the dividend (including cash dividend or stock dividend) in accordance with operating result, financial position and capital plan in the Board of Directors' meeting before the shareholders' meeting, and the proportion of cash dividend should not lower than 30% of total dividend. B. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital. C. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings. D. The Company recognised dividends distributed to owners amounting to $112,954 ($3.5 (in dollars) per share) and $96,818 ($3.0 (in dollars) per share) for the years ended December 31, 2018 and 2017, respectively. On February 26, 2019, the Board of Directors proposed for the distribution of dividends from 2018 earnings in the amount of $96,818, with $3.0 (in dollars) per share. E. For the information relating to employees’ compensation and directors’ and supervisors’ remuneration, please refer to Note 6(22). (17) Other equity items

Available-for-sale Currency translation investment differences Total At January 1, 2018$ 1,363 ($ 6,260) ($ 4,897) Retrospection transferred to ( 1,363) - ( 1,363) retained earnings–gross Retrospection transferred from ( 14,837) - ( 14,837) retained earnings–gross Currency translation differences: –Company - ( 487) ( 487) –Tax on Company - 324 324 ($ 14,837) ($ 6,423) ($ 21,260) At December 31, 2018

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Available-for-sale Currency translation investment differences Total At January 1, 2017($ 739) ($ 5,947) ($ 6,686) 4,982 - 4,982 Revaluation–gross ( 2,880) - ( 2,880) Revaluation transfer–gross Currency translation differences: –Company - ( 377) ( 377) –Tax on Company - 64 64 $ 1,363 ($ 6,260) ($ 4,897) At December 31, 2017 (18) Operating revenue Years ended December 31, 2018 2017 Revenue from contracts with customers Dining service income $ 5,170,958 $ 4,826,808 A. Disaggregation of revenue from contracts with customers The Company derives revenue from the transfer of goods at a point in time. Revenue is dining service revenue. B. Contract assets and liabilities As of December 31, 2018 and 2017, the Company has no contract assets in relation to contract revenue. In addition, the Company recognised contract liabilities as follows: December 31, 2018 December 31, 2017 Contract liabilities (shown as other current liabilities) Contract liabilities - customer loyalty$ 12,605 $ 10,355 Contract liabilities - advance receipts 268,271 242,882 $ 280,876 $ 253,237 (a) Significant changes in contract assets and liabilities None. (b) Revenue recognised that was included in the contract liability balance at the beginning of the period

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Years ended December 31, 2018 2017 Revenue recognised that was included in the contract liability balance at the beginning of the period Customer loyalty programmes$ 12,605 $ 10,355 Advance receipts 236,399 214,879 $ 249,004 $ 225,234 C. Related disclosures for 2017 operating revenue are provided in Note 12(5) B. (19) Other income

Year ended Year ended December 31, 2018 December 31, 2017 Rental revenue $ 9,434 $ 6,720 Dividend income 1,310 892 Interest income: Interest income from bank deposits 13,775 12,922 Other interest income 259 872 Other income - others 15,064 22,997 $ 39,842 $ 44,403 (20) Other gains and losses Year ended Year ended December 31, 2018 December 31, 2017 Loss on financial assets at fair value ($ 10,011) $ - through profit or loss Net currency exchange gain (loss) 558 ( 1,458) Loss on disposal of property, plant ( 1,771) and equipment - Gain on disposal of investments - 2,880 Impairment loss ( 333) ( 4,065) Miscellaneous disbursements ( 6,692) ( 7,515) ($ 18,249) ($ 10,158) The property, plant and equipment incurred impairment loss as the operating performance of certain stores did not meet the expectation; therefore, the Company recognised impairment loss amounting to $333 and $4,065, respectively in 2018 and 2017.

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(21) Expenses by nature

Year ended Year ended December 31, 2018 December 31, 2017 Raw materials and supplies used$ 1,840,700 $ 1,713,080 Employee benefit expense 1,627,245 1,536,706 Operating lease payments 573,536 529,036 Depreciation charges on property, plant and equipment 167,944 151,863 Amortisation charges on intangible assets 12,753 13,285 Utilities expenses 200,101 192,970 Advertising costs 148,723 106,604 Repairs and maintenance expenses 83,196 89,072 Transportation expenses 15,373 11,548 Others 301,835 271,917 $ 4,971,406 $ 4,616,081

(22) Employee benefit expense Year ended Year ended December 31, 2018 December 31, 2017 Wages and salaries $ 1,345,978 $ 1,276,705 Labor and health insurance fees 151,739 139,800 Pension costs 72,965 67,534 Other personnel expenses 56,563 52,667 $ 1,627,245 $ 1,536,706

A. Under the Company's Articles of Incorporation, the current year's earnings, if any, shall appropriate over 1~2% as employees' bonus, and under 5% as remuneration to directors and supervisors. However, if the Company has accumulated deficit, the earnings shall first be reserved to offset the deficit. B. For the years ended December 31, 2018 and 2017, employees’ compensation was accrued at $4,079 and $4,587, respectively; while directors’ and supervisors’ remuneration was accrued at $8,159 and $9,174, respectively. The aforementioned amounts were recognised in salary expenses. The employees’ compensation and directors’ and supervisors’ remuneration were estimated and accrued based on 2% and 4%, respectively, of distributable profit of current year for the years ended December 31, 2018 and 2017. The distributed amounts resolved by the Board of Directors were in agreement with estimated amounts, and the employees’ compensation will be distributed in the form of cash. Employees’ compensation and directors’ and supervisors’ remuneration of 2017 as resolved by

