An-Shin Food Services Co.,Ltd.

Dedicated to Every Meal We Serve.

CSR Corporate Social Responsibility Report

MOS CSR Report Contents 1. About An-Shin’s CSR Report 3 5. Fortify Brand Value 33 7.6 MOS Burger Academy 84 86 1.1 About the Report 3 5.1 Creating Product Value 35 7.7 An-Shin Occupational Health and Safety 86 1.2 Report Scope 3 5.2 Upgrading Service Quality 36 7.8 Safety and Store Inspection 1.3 Reporting Guidelines 3 5.3 New Product Development and Innovation 37 [ Special Report ] An-shin Smart Workplace Health Promotion Plan 91 1.4 Data Collection 3 5.4 Innovative Ordering Platforms 40 1.5 Contact Information 3 5.5 Internal HDCS Audit 41 8. Environmental Sustainability 5.6 Covert Customer Evaluations 43 95 2. Our Commitments 4 5.7 Customer Care 46 8.1 Energy Task Force 97 97 2.1 A Message from our Chairman 4 5.8 Safe Transactions 48 8.2 Energy-saving Investments [ Special Report ] GHP Excellence Recogni- 8.3 Paper Consumption Management 97 tion in Taipei and New Taipei City 50 8.4 Energy and Greenhouse Gas Management 98 3. Stakeholders Communication 8.5 Water Resources Management 99 5 6. Strengthen Food Safety and & Identification 8.6 Waste Treatment 99 Store Inspections 51 3.1 Stakeholders Communication 5 8.7 Green Store Plantations 101 53 3.2 Identification of Major Topics 7 6.1 Food Safety Task Force 6.2 The Only Food Chain Store with Dually- 3.3 Value Chain and Responses to Sustainable 103 54 9.Enterprise Influence on Society Development Goals (SDGs) 8 Certified Laboratory 105 6.3 Supplier Evaluation System 58 9.1 Our Influence on Society 108 6.4 Material Procurement Management 60 9.2 Employee Influence on Communities 4.Enhance Sustainability 11 6.5 Legal Compliance 63 4.1 Company Background 13 6.6 Store Sanitary Checks 65 10. Appendix 109 13 4.2 Company Overview 10.1 Limited Assurance Report by Independent 4.3 Awards and Recognition 14 7. Promote Employee Morale and Accountants 110 4.4 Company Growth Milestones 15 Teamwork Cohesion 67 10.2 GRI Standards Index 114 4.5 Industry Outlook 16 7.1 Employee Care 69 10.3 UN Sustainable Development Goals (SDGs)

4.6 Our Sustainable Organization 21 7.2 Employee Diversity 69 10.4 Rules Governing the Preparation and Filing of Corporate Social Responsibility 4.7 A Sustainable Business Model 23 7.3 Employee Feedback 78 Reports by Listed Companies 4.8 Sustainable Management Strategy 24 7.4 Disadvantaged Employee Support 79 (hereinafter referred to as the Rules) Article 4.1 Emphasized Disclosures and 4.9 Corporate Governance 27 7.5 Management Training System 80 Summary of Subject Information 115 About An-Shin’s CSR Report 1 1 About An-Shin’s CSR Report

1.1 About the Report 1.4 Data Collection

To elaborate on the Corporate Social Responsibility (CSR) progress of An-shin Food Services Co., Ltd. The data in this report were collected and verified by all depart- (hereinafter referred to as our company, An-shin Food, An-shin, MOS Burger or us) to all stakeholders, ments before submitting for compiling and further review. The and evaluate the performance of major concerns, we have published the annual CSR report. The CSR information includes operation statistics, training records, topical report and the CSR website are only two of the variable ways we communicate with our stakeholders, discussions, and also refers to department interviews. The meth- aiming to be accountable, transparent and objective. The goal of pursuing sustainability with integrity ods for collecting, measuring and calculating the data indicators makes An-shin the practitioner of CSR, and leader in the food services industry of Taiwan. are in compliance with local regulations. If there are no specific regulations, the international standards shall apply. If no interna- tional standards are applicable, then the industry standards or 1.2 Report Scope practices shall be adopted.

The report encompasses An-Shin’ s progress in 2018 (January 1, 2018- December 31, 2018), including 1.5 Contact Information industry outlook and business initiatives. The boundary of this report addresses An-shin Food Services Co., Ltd. with a focus on Taiwan. There are no substantial changes in our scale, organization structure, and ownership during the 2018 reporting time frame. An-shin Food Services Co.,Ltd.

Address 8F., No.156-1, Songjiang Rd., Zhongshan Dist., 1.3 Reporting Guidelines Taipei City 104, Taiwan (R.O.C.)

Tel The report states the sustainability progress from economic, environmental and social aspects. The +886-2-567-5001 report also identifies stakeholders and major concerns, assesses materiality, and responds to the 17 Website http://www.mos.com.tw/ United Nations Sustainable Development Goals (SDGs), emphasizing the disclosure of management approaches. The report follows “Taiwan Stock Exchange Corporation Rules Governing the Preparation Contact Corporate Sustainability Task Force and Filing of Corporate Social Responsibility Reports by TWSE Listed Companies,” and complies with the core option in the GRI Standards published by the Global Reporting Initiative (GRI). This report was Email [email protected] also verified by PricewaterhouseCoopers (PwC) Taiwan to assure selected information, and issue a lim- English ited assurance report in accordance with the Statement of Assurance Standard No.1 "Assurance Editors Monica Lee and Audrey Zheng Engagements other than Audits or Reviews of Historical Financial Information" in the Republic of China for transparency. The Limited Assurance Report of Independent Accountants and Summary of Infor- mation Assured can be found at the end of the report.

2014 2015 2016 2017 CSR Report CSR Report CSR Report CSR Report

Last issue date: August 2018 Latest issue date: June 2019 MOS CSR Report 3 2 Our Commitments 2 Our Commitments

Safe, Delicious and Healthy Food To ensure the health of our customers, An-Shin executes a specific “3-in-1 Green Purchasing Policy” which consolidates “food traceability,” “local sourcing,” and “contract farming” into our supply chain. Each spring we plan “LOHAS Morning Markets” to sell handpicked crops from “Farm Tour” allowing customers to enjoy the same fresh materials used in MOS Burger stores. An-Shin takes food safety as the top priority which is reflected in our internationally certified food safety control system, and dually certified Food Inspection Center (TAF and TFDA certification). From farm to table, An-Shin checks every step, not only providing quality and deli- cious meals, but also ensuring food safety and green purchasing.

Employee Care and Sustainable Environment An-Shin is not only dedicated to providing a cozy and low-carbon dining environ- ment, but also promotes the spirit of our logo: “Mountain, Ocean, Sun,” extending our love to the living planet. Besides encouraging employees to protect the earth, we also invite customers to be environmentally conscious. Our dedication to the earth is supported through the signing of the MOU as we cooperated with the Construction and Planning Agency, to strengthen environmental education in 2018. To further sup- 2.1 A Message from Our Chairman port our morals, information about activities in National Parks are broadcasted through our own FB pages, websites, display-related brochures in our stores and Integrity & Customer First blended into our interior design. These initiatives aim to recognize the intrinsic value of our beautiful earth and promote ecologic consciousness. In addition, since em- With over 28 years of history, An-Shin is a company dedicated to food safety, ployees are the foundation of an enterprise, we worked with the Health Promotion exceptional service, and a healthy diet. As our mission states, “Contribution to Hu- Administration (Ministry of Health and Welfare) to implement the “Smart Workplace manity, Contribution to Society,” everything we do at An-Shin reflects our sincerity 4-in-1: Innovation Service and Health Enhancement Plan, ” which utilized smart tech- in taking precise procedures to fulfill and surpass our commitments to our custom- nology to build a ‘smart’ office and track individual information such as diet, exercise, ers. and water intake. We aim to be the most prospective and sustainable company in the Innovative Service Experience with Smart Technology restaurant industry where each MOS Burger store is the base for sustainable devel- opment built upon our relationships with nature, friends, and family. We embrace cor- Eating habits are constantly changing, food delivery and smart technology are rap- porate social responsibility with business strategy, uphold customer-centric value, idly emerging, and these all impact the way businesses operate in the restaurant and offer customers the “Really Safe, Truly Delicious” products. Everyone at An-Shin industry. To respond to such changes, An-Shin adapts local specialty, smart tech- is an earth-right participant and contributes to sustainability. We foster customer loy- nology, and social media marketing, introducing the 3Q “product quality, service alty, employee engagement, and environmental friendliness, which leads to a virtuous quality, and environment quality” enhancement plan to shape new dietetic fusion cycle and make us a respectable enterprise with green credentials.. culture. Each initiative of An-Shin (including robots launched earlier this year) is to better the customer’s dining experience by catering to their needs, while emphasiz- ing the “Really Safe, Truly Delicious” belief. Chairman

4 MOS CSR Report Stakeholders Communication & Identification 3 Stakeholders Communication 3 & Identification 3.1 Stakeholders Communication

Aside from considering stakeholders’ opinions as a reference to redefine strategy, An-Shin would like to become the most outstanding com- pany with a friendly workplace environment. As such, we place importance on constant communication with stakeholders through the CSR website, meetings, annual reports, e-news, MOS Life periodicals, surveys, and social media, etc. to pinpoint major concerns of stakeholders and voluntarily disclose sustainability performances.

Table 3-1. An-Shin Stakeholders Communications Channels

Stakeholders Topics Concerned Communication Channels Frequency Communication Highlights in 2018 Shareholder Meeting annual Once a year Economic Performance Financial Statements quarterly Quarterly Annual Report annual Once a year Public Health and Food Shareholders Safety Website update when needed Disclose related information

Product & Service Investors Conference & Roadshow planning Planning Innovation TWSE Market Observation Post System update when needed Disclose related information Reply via phone or email reply at any time Replied to 22 inquiries from investors and analysts Dept. of Quality Assurance checks in accordance with Food Safety Periodical regulation daily related regulation checks nonscheduled Dept. of Legal Affairs summarizes corporate regulation and checks in accordance with related laws nonscheduled Dept. of General Affairs promotes and copes with updates of environ- Government Public Health and Food mental regulations Safety nonscheduled In accordance with Personal Information Protection Act and dissemi- Agencies nate irregularly Customer Privacy Advocate related regulations prompt In accordance with food safety regulation and latest updates In accordance with labor-management regulation revision and prompt disseminate internally prompt In accordance with labor legislation and latest updates Materials Clients or Water Customers Sewage & Waste External mailbox monthly Periodically obtain and analyze customer feedback Occupational Health and Safety Public Health and Food Safety Legal Compliance of Suppliers Supplier Meeting nonscheduled Review the order status and negotiate with suppliers Environmental Protection or Contractors Public Health and Food Safety Council/Audit quarterly Implement supplier evaluation and factory audit as planned

MOS CSR Report 5 3 Stakeholders Communication & Identification

Stakeholders Topics Concerned Communication Channels Frequency Communication Highlights in 2018

Materials Energy Water MOS Life periodical Published 11 issues in 2018 Local Sewage & Waste Residents Public Health and Food StakeholdersSafety Topics Concerned Communication Channels Frequency Communication Highlights in 2018 Marketing & Labeling Personal Information CSR Report annual Audited and published reports Protection Product & Service Innovation

Materials non- Press Conference scheduled 2 press conferences held in 2018 Media Emission Sewage & Waste non- Public Health and Food Safety Press Release scheduled 48 press releases held in 2018

Materials Supplier Environmental non- Website Assessment scheduled All related information disclosed Employee Equality and NGOs Diversity Right Human Rights Assessment Local Society Mailbox and Phone prompt Communicated, discussion, and replied Marketing & Labelling Customer Privacy

Employee-Employer quarterly Forums for part-time employees held Relationship Periodical labor-management meetings Training & Education quarterly Labor-management meetings held Employees Public Health and Food Safety Committee of Employees' Welfare quarterly 4 meetings held Traceability Product & Service Innovation Employee Appeal Mailbox monthly Replied to 25 appeals in 2018

6 MOS CSR Report Stakeholders Communication & Identification 3

Customer Health 3.2 Identification of Major Topics and Safety

Our CSR report consolidates assessment analysis into a systematic analysis and identifies major concerns/topics for stakeholders as a basis for reporting, which Product and Service Innovation allows for effective communication and continuous improvementin our sustainabil- Stakeholder Values ity performances. To address stakeholder inquiries, we enhance CSR disclosures Traceability Materials Employee- and respond in a timely manner. An-shin identifies key issues for stakeholder con- 4.18 Labor-management and Employer Relations Packing Relations cerns through materiality analysis, including (a) stakeholder’ s identification, (b) Marketing and Economic major topics identification, (c) materiality assessment& priority, and (d) validation & Occupational Health and Safety Labelling Performance Training and and Corporate discussion. Social and Economic Compliances Education and Regulations Customer water Equity Energy Privacy Governance Employee Diversity and Equity Supplier Environment Evaluation Major Topics Identification Procedure: Emissions Environmental Regulations and Compliance Supplier Social Evaluations Biodiversity Market Prescence Purchasing Practices Public Policy Forced Labour Step 1 Stakeholders Step 2 Identification 3.76 Child Labour Anti-Corruption 1 Identification 2 of Major Topics Anti- Local Society Step Step Competition Human Rights 88 major stakeholders 211 surveys were collected Assessment Indirect Freedom of Economic Impact An-Shin Corporate Sustainability Task An-Shin Corporate Sustainability Task Security Association Force identifies major stakeholders Force analyzes industry outlook, social Practices and Negotiations who interact with and/or might be dynamics, sustainable development, Indigenous impacted by An-Shin’ s operation after government concerns, and our strate- People's Rights discussion and assessment. Major gies, then identified 35 key issues. A stakeholders include employees, total of 211 surveys were collected in shareholders, government agencies, 2018. 3.34 clients or customers, suppliers or con- 0.00 2.30 4.60 6.90 tractors, local residents, the media and Company Impact NGOs. Figure 3-1. Major Topics matrix

3 Materiality 4 Validation Step Assessment & Priority Step & Disccussion Online Surveys for External Stakeholders 4 material topics CSR report framework & contents To strengthen the communication of company performance to Stakeholders, Corporate Sustainability After validating and elaborating on the our stakeholders, An-Shin undertook an online survey in 2018, Task Force, and senior executives which enables us to reach more stakeholders and increase were surveyed. Survey results were significant matrix diagram, An-Shin’ s our data sample size. We hope to evaluate the level of interest calculated and analyzed to pinpoint 4 senior executives decide the frame- major topics (Figure 3-1). We then dis- work of our CSR report and Contents. and the expectations of An-shin’s sustainable development plans. close strategies & management approaches, including Public Health & Food Safety, Product & Service Inno- vation, Traceability, and Economic Per- formance & Corporate Governance. Online survey：http://csr.mos.com.tw/QA.aspx

MOS CSR Report 7 3 Stakeholders Communication & Identification Table 3-2. Major Topics and GRI Standards Considerations Internal Stakeholders/Concerns Management Approaches GRI Standards Boundaries outlined in the Major Topics Considerations Clients or Suppliers or Local HQ Stores Shareholders股東 Government Consumers Contractors Residents Media NGOs Employees following related chapters: 201 Economic Economic Performance / Performance Corporate Government Chapter. 4 Product & Service Innovation Chapter. 5 416 Public Health Public Health & Food Safety & Food Safety Chapter. 6 Traceability Public Health & Food Safety Chapter. 6 boundaries high level of impact low level of impact

3.3 Value Chain and Responses to Sustainable Development Goals (SDGs)

Table 3-3. An-shin’s Risk Management & Value Chain and Responding to SDGs Understand the SDGs and Evaluate 1 Value Chain SDGs Step Relative Impact on the Value Chain Major Topics Inbound Logistics Operations Final Strengthen Positive Impact Alleviate Negative Chapters Alleviate Negative Impact An-Shin evaluates the impact of our operation on the value chain and priori- & Suppliers Services Impact tizes related SDGs. We review interlinkage of major topics and the value chain to affirm the alignment of our mission “Contribution to Humanity, Contribution 201 Economic Chapter. to Society” with the SDGs. After careful analysis, we decided to focus on sev- Performance 4 eral SDGs to strengthen positive impact: (Zero Hunger, Quality Education, Gender Equality, Decent Work and Economic Growth, Industry, Innovation Product & Service Chapter. and Infrastructure, Peace and Justice Strong Institutions) and alleviate nega- Innovation 4 tive impact (such as Responsible Consumption and Production, and Life on Land). 416 Public Health & Food Safety Chapter. 4 2 Step 2 Determine Priority SDG Targets Traceability Step and Integrate them into Corporate Reporting Value Chain SDGs Medium Relative After defining Priority SDG Targets, An-Shin integrates the value chain, from Inbound Ordinary Topics Logistics Operations Final Strengthen Positive Impact Alleviate Negative Chapters Alleviate Negative Impact inbound logistics and operations to final services, and cooperates with stake- & Suppliers Services Impact holders (including shareholders, government, suppliers or contractors, employ- Industrial relations, ees, clients or customers, local residents, media, and NGOs), to decide key labor relations, training and education, development directions which are linked with related actions for implementation. forced or compulsory labor/human rights Chapter. Map the value chain to identify impact areas (both direct and sub-tier suppliers) assessment, on how to integrate the SDGs into their core business and global supply chain. market position, 7 occupational safety and health Step 3 Prioritize SDGs and Consolidate Legal compliances 3 for energy, water, Step with the Value Chain Chapter. sewage, emissions, 8 An-Shin takes major topics as the foundation to identify priority SDG targets, and waste with continual review and refinement to make a real contribution to corporate Indirect economic sustainability. Secondly, An-Shin proactively discloses sustainability perfor- Chapter. mance and communicates with stakeholders in a timely manner. and local community impact 9

8 MOS CSR Report Stakeholders Communication & Identification 3 Table 3-4. An-Shin’s value chain and responding to SDGs

Input Operations Output & Impact

The total purchase amount of An-Shin integrates “food traceability,” “local sourcing,” and “contract farming,” in the agricultural and livestock prod- supply chain and promotes the “3-in-1 Green Purchasing Policy” . In addition, each ucts with traceability: $NT 67,110 spring we plan “Origin Travel” for employees to understand the importance of traceabil- 104,486 thousand products thousand. ity and foster recognition of environmental protection. As well, handpicked crops from were made. The total purchase amount of “Origin Travel” are ready for sale in “Lohas Morning Markets” , which allows customers agricultural and livestock prod- to enjoy the same fresh materials we use in MOS Burger stores. ucts with traceability by small- An-Shin purchased a total of 130,214 kg of agricultural and livestock products, includ- scale farmers: $NT 130,214 thou- ing 232,083 kg of traceable sweet potato and 2,649,360 kg of traceable cage-free eggs. usand.