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the Board of Directors were in agreement with those amounts recognised in the 2017 financial statements. Information about employees’ compensation and directors’ and supervisors’ remuneration of the Company as resolved by the Board of Directors and the shareholders at the shareholders’ meeting will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange. (23) Income tax A. Income tax expense (a) Components of income tax expense: Year ended Year ended December 31, 2018 December 31, 2017 Current tax: Current tax on profits for the year$ 47,398 $ 46,617 Tax on undistributed surplus earnings 3,035 5,562 Prior year income tax over estimation 1,353 ( 4,161) Total current tax 51,786 48,018 Deferred tax: Origination and reversal of temporary differences 2,803 ( 1,061) Impact of change in tax rate ( 3,510) - Total deferred tax ( 707) ( 1,061) $ 51,079 $ 46,957 Income tax expense (b) The income tax credit (charge) relating to components of other comprehensive income is as follows: Year ended Year ended December 31, 2018 December 31, 2017 Currency translation differences $ 324 $ 64 Remeasurement of defined benefit $ 430 $ 1,147 obligation

B. Reconciliation between income tax expense and accounting profit:

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Year ended Year ended December 31, 2018 December 31, 2017 Tax calculated based on profit before tax and statutory tax rate $ 38,346 $ 36,650 Effect of amount not allowed to recognise under regulations 2,359 371 Tax on undistributed earnings 3,035 5,562 Prior year income tax under (over) estimation 1,353 ( 4,161) Impact of change in tax rate ( 3,510) - Change in assessment of realisation of deferred tax assets 9,496 8,535 $ 51,079 $ 46,957 Income tax expense C. Amounts of deferred tax assets or liabilities as a result of temporary differences are as follows:

Year ended December 31, 2018 Recognised Recognised in other in comprehensive January 1 profit or loss income December 31 Temporary differences: - Deferred tax assets: Loss on foreign investment recognised by equity method $ 6,463 ($ 2,472) $ - $ 3,991 Unrealised expenses 18,948 3,477 430 22,855 Currency translation differences 1,282 - 324 1,606 $ 26,693 $ 1,005 $ 754 $ 28,452 - Deferred tax liabilities: Currency translation differences ($ 650) ($ 115) $ - ($ 765) Unrealised expenses ( 1,427) ( 183) -( 1,610) ($ 2,077) ($ 298) $ -($ 2,375)

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Year ended December 31, 2017 Recognised Recognised in other in comprehensive January 1 profit or loss income December 31 Temporary differences: - Deferred tax assets: Loss on foreign investment recognised by equity method $ 7,711 ($ 1,248) $ - $ 6,463 Unrealised expenses 15,567 2,234 1,147 18,948 Currency translation differences 1,218 - 64 1,282 $ 24,496 $ 986 $ 1,211 $ 26,693 - Deferred tax liabilities: Currency translation differences ($ 650) $ - $ - ($ 650) Unrealised expenses ( 1,502) 75 -( 1,427) ($ 2,152) $ 75 $ -($ 2,077)

D. The Company’s income tax returns through 2016 have been assessed and approved by the Tax Authority. E. Under the amendments to the Income Tax Act which was promulgated by the President of the Republic of China on February 7, 2018, the Company’s applicable income tax rate was raised from 17% to 20% effective from January 1, 2018. The Company has assessed the impact of the change in income tax rate.

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(24) Earnings per share Year ended December 31, 2018 Weighted-average number of ordinary Earnings per shares outstanding share Amount after tax (shares in thousands) (in dollars) Basic earnings per share Profit attributable to ordinary shareholders of the Company$ 140,649 32,273 $ 4.36 Diluted earnings per share Profit attributable to ordinary shareholders of the Company$ 140,649 32,273 Assumed conversion of all dilutive potential ordinary shares Employees’ compensation - 63 Profit attributable to ordinary shareholders of the Company plus assumed conversion of all dilutive potential ordinary shares$ 140,649 32,336 $ 4.35

Year ended December 31, 2017 Weighted-average number of ordinary Earnings per shares outstanding share Amount after tax (shares in thousands) (in dollars) Basic earnings per share Profit attributable to ordinary shareholders of the Company$ 168,633 32,273 $ 5.23 Diluted earnings per share Profit attributable to ordinary shareholders of the Company$ 168,633 32,273 Assumed conversion of all dilutive potential ordinary shares Employees’ compensation - 51 Profit attributable to ordinary shareholders of the Company plus assumed conversion of all dilutive potential ordinary shares$ 168,633 32,324 $ 5.22

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(25) Operating leases The Company leases offices, stores and warehouse assets under non-cancellable operating lease agreements. The lease terms are between 1 to 10 years. Rent on certain leases will be adjusted with an agreed upon ratio, taking into consideration the effect of price fluctuations. The Company recognised rental expenses of $573,536 and $529,036 for the years ended December 31, 2018 and 2017, respectively. The future aggregate minimum lease payments under non-cancellable operating leases are as follows: December 31, 2018 December 31, 2017 Not later than one year$ 456,521 $ 354,053 Later than one year but not later than five years 1,036,092 907,512 Later than five years 282,424 164,594 $ 1,775,037 $ 1,426,159 Details of the future minimum lease payments incurred from operating leases with related parties are provided in Note 7(2) H. (26) Supplemental cash flow information Year ended Year ended December 31, 2018 December 31, 2017 Investing activities with partial cash payments: Purchase of property, plant and equipment $ 193,180 $ 240,830 Add: Opening balance of payable on equipment 78,225 70,211 Opening balance of payable on equipment - related parties 18,927 14,268 Less: Ending balance of payable on equipment ( 21,421) ( 78,225) Ending balance of payable on equipment - related parties ( 7,784) ( 18,927) Cash paid during the year$ 261,127 $ 228,157

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7. RELATED PARTY TRANSACTIONS (1) Names of related parties and relationship

Names of related parties Relationship with the Company Mos Food Services, Inc. (Mos Food Services) Entity with significant influence over the Company Guang-Yuan Industries Co., Ltd. (Guang-yuan ) Entity with significant influence over the Company Mos Burger Australia Pty. Ltd. (Mos Burger Australia) Associate TECO Electric & Machinery Co., Ltd. (TECO Electric & Machinery) Other related party Magic-Food Mos Food Industry Co., Ltd. (Magic-Food Mos) Other related party GD Teco Taiwan Co., Ltd. (GD Teco Taiwan) Other related party Yuban & Company (Yuban) Other related party TECNOS International Consultant Co., Ltd. (TECNOS) Other related party Taiwan Pelican Express Co., Ltd. (Taiwan Pelican Express) Other related party Information Technology Total Services Corp. (Information Technology) Other related party Jie Zheng Property Service & Management Co., Ltd. (Jie Zheng) Other related party A-Ok Technical Service Co., Ltd. (A-Ok) Other related party E-Joy Electronics International Co., Ltd. (E-Joy Electronics ) Other related party TECO Tour Travel Service Co., Ltd. (TECO Tour) Other related party Royal Host Taiwan Co., Ltd. (Royal Host) Other related party Tong-An Assets Mangement & Development Co., Ltd. (Tong-An Assets) Other related party Kogyoku Foods Co., Ltd. (Kogyoku Foods) Other related party Le-Li Co., Ltd. (Le-Li) Other related party Xianlaoman Food Services Co., Ltd. (Xianlaoman) Other related party ABC Cooking Studio Taiwan Co., Ltd. (ABC Cooking) Other related party Fujio Food System Taiwan Co., Ltd. (Fujio Food) Other related party Century Development Corporation (Century Development) Other related party TECO Nanotech Co., Ltd. (TECO Nanotech) Other related party Tecom Co., Ltd. (Tecom) Other related party TECO Image Systems Co., Ltd. (TECO Image Systems) Other related party Dong Guang Co., Ltd. (Dong Guang) Other related party Wan Yi Educational Foundation (Wan Yi Foundation) Other related party Kogle Foods Co., Ltd. (Kogle Foods) Other related party Tong An Co., Ltd. (Tong An) Other related party Don Her International Co., Ltd. (Don Her) Other related party Ming Full Ltd. (Ming Full) Other related party Hao Di Foods Co., Ltd. (Hao Di Foods) Other related party An Tai International Co., Ltd. (An Tai) Other related party Foremost International Food & Beverage Co., Ltd. (Foremost Food) Other related party Miss Croissant Food Co., Ltd. (Miss Croissant) Other related party TECO Electro Devices Co., Ltd.( TECO Electro Devices) Other related party Technical Information International Corporation (Technical Information) Other related party

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(2) Significant related party transactions and balances A. Operating revenue:

Year ended Year ended December 31, 2018 December 31, 2017 Sales of goods: Entites with significant influence to the company $ - $ 1 Subsidiaries - 6 Other related parties 1,126 480 $ 1,126 $ 487 Year ended Year ended December 31, 2018 December 31, 2017 Sales of services (shown in ‘other income’): Subsidiaries$ 338 $ 392 Other related parties –Royal Host 3,686 3,771 –Others 1,752 1,861 $ 5,776 $ 6,024 (a) Service revenue is the revenue from providing consulting services. There is no similar transaction to be compared with for prices, and terms are determined in accordance with mutual agreement. (b) Sales of goods arise from selling commodity coupons and food. Transaction prices and terms for related parties are approximate to those for third parties. B. Purchases: Year ended Year ended December 31, 2018 December 31, 2017 Purchases of goods: Other related parties –Magic–Food Mos $ 799,225 $ 754,144 –Pelican Express 212,556 125,633 –Others 14,953 11,048 $ 1,026,734 $ 890,825

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Year ended Year ended December 31, 2018 December 31, 2017 Purchases of services: Subsidiaries$ 10 $ - Associates - 7 Other related parties –TECNOS 2,998 2,820 –Information Technology 3,240 4,028 –Others 2,309 965 $ 8,557 $ 7,820

(a) No similar transaction can be compared with the above purchases with related parties. Prices and terms are determined in accordance with mutual agreement. (b) Services rendered by related parties are payments for freight and services. Prices and terms for freight payment are approximately the same as those with third parties. Furthermore, no similar transaction can be compared with, and prices and terms are in accordance with mutual agreement and recorded as ‘5000 Operating costs’, ‘6100 Sales and marketing expenses’ and ‘6200 General and administrative expenses’. C. Use of assets:

Year ended Year ended December 31, 2018 December 31, 2017 Entities with significant influence to the Company - patent royalties $ 47,635 $ 44,817 Subsidiaries - rental expense 914 583 Associates - rental expense - 295 Other related parties - rental expense 21,939 21,862 $ 70,488 $ 67,557

The above expenses are payments for contracts of expertise and patent cooperation with related parties and rent paid for shops and offices leased from related parties. Royalties are paid based on a certain percentage of monthly operating net income and rent expenses are paid monthly in accordance with mutual agreement.