Input Operations Output & Impact

A total of $NT189 thousand for Lactation room was provided in headquarters. 10 pregnant mothers received maternal care welfare. maternal care welfare. We evaluate the benefits of health management & edu- The lactation room was granted an Excellence Award. Employee Health Screening: $NT cation, assess the health thresholds before and after The lactation room was used 81 times thus far. Strengthen Positive Impact 3,123 thousands in 2018. related education, which allows us to uplift personal 59 employees applied for parental leave in 2017~2018. Alleviate Negative Impact We had 61 hours and 32 exercise health management plans and become an accredited 2,191 employees received health education. healthy workplace. programs in 2018. 432 employees attended exercise classes.

Input Operations Output & Impact

We have 12 members in the Board Our Board of Directors and Supervisors all have diverse Directors and Supervisors attended a total of 100 hours in of Directors and Supervisors. professional experiences in various fields, whom also training with an average of 8.33 hours/person. attend trainings and classes. To reinforce cooperative education for participants and help We offer $NT 703 thousand total An-Shin continuously promotes bilateral cooperation with they become a new force for future development, An-Shin internship scholarships and $NT universities and vocational schools to strengthen coopera- offers a variety of compensation, benefits, and career devel- 57 thousand in cooperative learn- tive education. opment plans. ing scholarships. We hold a variety of workplace experience programs regularly. Our cooperative program has 66 interns and 6 cooperative A total of 1,056 hours in 11 work- An-Shin funds profound employee training programs, learning scholarship receivers. Strengthen Positive Impact place experience programs were Alleviate Negative Impact including vestibule training and on the job training, which In 2018, we had a total of 350 new recruits joining our company. conducted with 47 employees. lays the foundation for sustainable development. We had a total of 191 teachers and students participating in We attended 70 recruitment events To offer quality learning for partners who work in shifts, An- the work experience camp. for youth, municipal recruiting, etc. shin has provided the digital learning scheme since 2013. Partner with social welfare institutions and offer local employ- The total amount of employee train- We have advanced placements, basic tests, service verif- ment for 32 disabled workers. ing: $NT 4,811 thousand in 2018. ication, online courses, elective courses, online training for Launch 36 new elective courses and compulsory courses. PT, common learnings, in-house training, invited lectures, Total of 19,008 hours to create Employees can access diversified and quality online training external seminars, annual camp, projected courses, and online courses. at any time. training for staff personnel, etc.

Input Operations Output & Impact

6 board meetings in 2018. 2 female directors in the BOD (including 1 independent director) to promote gender 2017 Shareholders Meeting- the diversity. 10th Director/Supervisor election 2 personnel evaluation meet- 216 women managers, composing 63% of total managers. ings in 2018 . Ensure equal opportunities for women in decision- making on each level.

MOS CSR Report 9 3 Stakeholders Communication & Identification

Input Operations Output & Impact

In 2018, to thank frontline employees for their hard work, An-shin imple- We set up the Penghu Store, Hualien mented a salary increase for more than 3% to eligible faculty and staff (the A total of $NT 729 thousand for Zhongshan Store, Nantou Caotun average pay raise is about 4.2%, higher than that for public employees). Store, Taitung Xinsheng Store, and part-time employees elevated to The PT hourly wages were increased from $NT 133 to $NT 140 and full-time staff in bonuses, and $NT Kinmen Minquan Store. By leveraging complies with hourly minimum wage regulations. We review inflations and our stores, we boost rural tourism and 25 thousand in staff referral make salary adjustments to compensate employees for cost of living and support local employment. bonuses. work performance. We welcome the re-employment of The total amount of salaries and Promote local culture and production, by opening branches in rural senior workers, which recognizes wages: $NT 1,345,978 thousand in Taiwan. Cooperate with the Senior Workforce Resource Center to broad- self-fulfillment, and promotos, work- 2018. cast recruiting on our website, and welcome senior citizens with manage- rial skills and passion for service. They are experienced, harmonious, and force diversity, and community stabil- help enhance goodwill. ity.

Input Operations Output & Impact

$NT 6,024 thousand total in new Using current seasonal produce and ingredients to introduce new prod- Introduced 72 new products with a total 。 product launches. ucts. This aligns with company policies and can also be used to conduct of 6,341 thousand items sold product development. Operations Output & Impact

We adopt a fool-proof design beside the recycle bin, which guides con- The total amount of waste treat- sumers to pour out the liquid, wash the cups and place them into the recycle bin. ment: $NT 16,996 thousand in 2018. Near-expiry products donated to charity. PLA, thermoplastic aliphatic polyester derived from renewable fermented A total of $NT 527 thousand in corn starch, are used instead of plastic cups and salad containers. Donated 1,273 jars of peanut butter and sales. An-Shin supports packaging with Forest Stewardship Council certification 132 packs of cocoa crunch snacks. The total amount of PLA packaging: (Note 1). The FSC certification ensures that products come from responsibly $NT 11,593 thousand in 2018. managed forests that provide environmental, social and economic benefits. Recycle a total of 1,256 tons of resource- An-Shin contributes to sustainable development with green consumption. The total usage of office paper with ful waste. Ah-Shin headquarters uses PEFC-certified (Note 2) copy paper to help pro- PEFC certification: $NT 67 thousand tect our forests by promoting sustainable forest management, and in 2018. achieves relevant ecological, economic and social balance. TM The total amount of FSC paper Through source reduction, light weighting and recycling, renewable packaging is usage and soy ink printing: $NT helping to address sustainability concerns. We changed the packaging of some 14,812 thousand in 2018. sauces to small bags to reduce food loss and reduce waste by 22% in 2018

Operations Output & Impact

53 hours and 17 related classes in 2018. Comply with regulations, maintain data books, launch courses for occupational health issues (ergonomics) , workplace bullying and harassment, workplace 1,174 course attendances in 2018. 4 labor-management meetings mental health education, and maternal care.

(Note 1) The Forest Stewardship Council (FSC) is an international non-profit, multi-stakeholder organization established in 1993 to promote responsible management of the world’s forests. The FSC does this by setting standards on forest products, along with certifying and labeling them as eco-friendly. It is a platform for forest owners, timber industries, social groups and environmental organizations to come together to find solutions to improve forest management practices. It is governed by its members from 25 countries, who join either as individuals or as representatives of organizations coming from diverse backgrounds including environmental NGOs, the timber trade, community forest groups and forest certification organizations. FSC has the world's most widely recognized forest certification scheme. (Note 2) PEFC, the Program for the Endorsement of Forest Certification, is a leading global alliance of national forest certification systems. As an international non-profit, non-governmental organization, PEFC is dedicated to promoting sustainable forest management through independent third-party certification. 10 MOS CSR Report 4 Enhance Sustainability

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

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

Material Topics Economic Performance/Corporate Governance

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

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

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

How to Manage

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

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

12 MOS CSR Report Enhance Sustainability 4

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

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

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

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

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

MOS CSR Report 13 4 Enhance Sustainability

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

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

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

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

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

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

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

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

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

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

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

MOS CSR Report 15 4 Enhance Sustainability

4.5 Industry Outlook

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

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

Industry Consumption Trends:

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

16 MOS CSR Report Enhance Sustainability 4

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

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

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

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

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

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4.5.1 Industry impact on climate change economic development green protection

An-Shin’s Operation smart technology

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

Table 4-2. Strategies to tackle opportunities and threats

SDGs Competitive Advantages Opportunities Threats

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

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

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

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

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SDGs Competitive Advantages Opportunities Threats

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

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

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

SDGs Response Strategies

Supply chain

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

Product

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

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SDGs SDG Response Strategies

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

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

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

Cost

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

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4.6 Our Sustainable Organization

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

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

Remuneration Board of Committee Directors Meeting Department Function:

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

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

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

An-Shin’s Seven Principles

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

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4.7 A Sustainable Business Model

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

Products and Services Value Chain:

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

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

Food Safety Review Meeting annual Special Assistant to the Chairman

Energy Review Meeting annual President

Customer Service Meeting Chairman

Operation Upgrade Meeting on Chairman Project occasion Project Meeting Chairman

Store Interior Design Meeting Chairman

Table 4-4. Major Internal Communications Meeting

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

Figure 4-7、Annual Strategic Meeting

職稱

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

Environment

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

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

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

2016 2017 2018 2016 2017 2018

MOS CSR Report 25 4 Enhance Sustainability Social

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

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

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

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

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

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

26 MOS CSR Report Enhance Sustainability 4

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

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

Table 4-7. Board of Directors

Nationality Job Title Name Gender Major Experience and Education

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Supervisor Compensation Categorie Name Supervisor Yao Chao-Tang 10

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

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

MOS CSR Report 29 4 Enhance Sustainability

CSR Committee Task Force Function

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

Figure 4-8. CSR Committee Organization Chart

Board of Directors

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

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

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

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

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

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

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

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

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

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

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

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

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

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

32 MOS CSR Report 5 Enhance Brand Value

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

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

Major topics: Innovation of Product and Services

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

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

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

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

34 MOS CSR Report Enhance Brand Value 5

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

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

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

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

MOS CSR Report 35 5 Enhance Brand Value

5.2 Upgrading Service Quality

Artificial Intelligence 2018 KD (Kitchen Displays) Employment

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

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

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

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

36 MOS CSR Report Enhance Brand Value 5

5.3 New Product Development and Innovation

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

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

Proposal and New specialty product proposals Materials Survey

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

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

Purchasing Ensure suppliers satisfy supplier management regulations

Education New product launch processes with new SOPs are composed

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

MOS CSR Report 37 5 Enhance Brand Value

5.3.3 Research and Development

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

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

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

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

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

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

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

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

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

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

38 MOS CSR Report Enhance Brand Value 5

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

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

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

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

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

MOS CSR Report 39 5 Enhance Brand Value

5.4 Innovative Ordering Platforms

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

413 165 212 204 155 109 96 28 0

449 WEB APP KIOSK Total

Figure 5-9. 2016 to 2018 Order Transaction count

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

502.51

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

449 WEB APP KIOSK Total

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

40 MOS CSR Report Enhance Brand Value 5

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

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

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

MOS CSR Report 41 5 Enhance Brand Value

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

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

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

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

42 MOS CSR Report Enhance Brand Value 5

5.6 Covert Customer Evaluation

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

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

Figure 5-11. 6 Aspects of Evaluations

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

Q1 Q2 Q3 Q4

Figure 5-13. 2018 Covert Customer Evaluation Scores

MOS CSR Report 43 5 Enhance Brand Value

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

258 257 257 255 251 250

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

Q1 Q2 Q3 Q4

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

x 2016 2017 2018

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

Just Under 100 Covert Customers

Store Visits at least once per Annual Quarter

44 MOS CSR Report Enhance Brand Value 5 5.6.1 Customer Feedback

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

Phone Number Email 080

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

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

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

MOS CSR Report 45 5 Enhance Brand Value

5.7 Customer Care

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

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

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

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

2018 Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Average Number of Specialized 0 20000000000 2 Forms filed

Figure 5-25. Specialized Forms filed in 2018

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

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

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

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

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

MOS CSR Report 47 5 Enhance Brand Value

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

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

Outstanding store managers Excellent store managers Interview excellence

12 11 11

10

8 7 6

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

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

48 MOS CSR Report Enhance Brand Value 5

5.8.1 Information Security Certification

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

Figure 5-31. TCIC Certificate

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

MOS CSR Report 49 5 Enhance Brand Value

Special Report GHP Excellence Recognition in Taipei and New Taipei

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

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

Environmental Equipment sanitation and instruments

Figure 5-34. Ceremony Group Photo

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

50 MOS CSR Report 6 Strengthen Food Safety and Store Inspections

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

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

Major Topics Customer Health and Safety, and Traceability

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

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

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

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

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

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

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

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

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

6.2 The Only Food Chain Store with Dully-Certified Laboratory

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

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

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

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

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

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

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

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

MOS CSR Report 55 6 Strengthen Food Safety and Store Inspections

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

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

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

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

56 MOS CSR Report Strengthen Food Safety and Store Inspections 6

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

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

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

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

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

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

MOS CSR Report 57 6 Strengthen Food Safety and Store Inspections

6.3 Supplier Evaluation System Evaluation items:

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

58 MOS CSR Report Strengthen Food Safety and Store Inspections 6

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

Department of Quality 30% Assurance Checks

Grading: Score Interval

A B C

Above 70% 60%-70% Under 60%

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

MOS CSR Report 59 6 Strengthen Food Safety and Store Inspections

6.4 Material Procurement Management

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

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

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

60 MOS CSR Report Strengthen Food Safety and Store Inspections 6

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

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

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

HACCP certified material purchase FSC Purchasing:

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

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

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

MOS CSR Report 61 6 Strengthen Food Safety and Store Inspections

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

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

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

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

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

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

Active Cooperation with the Government Food and Beverage Hygiene Evaluation

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

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

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

64 MOS CSR Report Strengthen Food Safety and Store Inspections 6

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

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

MOS CSR Report 65 6 Strengthen Food Safety and Store Inspections

Food Hygiene Stamp Project ‒ Hygiene Monitoring Program

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

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

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

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

66 MOS CSR Report 7 Promote Employee Morale and Teamwork Cohesion

5,721 total employees in 2018, an increase by 334 people compared with 2017 Employees from over 10 countries, promoting international views and diversity Compared with that of 2017, in 2018 the company saw an increase in 13 female managers, making up 63% of total managers. 673 returning workers over the age of 50, made up 12% of total employees 153 disabled employees joined our company, which is 2.8 times of which is required by the law 6 work place experience camps, with a total of 302 participants Subsidies for employee activities were more than $NT 10,000 thousand in 2018. A total amount of NT$ 4,811 thousand invested for employee training and education A total of 991 hours of professional and certified barista training held 38 courses on health promotion and prevention of workplace accidents held, with 2,700 participants 42 continual health promotion course series held with 1,035 attendees In 2018, 10,448 employees undertook training and passed the exammations on food safety updates

Stakeholders: ■ Shareholders ■ Government ■ Employees 7 Promote Employee Morale and Teamwork Cohesion 7Promote Employee Morale and Teamwork Cohesion Management Approach

Medium/ Industrial relations, labor relations, training and education, forced or compulsory labor/human rights assessment, Ordinary Topics market position, occupational health and safety We believe that employees are the most important asset to the company. Only healthy and happy employees can bring creativity and com- Meanings petitiveness to the company. An-Shin provides a variety of transparent communication platforms, listens to employee feedback, and pro- for An-shin motes a healthy and friendly workplace environment to achieve sustainable development goals. In addition, we worked to introduce a pro- found training system and fair promotion scheme for all partners.

Our Comply with relevant labor laws and regulations, ensure that employees have reasonable working hours and income, adequate employee Commitment rest and a healty balanced life.

Short term: Periodical employee forums held to promote smooth and transparent communication for labor and management. Goals and Objectives Medium & Enhance the company's business performance, promote employee benefits, uplift training and education, and inspire em- : Long Term ployee enthusiasm for work. To cope with the company's future demand for talents, we strengthen our education and train- ing, help to develop employees for domestic and overseas operations and management, and cultivate future high-level managers to achieve sustainability within our business. Our goal is to employ sustainable catering exemplary practices.

How to Manage

‧ The total amount of employee health checks amounted to $NT 3,123 thousand (except for new employees who already Investments/ had physical examinations). Input ‧ The total cost of employee education and training (including orieneation, professional knowledge, management courses, and general training) is $NT 4,811 thousand.

‧ In order to understand store operations, the store managers provide feedback every annual quarter, which also serve as an Evaluation Review for the Headquarters. Management ‧ Each partner of An-shin regularly has performance evaluations. Store staff are evaluated according to the “Store Operation Approach and Performance Evaluation Rules” , and others are reviewed with the “Employee performance evaluation Principles” . All and employees are assessed and headquarters then decide promotions, transfers, job remunerations, profit sharies, bonus Evaluation distributions, extra education and training if necessary, and career path planning. Schemes ‧ Through the Remuneration Committee, the HR Development Committee, and the HR Evaluation Committee, An-Shin reviews the HR and employee development strategy.

68 MOS CSR Report Promote Employee Morale and Teamwork Cohesion 7

7.1 Employee Care

An-Shin takes responsibility for food safety, dedicates our services to customer Table 7-1. Employees statistics (Gender and Category) health, and provides healthy and delicious products for our customers. In addition 2016/12/31 2017/12/31 2018/12/31 to meals and a comfortable dining environment, An-shin also takes care of employ- Year in-service in-service in-service ees, provides local employment opportunities, contributes to society, and actively Male Female Male Female Male Female promotes education. We hope all of our employees can experience the happiness of Managers 31 55 29 56 36 65 helping others, and practice our business philosophy of “Contributing to Humanity, Staffs 27 51 23 53 22 44 Contributing to Society.” Employees Store managers 91 140 93 147 92 151 194 323 226 369 230 420 7.2 Employee Diversity Store clerks Part time 1,406 2,774 1,494 2,898 1,599 3,062 1,749 3,343 1,865 3,523 1,979 3,742 An-Shin staff can experience the friendly atmosphere at work, which can enrich Total their work expenence. As of December 31, 2018,An-Shin’ s total number of employ- Ordinary (Note1) 1,749 3,343 1,865 3,523 1,979 3,742 Employees ees was 5,721, of which 63 were foreign employees, including partners from Japan, Temporary (Note1) 0 0 0 0 0 0 Canada, China, Hong Kong, Malaysia, Indonesia, Vietnam, Myanmar, and Macau. Total 1,749 3,343 1,865 3,523 1,979 3,742 There were no major changes or seasonal differences from 2017. It is expected that approximately 620 people will be recruited in 2019. In terms of national statistics, by (Note 1) Data collection covers employees in Taiwan. Employees include full-time and the end of 2018, 80% of our top management team were Taiwanese, with one Japa- part-time employees who sign non-scheduled contracts. Temporary nese director. Please refer to following figure: employees are employees who sign a fixed contract.