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D. Other expenses: Year ended Year ended December 31, 2018 December 31, 2017 Entities with significant influence to the Company $ 458 $ 2,584 Subsidiaries 292 240 Associates 83 120 Other related parties 78,422 59,938 $ 79,255 $ 62,882 E. Receivables from related parties: December 31, 2018 December 31, 2017 Other accounts receivable: Entities with significant influence to the Company $ 2 $ - Subsidiaries 38 51 Associates 150 163 Other related party ─Royal Host 12,660 2,778 ─Kogyoku Foods 2,508 - ─Others 1,068 493 $ 16,426 $ 3,485

Receivables due from related parties arise from consulting revenue and prepaid rents and do not have collateral nor bear interests. No provision is appropriated for receivables due from related parties. F. Payables or related parties: (a) Accounts payable: December 31, 2018 December 31, 2017 Accounts payable to related parties: Other related parties ─Magic-Food Mos $ 68,345 $ 68,954 ─Taiwan Pelican Express 63,155 56,637 ─Others 4,022 173 $ 135,522 $ 125,764

Payables to related parties are incurred from purchases and services received and do not have collateral nor bear interests.

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(b) Other payables: December 31, 2018 December 31, 2017 Other accounts payable to related parties: Entities with significant influence to the Company $ 4,005 $ 3,760 Subsidiaries 387 230 Other related parties ─A-Ok 2,616 4,466 ─GD Teco Taiwan 1,832 5,257 ─Yuban 2,961 4,739 ─Information Technology 8,998 8,922 ─Jie Zheng 6,022 12,725 ─Tong-An Assets 684 469 ─Others 7,276 4,180 $ 34,781 $ 44,748

G. Property transactions: (a) Acquisition of property, plant and equipment: Year ended Year ended December 31, 2018 December 31, 2017 Other related party －Jie Zheng $ 20,516 $ 29,588 －Others 12,850 42,357 $ 33,366 $ 71,945

(b) Other payables - related parties - ending balances of acquisition of property, plant and equipment:

December 31, 2018 December 31, 2017 Other related party －GD Teco Taiwan $ - $ 3,106 －Yuban 1,108 3,040 －Information Technology 3,258 1,824 －Jie Zheng 3,110 7,796 －A-Ok - 3,134 －Others 308 27 $ 7,784 $ 18,927

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(c) Acquisition of other assets: Year ended Year ended December 31, 2018 December 31, 2017 Accounts Consideration Consideration Other related party Intangible assets –GD Teco Taiwan $ - $ 6,290 –Information Technology 799 129 –Technical Information 1,096 549 $ 1,895 $ 6,968

H. Commitments and contingent liabilities (a) Significant commitments of the technology cooperation contracts signed by the Company with entities who have significant influence to the Company are as follows: －Operating and inventory control methods and managing methods are provided by entities with significant impact to the Company. －Registered trademarks and patents provided by entities with significant impact to the Company are rights the Company uses in Taiwan region. －The Company shall pay expertise and patent cooperation expenses and royalties with a certain percentage of the Company’s monthly operating net income to the related parties. (b) Future rental payments that shall be paid to other related parties which are based on the contracts are as follows: December 31, 2018 December 31, 2017 Total rental payment Total rental payment Not later than one year $ 18,222 $ 13,929 Later than one year but not later than five years 32,278 28,680 Later than five years 717 - $ 51,217 $ 42,609

(3) Key management compensation Year ended Year ended December 31, 2018 December 31, 2017 Salaries and other short-term employee benefits $ 34,085 $ 35,465 Post-employment benefits 381 451 $ 34,466 $ 35,916

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8. PLEDGED ASSETS The Company’s assets pledged as collateral are as follows: Book value Pledged asset December 31, 2018 December 31, 2017 Purpose Other current assets: Time deposits$ 280,000 $ 250,000 Performance guarantee for issuance of MOS Card and gift certificates

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT COMMITMENTS (1) Contingencies The information on contingencies incurred from technology cooperation contracts is provided in Note 7. (2) Commitments A. Operating lease agreements are provided in Notes 6(24) and 7. B. Capital expenditures contracted for at the balance sheet date but not yet incurred are as follows: December 31, 2018 December 31, 2017 Property, plant and equipment$ 27,419 $ 92,020 Intangible assets 5,678 3,305 $ 33,097 $ 95,325

10. SIGNIFICANT DISASTER LOSS None. 11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE None. 12. OTHERS (1) Capital management The capital structure management is based on the Company’s business scale, industry’s future growth and product development plan to determine the target market share. The most appropriate capital structure is determined based on the capital expenditure requirements, operating capital requirements and operating profit and cash flow that may arise from the products’ competitiveness. (2) Financial risks of financial instruments A. Financial risk management policies (a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial position and financial performance.

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(b) Risk management is carried out by a treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close cooperation with the Company’s operating units. The Board provides written policies for overall risk management, as well as written policies covering specific areas and matters, such as credit risk and investment of excess liquidity. B. Significant financial risks and degrees of financial risks (a) Market risk Foreign exchange risk i. The Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the USD, AUD and RMB. Foreign exchange risk arises from recognized assets and liabilities. ii. The Company’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows: December 31, 2018 Foreign currency amount Book value (In thousands) Exchange rate (NTD) Financial assets Monetary items RMB:NTD$ 7,938 4.47$ 35,501 AUD:NTD 3 21.67 66 USD:NTD 1,249 30.72 38,351 Non-monetary items USD:NTD 543 30.72 16,681 AUD:NTD 495 21.67 10,726 December 31, 2017 Foreign currency amount Book value (In thousands) Exchange rate (NTD) Financial assets Monetary items RMB:NTD$ 6,694 4.57$ 30,560 AUD:NTD 2 23.19 38 USD:NTD 1,214 29.76 36,139 Non-monetary items USD:NTD 1,015 29.76 30,207 AUD:NTD 359 23.19 8,335

-286- iii. Please refer to the following table for the details of unrealised exchange gain (loss) arising from significant foreign exchange variation on the monetary items held by the Company: Year ended December 31, 2018 Unrealised exchange gain (loss) Foreign currency amount Book value (In thousands) Exchange rate (NTD) Financial assets Monetary items RMB:NTD $ 7,938 4.91 ($ 3,465) USD:NTD 1,249 30.04 825 AUD:NTD 3 25.00 ( 9) Year ended December 31, 2017 Unrealised exchange gain (loss) Foreign currency amount Book value (In thousands) Exchange rate (NTD) Financial assets Monetary items RMB:NTD $ 6,694 4.99 $ 2,823 USD:NTD 1,214 30.06 357 AUD:NTD 2 21.05 5 iv. Analysis of foreign currency market risk arising from significant foreign exchange variation: Year ended December 31, 2018 Sensitivity analysis Effect on other Degree of Effect on comprehensive variation profit or loss income Financial assets Monetary items RMB:NTD 1%$ 355 $ - AUD:NTD 1% 1 - USD:NTD 1% 384 -

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Year ended December 31, 2017 Sensitivity analysis Effect on other Degree of Effect on comprehensive variation profit or loss income Financial assets Monetary items RMB:NTD 1%$ 306 $ - AUD:NTD 1% - - USD:NTD 1% 361 - Price risk i. The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company. ii. The Company’s investments in equity securities comprise shares and open-end funds issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2018 and 2017 would have increased/decreased by $1,391 and $0, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $0 and $1, 830, respectively, as a result of other comprehensive income classified as financial assets at fair value through other comprehensive income. Cash flow and fair value interest rate risk None.

(b) Credit risk i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms. ii. The Company manages their credit risk taking into consideration the entire group’s concern. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analysing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered.

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Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored. iii. The Company adopts following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition. iv. The Company classifies customers’ accounts receivable in accordance with credit risk on trade. The Company applies the simplified approach using provision matrix to estimate expected credit loss under the provision matrix basis. v. The Company used the forecastability to adjust historical and timely information to assess the default possibility of allowance for accounts receivable. The Company’s estimated default possibility of accounts receivable that were past due or were not past due were not material to the Company on December 31, 2018 and 2017. vi. Accounts receivable that the Company applies the simplified approach to provide loss allowance are not significant, therefore, no impairment loss was recognised for the years ended December 31, 2018 and 2017. vii. Credit risk information of 2017 is provided in Note 12(4). (c) Liquidity risk i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs. ii. Company treasury invests according to cash flow forecasts surplus cash in interest bearing demand deposits, time deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. As at December 31, 2018 and 2017, the Company held monetary position of $1,664,404 and $1,665,797, respectively, that are expected to readily generate cash inflows for managing liquidity risk. iii.Because the Company’s working capital is sufficient, therefore, the Company does not sign any borrowing agreement with financial institutions. As of December 31, 2018 and 2017, the Company’s undrawn borrowing facility was $0. iv.The table below analyses the Company’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

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Non-derivative financial liabilities: Between 3 Less than 3 months and Between 1 Cash flow Carrying December 31, 2018 months 1 year and 2 years of contract amount Notes payable $ 640 $ - $ - $ 640 $ 640 Accounts payable 326,646 - - 326,646 326,646 Other payables 379,025 108,389 - 487,414 487,414 Between 3 Less than 3 months and Between 1 Cash flow Carrying December 31, 2017 months 1 year and 2 years of contract amount Accounts payable $ 306,843 $ - $ - $ 306,843 $ 306,843 Other payables 426,885 108,839 6,716 542,440 542,440 The Company does not expect the timing of occurrence of the cash flows estimated through the maturity date analysis will be significantly earlier, nor expect the actual cash flow amount will be significantly different. (3) Fair value estimation A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks and beneficiary certificates is included in Level 1.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3:Unobservable inputs for the asset or liability. The fair value of the Company’s investment in equity investment without active market is included in Level 3. B. The carrying amounts of the Company’s financial instruments not measured at fair value (including cash and cash equivalents, notes receivable, accounts receivable, other receivables, notes payable, accounts payable and other payables) are approximate to their fair values. C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at years ended December 31, 2018 and 2017 is as follows: (a) The related information of natures of the assets and liabilities is as follows:

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December 31, 2018 Level 1 Level 2 Level 3 Total Assets Recurring fair value measurements Available-for-sale financial assets $ 139,136 $ - $ - $ 139,136 Equity securities December 31, 2017 Level 1 Level 2 Level 3 Total Assets Recurring fair value measurements Available-for-sale financial assets Equity securities $ 182,987 $ - $ - $ 182,987

(b) The methods and assumptions the Company used to measure fair value are as follows: i. The instruments the Company used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics: Listed shares Open-end fund Market quoted price Closing price Net asset value ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the parent company only balance sheet date (i.e. yield curves on the Taipei Exchange, average commercial paper interest rates quoted from Reuters). iii. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Company’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions. iv. The Company takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Company’s credit quality. D. For the years ended December 31, 2018 and 2017, there was no transfer between Level 1 and Level 2.