Vice President President

An-Shin promotes gender equality and An increase ensures women's participation in political of 13 and economic decision-making, reflecting female managers women's fair opportunities to participate in company decision-making at all levels. In 2018, we had 216 female managers Chief Special Chief (including administrative and operational Financial Assistant to Auditor management positions), an increase by 13 Officer the Chairman managers compared with last year. Female managers accounted for 63% of the total management.

MOS CSR Report 69 7 Promote Employee Morale and Teamwork Cohesion

Table 7-2. Age distribution of employees in 2018 Table 7-3. Employees statistics (age, gender, new vs. former employee comparison)

Below 30 Age 31-50 Above 50 Year 2017 2018 Category Total Male Female Male Female Male Female New employees Former employees New employees Former employees Age Managers 2 8 27 54 7 3 101 FT-male FT-female FT-male FT-female FT-male FT-female FT-male FT-female Staffs 8 17 12 25 2 2 66 Below 30 178 232 132 170 153 242 142 185 Store managers 34 65 58 83 - 3 243 Age 31-50 36 68 52 74 32 51 34 57 Store clerks 184 315 45 86 1 19 650 Above 50 2 5 4 5 3 9 3 5 Part time 1,317 1,707 231 825 51 530 4,661 (Note 2) FT statistics only. Total 1,545 2,112 373 1,073 61 557 5,721 (Period) 2018/1/1~2018/12/31

An-shin is a multinational company and we hire talents from different countries, promote diversity, learning, and mutual understanding.

Table 7-4. An-shin employee nationalites Taiwan China Japan Canada Indonesia Hong Kong Malaysia Vietnam Myanmar Macau Category Total Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Managers 34 65 0 0 2 0 0 0 0 0 0 0 0 0 0 00 0 0 0 0 101 Staffs 22 44 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 66 Store managers 92 151 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 243 Store clerks 229 415 0 2 0 0 0 0 0 0 0 0 1 2 0 0 0 0 0 1 650 Part time 1,586 3,020 1 16 0 0 0 1 0 1 2 0 6 10 4 12 0 2 0 0 4,661 Total 1,963 3,695 1 18 2 0 0 1 0 1 2 0 7 12 4 12 0 2 0 1 5,721

70 MOS CSR Report Promote Employee Morale and Teamwork Cohesion 7 7.2.1 Remuneration system and employee welfare protection

An-Shin aims to achieve overall productive employment with morate. We not only training, which encourages language learning and enhances professional ability. provide a safe and secure working environment, but also give opportunity for career Please refer to Table 7-5 and Table 7-6 for details. fulfillment. In order to uplift the overall employment and performance, An-Shin offers According to Article 4 of the “Taiwan Stock Exchange Corporation Rules Governing employees various compensation and benefits, regardless of gender, age, national- the Preparation and Filing of Corporate Social Responsibility Reports by TWSE ity, physical and mental disabilities, ethnicity or other conditions, and actively hires Listed Companies” , we have 1,023 non-manager full-time employees (Note 3), returning workers and minorities. An-Shin shares company profits with employees. which increased by 8 people compared with 2017. The average salary was NT$ 519 Our salary and overtime scheme adheres to the “Labor Standard Law” and related thousand in 2018, a decrease by 10 thousand compared with that of 2017. The regulations. An-shin evaluates employee performance and compensates partners median salary in 2018 was NT$ 466 thousand, a decrease by 2 thousand as of with salaries and bonuses, which allows colleagues to work happily and achieve top 2017. This variation was mainly due to compensation adjustment with business per- results. We offer a variety of benefits, including travel subsidies, language certifica- (Note 3) non-manager full-time employees are those not included as managers defined in the TWSE tion grants, maternity benefits, children education grants, annual medical examina- 920001301 regulation, whose working hours have reached the normal working hours specified by tions and group medical insurance, as well as provide overseas the company.

Table 7-5. Benefits for part-time employees Subsidies Night shift (23：00~06：00) subsidy (+NT$ 45/hour besides basic hour wage)/work in holidays : double hour rate/specific level staffs who work over and bonuses 120 hours/ month will have additional bonuses Benefit Group insurance accidental injury/accidental medical insurance / travel subsidy (subsidy varies with service years and hours) / staff food and beverage discounts / special offers for home appliances by TECO group / occasional dinner and recreational activities / friends recommendation coupons / refer bonus Retirement Profound employee benefit system (labor insurance, health insurance, pension fund) Employee welfare committee Birthdays / Dragon Boat Festival gifts / Mid-Autumn Festival gifts

Lifetime learning Certification subsidy

Table 7-6. Benefits for Full-time employees

Subsidies Employee Dividends and Stock Warrants of Capital Increases / Employee Stock Ownership Trust/Performance Bonuses and Achievements Bonus / and bonuses Participation in Remuneration Distribution / Year-end Bonus

Employee annual health check subsidy / group accident insurance / shop staff work meal subsidy / employee networking dinner / employee friend Benefits sharing coupon / wedding & funeral subsidy / maternity bonus / foreign county staff dormitory / physician visit to the store & consultation / special Employee Discount by contracted 3rd parties / Special Promotion Activities / Remote Area Subsidy / Employee Rent Allowance Subsidy/Referee & Transfer bonus / Society Subsidy

In accordance with the “Labor Standard Act” and the “Labor Pensions Act” , An-shin established an employee retirement scheme, which was moni- tored by the “Labor Retirement Reserves Supervision Committee” , which monitors pension plan operations. Employees who chose the new pension Retirement scheme, 6% of their monthly salaries will be withheld to a personal retired account of the Labor Insurance Bureau. Employees who chose to select the old pension scheme, whose seniority will be retained, and appropriate amounts withheld to personal account of the Bank of Taiwan. At present, em- ployees who chose the old pension scheme accounts for about 0.13% of total employees, all others follow the new scheme.

Employee welfare NT$. 2,000~6, 000 annual travel allowance / New Year gifts and Spring party / Dragon Boat Festival and Mid-Autumn Festival bonus / birthday gifts / committee Staff Relief funds

Lifetime learning Certification subsidy

MOS CSR Report 71 7 Promote Employee Morale and Teamwork Cohesion

7.2.2 Performance evaluation In order to understand the satisfaction of our first-line partners about the support Headquarter Christmas from headquarters staff, the store managers provide feedback every quarter, which Get-together also serve as an Evaluation Review for Headquarters. Each partner of An-Shin regularly has performance evaluation. Store staffs are At the end of each year, An-Shin will evaluated according to the “Store Operation and Performance Evaluation Rules” , hold a Christmas get-together. and others reviewed with “Employee Performance Evaluation Principles” . All em- Executives will thank staffs for their ployees were assessed with references to the evaluation mentioned above and hard work over the past year and headquarter then decide promotions, transfers, job remunerations, profit shares, encourage better performance for bonus distributions, furter education and training if needed, and career path planning. the coming year. Headquarter colleagues can also be grateful to Through the Remuneration Committee, the HR Development Committee and the HR each other and enhance friendship Evaluation Committee, An-Shin objectively reviews the HR development and em- across various departments. ployee strategy. Figure 7-3. Headquarter Christmas get-together 7.2.3 Excellent Staff Prize The Operation Management Department collects feedback from store staff about Table 7-7. Subsidies in 2018 assistance from headquarters and ranks performaces of each unit. For excellent Number Item Rules & Purpose of subsidies Grants(NT$) headquarter units and staffs, internal recognition will be carried out at the monthly According to the club assessment and the headquarter meeting to recognize and encourage a customer-centric mindset. In number of members, different subsidies are 2018, 13 units recived recognition at the monthly meetings. granted. The annual maximum amount of 106 39,482 Club Subsidies subsidies applied by each club is NT$ 20,000. Special project subsidies of NT$ 15,000 will be granted after review.

Enhance employee welfare, improve ESOP employee recognization, and share business 172 7,827,231 performances.

Children Employees’ children who don’ t fail any sub- education jects at school, may apply for education 32 49,000 subsidy subsidies. Subject to seniority limitations, employees Travel Subsidy may apply for annual travel subsidies of 332 1,160,000 NT$2,000~6,000.

Wedding subsidy Employees may apply for a marriage subsidy. 12 236,600 Figure 7-1. Store Development Birth subsidy Employees may apply for a birth benefit. 10 189,000 When the employee's parents, adoptive par- Funeral subsidy ents, step-parents, spouse, or children pass, 68 278,100 they may apply for a funeral subsidy. Figure 7-2. Purchasing Dept. Besides in-house lectures and staff accom- Space Usage modation, the comfortable and quiet An- 486 553,160 Discount Shin Academy also offers affordable rentals for external groups and activities

72 MOS CSR Report Promote Employee Morale and Teamwork Cohesion 7

An-Shin promotes balance between work and life and encourages employees grow with the company and bring customers a safe and delicious dining experience. In particular, at the end of 2017, club subsidies were granted with a annual maximum subsidy of NT$ 20,000. In 2018, four new clubs were established including basketball club, badminton club, yoga club, and mountaineering club.

Basketball club: 25 members Badminton Club 1 & Club 2: 39 members

The first employee club established by An-Shin was the "Basketball Club". It was Badminton Club was proposed for staff who want to engage in less intense exer- originally initiated by several people who have passion for basketball. The club cise, but still achieve a work-out effect. It is aimed to enhance the relationship helps to to promote the sports atmosphere of the company's workplace. Many between the stores and headquarters. Members are mainly from the operation colleagues live a routine life, and store staff are often exhausted after work. This life Mangement Dept. and Customer Service Group. At a fixed time each week, mem- style will gradually reduce the time and hassle of exercise. The increase of occupa- bers will play badminton in Jilin Elementary School Gym, and participants can get tional diseases/ diseases of civilization, and the lack of a healthy body, is equiva- rid of stress after work. You can join at any time, spare rackets and birdies can be lent to inefficiency of work and the deteriorating quality of personal life. Therefore, used for beginners or temporary partners. Through exercises, members can learn through participation in the establishment of clubs within the company, employees techniques under the guidance of each others and seniors. Our president and have the opportunity to exercise together, and at the same time allow different Japanese vice president also enjoy badminton. They often play with staffs and departments or colleagues to get closer to each other. At present, female and male have a good time. members are welcome. Current participants include former basketball players and Like other sports, badminton requires concentration and agility. Same with what beginners. They expect to gradually lead the company's sports atmosphere and we face in every day work, badminton helps to train our concertation, alertness improve the mind and body of employees! and reaction to cope with challenges.

Figure 7-4. Basketbal cluB Figure 7-5. Badminton club

MOS CSR Report 73 7 Promote Employee Morale and Teamwork Cohesion

Yoga club: 22 members Mountaineering club: 20 members

The Yoga Club was initiated by the senior manager of the Finance Estabished on July 15, 2018 by two employees who love nature, mountaineering club initiates regular Department who loves yoga. The company’ s headquarters is monthly outdoor leisure activities to develop regular exercise habits, improve health and enhance dominated by women, and professional women often have the mutual communication and friendship in 2018. In 2018, a total of 6 events were held. Not only did the pressure of work and family. They often rush to go home after members have the opportunity to exercise together, but also were able to establish good interper- work immediately to take care of their family. Yoga can achieve sonal relationships between headquarters and store staff, and participate in environmental and eco- mind and body relaxation through proper limb stretching, body logical education activities. posture and thus increase muscle endurance. Since October 2018, the step-by-step curriculum allows begin- Table 7-9. Mountaineering activities ners to advance to the correct posture in a yoga course. Whether Date Activity & Route Participants it is a single stand alone exercise or interactive course, which can enable members to restore the balance of grace, and prepare for NCCU-Chihnan Tea Trail-Eucalyptus Trail- Mao-Kong Jul. 15th 7 people next day challenges. Gondola-Mos Burger Mucha Zoo store Lengshuikeng Tourist service station- Qixing Park-Dream Table 7-8. Yoga activities Aug. 11th Lake–Lengshuikeng visitor center 12 people month Activitiy Participants Sep. 15th Tamsui : City Treasure Hunt- real escape game 12 people Oct. Parter yoga 12 people Environmental education experience activities for the Oct. 13th removal of Spiderwort in Datun Mountain 19 people Nov. Basic poses 9 people Nov. 11th Taoyuan Valley - elephant trunk rock 15 people Dec. Basic poses 10 people Dec. 15th Jinmian Mountain Trail 7 people

Figure 7-6. Yoga club Figure 7-7. Mountain-climbing Figure 7-8. Picnic

74 MOS CSR Report Promote Employee Morale and Teamwork Cohesion 7

An-Shin follows the "Gender Equality Law" and "Measures for Implementing Unpaid Parental Leave for Raising Children" to provide employees with relevant support. After a full year of employment, employees can apply for nursing stay before the child reaches the age of three, but leave for no more than 2 years. Please refer to the following tables for nursing stay statistics:

Table 7-10. Reinstatement and retention rate after unpaid parental leave

Year 2016 2017 2018

Reinstatement 120% 40% 100% Rate (Note 4)

Employee Retention 50% 100% 50% Rate (Note 5)

（Note 4）Reinstatement Rate： Actual employees on parental leave on reinstatement/Expected employees on parental leave on reinstatement （Note 5）Retention Rate: Reinstated employees working for over 12 months/Actual employees on parental leave on reinstatement

Table 7-11. 2018 Reinstatement and Retention Employee Statistics

Employees who apply for parental Item leave in 2018 Male Female Total For female reinatated employees, the company also pro- Actual parental leave in 2018 0 22 22 vides them with a subsidy to care for newborn children. In 2018, there was also an overall salary raise of 3-7%, which is more than government adjustments. Subsidies are also Expected reinstatement in 2018 0 8 8 provided for employees living in remote/rural areas and high-sales store employees. Actual reinstatement in 2018 0 8 8

Actual reinstatement in 2017 2 0 2

Reinstated employees working for over 12 months in 2017 1 0 1

MOS CSR Report 75 7 Promote Employee Morale and Teamwork Cohesion

7.2.4 Annual Company Training Camp 7.2.5 Management Trainee Program

“3 Quality Innovation ” The Management Trainee Program started in 2010, and trainees go through the pro- On January 23rd of 2018, the annual company training camp was held with a total gram to fulfill management positions within the company. Adjustments were made in attendance of 329 staff including store managers, department heads and top man- 2018 to attract international talent with diverse language abilities. According to per- agement. Through the training, we hope to enhance product, service and environ- formance, training schedules (pre-job training, rotations, and on-job training, etc.) ment quality to better customer experience, which is all taught through activities will be arranged. In 2018, recruitment interviews were conducted in May, and we such as a reality puzzle hosted by outside consultants. During the “reality hope more talent can join our company. puzzle ” activity, in addition to the need for teamwork, participants must also use creative and logical thinking, and carefully observe the surrounding environment with similar thinking when providing services that are more in line with customer needs. Participants were deeply inspired by the activities, felt the importance of practicing, and uitimately reached the goal of the education & training (I Care, We Share, Growing Together).

Figure 7-13. Prospects group photo Figure 7-14. MA prospects photo

2018 Management Trainee Rotation Scheme

Steps Operations Headquarters

New Training Headquarter Headquarter Rota- recruit store Ordinary rotation tion (6 months) Basic 1.5 year training practice store (6 months) first second rotation (4 days) (6 weeks) (18weeks) rotation . . period Figure 7-9 Group Section Figure 7-10 Group Activity Rotations must include store operations, headquarters (2 rotations required of which one must coincide with operations)

According to your own ambitions, choose career path: Advanced 2 year period Operations Headquarters Overseas

Department Store Operations Department Catering choice Manager Manager Affiliates Manager Figure7-11. Reality Puzzle Game Figure 7-12. 3Q Training Reflection

Figure 7-15. MA Training Program

76 MOS CSR Report Promote Employee Morale and Teamwork Cohesion 7 7.2.6 Workplace Experience Camp

In 2018, there were 6 workplace experience camps and a total of 302 participants [Coop Student Feedback] which was an increase from 2017. Aside from camp introductions and company phi- losophies, participants are lead into a mock kitchen for training in preparation of food products. The purpose is to allow trainees to better understand the work envi- Store：Taiwan High Speed Rail Kaohsiung ZuoYing Store ronment and company operations. Participants can also slowly integrate to adopt ： company morals within their work. School National Kaohsiung University of Science and Technology Student：Hui Xian He

“Before entering An-Shin as an intern, I spent 10 months as a part-time em- ployee. I had a very different experience with other interns during the intern- ship. When I was a part-time student, I had learned all ten basic work sta- tions which allowed me to enter the internship program smoothly. Therefore, when I became an intern, the first thing I learned was the inventory checks and sales management. At the beginning I was slightly reluctant to learn these difficult new tasks, but it didn’ t take long for me to slowly adjust and even learn night-shift work. I still remember when we went to DanSui’ s academy for pre-job training, including company mission and basic kitchen operation; we could feel that An-Shin hopes we can truly understand com- pany principles and food safety. The most impressive aspect of the training . . Figure. 7-16 Kitchen operations Figure. 7-16 Kitchen operations for me is how we have to read aloud the company principles and service beliefs before beginning work. At the same time, as you read these prin- ciples, you can shift your mindset to be able to offer good service to the 7.2.7 Cooperative Education customers and do your best at work everyday.