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E. For the years ended December 31, 2018 and 2017, the level 3 financial instruments held by the Company had no change in fair value. F. For the years ended December 31, 2018 and 2017, there was no transfer into or out from Level 3. G. Accounting department is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value. H. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement: Fair value at Significant Range Relationship of December Valuation unobservable (weighted inputs to fair 31, 2018 technique input average) value Non-derivative equity instrument: Unlisted shares$ - Market Price to 1.36%~ The higher the comparable book ratio 1.49% net asset value, companies multiple the higher the fair value Discount for 13.24% The higher the lack of discount for lack marketability of marketability, the lower the fair value

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Fair value at Significant Range Relationship of December Valuation unobservable (weighted inputs to fair 31, 2017 technique input average) value Non-derivative equity instrument: Unlisted shares$ - Market Price to 1.36%~ The higher the comparable book ratio 1.49% net asset value, companies multiple the higher the fair value Discount for 13.24% The higher the lack of discount for lack marketability of marketability, the lower the fair value I. The Company has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed: December 31, 2018 Recognised in profit or Recognised in other loss comprehensive income Favourable Unfavourable Favourable Unfavourable Input Change change change change change Financial assets Equity The discount instrument for lack of ± 5% $ - $ - $ - $ - marketability

December 31, 2017 Recognised in profit or Recognised in other loss comprehensive income Favourable Unfavourable Favourable Unfavourable Input Change change change change change Financial assets Equity The discount instrument for lack of ± 5% $ - $ - $ - $ - marketability

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(4) Effects on initial application of IFRS 9, ‘Financial instruments’ A. Summary of significant accounting policies adopted in 2017 : (a) Available-for-sale financial assets i. They are non-derivatives that are either designated in this category or not classified in any of the other categories. ii. On a regular way purchase or sale basis, available-for-sale financial assets are recognised and derecognised using trade date accounting. iii. They are initially recognised at fair value plus transaction costs. These financial assets are subsequently remeasured and stated at fair value, and any changes in the fair value of these financial assets are recognised in other comprehensive income. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured or derivatives that are linked to and must be settled by delivery of such unquoted equity instruments are presented in ‘financial assets at cost’. (b) Loans and receivables Accounts receivable are loans and receivables originated by the entity. They are created by the entity by selling goods or providing services to customers in the ordinary course of business. They are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. However, short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial. (c) Impairment of financial assets i. The Company assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. ii. The criteria that the Company uses to determine whether there is objective evidence of an impairment loss is as follows: (i) Significant financial difficulty of the issuer or debtor; (ii) A breach of contract, such as a default or delinquency in interest or principal payments; (iii) The Company, for economic or legal reasons relating to the borrower’s financial difficulty, granted the borrower a concession that a lender would not otherwise consider; (iv) It becomes probable that the borrower will enter bankruptcy or other financial reorganisation; (v) The disappearance of an active market for that financial asset because of financial difficulties;

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(vi) Observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial asset in the group, including adverse changes in the payment status of borrowers in the group or national or local economic conditions that correlate with defaults on the assets in the group; (vii) Information about significant changes with an adverse effect that have taken place in the technology, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in the equity instrument may not be recovered; (viii) A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost. iii. When the Company assesses that there has been objective evidence of impairment and an impairment loss has occurred, accounting for impairment is made as follows according to the category of financial assets: (i) Financial assets measured at amortised cost The amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate, and is recognised in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment loss was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the asset does not exceed its amortised cost that would have been at the date of reversal had the impairment loss not been recognised previously. Impairment loss is recognised and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account. (ii) Available-for-sale financial assets The amount of the impairment loss is measured as the difference between the asset’s acquisition cost (less any principal repayment and amortisation) and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss, and is reclassified from ‘other comprehensive income’ to ‘profit or loss’. If, in a subsequent period, the fair value of an investment in a debt instrument increases, and the increase can be related objectively to an event occurring after the impairment loss was recognised, such impairment loss is reversed through profit or loss. Impairment loss of an investment in an equity instrument recognised in profit or loss shall not be reversed through profit or loss. Impairment loss is recognised and reversed by adjusting the carrying amount of the asset through the use of an impairment allowance account.

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B. The reconciliations of carrying amount of financial assets transferred from December 31, 3017, IAS 39, to January 1, 2018, IFRS 9, were as follows: Available-for- sale - equity Effects Measured at fair value Measured at through other fair value comprehensive through income - Retained Others profit or loss equity Total earnings equity IAS 39 $ - $ 182,987 $ 182,987 $ 617,583 ($ 15,020) Transferred into and measured at 182,987 ( 182,987) - 1,363 ( 1,363) fair value through profit or loss

Transferred into and measured at fair value through other comprehensive income - equity - - - 14,837 ( 14,837) $ 182,987 $ -$ 182,987 $ 633,783 ($ 31,220) IFRS 9 (a) Under IAS 39, as the equity instruments, which were classified as ‘available-for-sale financial assets’ amounting to $14,837 (an impairment loss in the amount of $14,837 was recognised, thus the fair value is $0), are not held for trading, they were reclassified as ‘financial assets at fair value through other comprehensive income (equity instruments)’ on initial application of IFRS 9. (b) Under IAS 39, the equity instruments, which were classified as: ‘available-for-sale financial assets’amounting to $182,987, were reclassified as ‘financial assets at fair value through profit or loss (equity instruments)’on initial application of IFRS 9. C. The reconciliation of allowance for impairment and provision from December 31, 2017, as these are impaired under IAS 39, to January 1, 2018, as these are expected to be impaired under IFRS 9, are as follows:

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Measured at fair value through other Available-for-sale comprehensive income Total IAS 39 $ 14,837 $ - $ 14,837 Transfer into and measured at fair value through other comprehensive income ( 14,837) 14,837 - $ - $ 14,837 $ 14,837 IFRS 9 D. Available-for-sale financial assets Items December 31, 2017 Current items: Listed stocks$ 30,822 Open-end funds 150,802 181,624 Valuation adjustment 1,363 $ 182,987 Non-current items: Non-listed stocks$ 14,837 Accumulated impairment ( 14,837) $ -

(a) The Company recognised $4,982 in other comprehensive income for fair value change and reclassified $2,880 from equity to profit or loss for the year ended December 31, 2017. (b) As Guangdon Mos Burger Food Management Co., Ltd. held by the Company continued to incur losses, the Company recognised impairment after assessment. As of December 31, 2017, the accumulated impairment loss was $14,837. E. Credit risk information as of December 31, 2017 and for the year ended December 31, 2017 are as follows: (a) The ageing analysis of accounts receivable is as follows: December 31, 2017 Neither past due nor impaired $ 69,372 Past due but not impaired Up to 30 days 13,721 31 to 90 days 121 91 to 180 days 32 Over 181 days - $ 83,246 The above ageing analysis was based on invoice date.

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(b) The counterparties are mainly located in department stores or hypermarkets which collect sales on behalf of the Company. The credit quality of the counterparties which is mostly optimal and is neither past due nor impaired, is in the A ranking. The Company management assesses and classifies the credit quality of counterparties based on whether the counterparties have any non-performing loans or returned cheque records and on the historical transactions and their operating performances with the Company. The counterparties are ranked A if the counterparties do not have any aforementioned defect, and the historical records and dynamics are optimal. (c) The Company does not hold any collateral as security as of December 31, 2017. (5) Effects on initial application of IFRS 15 A. The significant accounting policies applied on revenue recognition for the year ended December 31, 2017 are set out below. (a) The Company is engaged in managing fast food restaurant chains which mainly sells hamburger and related goods. Revenue is measured at the fair value of the consideration received or receivable taking into account of business tax, returns, rebates and discounts for the sale of goods to external customers in the ordinary course of the Company’s activities. Revenue arising from the sales of goods is recognised when the Company has delivered the goods to the customer, the amount of sales revenue can be measured reliably and it is probable that the future economic benefits associated with the transaction will flow to the entity. The delivery of goods is completed when the significant risks and rewards of ownership have been transferred to the customer, the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and the customer has accepted the goods based on the sales contract or there is objective evidence showing that all acceptance provisions have been satisfied. (b) The Company has customer loyalty programmes where the Company grants loyalty award credits that can be used to exchange for free or discounted goods to customers as part of a sales transaction. The fair value of the consideration received or receivable in respect of the initial sale is allocated between the initial sale of goods and the award credits. The amount of proceeds allocated to the award credits is measured by reference to the fair value of goods that can be redeemed by using the award credits and the proportion of award credits that are expected to be redeemed by customers. The Company recognises the deferred portion of the proceeds allocated to the bonus credits as revenue only when it has fulfilled its obligations in respect of the bonus credits.

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B. The revenue recognised by using above accounting policies for the year ended December 31, 2017 are as follows: Year ended December 31, 2017 $ 4,826,808 Sales revenue-dining service income C. There was no significant effect on current balance sheet and comprehensive income statement items if the Company continues adopting above accounting policies. 13. SUPPLEMENTARY DISCLOSURES (1) Significant transactions information A. Loans to others: None. B. Provision of endorsements and guarantees to others: None. C. Holding of marketable securities at the end of the period: Please refer to table 1. D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None. E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None. F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None. G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 2. H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None. I. Trading in derivative instruments undertaken during the reporting periods: None. J. Significant inter-company transactions during the reporting periods: Not applicable because there is no significant transaction between the Company and subsidiaries or among subsidiaries. (2) Information on investees Names, locations and other information of investee companies (not including investees in Mainland China): Please refer to table 3. (3) Information on investments in Mainland China A. Basic information: Please refer to table 4. B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland China: None. 14. SEGMENT INFORMATION Not applicable.

-299- An-Shin Food Services Co., Ltd. Holding of marketable securities at the end of the period Year ended December 31, 2018 Table 1 Expressed in thousands of NTD (Except as otherwise indicated)

As of December 31, 2018

Number of shares Relationship with the (thousand shares Securities held by Marketable securities securities issuer General ledger account /thousand units) Book value Ownership Fair value Footnote An-Shin Food Services Co., Ltd. Stock 1 None Financial assets at fair value through profit or 75 $ 5,663 - $ 75.50 None loss-current 〃 Stock 2 Associates 〃 20 349 - 17.45 〃 〃 Stock 3 None 〃 45 3,591 - 79.80 〃 〃 Stock 4 〃〃 32 2,248 - 70.80 〃 〃 Stock 5 〃〃 10 2,210 - 210.50 〃 〃 Stock 6 〃〃 15 1,808 - 120.50 〃 〃 Stock 7 〃〃 35 7,893 - 225.50 〃 〃 Stock 8 〃〃 23 1,888 - 82.10 〃 〃 Stock 9 〃〃 70 1,676 - 23.94 〃

-300- 〃 Stock 10 〃〃 13 2,784 - 221.00 〃 〃 Stock 11 〃〃 5 216 - 43.25 〃 〃 Stock 12 〃〃 63 1,268 - 20.10 〃 〃 Stock 13 〃〃 20 804 - 40.20 〃 〃 Stock 14 〃〃 12 1,416 - 118.00 〃 〃 Stock 15 〃〃 - 16 - 67.00 〃 〃 Stock 16 〃〃 60 3,720 - 62.00 〃 〃 Stock 17 〃〃 3 675 - 225.00 〃 〃 Stock 18 〃〃 20 2,130 - 106.50 〃 〃 Stock 19 〃〃 100 1,651 - 16.51 〃 〃 Stock 20 〃〃 11 392 - 35.60 〃 〃 Stock 21 〃〃 13 1,086 - 83.50 〃 〃 Stock 22 〃〃 2 286 - 143.00 〃 〃 Stock 23 〃〃 30 1,296 - 43.20 〃 〃 Stock 24 〃〃 30 669 - 22.30 〃 〃 Stock 25 〃〃 - - - - 〃 〃 Stock 26 〃〃 200 10,017 - 50.00 〃