An-Shin works with schools to provide students with coop opportunities within our For other workers transferring from other compa- company, and increased partnerships with 17 more schools and a total 100 partici- nies, they may feel that An-Shin’ s work process, pants (increased 70%) from last year. To retain talent, we provide many benefits to SOPs, and procedures are very time-consuming attract students to become full-time employees with increasing rewards for longer and complex, but because of these SOPs which working hours. make An-Shin trustworthy and safe for custom- ers, I am proud to be an employee for this com- pany. The reason why I chose to stay in MOS is 7.2.8 Dual Scholarship Program because when I was a part-time employee, I felt happy working alongside my colleagues so I was The dual scholarship program is a collaboration between An-Shin, local schools, willing to stay and continue my contributions to and the Ministry of Labor, allowing students to simultaneously go to school and also An-Shin. ” gain work experience. At the end of the summer, if student transcripts (grades) are satisfactory, and weekly reports are completed, then a semester scholarship is granted. In 2018, there were 10 student scholarship recipients totaling $NT 60,000.

MOS CSR Report 77 7 Promote Employee Morale and Teamwork Cohesion

7.3 Employee Feedback 7.3.1 New Employee Ceremony and Seminar

An-Shin pays attention to employee feedback and works to find a solution to any The ceremony was introduced in 2016 and slowly became a tradition. In 2018, a issues, which shows that we care about our employee’ s wellbeing while working total of 81 employees joined the ceremony. Through the ceremony, we help to inte- with our company. As such, An-Shin has good relations with all of our employees grate newcomers into our company, tour TECO Catering Affiliates, as well as invite and suggestions can be placed in the Chairman’ s mailox outside his door, or on senior employees to share experiences. All top management is present at the An-Shin’s website and facebook. An-Shin also encourages employees to join clubs seminar and are available to answer questions. At the end of the seminar, we hope and meet each other. In 2018, An-Shin received 25 employee feedback forms of to pass down various experiences and company principles to the new workers. which the majority were company communication issues and were all resolved immediately.

100 81people 80 董事長信箱 Chairman’s 76people Mailbox 60 54people 40

20

0

2017year 2018year 2019year

Figure 7-18. Newcomer seminar statistics

Employee Feedback on Websit

Employee Feedback

Figure 7-19. Ceremony group ghoto Figure 7-20. Seminar JiLing group photo

78 MOS CSR Report Promote Employee Morale and Teamwork Cohesion 7

7.4 Disadvantaged Employee Support 7.4.2 Disabled Employees

This aligns with UN’ s SDGs which state that everyone should have an opportunity Our store also serves as a learning place for our disabled employees and in 2017 for working jobs. This includes middle aged, disabled, poor students, and returning we had 151 workers and 153 in 2018 making up 2.7% of our employee population. workers regardless of gender, with equal compensations. An-Shin hopes through The purpose is to eliminate discrimination against these employees and work to this support system we can allow employees to feel happy working and it gives us offer equal opportunities in the work place. We believe that these employees can a sense of happiness as well. do tasks just as well if correctly taught by our staff. We have a long-term collabora- tion with several non-profit organizations to create a learning place for these work- ers. 7.4.1 Middle-aged Plan Middle-aged workers normally are stable and can offer customers a very comfort- Table 7-12. able dining experience, so since the establishment of MOS,we continue to recruit Disabled Workers Part-time 2016 to 2018 Disabled Employee Statistics (number of people) returning female workers and middle-aged workers. In 2018, we had 673 returning Store clerk Store manager workers above the age of 50, making up 12% of our total employees. In 2018, we Year 2016 2017 2018 hosted 11 recruiting sessions, with a total of 82 new recruits. As such, we are com- 1 Management 1 1 1 mitted to our CRS, and strive to integrate people with different backgrounds, ages, 1 7 and genders promoting diversity within the workplace and continue to contribute 6 Staff 0 0 0 to our society. 1 1 0 0 2 Store Manager Store Clerk 2 6 7

136 144 145 Part-Time 136 144 145 140 151 2016 2017 2018 Total: 153 Percentage 2.7% Image 7-22. Recruiting Session of Total 2.7% 2.8% Employees

7.4.3 Minimal Notice for Employee Dismissal due to Operational Changes If An-Shin Food terminates the labor contract in accordance with Article 11 or Article 13 of the Labor Law, the notice period shall be handled in accordance with the following provisions: Image 7-21. Middle-aged employees trial experience Employees working between 3 months-1 year, minimum notice is 10 days Employees working between 1 year-3 years, minimum notice is 20 days Employees working over 3 years, minimum notice is 30 days When an employee receives a dismal notice, they have a maximum of 2 days per week with pay to find new work if needed

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7.5 Education and Management Training System 7.5.1 Diversity of Systematic Training

An-Shin’s education and management training system is designed to align with our An-Shin hopes to offer equity in education which can be divided into two catego- visions and training needs. An-Shin will offer different types of training depending on ries: pre-job and on-job training. Therefore we have a dual training approach to employee position and needs. For example, for store staff, we will educate them retain and develop internal and external skills. In addition, we also offer options to about strategy, food sanitation, product preparation, and product sales, as well as take class outside of the company to improve core competence. Aside from these how to spot customer needs. As there are different levels to store staff, we will also routinely trainings, we also offer special courses aligning with our strategy. The provide trainings on how to analyze store financials and operations. total amount for employee training and education was $NT 4.81 million in 2018, In addition, our Store Training Department will also increase special courses to comparing with $NT 4.26 million in 2017. enhance experience in areas such as periodical operation checks and store man- ager tests. In 2018, there were 10,448 employees who passed the store manager General training New recruit training tests, and through periodical checks they can help enhance our food safety and product process. 3%3% We hope the training is organized and systematic, so to increase the quality of our training, we keep increasing the number of our qualified teachers and follow the TTQS (Taiwan TrainQuali System) continuously reviewing our company needs and strategy, confirming performance of every detail. Therefore we received the TTQS 54% 40% Copper Award in 2010, 2014, 2016 and 2018.

Professional training Management training

Figure 7-25. Headquarters staff training components

In order to allow our headquarter staff to understand in-store jobs, everyone must first undergo two weeks in-store training and also pass the service exam. General education including crisis management and proposal drafting, power point presenta- tion, and time management and subordinate development, making up 6% of total trainings. In order to update this training, we have a quarterly newsletter publication which include software tips and new skills updates for everyone to learn.

Figure 7-23. TQS Award Figure 7-24. TTQS Certificate Validation Notice

Figure 7-26. Staff Training Figure 7-27. An-Shin Quarterly Newsletter

80 MOS CSR Report Promote Employee Morale and Teamwork Cohesion 7

Besides internal training, we also send out people for trainings (for example: pesti- cide tests, supplier evaluation, big data, performance evaluation, corporation and CSR, membership economics, etc.) In addition, we also offer specialized trainings available for staff (for example: special coffee training programs, etc.), allowing them Table 7-13. Certified Barista Training to be certified baristas. Year 2018

Employee Courses (hours) Participants (people) Average training hours/person

Professional and cross-disciplinary functional courses account for 40% of the over- Gender Male Female Male Female Male Female all training. The overall management training courses emphasize leadership devel- 91 117 34 44 2.68 2.66 opment which account for 54% of the total training, such as reading clubs, invite Staff external experts to share experience and give lectures on industry outlook (for Store Manager 89 176 30 62 2.97 2.84 example: industrial development, innovation and technology, legal compliances, new trends, healthy eating and lifestyle,etc.) Internal training courses include finan- Store Clerk 128 198 41 59 3.12 3.36 cial statement analysis and strategic planning. In addition to the supervisor's team Part-time 28 164 7 41 4.00 4.00 leadership and employee development, topics also cover recruitment of internal lec- turers, selection of talents, and training courses on employee dismissal interviews. Total 336 655 112 206 3.00 3.18 In 2018, the number of management courses was 148.5 hours. In addition to the internal lecturer's courses, the management course also invites external lecturers to conduct relevant management training. The senior executives participate in external “Afterwards, you need to increase your concentration, self-awareness and adjust management and professional related training, continuously absorbing new knowl- habits for personal growth; and don't fall into an automated behavioral model.” “Re- edge on enterprise management, and ensuring the implementation of internal man- spect others and be responsible for your own actions. You must actively change agement mechanisms. In 2018, a special coach who specializes in corporate trainig yourself to better serve your team and respect your competitors.” “To communicate was invited to lead a “samurai game training.” Samurai Game® is a simulation game with yourself, and practice self-awareness! Give yourself affirmation and support, for leadership and team development. Through the simulation battle, participants without limiting yourself, focus on the present, and you will not miss opportunities.” will practice their personal and organizational awareness, leadership, and team “Change yourself, consciously, and communicate with your team, listen to your cohesion. The participating supervisors share their experiences in the two-day peers in order to effectively solve problems.” In addition, for the annual strategy course after class. Participants’ comments are as follows. “This course is different training, the “Strategic King” course was launched so that supervisors can learn the from listening and being taught techniques. I hope that after completing the course, methods of strategic thinking and establish skills for more effective strategic plan- I can use more innovative leadership techniques to form a stronger team.” ning.

Figure 7-28. Certified coffee courses Figure 7-29. Coffee demonstration Figure 7-30. Samurai training introduction Figure 7-31. Samurai group discussion

MOS CSR Report 81 7 Promote Employee Morale and Teamwork Cohesion

For the internal lecturers, the annual An-Shin provides management special "High-performance Materials newsletters (Figure 7-40), and Planning and Teaching Revitalization" monthly reading clubs (Figure and "Flip Experiential Teaching" 7-41, 7-42), which demonstrates courses were attended by 64 partici- how we offer various communica- pants. It is hoped that the internal lec- tion platforms to share ideas and turers will be strengthened through the experiences and an opportunity curriculum so that students can learn for multi-lateral learning. more effectively and nurture deeper thinking and open-mindedness. Figure 7-32. Group Presentations

Figure 7-37. Management newsletter

Figure 7-33. High-performance material planning

Figure 7-38. Reading club Figure 7-39. Reading club training

Figure 7-34. Flip experiential training Figure 7-35. training activity General training New In addition to management related training 8% recruit training courses, two other lectures were arranged in the year, with a total of 138 participants. An-Shin invited 70 man- Management Experts, scholars and managers were agement staff from our training Store 37% invited to share ideas and experiences for catering affiliates to join Staff self-growth. Lectures can cover broader our internal training activi- 33% Trainings and cross-border innovative thinking, such ties. The average per Professional as "Exploration of the Model of the Fast attendee was 34.5 hours. training Food Business Model", "2018 Big Data De- 22% velopment Trends", "Current Perspectives on Corporate Governance", and "Big Data Figure 7-36. An-Shin training in the Catering Industry.” Figure 7-40. Store Training Courses

82 MOS CSR Report Promote Employee Morale and Teamwork Cohesion 7

The store training course is mainly for store staff. For new Table 7-14. Average hours of education training for attendees recruits, the course content focuses on company philosophy, food safety and hygiene, operation standards, customer ser- Year 2018 vice concepts, etc., so that newcomers can think about how Average training hours/ to improve customer satisfaction and apply concepts at work. Category Total Training (hours) Attendees (people) person After completing the newcomer training, recruits will be Gender Male Female Male Female Male Female assigned to the training store to experience the actual opera- tion on-site, and apply basics of the new training. New recruit Management 2,485.5 4,441 36 65 69.04 68.32 training accounts for 37% of the overall training. For the store 746 2,346.5 22 44 33.91 53.33 manager trainings, the management ability of the store man- Staff agers and district managers account for 33% of the total Store manager 2,976 4,841 92 151 32.35 32.06 training. Professional training focuses on the knowledge and skills required for basic store operations management, such Store clerk 9,410 16,552 230 420 40.91 39.41 as customer service, inventory, duty, OJT guidance skills, etc., Total 15,617.5 28,180.5 380 680 41.10 41.44 accounting for 22% of the overall training. The general training includes the customer service skills and sharing ideas, (Note 6) Part-time staff training takes place online (e-learning sites) since 2015 accounting for 8% of the total.

Table 7-15. External Training

Year 2018 Average training hours/ Category Total Training (hours) Attendees (people) person

Gender Male Female Male Female Male Female

Class C staff 138 294 23 44 6 6.68

Fire prevention 0 60 0 7 0 8.57 staff First-Aid staff 0 36 0 2 0 18

Total 138 390 23 53 6 7.36

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7.6 MOS Burger Academy

MOS Burger has two academies, located in JiLin and DanSui. We also have two training centers located in Taichung FengLe and Kaoh- siung ZiYou store with professional teachers and staff to provide valuable learning experi- ences in the career path program. As well, if students are willing to Figure 7-44. work internationally, Recreation An-Shin DanSui Academy they can participate in specific training to be assigned for overseas work.

Figure 7-41. Figure 7-42. TaiZhong FengLe classroom KaoXiong ZiYou classroom

7.6.1 DanSui An-Shin Academy Figure 7-43. Figure 7-45. An-Shin DanSui academy Drawing board of An-Shin In addition to a warm, friendly and challenging work environment, An-Shin has a DanSui academy proficient education and training system. Every partner starts training at this loca- tion to understand company principles, correct service etiquette, the knowledge of products, and kitchen training. Through the completion of each training stage, each recruit can smoothly learn management skills. Through different courses, each recruit can learn skills both inside and outside the store. An-Shin College located in the suburbs of DamSui is a peaceful centre for studies and accomodation. Every recruit from the beginning of the new employee educa- tion training course to store managers are all trained here. An-Shin Food also con- tinues to improve the infrastructure of the academy, such as adding audio and improving the space for rest and relaxation, so that recruits can more effectively An-Shin academy learn in class. An-Shin Food expects to cultivate employees with a “passionate, cheerful, enthu- siastic, and honest” attitude through relevant courses at the An-Shin College, so that each partner can be a manager and effective. As these managers and leaders develop we hope they can all fulfill their personal careers, and make customers feel satisfied and assured.

84 MOS CSR Report Promote Employee Morale and Teamwork Cohesion 7

New Recruit Training

Talent is the most important asset cherished by An-Shin. After accepting the four- day new recruit training of each colleague, they then proceed to the training store to complete the in-store service training ranging from two weeks to two months. In 2018, a total of 469 people participated in the newcomers training. Through the company's business philosophy, food safety standards and service processes, we ensure that the participants fully understand the content of the course, with tests conducted every day. In order to enable each new employee to fully understand se- rvice attitude and become a catering talent, all colleagues in the trial period need to fill their work experience into the “New Recruit Log.

Figure 7-46. An-Shin new recuits photo 7.6.2 JiLin Academy

Each of the full-time partners learn both off-job and on-job training at An-Shin Academy and JiLin Academy. In addition, the Jilin Training Center, located near the head office, provides an environment for partners to learn and grow in a noisy city, lead- ing different partners to embark on a larger world stage, currently in addition to the domestic chain-stores, we also provide career experiences in Japan, mainland China, Australia and other countries.

Figure 7-47. JiLin decorations Figure 7-47. JiLin decorations Figure 7-47. JiLin decorations

MOS CSR Report 85 7 Promote Employee Morale and Teamwork Cohesion

7.7 An-Shin Occupational Health and Safety After the medical examination, according to the health grading management guidelines of the Labor Health Protection Rules, the health inspection reports are graded and analyzed. In accordance to the occupational safety law "Overwork Safety is an important life requirement for human beings after physiological and Prevention Clause" (Article 6(2), Article 21(1) of the Occupational Safety and Health health needs. An-Shin recognizes the importance of workplace health and safety Act, and Article 324 of the Occupational Safety and Health Facilities Regulations and implements several workplace procedures and guidelines. 2) , employers who work in shifts, night work and long hours of work should plan and take necessary safety measures to prevent employees from overworking.our proactive health program operates through questionnaires, surveys, Framingham's 10-year cardiovascular disease risk prediction, and reference to personal health 7.7.1 Workplace Environment reports, our reports are divided into 0 to 4 levels). Levels 1 to 4 results are used by An-Shin asks third-party inspectors every 6 months to examine our stores and the nurses in November and December to provide advice on health education, check CO2 concentration levels in the dining area and kitchen to ensure the safety follow-up visits, as well as to arrange on-site services and labor health service phy- of our employees and customers. In 2018, all levels were below the 5,000 ppm sicians for consultations. standard. The Ministry of Labor on January 5, 2018, stating that "the labor designated for long-term night work should be the specific target of the specific project health check for the employer", and night shift work patterns, self-diagnosed symptoms 7.8 Safety and Store Inspection (including fatigue), and physical examination. The relevant blood and urine tests and ECG assessments are included in the health checkup project. In order to eliminate workplace dangers, the Occupational Health and Safety Team of An-Shin Food conducts monthly safety and sanitation inspections in each Southern taiwan branch. The occupational safety ad health management personnel of An-Shin con- 8people ducted inspections at various stores to conduct pre-hazard identification which will 13% Central taiwan be analyzed and assessed to ensure the safety of employees. 13people 9% BMI≧35 Statistics 7.8.1 Employee Health Management 78%

Based on the Labor Health Protection Northern taiwan Rules and the Good Hygiene Practice, 107people An-Shin Foods provides employees Figure 7-51. Overburden work evaluation with health check services every year, Table 7-16. 2018 Abnormalities in health report (Level 3) including specialized checks for food staff and general medical examina- 2018 Level 3 Health Abnormalities (all stores) People tions. In addition, all current employ- ees of An-Shin are subsidized for Waist (cm) male 110；female 100 105 health checks each year. The total BMI (kg/m*m) 35 138 health checkup in 2018 was $NT Blood Pressure (mm-Hg) SBP 160；DBP 100 68 3,123 thousand.. Cholesterol (mg/dL) 300 32 Triglyceride (mg/dL) 500 8 Low Density LipoProtein (mg/dL) 193 34 Glutamic Acid Transaminase ALT (IU/L) 200 4 Figure 7-50. 2018 Employee Health Check Creatinine (mg/dL) 2.5 3 HBA1C (g/dL) 7.5 8

86 MOS CSR Report Promote Employee Morale and Teamwork Cohesion 7 Healthy Workplace Seal Inspections An-Shin promotes health knowledge and implements health promotions for all partners. Since 2017, we have collaborated with QiXin Clinic to host lectures covering personal weight management, nutrition knowledge, and exercise classes, with professional health management instruc- tors, dietitians and exercise instructors, and smart pedometers to encourage employees to practice physical health. Employees also have access to exercise equipment in the workplace. They hope to promote that the workplace is not just synonymous with fatigue, but a healthy place caing for employee well-being. We were rewarded the start-up stamp certificate in 2017, and hope to apply such health management in all stores in 2018. In 2018, we continued to promote the Healthy Workplace Startup Stamp, and with joint efforts of all our part- In 2018, 38 courses ners, we obtained the Healthy Workplace Promotion Certification with 250 store chain certifications across conducted with 2,700 TaiwanOur partners have experienced the Zen painting activity, the psychological pressure course, planting succulent course, banded sports course, and the green latte activity, quit smoking conferences, etc. All health participants promotion activities from the headquarters will continue to promote health. In 2019, we will strive to receive the Excellence in Health certificate.

Quitting Smoking and Harmful Afternoon Work Excercise Substances (Betel Nuts)

On March 14th 2018, store managers were ‧In 2017, we cooperated with the National University teachers to lead by President Kao to promote the quit- launch MOS Health Gymnastics, as an employee exercise break in tance of smoking and harmful substances the afternoon. It takes about 3 minutes for the employees to stretch including betel nuts, collaborating with the their muscles and avoid the “Economy Syndrome” . The habits of everyone's exercise make employees physically and mentally Food and Drug Administration and Professor . healthier. Figure 7-53 Chen Jianzhi of the Taipei Medical University, Afternoon Excercise making us the first fast-food chain to promote ‧The follow-up will also be implemented at the store manager's such programs. monthly meeting and the national store manager's monthly meeting. . Figure 7-52 Supporting harmful Later, An-Shin hopes that all stores can perform this practice. substance quittance

Ba Duan Jin Exercise Intemal Health Leaflets

During the Education and Training Conference of An-Shin ‧The Safety and Health Team regularly provides a variety of health education Food, the Department of Traditional Chinese Medicine and leaflets through the company's internal contact list. The topics are on work- the Department of Orthopaedic Surgery at Chiayi Christian place mental health care, disease prevention, and infectious disease Hospital taught this set of eight-sestion exercise. Ba Duan Figure 7-54. prevention . Ba Duan Jin lesson Jin is a kind of fitness method invented in ancient China. It ‧In 2018, we will cooperated with the North, Central and South District Health consists of eight kinds of limb movements, which can help Workplace Promotion Center and Mental Health Center for workplace mental with breath conditioning. Because this method helps to health, informing employees about work and personal adjustment, and guiding stretch the body and mind, it has recently become popular in them through the curriculum to learn about rolling techniques and training the Chinese medicine community, and a total of 46 employ- abdominal breathing. ees participated in the competition. ‧Renewal of the workplace posters every month: With health promotion as the main axis, we provide articles on weight management, healthy eating and Figure 7-56. sports knowledge,so that employees can easily absorb health knowledge and . Health Newsletter Figure 7-55 improve health knowledge. Ba Duan Jin practice

MOS CSR Report 87 7 Promote Employee Morale and Teamwork Cohesion

On September 12th, September 18th and October 14th , Zen Drawing Activity Pressure Relief Courses 2018, a series of stress-relieving courses, such as the suc- culent planting, were opened (Figure 7-58,7-59). On October 11th, 12th, and 15th, 2018, the district store manager's monthly meeting had 3 courses, with 162 participants in the Zen-circle painting activities. The Zen-circle painting is a creative way of healing the mind. The focus is on getting to a relaxed and focused state in the process of regular- ity to form a pattern. Figure 7-57. Zen drawing activity Figure 7-58. Pressure relief Figure 7-59. Pressure relief

CPR+AED Training Medicine and Nutritional Pressure Relief Courses Supplement Information

Figure 7-64. ‧An-Shin Food cooperates with the Taiwan Drug Relief Since 2016, the headquarter staff are required to receive AED+CPR training courses, and Nutritional Foundation to promote the benefits and risks of medi- 70% of all staff are trained to apply for CPR+AED An-Shin certification. An-Shin offers at supplement least two annual courses, allowing employees to flexibly choose sessions to participate in cation safety, medicines and healthy foods, so that information and pass the test. store managers can understand how to choose nutri- tional supplements and properly ingest them. In 2018, The An-Shin headquarters has set up AED equipment in August 2017. The AED is located it was announced through posters: through the at the elevator exit on the 8th floor of the building and is managed by qualified adminis- exchanges between partners and safety health team trators on a regular basis. There are 77 enterprises and schools certified in Chungsang nurses, to understand the difference between pharma- District, and An-Shin is one of them. In addition to providing a safe workplace environ- ceuticals, prescription drugs, finished drugs, and lec- ment, it has also become a community security resource provider. tures. The recent An-Shin certification has also been extended to the company's ‧ In March 2018, the "Smoke and Betel Nuts Prevention internal academy in Danshui. The trainees who provide training to the Lecture" was held at the Store managers' meeting. An-Shin Academy and every person who stays there, can enjoy a safe ‧In July 2018, the Pharmacy Foundation was invited to and secure environment. In the future, we will continue to expand the AED hold a "Drug Injury Relief Lecture" at the store man- to all stores. ager's monthly meeting. Figure 7-65. Smoking and betel nut prevention lecture

Nutrition Lecture

‧Cooperate with nutritionists to hold nutrition lectures, allowing employees to learn about significant meta- bolic symptoms and the importance of a healthy diet. Figure 7-62. The relation between health symptoms and diet were DanSui AED equipment Figure 7-63. also taught. . . AED+CPR Figure 7-60 Figure 7-61 . CPR+AED certificate AED equipment mannequins Figure 7-66 Green smoothie activity

88 MOS CSR Report Promote Employee Morale and Teamwork Cohesion 7

和平與正義 減少不平等 Workplace Accident Statistics Workplace Accident Prevention 制度

According to the relevant provisions of An-Shin Foods has established a complete reporting system to analyze the types the Occupational Safety and Health Law, of work accidents and track the recovery status of injured employees to estimate An-Shin regularly reports online statistics return-to-work dates. According to the results, cut injuries, burns and falls are the of occupational hazards. In the event of a most common work accidents for An-Shin. Therefore, education training lectures work safety accident, in addition to notify- and conferences are specially organized for these injury preventions. An-Shin has ing the relevant supervisors, the health also cooperated with the government's four regulations of occupational safety to and safety team will initiate an accident eliminate unlawful infringement, promote workplace mental health, musculoskel- investigation, and conduct analysis, treat- etal workplace injury prevention, and a maternal protection program. We have ment, and research. We will also publicize also established a record-tracking system for all injury cases and harassment relevant health and safety matters to pre- cases. vent similar problems from reoccuring. In Table 7-18. Work place accident prevention order to facilitate incident reporting, an online accident notification is provided so In-store health checks that the health and safety team can and consulting assess accident situations. . Figure 7-67 The health and safety group was established Online Accident Notification in 2015 and has since visited all MOS stores at least once. In 2018, we had a total of 465 visits to ensure employee wellbeing. In-store checks are accompanied by nurses, doctors and the health and safety group. Table 7-17. Severe injury statistics (excluding transportation incident data)： The member include workplace safety personnel and nurses, and employs 4 Year 2017 2018 physicians in North, Central and Southern Taiwan for evaluation items such as maternal, infringement law issues, work overload, ergonomic issues, workplace Gender Male Female Male Female mental health, rehabilitation, and assignment evaluation, follow-up care for work-related accidents, store first-aid kit configurations, employee health con- 0.54 3.06 0.15 2.22 Severe injury frequency sultations, and suggestions for work environment improvement measures. Injury severity 14.04 92.54 1.03 68.42 There were 108 store visits inn 2018 to serve 120 stores and their staffs.

Work-related injury rate 0 0 0 0 Workplace Harrassment (unlawful infringement) and mental health issues Work-related deaths 0 0 0 0 Absence rate 0.09 0.19 0.06 0.23 In September 2018, we held monthly operation meetings promoting workplace harassment prevention (Figure 7-73), and provide a special notification platform for Average number of 26 30.24 7 30.8 alert.An-Shin has platforms that allow for employees to notify human resources if off-work days due to injury there are any workplace infringements. (Note 7) At the headquarters meeting in September 2018: DingXi store Chen○○fallen injury，72 day days off-work Announcements to prevent workplace harass- ment were announced by Chairman Lin to DingXi store Chou○○fallen injury，68 days off-work enhance the cohesiveness of employees and ○○ ， FuLing store Lin cut injury 99 days off-work allow all employees to feel happy and safe at Taipei ChungShan store Chen○○shaved cut injury，82 days off-work work. Figure 7-68. Announcement Materials

MOS CSR Report 89 7 Promote Employee Morale and Teamwork Cohesion

Maternity Protection Plan

An-Shin Food pays special attention to female maternal employees. In order to encourage and protect MOS expectant mother employees during pregnancy and breastfeeding, we will support them through an online reporting system to pro- vide protection measures, work environment hazard identification risk assess- ment, tracking regular care and assistance, provide breastfeeding education during pregnancy, breastfeeding-related counseling, and indirectly strengthen Figure 7-69. MOS Pregnancy Badge infant care. This shows that An-Shin will provide them with a safe and comfort- able working environment and will adjust work loads for these employees. According to the Women's Maternity Workplace Protection Guidelines, and the Gender Work Equality Law, we have planned to set up a feeding room in head- quarters since 2015. In 2016, we applied for subsidies through the government to improve the nursing rooms. In 2017, the Taipei City Government Health Bureau awarded An-Shin the Maternal Nursing Room Certification. In 2019, An-Shin will from a LINE Group for constant communication with our expectant mother employees.

Figure 7-70. MOS pregnancy nurse consultations via call

Figure 7-71. An-Shin’s nursing room

Figure 7-72. 2017 to 2020 excellent maternal nursing room certification

90 MOS CSR Report Promote Employee Morale and Teamwork Cohesion 7

An-Shin Smart Workplace-Health Promotion Plan In September, during the store manager meeting in northern Taiwan, the health Special On August 15, 2017, An-Shin cooperated with the Health Bureau of Taipei program and simple physical fitness tests were demonstrated. An-Shin head- Report City, the national Ministry of Health and Welfare, and the Taipei City Univer- quarters conducted physical fitness tests, one-on-one exercise consultations, sity to implement the Smart Workplace-Health Promotion program. We sports nutrition lectures, and a series of courses including TABATA aerobics and hope that through sports courses and the introduction of smart technol- advanced rollers. In 2018, a total of 1,035 participants attended 42 events ogy, we can promote employee physical and mental health through activities including personal weight management, nutrition knowledge, rhythm ladder that can be completed in a short period of time without affecting work times. aerobics, stretching relaxation, freehand muscle training, sports consultations and FMS function tests. As well as upper and lower limb tests, spine and pelvic The fitness test includes a before and after habit questionnare, outputs mobility, through elastic band and other sports courses, professional health man- various data analysis reports: including the age of the tester, waist-to-hip agement lecturers, nutritionists and sports instructors, encourage employees to ratio, BMI, blood pressure, body fat percentage, and overall healthy living practice and increase exercise. The chairman and high-level executives lead by habits. The pre- and post-questionnaires include health measurement example together to maintain a healthy workplace. frequency, health knowledge, water consumption, sedentary time, exercise frequency and recommendations (see table below). Relaxation classes with mats and freehand muscle training without the use of equipment (pushups, situps, etc.) were also held. Table 7-19. Healthy living habits questionnaire before and after analysis results

Health check 13.04% of staffs measure weighs more than 3 times/week. frequency 2.22% of staffs take blood pressure very day.

Health Health knowledge quiz had an average score of 73.88. knowledge

Water 22.22% of staffs will drink more than 2L a day. Consumption Sedentary 31.11% of staffs will stand up once per hour. time Figure 7-73. Figure 7-74. Figure 7-75. Measuremente The average employee excercises 2.5 times/week. Ladder excercise Stretching and relaxation Freehand muscle training Frequency 73.91% of employees will take the stairs at least once per day.

每週平均運動2.5次 Proactively check your health conditions (blood pressure)and seek The lower extremities, spine, and pelvic mobility courses were health73.91%每天走樓梯一次以上 care if needed. implemented to improve the stability of the upper and lower Recommen- Only 30% of employees drink enough water, so to help metabolism and limbs and the spine, pelvis, improve sedentary habits, long dations overall health, it is recommended to drink at least 2L of water per day. standing, and lower back muscles. Reduce the risk of developing posture pain caused by sedentary habits and encourage colleagues to increase movement at work.

Health Status Recognized health issues

Waist to Hip issue normal (84.48%) 49.15% with blood pressure above 120/80mmHg BMI normal results (50.85%) 16.95% with blood pressure above 140/90 mmHg 68.42% with abnormal body fat percentages Figure 7-78. Figure 7-76. Figure 7-77. Upper and lower limbs, spine, FMS exercise class Exercise consulting and pelvic mobility

MOS CSR Report 91 7 Promote Employee Morale and Teamwork Cohesion

Supervisors and top management also In December, 2018, the 4+1 implementation plan of the Smart Health City was actively participated in muscle training of held, which is comprised of 4 aspects: smart lobby, staircase, water cup, and using elasticity from the band, and the office innovation. Health habit questionnares were conducted before implementa- upper and lower limb relaxation course. tion. The massage rollers promote blood circu- lation, improve muscle malleability, improve body fatigue and reduce chronic pain. The floor smart mats were imple- mented, combined with the sports hall design movements, to allow employees to stretch and exercise their bodies while waiting for the elevator.

Figure 7-81. Smart health city meeting

On September 7th, a smart meeting room was built with adjustable table height. It is equipped with a walking machine, and an exercise bike. On September 14th, 2018, the smart meeting room was officially launched. During lengthy meetings, a standing desk could be used to relieve the discomfort of staying sedentary for an extended period of time.

Figure 7-79. Advanced roller mat class Figure 7-80. Relaxation roller class Figure 7-82. Standing meeting in session

92 MOS CSR Report Promote Employee Morale and Teamwork Cohesion 7

On October 2nd, 2018, a health station On October 23rd, 2018, the smart lobby was established to detect 5 major items: was built, combining the health station emotional stress, 12 indicators in three- and the smart floor mats (whack-a-mole minute body and mind tests, blood pres- and V-jumps) to allow for employee use ssure, pulse, body temperature, body while waiting for the elevator. The smart weight, and body fat. Through the health lobby program had a total of 18 partici- station, employees can pay attention to pants using smart floor mats to do sport their own physical and mental changes, activities, and drink from smart water and effectively adjust lifestyles. bottles.

Figure 7-83. Figure 7-84. Figure 7-85. 1-minute indicators 1-minute indicator descriptions 3-minute test with 12 indicators

Figure 7-92. Smart mats in use

Figure 7-86. Figure 7-87. Figure 7-88. Indicator descriptions Blood pressure and pulse Pressure and pulse indicators

Figure 7-89. Figure 7-90. Figure7-91. . Body temperature Temperature indicators Weight and body fat analysis Figure 7-93 Activity scores

MOS CSR Report 93 7 Promote Employee Morale and Teamwork Cohesion

The smart desk and smart cushion program had a total of 9 par- ticipants. With a mobile app, you can set times and be reminded The smart water cup program once per hour to stand up and exercise. The smart seat cushion has a total of 9 participants. also has sensors which can determine your left and right body Using the mobile phone posture, and determine if it is balanced. Drinkup app, you can set times to remind yourself to drink water, and see your water con- sumption records.

Figure 7-94. Figure 7-95. Drinking water Drink Up Smart Cup APP

The smart staircase program is consisted of 13 participants. Figure 7-99. Figure 7-100. Figure 7-98. The Beacan device, bluetooth positioning system and the In-body analysis 3-minute stairs test YMCA heart and lung function test APP sets up a record to understand the movement of each floor. If you are within the top 5 participants in this program, you will be rewarded with a smart water cup!

Figure 7-101. Figure 7-102. Flexibility test Sit-up test

Figure 7-96. Figure 7-97. Smart stairs APP Smart stair program

Pre-and post-test analysis questionnaires for employees in the workplace were conducted to investigate the satisfaction of various health programs. Figure 7-103. Figure 7-104. Reaction time test Stamina test Table 7-19. Before and After test results Continuous exercise employee habits Employees practicing the 5 vegetable and fruit Before BMI≧27 employee weight reduced by 0.5kg increased by 2% diet increased by 1% After Continuous exercise employee habits Employees practicing the 5 vegetable and fruit Employees with BMI≧27 consists of 13.1% of total employ- increased by 8%(28%-36%) diet increased by 4%(36%-40%) ees, with weight reduction of 0.72kg

Before Employee fitness increased by 5% Employee health Knowledge increased 10% Employee satisfaction towards the program was 80%

Prior to testing, 29% of employeesdid not under- After the program, employee satisfaction increased to 96% After 62% of employees improved at least 4 stand fat, cancer and chronic disease. After the Fitness program satisfaction was 95.9% health items testing, there was more general understanding Exercise program satisfcation was 98.9% with an increase of 11% (from 71% to 81%). Individual exercise program satisfaction was 93.4%

94 MOS CSR Report 8 Environmental Sustainability

In 2008, we invested in an energy-saving and emission reduction automation project worth $NT 18.83 million Annual environmental protection and energy-saving invest- ment expenditure undertaken, worth $NT 75,163 thousand The Reusable Cup Program saw 101,000 exchanged cups and reduced a total of 505,000 cups and lids Replacement of energy-efficient equipment with 273 energy-saving indoor and outdoor air-conditioning equipment 100% use of PEFC certified photocopy paper 8 stores recognized as green stores, of which 1 was also awarded as an environmentally-conscious store

Stakeholders: ■ Government ■ Clients or Customers ■ Local Residents ■NGOs ■ Employees 8 Environmental Sustainability 8 Environmental Sustainability Management Approach

Medium/ Legal compliances for energy, water, emissions, sewage, and waste Ordinary Topics:

Meanings for An-Shin’s mission is “Contribution to Humanity, Contribution to Society,” and we work to ease climate change, reduce our impact on the An-Shin environment through energy-saving and water management, as well as promote environmental education to uitimately achieve sustainability.