Table 1 Page 1 As of December 31, 2018

Number of shares Relationship with the (thousand shares Securities held by Marketable securities securities issuer General ledger account /thousand units) Book value Ownership Fair value Footnote 〃 None Financial assets at fair value through profit or 367$ 4,402 - $ 12.01 〃 Fund 1 loss-current 〃 Fund 2 〃〃 393 4,772 - 12.15 〃 〃 Fund 3 〃〃 1,436 14,619 - 10.18 〃 〃 Fund 4 〃〃 803 10,053 - 12.52 〃 〃 Fund 5 〃〃 926 15,091 - 16.29 〃 〃 Fund 6 〃〃 1,110 14,298 - 12.88 〃 〃 Fund 7 〃〃 742 10,079 - 13.58 〃 〃 Fund 8 〃〃 724 10,070 - 13.90 〃 〃 Stock 27 〃 Financial assets at fair value through other 3,850 - 4.21% - 〃 comprehensive income-non current $ 139,136 -301-

Table 1 Page 2 An-Shin Food Services Co., Ltd. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more Year ended December 31, 2018 Table 2 Expressed in thousands of NTD (Except as otherwise indicated)

Differences in transction terms compared to third party Transaction transactions Notes/accounts receivable (payable) Relationship with the Purchases Percentage of Percentage of total notes/accounts Purchaser/seller Counterparty counterparty (sales) Amount total purchases (sales) Credit term Unit price Credit term Balance receivable (payable) Footnote An-Shin Food Magic-Food Mos Other related party Purchases 799,225$ 41% Note Not applicable Not applicable 68,345$ 21% None Services Co., Ltd. Food Industry Co., Ltd. An-Shin Food Taiwan Pelican Other related party Purchases 212,556$ 11% 〃〃 〃 63,155$ 19% None Services Co., Ltd. Express

Note: Credit terms are in accordance with mutual agreement. -302-

Table 2 Page 3 An-Shin Food Services Co., Ltd. Information on investees (not including investees in Mainland China) Year ended December 31, 2018 Table 3 Expressed in thousands of NTD (Except as otherwise indicated)

Initial investment amount Shares held as at December 31, 2018 Net profit (loss) of the Investment income (loss) Balance at Balance at investee for the year recognised by the Company December 31, December 31, Number of ended December 31, for the year ended Investor Investee Location Main business activities 2018 2017 shares Ownership Book value 2018 December 31, 2018 Footnote An-Shin Food Services An-Shin Food Services Singapore Foreign investment$ 230,381 $ 230,381 7,607 40.35% 16,681$ ($ 32,906) ($ 13,277) The Company's Co., Ltd. (Singapore) Pte. Ltd. subsidiary 〃 Mos Burger Australia Australia Restaurant management: 82,880 63,181 3,071 29.19% 10,726 ( 55,289) ( 16,140) The Company's Pty. Ltd. restaurant services investee accounted for using equity method -303-

Table 3 Page 4 An-Shin Food Services Co., Ltd. Information on investments in Mainland China Year ended December 31, 2018 Table 4 Expressed in thousands of NTD (Except as otherwise indicated)

Amount remitted from Taiwan to Mainland China/ Amount remitted back Accumulated Accumulated to Taiwan for the year ended amount of Book value of amount of Accumulated amount December 31, 2018 remittance from Net income Ownership Investment income investments in investment of remittance from Taiwan to of investee held by the (loss) recognised by Mainland income remitted Taiwan to Mainland Remitted to Mainland China as of Company the Company for the China as of back to Taiwan as Investee in Main business Investment China as of Mainland Remitted back as of December December (direct or year ended December December 31, of December 31, Mainland China activities Paid-in capital method January 1, 2018 China to Taiwan 31, 2018 31, 2018 indirect) 31, 2018 2018 2018 Footnote Xia Men An-Shin Restaurant $ 569,926 Note 1 $ 230,381 $ - $ - $ 230,381 ($ 32,850) 40.35% ($ 13,255) $ 36,274 $ - Notes 3 and Food Management management: 5 Co., Ltd. restaurant services (limited to branches)

-304- Guangdong Mos Restaurant 353,245 Note 2 14,837 - - 14,837 ( 27,595) 4.21% - - - Notes 5 and Burger Management management: 6 Co., Ltd. restaurant services (limited to branches)

Investment amount approved by Ceiling on investments in Accumulated amount of remittance the Investment Commission of the Mainland China imposed by from Taiwan to Mainland China as Ministry of Economic Affairs the Investment Commission of Company name of December 31, 2018 (MOEA) MOEA Xia Men An-Shin $ 230,381 $ 247,685 $ 1,073,314 Food Management Co., Ltd. Guangdong Mos 14,837 Burger Management Co., Ltd.

Note 1: Through investing in an existing company in the third area, which then invested in the investee in Mainland China : Invest through An-Shin Food Service (Singapore) Pte. Ltd. Note 2: Through investing in an existing company in the third area, which then invested in the investee in Mainland China : Invest through H.K. Mos Burger Investment co., Ltd. Note 3: The financial statements were audited by R.O.C. parent company’s CPA. Note 4: In accordance with ‘Regulations Governing the Approval of Investment or Technical Cooperation in Mainland China’ and ‘Regulations Governing the Permission of Investment or Technical Cooperation in Mainland Area’ amended on August 29, 2008 by Investment Commission of Ministry of Economic Affairs, the limit on accumulated investment amount in Mainland China for investors (not including individuals and small and medium enterprices) is 60% of net assets or consolidated net assets, whichever is higher. Note 5: The amounts in this table are expressed in New Taiwan Dollars. Note 6: Recorded as financial assets at fair value through other comprehensive income.

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