An-Shin will implement energy conservation and control management to promote a low-carbon and high-quality environment. We will review Our the implementation effectiveness regularly, follow energy laws, regulations, and other requirements, develop correct energy-saving concepts, Commitment and improve employees' sustainability literacy. The purpose of the effort is to reduce the loss of environmental resources and achieve a solution for energy conservation, environmental protection and economic benefits.

Short term：‧We will review our energy efficiency and continuously improve our procedures. Goals and Objectives Medium & ‧We will continue to practice environmental sustainability and build our competitive advantage by implementing smart proce- Long Term： dures to track our energy usage and performance.

How to Manage

Investments/ ‧In 2018, we invested a total of $NT 18.83 million in energy saving and automation programs. Input ‧In 2018, we invested a total of $NT 75,163 thousand in energy saving programs.

‧ In 2016, we received the ISO 50001 certification, and we will continuously review our energy usage every month, and propose annual action plans and audits for further improvement. ‧ In addition to adopting environmentally-friendly building materials for new stores, An-Shin also introduced energy-saving lighting, air condi- tioning, and kitchen equipment. ‧ In order to reduce water waste, we reinforce the management and replacement of water-saving facilities in stores and adjust the flow of fau- Management cets for guest sinks. Approch ‧ We has promoted “MOS Eco Cup, Love Earth Relay” program for more than 7 years. Customers have exchanged 101,000 cups of free and drink in 2018, and thus reduced the use of at least 505,000 paper cups and lids. Evaluation ‧ MOS Burgers have separate dining areas with a variety of recycling facilities and signs. In our drink disposal process, lids, drink contents, Schemes and the cup are all placed in different places following our fool-proof disposal procedure. ‧ To effectively reduce food waste, some sauces were changed to bagged shipments, which met the needs of use and the source reduction. ‧ The waste oil after the replacement is properly kept and disposed by parties approved by the environmental protection authority, according to the regulations to avoid the unlawful flow and usage. ‧ Regular visit by professional florists to help maintain the planting of the store and create a comfortable dining environment for customers.

96 MOS CSR Report Environmental Sustainability 8

8.1 Energy Task Force Table 8-1. Investments in environmental protection and energy savings Amount of investment (thousands) Item Description To promote energy conservation, we established a systematic energy manage- 2016 2017 2018 ment system and Energy Task Force. President Kao appointed the chief of the Non-reusable testing kits, and third-party inspection 2,529 2,506 3,646 Engineering Department to act as the representative of energy management. The Materials and Product Inspection Inspection expenses, including staff salaries and 6,071 6,762 7,027 members of the Energy Task Force direct and supervise energy management and hardware coordinate the implementation to employees. To ensure continuous improvement PLA certified packaging 9,468 9,470 11,593 and effective implementation of the ISO 50001 related energy management ： TM system, we conducted a re-verification by a third party institution on November Environmental Photocopy paper using FSC certified paper 11,608 10,386 14,812 purchases and soybean-based ink 14, 2018. Minsheng Store aims to become a model store for implementation of Office Paper：using PEFC certified paper - - 67 the ISO 50001 energy manage- ment system. The rest of the stores Waste disposal 12,703 15,171 16,996 are also based on the Minsheng 119 585 406 Cleaning Oil filter equipment cleaning Store as a standard, and comply and Waste Smoke extraction equipment cleaning 269 255 576 with the ISO 50001 management Management Environmental decorations (plants) 989 1,304 1,441 system for energy control and effi- cient energy use. An-Shin works to Waste and recycleables 961 980 1,222 reduce greenhouse gas emissions Cleaning Smoke extraction (static motor and UV systems) 4,831 3,066 2,334 to achieve the goal of energy and Waste Waste disposal station 263 240 342 saving and carbon reduction. Energy Saving Energy-saving equipment 7,562 10,169 10,099 Figure 8-1. ISO 50001 Certification Prolong asset and 3,099 2,265 1,627 equipment life Reusable equipment Green product Electronic ivoices 2,562 3,039 2,975 8.2 Energy-saving Investments purchases Total 63,034 66,198 75,163 With the concept of green environmental protection and the ecological economy gaining popularity, it has a considerable degree of influence on the business phi- 8.3 Paper Consumption Management losophy and business model of An-Shin. We pay special attention to environmen- Our office uses tal issues, advocating the green operation of stores, establishing a green busi- 100% PEFC ness concept, and adopting a green business model. For An-Shin, green opera- To compensate for the large amounts of paper, energy, and certified photocopy tions are no longer just expenditures and investments, but a new source of water the office uses, we actively promote office smart tech- paper wealth. Measuring environmental expenditures can track and analyze the costs of nology and paperless systems. In 2018, An-Shin Foods used environmental protection or environmental impact reduction. In addition to a total of 400,000 copies of PEFC Certificatied paper. (The assessing the efficiency of environmental protection measures, it also provides PEFC Forest Validation Accreditation Program is an interna- useful analytical information for internal cost-effectiveness. Specifically, for tional non-profit, non-governmental organization established example, the drainage unit of the oil tank separates the oil and other insoluble in 1999. It is a third-party independent agency that promotes substances in the discharged water to prevent the kitchen waste and oil from the management of sustainable forests and is the world's larg- polluting the ditch. Or, water-washing and electrostatic exhaust devices dis- est forestry certification system.) An-Shin helps to solve prob- charge polluted air to reduce soot and odor. Overall, in 2019, An-Shin will con- lems facing the global forest, promote sustainable develop- . tinue to strengthen the use of oil filters, cleanliness of oil fume equipment, and ment of forests, and reduce the environmental impact of Figure 8-2 increase the purchase of electrostatic smoke extraction equipment to prevent the operations by purchasing verified paper to support sustain- PEFC Certified Logo occurrence of environmental incidents caused by soot and wastewater. able forest practices.

MOS CSR Report 97 8 Environmental Sustainability

8.4 Energy and Greenhouse Gas Management 8.4.1 Energy-saving Action Plan

In 2018, our total electricity usage was 39,135 thousand kilowatts, and our sales rev- An-Shin Food hopes to enhance the improvement of energy efficiency in stores and enue was $NT 5,170,958 thousand. Therefore, our sales density was 7.57 within headquarters. We aim to achieve the goals set by the company's policies, kilowatts/thousand NT in sales revenue, which demonstrates that we have increased quantify the requirements of performance as much as possible, and achieve the our electricity efficiency by 3.32% comparing with last year. In 2018, during the winter, desired goals through the improvement of the program. By the end of 2018, we turn off the air conditioning in the office one hour before closing. In 2019, we will An-Shin had a total of 265 stores, and the energy consumption of lighting and replace the water tower to increase efficiency. air-conditioning equipment accounted for more than 50% of the total electricity. An-Shin replaced the LED lamps from indoor lighting to outdoor signboards. In addition, our new store design and decoration uses environmentally-friendly build- ing materials, as well as energy-saving lighting, air conditioning, kitchen and other Table 8-2. Electricity usage and greenhouse gas emissions equipment. Every year, through existing shop modifications, air-conditioning machines are replaced. Up to now, 273 air-conditioned indoor and outdoor Year Unit 2016 2017 2018 machine units have been replaced. By gradually replacing the equipment with poor Electricty kilowatts 36,873,072 37,797,246 39,134,926 energy efficiency, our company’s efficiency is continuously improved, and the Secondary energy million joules 132,743,059 136,070,086 140,885,734 purpose of energy saving and carbon reduction is achieved. Product density million joules/production quantity 1.38 1.38 1.37 Service density million Joules/service quantity 3.99 4.01 3.98 Table 8-3. Energy-saving performance

Sales density kilowatts/sales revenue in thousands 8.10 7.83 7.57 Estimated electricty savings (kilowatts) Electricity density kilowatts/number of stores 149,891 146,501 147,679 Air-conditioning 1,024,131.60 (including indoor and Electricity density kilowatts/square meters 767 753 749 Estimated secondary energy savings (million joules) outdoor equipment) 3,686,873.76 Category 2 greenhouse e tonnes CO2 19,506 20,940 20,859 gas emissions Carbon emission reduction (tons of CO2e) Quantity Greenhouse gas tonnes CO2e/sales revenue 273 567,368.906 0.0043 0.0043 0.0419 emission density in thousands (Note 4) Since the 2018 coefficient has not been announced, we have used 2017 coefficients of (Note 1) Secondary energy is purchased electricity, and all statistics include headquarters and all stores. 0.554kgCO2/kWh to form estimates. Greenhouse gas emissions only emcompass category 2 gas emissions. (Note 2) The carbon emission coefficient of electricity is calculated by 0.529 kgCO2/kWh in 2016 and 8.4.2 Energy Savings, Reduced Emissions, and the 0.554 kgCO2/kWh in 2017, and 0.533 kgCO2/kWh in 2018. Automation Program In 2018, An-Shin invested in energy savings, reduced emissions, and implemented an automation program with a total of $NT17,635 thousand including kitchen dis- play (KD), MOS APP, table ordering, and robots.

2016Year 2017Year 2018Year 2017Year 2018Year Electricity usage of Electricity usage of Electricity usage of Investments in energy savings, Investments in energy savings, 36,873,072 kilowatts 37,797,246 kilowatts 39,134,926 kilowatts reduced emissions, reduced emissions, Total greenhouse gas Total greenhouse gas Total greenhouse gas and automation programs and automation programs emissions usage of emissions usage of emissions usage of 19,506 tons of CO2e 20,940 tons of CO2e 20,859 tons of CO2e 16,884 thousand 17,635 thousand

98 MOS CSR Report Environmental Sustainability 8

8.5 Water Resources Management 8.6 Waste Treatment

In order to effectively implement food hygiene In order to reduce the negative impact of business practices on the environment, and safety, as a food services industry, the An-Shin Food actively promotes sustainable waste management. The waste dis- amount of water needed for sufficient cleaning posal policy focuses on “original source waste reduction,” and promotes green and sanitation is in larger quantities compared operation and recycling to effectively handle resources. At the same time, we to other industries. In addition, before custom- launched a source reduction project inviting people to develop a good habit of 2018Year ers dine, An-Shin provides extra store func- promoting environmental protection through the “MOS Eco Cup and the We Love tions such as a hand washing station in the Item Earth Relay.” guest dining area. In order to reduce the waste Water Saving of water resources, we will reinforce the man- 8.6.1. Original Source Waste Reduction agement and replacement of water-saving certified toilet facilities in stores and adjust the flow of fau- An-Shin hopes to significantly reduce waste through prevention, reuse, reduction, cets for guest sinks. The newly opened shops 8 and recycling. Since 2003, An-Shin has introduced dine-in tableware to replace also all use toilets with water-saving systems. disposable cups and packaging, effectively reducing the amount of paper and In 2018, a total of 8 toilets with a water-saving plastic waste. Since 2005, all stores began to use soy-based ink printing and function were installed, where each flush can paper for printing without fluorescent brightening agents. The plastic cups and save up to 50-67% of water. salad containers used by our stores have also been changed with environmentally friendly Polylactic Acid or Polyactide, PLA certified plastic (made from corn starch to reduce plastic waste). As well, in 2016, prints continued to use the FSC (Forest Stewardship Council) verification paper for all company uses to support respon- sible sustainable forest management. Table 8-4. Water density and management An-Shin’ s “MOS Eco Cup and the We Love Earth Item Unit 2016 2017 2018 Relay” has been promoted for more than 7 years. When customers bring their own cups for a drink, Water usage tons 1,090,167 1,163,640 1,248,343 it can be rewarded for one point, and every five points we will give a prize reward of $NT 35 for Product density tons/production 0.011 0.012 0.012 drinks. In 2018, a total of 101,000 cups were quantity exchanged for 505,000 disposable paper cups Service density tons/service 0.033 0.034 0.035 and lids saved. quantity

Sales density tons/sales revenue in 0.24 0.24 0.24 thousands Year Water usage tons/number 4,432 4,510 4,711 2018 of stores Total drink exchanges Saved amount Water density tons/square meters 23 23 24 505,000 disposable (Note 5) Water usage is estimated in reference to our water bill and unit price. 101,000 cups cups and lids

MOS CSR Report 99 8 Environmental Sustainability

8.6.2 Reduction and Recycling Performance Green Store Evaluation An-Shin employs an effective way to classify and recycle waste. MOS Burger’ s dining areas are Since 2011, New Taipei City has evaluated 10 fast-food chain stores, pizzerias, equipped with various signs for recycling instructions. In our drink disposal process, lids, drink con- coffee chains, and other wholesale companies to encourage these companies tents, and the cup are all placed in different places following our fool-proof disposal procedure. An-Shin to use environmentally-friendly products, and practice proper waste disposal. follows the “Fast-Food Chain Recycling and Disposal Regulations” and “Business Waste and Clean-up An-Shin focuses on corporate governance and the principles of social respon- Management Regulation” where records on the amount of general waste, resource waste, and waste sibility, promoting environmental sustainability, long-term planning of resource oil that is generated by the store every day are kept. It must be recorded regularly and reported to and waste reduction, and improving energy efficiency. An-Shin actively pro- headquarters on a monthly basis. In 2018, An-Shin’ s general waste was 4,416 tons, the amount of motes six major items in aspects of waste reduction control including: treat- recycleable waste was 1,256 tons, and the amount of waste oil was 485 tons. In 2018, to further reduce ment and classification of resource recovery, a clean and green environment waste, some sauce bottles were changed to bagged shipments which met the demand for use and had around the store, implementation of energy-saving facilities, promoting environ- a waste reduction of 22% compared to the previous year. Finally, all of An-Shin’ s waste oil is handled mental protection concepts, and food waste prevention hoping to spread green by government-approved disposal companies to avoid reuse. values in society.

Table 8-5. Recycleable Waste 3-step Green Evaluation Item Unit 2016 2017 2018 Recycleable waste tons 583 1,613 1,256 1 2 3 Step Step Step Product density tons/production quantity 0.000006 0.000016 0.000012 Application On-site visit Covert on-site visit Service density tons/service quantity 0.000018 0.000048 0.000035 and review with notice without notice Sales density tons/sales revenue in thousands 0.00013 0.00033 0.00024 of processes and evaluation and evaluation Recycleable waste density tons/number of stores 2.37 6.25 4.74 Recycleable waste density tons/square meters 0.012 0.032 0.024 An-Shin's long-term planning and promotion of resource and waste reduc- tion have been recognized with the “Green Store Award” in New Taipei City for 6 consecutive years. We participated in the Green Store Evaluation in Table 8-6. General Non-reusable Oil 2018 and a total of 8 MOS Burgers were selected for recognition. We proudly Item Unit 2016年 2017年 2018年 showcase 7 four-star shops (Sanchong Taipei Bridge Store, Sanchong Non-reusable oil tons 529 482 485 Justice Store, Sanchong Chongyang Store, Sanchong Xuhui Store, Xindian Product density tons/production quantity 0.0000055 0.0000049 0.0000047 City Hall Store, Xinzhuang Zhonggang Store, Xinzhuang Zhongping Store), and 1 three-star store (Beixin shop). Through our own supply-origin resource Service density tons/service quantity 0.000016 0.000014 0.000014 reduction, energy-saving facilities and green consumption strategies, we Sales density tons/sales revenue in thousands 0.000116 0.000100 0.000094 have achieved the goal of reducing resources and waste for the betterment Non-reusable oil density tons/number of stores 2.15 1.87 1.83 of our society. Non-reusable oil density tons/sqaure meters 0.011 0.010 0.009

(Note 6) Our waste statistics are based on monthly averages to determine store estimates

2016Year 2017Year 2018Year we had a total of we had a total of we had a total of 4,764 tons of waste 6,208 tons of waste 6,157 tons of waste

Figure 8-3. Green Store Awards

100 MOS CSR Report Environmental Sustainability 8

8.7 Green Store Plantations

In addition to providing customers with delicious meals, An-Shin hopes to provide a comfortable environment by using green decorations. Planting flowers and trees can not only improve the environment by absorbing CO2 gases, but also greatly allow cus- tomers to feel happy and alleviate stress. Therefore, we regularly ask florists to help maintain the greenery Figure 8-5. Dining area decorations around our stores.

Figure 8-6. Store corridor decorations Figure 8-4. Gate decorations

8.7.1 Working with National Parks on Environmental Education An-Shin Food Services Co., Ltd. has signed a memorandum with the Construction and Plan- ning Agency Ministry of the Interior on April 1, 2018. It is expected to protect Taiwan’s natural The “MOS” of Mos Burger stands for: beauty with the strength of enterprises and our employees. Through our employees and each store, we can spread environmental consciousness throughout our communities. In Mountain, Ocean and Sun, with the addition to authorizing An-Shin Food, some of the storefronts can display pictures of national aim of providing natural and healthy parks, encourage community members to participate in litter pick-up and ecological educa- ingredients to influence society on tion activities. appreciating the environment. At present, we display the "National Park" Ecology Magazine (Figure 8-9) across more than 100 MOS Burger stores as well as on our official web- site, or facebook. From time to time, we also announce national park ac- tivities, so that consumers can become more aware of environmental protection.

Figure 8-7. Figure 8-8. An-Shin Memorandum Group photo with National Parks

MOS CSR Report 101 8 Environmental Sustainability

8.7.2 Yangmingshan Invasive Species Removal Invasive species within Yangmingshan seriously affect the habitat of Taiwan's native species, and numerous investments have already been made to remove these species. On October 13th, 2018, An-Shin Food Services Co., Ltd. cooperated with Yang- mingshan National Park to hold the invasive spiderwort plant activity to help ease ecological strain on native plants. Through the explanations of the volunteers of the Yangmingshan National . Park (Figures 8-9, 8-10), our employees learned how to distin- Figure 8-11 Activity accomplishment guish the characteristics of spiderwort leaves and the correct method of extraction. Employees participated in the half day event and removed 14 large bags of spiderwort leaves (Figure Figure 8-10. Invasive species activity

8.7.3 Gray-faced Eagle Ecological Conservation

The Kenting National Park works to protect their native migratory Figure 8-9. birds. In order to educate schools and communities on the Educational lecture on spiderwort plants concept of conservation and related laws and regulations, the annual eagle season is held from October 1st to October 31st (Figure 8-12). During this month, Kenting National Park will hold a gray-faced eagle ecological conservation painting activity, where participants can obtain gray-faced eagle blank painting paper from MOS Burger stores. Upon completion, participants can redeem their artwork for a portion of fries at the counter. Last year, we had a total of 1,089 activity participants. The award-winning students receive awards and prizes, and we had a total of 60 quality-award winners, and 124 honourable mentions.

Winners H=Honourable Mention Q=Quality Award

48 39 37 20 20 20 HQHQHQ Primary Intermediate Senior students students students

Figure 8-12. KenTing Eagle Season

102 MOS CSR Report 9 Enterprise Influence on Society

197 Children Educational Activities, with a total of 788 hours and 2,609 participants We donated $NT 527 thousand of worth of near-expiry products to promote waste reduction March 12th (3/12) annual MOS Burger birthday celebration held with community street-sweeping con- tributions with local residents and customers Coin boxes for charity donations generated a total of $NT 1,647 thousand, helping children in low-income families, 3,183 educatational tutoring sessions for students, 5,864 meals served, and 3,030 educational activities and courses held Taiwan High Speed Rail ZhangHua store invited 10 student musician bands to perform for over 1.35 million audience members

Stakeholders: ■ Local Residents ■ Media ■ Clients or Customers ■ NGOs ■ Employees 9 Social Responsibility and Enterprise Influence on Society 9 Social Responsibility and Enterprise Influence on Society

Management Approach

Medium/ Indirect economic and local community impact Ordinary Topics:

Meanings for A majority of An-Shin’ s stores are located within local communities actively handling social welfare activities, paying special attention to An-Shin neighbourhood needs and promoting local prosperity. An-Shin will continue to work hard to participate within our society.

Our “Contribution to Humanity, Contribution to Society” Commitment

Short term：‧Local cleaning (daily sweeping) the surrounding area around the store. Goals and Objectives Medium & ‧ Long Term： Contribute to our society while gaining profit to support future CSR initiatives.

How to Manage

‧Collaborations with the ‘Good Friend Mission’ Christian Committee. ‧ Investments/ Headquarters and store staff encourage customers to sweep the streets with us on MOS Burger’s birthday (03/12). Input ‧ MOS Burger Japan has consistently swept the streets since establishment, and every year on March 12th, customers celebrate MOS’ birthday by sweeping the local streets along with An-Shin staff .

‧ An-Shin has an invoice box for charity donation collections. Management Approach ‧ Our educational sessions with the purpose of promoting healthy diets are not only arailable for children, but open for teenagers and and Evaluation adults. Food educationals have an average of 20 participants with 4 store staffs preparing and teaching the 4 hour activities. Schemes ‧ MOS Burger held summer concert with children performances and hamburger prizes.

104 MOS CSR Report Social Responsibility and Enterprise Influence on Society 9

9.1 Our Influence on Society

An-Shin believes in entreprise responsibility for societal contributions. As we have many stores and market channels, we hope to use this local influential power to promote var- since 2007 lous ethical goals, and donate to better the local community. For example, in 2008, the Hualien earthquake occurred and An-Shin worked to provide meals and donations to disaster victims and relief personnel. We have long-term cooperations with local govern- ments, schools, non-profit organizations and other stakeholders, with volunteer services, products, funds, and other resources to contribute to society. For example, the Good Friend Committee invoice boxes are placed within our stores to collect donations for vari- ous causes. We also take initiative in food educational activities, summer concerts, blood donation activities, environmental protection, ecological education, etc., in different forms, to encourage community engagement in MOS initiatives.

Figure 9-2. Correct hand-washing procedures

9.1.1 Food Education from our Hearts

The concept of “food education” can be traced back to 1896, from the Japanese After 11 years of food education activities open for all ages, we have monthly healthologist Sagen Ishizuka’s book “Chemical Food and Longevity Theory” , which store activities with a maximum of 20 participants each time. The purpose is to proposed various food education ideas. The implication is that food education is the promote our business philosophy and encourage customers to pay attention to foundation of all education. In essence, the concept promotes learning through personal diet and health. The activity time is approximately 4 hours through class eating habits, food-related nutritional knowledge and food safety, knowing how to and hands-on activities (Figure 9-5). In 2018, over 197 food education activities properly choose diets that are good for your health, and cultivating people's were held with a total of 788 hours and 2,609 participants. gratitude for food. An-Shin has been established for 27 years and has always insisted on providing customers with healthy and safe products. It hopes to convey the correct concept of eating through food education activities. An-Shin’s earliest food education activities can be traced back to 2007, when Changan Elementary School was invited to visit An-Shin. The elementary school students participated in the first food education activity ever held (Figure 9-1), where they learned about the nutritional value of the lettuce, onion and chicken drumsticks within our burger by making the honey sauce roast chicken burger. Through the food education course, students are taught the correct concept of hand washing (Figure 9-2), to cherish food, and food nutrition concepts. Figure 9-3. Group photo Figure 9-4. Little Hamburger maker

Figure 9-1. 2007 Food Education program

MOS CSR Report 105 9 Social Responsibility and Enterprise Influence on Society

9.1.2 Food Waste Prevention and Near-Expiry 9.1.4 ＭＯＳ Ｓｕｍｍｅｒ Ｃｏｎｃｅｒｔ Food Donations Music, regardless of age, is an expression of emotion and a source of happiness. In addition to reducing hunger in response to the UN Sustainable Development In 2018, MOS Burger THSR Changhua Store invited various local music groups in Goals, we are also making efforts to reduce global food waste during production TianZhong Town of Changhua to perform outside the store, such as Nei'an and processes, and to effectively link resources and people through food donations. In Xinming Elementary School. A total of 17 different types of music events were held, 2018, An-Shin Food cooperated with the Taiwan Newcomers Budding Association, and sponsorship activities for bands of all sizes totalled $NT 39 thousand. Con- Taipei City Jensoshiang Social Service Association, and Taiwan Food Banks to col- certs held included a variety of different instruments including violin, guitar, flute, lect total donations of $NT 527 thousand, donate 1,273 cans of peanut butter and Chinese harp, etc. 132 packets of cocoa chips to charity. MOS’ s concerts reached over 1,353,258 visitors. Through these concerts, children have the opportunity to express themselves, and perform for our community. At the end of the performance, children can enjoy our delicious burgers. If you have the chance, it is highly suggested to visit the MOS Burger THSR Changhua store to support our community performers.

9.1.3 An-Shin’s Painting Activity Mother's Day is a meaningful festival celebrated around the world. An-Shin holds a hand-painted card activity for mothers in May. After the painting is completed, participants can exchange their artwork for french fries at a MOS Burger chain store. Last year, we received a total of 1,314 submissions and all completed works were awarded for voting activities where 11 winners were awarded with MOS Card giftcards ($NT 500- 3000). All artwork submissions are also shown on our website and facebook page Figure 9-8. Chinese flute concert Figure 9-10. Violin performance

Figure 9-5. Figure 9-6. Figure 9-7. First-place submissions Second place submission Third place submission Figure 9-9. Summer concert Figure 9-11. Ocarina concert For more information:https://www.facebook.com/mosburger.tw/posts/10155695853825662

106 MOS CSR Report Social Responsibility and Enterprise Influence on Society 9

9.1.5 HuaLien Disaster Relief 9.1.6 Invoice Donations When the HuaLien earthquake occurred, An-Shin’s President Kao visited HuaLien’s An-Shin has cooperated with the Good Friend Mission for more than 6 years and Relief Center to serve hot meals for victims and relief personnel (Figure 9-12, 9-13). set up invoice boxes within stores for donation collections, (Figure 9-23) raising a An-Shin also donated $NT 1.5 million to Taiwan’ s Hualien County Government to total of $NT 1,478,099 in donations in 2018. The coin box also raised a total of aid with building aid community reconstructions. $NT 168,555. The proceeds will be used to protect children and adolescents living in poverty from 6 to 18 years old, and provided aid to a total of 79 children, 3183 tutoring classes of supplementary students, 5864 meals served and 3,030 educa- tional courses. An-Shin uses a variety of methods to support these children and provide aid. An-Shin hopes that by helping these children through MOS Burger Figure 9-13. stores acting as child-care centers, when the children grow up, they will give back Serving to the community and help those who need it as well. This demonstrates our con- hot meals stant objective in contributing to our society one child at a time.

Figure 9-12. President Figure 9-14. Kao visiting the Necessity relief center donations

. MOS Burger Japan donated 1 million Figure 9-15 Educational activities Japanese yen to HuaLien

MOS Burger Japan’ s Chairman Sakurada, who worked in Taiwan for a period of time, felt the true charm and warmth of Taiwan. He also expressed his gratitude to Taiwan’ s aid in the 3/11 earthquake in Japan. There- fore, employees donated 1 million Japanese yen to Hualien for aid in disaster relief (Figure 9-17). They expressed concern and supported the reconstruction of affected . communities. Figure 9-16 Stray animal educational program

MOS CSR Report 107 9 Social Responsibility and Enterprise Influence on Society

9.2 Employee Influence on Communities 9.2.2 Blood Donations

As new employees enter MOS Burger, we continuously them how to serve the During the wintertime, MOS Burger holds blood dona- community through cleaning activities and daily objectives. We hope all employ- tion activities with local residents. Many of our blood ees enter work with a clear service mindset and energetically greet fellow col- donors are first-time donors and therefore our nurses leagues. Since all of our employees practice this positivity at work, we hope they will accompany them throughout the process. In 2018, can take this home with them after work as well. Especially, as our front-desk we donated a total of 5,500 c.c. of blood. staffs that have direct contact with customers, we hope their positivity, allow our In May 2019, we will cooperate with the local bank to customers to have a great day as well. run the blood donation program and encourage more people to help those in need. We also hope community Figure 9-20. 9.2.1 Community Clean-Up members can be more aware of their own personal Event thank-you letter health and contribute to other’s health needs. On March, 12th, 1972, the first MOS Burger store was opened in Japan. Since establishment, the founder himself used to sweep the streets every day to wel- come customers with a clean environment. Through this inspiring story, MOS Burger celebrates every March 12th, to recognize the founder and birthday of this fast food chain. The belief behind this practice is that if you contribute to society, then profit can be made. Every March 12th, we encourage local residents and customers to join staff and sweep the streets just as our founder did many years ago.

Figure 9-21. Blood donations

Figure 9-17. Figure 9-18. Figure 9-23. Headquarters sweeping a ctivity Community clean-up Blood donation event

Figure 9-22. Blood donations

108 MOS CSR Report Figure 9-19. Inviting Customers to join our March 12th event Appendix 10 10 Appendix 10.1 Limited Assurance Report by Independent Accountants

MOS CSR Report 109 10 Appendix

10.2 GRI Standards Index 29 GRI 100 Universal Standards 27、29

GRI Standards Disclosure Pages /comments 22、31

GRI 102: General Disclosures 2016 Organizational profile 22、31 3、13 102-1 Name of the organization 22、31 35、36 102-2 Activities, brands, products, and services 27 3、13 102-3 Location of headquarters 27 13 102-4 Location of operations 27 3、23 102-5 Ownership and legal forms 29、71 13 102-6 Markets served 29 13、25、69、70 102-7 Scale of the organization 7 102-8 Information on employees and other workers 70 23、58 102-9 Supply chain 7 3、58 102-10 Significant changes to the organization and its supply chain N/A 31 102-11 Precautionary principles or approach 7 N/A 102-12 External initiatives 5、6 32 102-13 Membership of associations 7 Strategy

102-14 Statement from senior decision-maker 4

102-15 Key impacts, risks, and opportunities 18 Ethics and integrity

102-16 Values, principles, standards, and norms of behavior 22 22 102-17 Mechanisms for advice and concerns about ethics 3

Governance - 27 102-18 Governance structure N/A 27 102-19 Delegating authority N/A 27 102-20 Executive-level responsibility for economic, environmental, and social topics 3 7 102-21 Consulting stakeholders on economic, environmental, and social topics 3 27、31 102-22 Composition of the highest governance body and its committees 3 27 102-23 Chair of the highest governance body 3 27 102-24 Nominating and selecting the highest governance body 3 27 102-25 Conflicts of interest 110 27 102-26 Role of highest governance body in setting purpose, values, and strategy 109

110 MOS CSR Report Appendix 10 GRI 100 Universal Standards GRI Standards Disclosure Pages /comments

GRI 102: General Disclosures 2016 102-27 Collective knowledge of highest governance body 29 102-28 Evaluating the highest governance body’s performance 27、29

102-29 Identifying and managing economic, environmental, and social impacts 22、31 Organizational profile 102-30 Effectiveness of risk management processes 22、31 102-1 Name of the organization 3、13 102-31 Review of economic, environmental, and social topics 22、31 102-2 Activities, brands, products, and services 35、36 102-32 Highest governance body’s role in sustainability reporting 27 102-3 Location of headquarters 3、13 102-33 Communicating critical concerns 27 102-4 Location of operations 13 102-34 Nature and total number of critical concerns 27 102-5 Ownership and legal forms 3、23 102-35 Remuneration policies 29、71 102-6 Markets served 13 102-36 Process for determining remuneration 29 102-7 Scale of the organization 13、25、69、70 102-37 Stakeholders’ involvement in remuneration 7 102-8 Information on employees and other workers 70 Stakeholder engagement 102-9 Supply chain 23、58 102-40 List of stakeholder groups 7 102-10 Significant changes to the organization and its supply chain 3、58 102-41 Collective bargaining agreements N/A 102-11 Precautionary principles or approach 31 102-42 Identifying and selecting stakeholders 7 102-12 External initiatives N/A 102-43 Approach to stakeholder engagement 5、6 102-13 Membership of associations 32 102-44 Key topics and concerns raised 7 Strategy Reporting practice 102-14 Statement from senior decision-maker 4 102-45 Entities included in the consolidated financial statements Our Consolidated Subsidiaries： 102-15 Key impacts, risks, and opportunities 18 1.An-shin Food Services (Singapore) Pte. Ltd. Ethics and integrity 2.XiaMen An-Shin Food Management Co., Ltd. 102-16 Values, principles, standards, and norms of behavior 22 According to the consolidated financial statement, there is a focus on Taiwan. 102-17 Mechanisms for advice and concerns about ethics 22 102-46 Defining report content and topic Boundaries 3 Governance 102-47 List of material topics - 102-18 Governance structure 27 102-48 Restatements of information N/A 102-19 Delegating authority 27 102-49 Changes in reporting N/A 102-20 Executive-level responsibility for economic, environmental, and social topics 27 102-50 Reporting period 3 102-21 Consulting stakeholders on economic, environmental, and social topics 7 102-51 Date of most recent report 3 102-22 Composition of the highest governance body and its committees 27、31 102-52 Reporting cycle 3 102-23 Chair of the highest governance body 27 102-53 Contact point for questions regarding the report 3 102-24 Nominating and selecting the highest governance body 27 102-54 Claims of reporting in accordance with the GRI Standards 3 102-25 Conflicts of interest 27 102-55 GRI content index 110 102-26 Role of highest governance body in setting purpose, values, and strategy 27 102-56 External assurance 109

MOS CSR Report 111 10 Appendix

GRI 200 Topic-specific Standards GRI Standards Disclosure Pages /comments Economic Performance GRI 103 Management Approach 2016 103-1 Explanation of the material topic and its boundary 12

103-2 The management approach and its components 12

103-3 Evaluation of the management approach 12

201-1 Direct economic value generated and distributed 26

GRI 201: Economic Performance 2016 201-3 Defined benefit plan obligations and other retirement plans 71

201-4 Financial assistance received from government 32

Product and Service Innovation GRI 103 Management Approach 2016 103-1 Explanation of the material topic and its boundary 34

103-2 The management approach and its components 34

103-3 Evaluation of the management approach 34

Non-GRI Disclosure, not applicable Commodity R&D and Innovation 33-50 Customer Health and Safety GRI 103 Management Approach 2016 103-1 Explanation of the material topic and its boundary 52

103-2 The management approach and its components 52

103-3 Evaluation of the management approach 52

GRI 416: Customer Health and Safety 2016 416-1 Assessment of the health and safety impacts of product and service categories 64、65

416-2 Incidents of non-compliance concerning the health and safety impacts of products and services 63

Traceable Agricultural Products GRI 103 Management Approach 2016 103-1 Explanation of the material topic and its boundary 52

103-2 The management approach and its components 52

103-3 Evaluation of the management approach 52

Non-GRI Disclosure, not applicable Traceable agricultural products 51-66 GRI 202: Market Presence 2016 202-2 Proportion of senior management hired from the local community 69 GRI 203 Indirect Economic Impacts 2016 203-2 Significant indirect economic impacts 103-108 GRI 302: Energy 2016 302-1 Energy consumption within the organization 98

302-3 Energy intensity 98

302-4 Reduction of energy consumption 98

GRI 303: Water 2016 303-1 Water withdrawal by source 99

303-2 Water sources significantly affected by withdrawal of water 97，No usage of natural running water

112 MOS CSR Report Appendix 10

GRI 200 Topic-specific Standards GRI Standards Disclosure Pages /comments GRI 305: Emissions 2016 305-2 Energy indirect (Scope 2) GHG emissions 96

103-1 Explanation of the material topic and its boundary 305-4 GHG emissions intensity 96

103-2 The management approach and its components 305-5 Reduction of GHG emissions 96

103-3 Evaluation of the management approach GRI 306: Effluents and Waste 016 306-2 Waste by type and disposal method 97 ， 201-1 Direct economic value generated and distributed GRI 307: Environmental Compliance 2016 307-1 Non-compliance with environmental laws and regulations In 2018 we received 3 fines with a total of $NT 102,400 we will strengthen our management to prevent such cases 201-3 Defined benefit plan obligations and other retirement plans from repeating itself in the future

201-4 Financial assistance received from government GRI 308: Supplier Environmental 308-1 New suppliers that were screened using environmental criteria 58 Assessment 2016 308-2 Negative environmental impacts in the supply chain and actions taken 59

103-1 Explanation of the material topic and its boundary GRI 401: Employment 2016 401-1 New employee hires and employee turnover 70

103-2 The management approach and its components 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees 71

103-3 Evaluation of the management approach 401-3 Parental leave 75 GRI 403: Occupational Health and Safety 2016 403-2 Types of injury and rates of injury, occupational diseases, lost days, absenteeism, 89 Commodity R&D and Innovation and number of work-related fatalities 403-3 Workers with high incidence or high risk of diseases related to their occupation N/A

103-1 Explanation of the material topic and its boundary GRI 404 Training and Education 2016 404-1 Average hours of training per year per employee 83 103-2 The management approach and its components 404-3 Percentage of employees receiving regular 72 performance and career development reviews 103-3 Evaluation of the management approach GRI 405 Diversity and Equal Opportunity 2016 405-1 Diversity of governance bodies and employees 27、69、70 416-1 Assessment of the health and safety impacts of product and service categories GRI 419: Socioeconomic Compliance 2016 In 2018, we had 5 violations including tax, labour and fire 419-1 Non-compliance with laws and regulations in the social and economic area prevention totaling $NT 296,370，we will strengthen 416-2 Incidents of non-compliance concerning the health and safety impacts of products and services management to prevent these cases in the future GRI 414: Supplier Social Assessment 2016 414-1 New suppliers that were screened using social criteria 58

103-1 Explanation of the material topic and its boundary 414-2 Negative social impacts in the supply chain and actions taken 59

103-2 The management approach and its components GRI 417 Marketing and Labeling 2016 417-1 Requirements for product and service information and labeling 63

103-3 Evaluation of the management approach GRI 418 Customer Privacy 2016 418-1 Substantiated complaints concerning breaches of customer privacy and losses of customer data 46、48

Traceable agricultural products GRI 413: Local Communities 2016 413-1 Operations with local community engagement, impact assessments, and development 103-108 programs 202-2 Proportion of senior management hired from the local community FP1 Percentage of purchased volume from suppliers compliant with company’s sourcing policy. 61

203-2 Significant indirect economic impacts FP2 Percentage of purchased volume which is verified as being in accordance with credible interna- 61 tionally recognized responsible production standards, broken down by standard. 302-1 Energy consumption within the organization FP4 Nature, scope and effectiveness of any programs and practices that promote access to healthy 302-3 Energy intensity lifestyles; the prevention of chronic disease; access to healthy, nutritious and affordable food; and 105 improved welfare for communities in need. 302-4 Reduction of energy consumption FP5 Percentage of production volume manufactured in sites certified by an independent third party 53 according to internationally recognized food safety management system standards. 303-1 Water withdrawal by source FP8 Policies and practices on communication to consumers about ingredients and nutritional informa- 63 303-2 Water sources significantly affected by withdrawal of water tion beyond legal requirements.

MOS CSR Report 113 10 Appendix

10.3 UN Sustainable Development Goals (SDGs)

SDGs Pages /comments

Goal 1 End poverty in all its forms everywhere -

Goal 2 Zero Hunger 9、16、17、18、19、39、60、61、62

Goal 3 Ensure healthy lives and promote well-being for all, at all ages 8、9、87、88

Goal 4 Ensure healthy lives and promote well-being for all, at all ages 8、9、16、17、18、20、29、77、79、80

Goal 5 Ensure healthy lives and promote well-being for all, at all ages 8、10、69

Goal 6 Ensure access to water and sanitation for all -

Goal 7 Ensure access to affordable, reliable, sustainable, and modern energy for all -

Goal 8 Promote inclusive and sustainable economic growth, employment, and decent work for all 8、10、16、17、18、20、69、79

Goal 9 Build resilient infrastructure, promote sustainable ndustrialization and foster innovation 38

Goal 10 Reduce inequality within and among countries 69、89

Goal 11 Make cities inclusive, safe, resilient, and sustainable 71、99

Goal 12 Ensure sustainable consumption and production patterns 8、10、18、19、99、101、106

Goal 13 Take urgent action to combat climate change and its impacts 18、19

Goal 14 Conserve and sustainably use the oceans, seas, and marine resources -

Goal 15 8、10、61、99、102 Sustainably manage forests, combat desertification, and halt reverse land degradation, halt andbiodiversity loss

Goal 16 8、10、89 Promote just, peaceful and inclusive societies

Goal 17 Revitalize the global partnership for sustainable development 16、17、19

114 MOS CSR Report Appendix 10 10.4 Rules Governing the Preparation and Filing of Corporate Social Responsibility Reports by Listed Companies (hereinafter referred to as the“Rules”) Article 4, Paragraph 1 Emphasized Disclosures and Summary of Subject Information Assured

No. Subject Matter Information Applicable Criteria Rules Pages

The An-Shin Quality Assurance Division continues to conduct sampling inspections for MOS stores throughout the year (Note 15), and to inspect the 1 hygiene quality, water quality, conditioning equipment, surface application, temperature and each of the foods sold by each store. The methods of sampling inspection follow the Food Safety and Health Management Law and the Good Food Hygiene Standards, to carry out the sampling inspection Following the Food Safety and Health Management Law and of sanitary operations with reference to the food safety management system and the important control point procedures for hazard analysis. the Good Food Hygiene Standards, to carry out the sampling inspection of sanitary operations with reference to the food Sub- Except for the first quarter water quality inspection (including ice, filtered water, tap water), the total number of shops in the second quarter to the fourth paragraph 1, quarter that met expectations (Note 16) was 96.6%. The second qualification rate of re-examination reached 100%. safety management system and the important control point 65 item 1 (Note 15) Including the first season water quality sanitation inspection and the second to fourth season comprehensive sanitation sampling, except for procedures for hazard analysis. Percentage of Inspection Rate, some shops to arrange operations due to suspension of business, withdrawal or new store opening. and Reinspection Satisfaction Rate were calcaulated from (Note 16) The results of the random inspection are divided into 4 levels: perfect, excellent, good, and to be improved. The shop to be improved will also Q2-Q4. open a special visit report and strengthen the counseling until the re-examination.

In 2018, we purchased a total of 1,314,144 thousand NT HACCP certified (including BRC (Note7)) food material products, making up 75% of our total 2 purchases. A total of $1,337,166 thousand NT of ISO2200 certified products were purchased, making up 76% of our total purchase. In 2018, ISO22000 or HACCP (including BRC) certified Sub- purchase amount divided by total food purchases gave the (Note 7) BRC (British Retail Consortium) is an international trade association whose members include large-scale multinational retail chains, department paragraph 1, 52 & 61 percentage. stores, and other retailers. It’s standards are recognized by the Global Food Safety Initiative (GFSI), and cover HACCP system requirements, food safety item 1 and quality management systems, factory environmental standards, product controls and personnel management.

In 2018, we complied with "Act Governing Food Safety and Sanitation", "The Regulations on Good Hygiene Practice for Food, GHP", "Enforcement 3 In 2018 fines due to violations of " Act Governing Food Safety Sub- Rules of the Act Governing Food Safety and Sanitation", "Standards for Pesticide Residue Limits in Foods", and related food safety regulations and Sanitationand" and related enforcement rules and regula- paragraph 1, 63 and therefore had no violations or fines (Note 9). tions. Food Safety Regulations can be referenced in the following website: https://www.fda.gov.tw/TC/law.aspx?cid=62&pn=2 item 2

Sub- 4 In 2018, $57,490 thousand NT of FSC (trade marked) certified packaging, cups, paper bags,and product cases were purchased, making up 74% of our In 2018, FSC certified paper purchasing divided by total paper 52 & 61 packaging costs. purchase packaging gave the percentage. paragraph 1, item 3 5 To ensure the continuous improvement and effective implementation of the ISO 22000 related food safety management system, we passed the reassessment on March 9, 2018. The goal of ISO 22000 certification for Songjiang Store is to become a demonstration store for implementing ISO Sub- In 2018 ISO22000 and HACCP certified store’ssales revenues 22000 food safety management system. The rest of the stores are also based on the Songjiang store as a model standard, and follow ISO22000 food paragraph 1, divided by total company sales revenues gave the percentage. 53 safety management system and HACCP for management and product quality control. In 2018, the amount of goods sold by Songjiang Store accounted item 4 for 0.68% of the net revenue of the company's standalone statements.

New Supplier and Product Development Evaluation Process 6 We conduct evaluations according to the GHP through factory visits, including workplace, equipment, material management, quality controland staff In 2018 according to GHP regulations, we evaluate new management. Only suppliers with a B grade (possible grades of: A, B, C , or D grade), and above can produce our products. C level suppliers must Sub- undergo improvement plans and consulting in order for us to conduct business with them. B grade suppliers refer to companies with a score of 70% suppliers by: number of new suppliers, total purchases, and 58 satisfactory percentage. Same evaluations apply to both direct paragraph 1, or higher. If you recieve a D grade rating, offers will be rejected. In 2018, we had 17 new suppliers undergoing 33 on-site inspections, which made up item 5 25% of our total suppliers, with 100% satisfaction. In addition, 5 manufacturers, new non-direct trading suppliers and process manufacturers, and a and indirect suppliers. total of 5 factory production lines were evaluated with 100% satisfactory results.

Supplier Evaluation for Current Suppliers 7 "Annual Supplier Evaluate Plan"is schesuled in accordance with "Suppliers Management Procedues". Procurement Dept. has statistics on each In 2018 aspects assessed through current supplier evaluation, number of suppliers, frequency of evaluation, the percentage of supplier on transaction amount, cooperation, and conducts evaluations every year. Evaluation includes managment ability, product quality, service and Sub- delivery time. In 2018, there were 37 suppliers with 47 inspections on agriculture and meat&poultry, which made up 47% of our suppliers. Other purchase of food materials, produce, meat & poultry, the qualification rate, and the evaluation of other and indirect paragraph 1, 59 suppliers made up of 9 suppliers had a total of 12 inspections. As well, our 12 indirect suppliers underwent 12 evaluations. Currently, our evaluations item 5 have three levels A (70% and above, with priority for increased purchasing), B (60-70%, with acceptable purchasing), C (needing improvement, or suppliers, number of suppliers, frequency of evaluation, and cancel contracts.) the qualification rate.

Although An-Shin is not a manufacturer that is required to tracks the traceability system as defined in Article 9 of the Food Safety and Health Adminis- 8 tration Law, in order to strengthen food safety management, we voluntarily check the self-developed new ingredients (Note 10) (Note 11). In 2018, a total of 71 of food quality specifications were reviewed. According to its food quality specifications, 70 materials were traceable to third-tier suppliers, with a rate of 98.59% In 2018, according to our supplier contracts, we request ( ) Sub- Note 10 At present, the traceability of raw materials is graded according to the ingredients. Each ingredient has a quality specification. Each product specifications tracing back to primary sources 64 specification is aimed at exposing to third-tier information. For example, An-Shin's ingredients include tomatoes, meat, bread, etc. (first tier), which paragraph 1, (third-tier) the percentage of specifications of new matericals, item 6 will be traced back to the suppliers of meat (second tier) and upstream of suppliers (third tier). Some agricultural raw materials (such as rice and and the number of specifications of new materials. carrots) are difficult to trace back to the third stage because the suppliers are purchased from the fruit and vegetable collection market. (Note 11) The self-developed new food inspection department will review the first use of the cooperative development of the supplier, the re-sale of the old raw materials (food ingredients), the formula change, and the provision of the product quality specification, excluding the limited store sales, Non-MOS brand is sold and used in stores, as well as ingredients for fruits and vegetables.

MOS CSR Report 115 10 Appendix

No. Subject Matter Information Applicable Criteria Rules Pages

Of the 71 self-developed new ingredients in the 2018 new review, 61 items contain foreign raw materials (Note 12), and 61 certificates of raw materials 9 related to the raw materials have been completed, accounting for 100% of the items containing foreign raw materials. ( ) Sub- Note 12 In 2018, number of foreign new matericals, number of new paragraph 1, The relevant certificate of origin may include an import declaration, an import permit, an additive license or an inspection certificate/report. However, matericals origin certificate reviewed and the percentage. 64 item 6 in a small number of early-issued additive licenses (still valid), it is not mandatory to note the manufacturing country. However, we use on-site or field audits to strengthen specifications. Sub- In 2018, the purchase for TAP traceability-certified produce meat & poultry is 67,110 thousand NT, making up 56% of total purchasing for meat & In 2018, the total TAP certified purchase complied with Council paragraph 1, 52 & 61 10 poultry and produce. of Agriculture Traceability System. item 6

11 Microorganisms Chemicals Method Certified by TFDA (recently added in 2018) Rapid Bioassay for Pesticide Residues certified by the Council of Food：Microorganisms, E.Coli Groups, E.Coli Agriculture Certified Method by TAF Chemicals：organic phosphorus insecticide and Carbamate Food：Microorganisms, E.Coli Groups, E.Coli Antibiotic and Beta-adrenergic agonist Test for Meat, Eggs and Water：Microorganisms, E.Coli Groups Seafood In 2018, our food inspection followed TAF certified and Sub- internatinally recognized inspection methods (for example: Method in Accordance to (AOAC) Method Antibiotic Rapid Test using Premi® Test paragraph 1, 56 ： AOAC) to test our food products and other proactive inspectian Food Microorganisms, E.Coli Groups, E.Coli, and Staphylococcus Reagent Kit of Ractopamine, and Reagent Kit of Clenbuterol item 7 aureus,Salmonella, Listeria monocytogenes, Escherichia Coli O157:H7 Reagent Kit of Anitbodies items. (recently added in 2018) Chemical Wet and Dry Test (swab): microorganisms, and E.Coli Dry Test：with reference to Tokyo’s Department of Health Wet Test：3M e.Swab（BPW）Test

In 2018, the annual number of proactive tests for microorgan- 12 In 2018, the total inspections testing by the laboratory included products, drinks, ice, water, and materials (Note 3) was 2,537 total, with 2,294 isms and chemicals, were conducted with reference to satisfactory results and 90.4% satisfactory rate. These testings include microorganisms (Note 4) and chemicals. "Sanitary Standards for Raw and Cooked Mixed Foods", ( ) "Beverage Hygiene Standards", "Hyperfood Hygiene Sub- Note 3 Samples are from the Business Inspection Department, suppliers, and synchronous sampling with the Government Agency, and shopping paragraph 1, 56 centres. Results are compared. Standards, The allowable quantities of "Drinking Water Quality item 7 (Note 4) The regulations are based on the hygiene standards for cooked foods, ready-to-eat foods, food hygiene standards, frozen food hygiene Standards", "General Food Hygiene Standards", "Ice Hygiene standards, drinking water quality standards, general food hygiene standards, and ice hygiene standards. Standards", and the number of qualified and total qualified rates determined by the company's internal rapid detection method for pesticides and residues of fruits and vegetables.

13 The total expenses in 2018 at the food inspection centre were 7,164 thousand NT (Note 5), including third-party inspection fees the total was 2,274 In 2018 the Food Inspection Centre Expenditure divided by Sub- thousand NT. Total, making up 3.59% of operating profit, and 0.14% of sales revenue. total company operating profit gives the percentage. Also, the paragraph 1, 57 (Note 5) The Food Inspection Centre expenses include: third-party inspection fees, laboratory one-time-use equipment, equipment purchase and Food Inspection Centre Expenditure divided by total company adjustments, salary, rent, proficiency tests, training and maitenance of equipment, etc. sales revenue gives the other percentage. item 7

In 2018, our store manager’s food safety training hours, food Voluntary 14 The average training hours is 16.21 (including workplace health regulation, prevention of accidents was 7.48 hours). education hours, and external training hours divided by number assurance 52 & 53 of store managers gave the average. items

For the 2018 annual risk-hazard substances outsourcing test (Note 13) a total of 158, the number of qualified pieces 158, the pass rate of 100%. Voluntary ( In 2018 the number of inspection cases and our third party 65 15 Note 13) Risk-hazardous substances refer to the inspections in accordance with the hygiene standards items in the products announced by the inspection satisfaction rate gave the percentage. assurance Food and Drug Administration of the Ministry of Health and Welfare. items

16 As of December, 31st, 2018, we had a total of 265 stores, aside from special conditions, there is a monthly pesticide inspection conducted, with a In 2018 the monthly pesticide control sanitation was conducted Voluntary total of 2,726 times. (note: stores located in department stores, shopping centres, assurance 52 & 53 (Note 2) Pesticide counts are based on effectiveness. schools and local streets) items

Voluntary Until May of 2019 the number of total received self-inspection 17 A total of 162 self-inspection reports for 2018 annual regular food suppliers were obtained. assurance 65 reports gave the value. items

116 MOS CSR Report An-Shin Food Services Co.,Ltd. (MOS Burger)

Address：8F., No. 156-1, Songjiang Rd., Zhongshan Dist., Taipei, Zip 104, Taiwan More Information：Taiwan Stock Exchange Market Observation Post System：http://mops.twse.com.tw MOS Burger：http://www.mos.com.tw Telephone：(02)2567-5001