01. Letter to shareholders001
02. Corporate Profile002
1. Company and Group Profile002
2. Corporate History004
03. Corporate Governance007
1. Organization007
2. Information on Directors, Supervisors, and Management of the Company and Various
Departments and Branches008
3. Corporate Governance019
4. External audit fees 029
5. Changing of auditors029
6. If the Company's Chairman, CEO, or managers responsible for financial and accounting affairs
have held any position in the accounting firm or its affiliates during the past year, all relevant
information should be disclosed029
7. Net Change in shareholdings and in shares pledged by directors, supervisors,	management, and
shareholders holding more than a 10% share in the Company030
8. Information Disclosing the Relationship between any of the Company's Top Ten
Shareholders031
9. Company director, supervisor, and manager direct and ownership of shares in	affiliated
enterprises032
04. Capital Overview034
1. Capitalization034
2. Status of corporate bonds, preferred shares, GDR, employee stock option plans, mergers,
acquisitions, spin-offs, and employee restricted stock plans037
3. Status of capital utilization plan037
05. Operational Highlights038
1. Business Activities038
2. Market analysis and merchandise041
3. Personnel information043
4. Environmental protection expenditure044
5. Labor relations044 6. Important Contracts045
06. Financial Information046
1. Five-Year Financial Summary046
2. Five-Year Financial Analysis050
3. The most recent independent auditors' report053
4. Any cash flow difficulties during the most recent year and as of April 30, 2017 at the	Company
and its affiliates126

07. Review of Financial Conditions, Operating Results, and Risk Management127
1. Analysis of Financial Status127
2. Analysis of Operating Results127
3. Analysis of Cash Flow128
4. Major capital expenditures over the past fiscal year and their
impact128
5. Analysis of investments in affiliated enterprises over the past fiscal year128
6. Risk assessment130
7. Other important items132
08. Special Notes133
1. Information about Affiliated Enterprises133
2. Private Placement Securities in 2016 and as of the Date of this Annual Report141
3. Status of Common Shares Acquired, Disposed of, and Held by Subsidiaries141
4. Special Notes. 141
5. Any Events in the most recent year and as of the Date of this Annual Report that Had Significant
Impacts on Shareholders' Right or Security Prices as Stated in Item 2 Paragraph 2 of Article 36
of Securities and Exchange Law of Taiwan. 142

01. Letter to shareholders

Dear Shareholders,

Gourmet Master Co. Ltd. (The Company) reported consolidated sales for 2020 15% lower than that in 2019. The Company reported 2020 net profit higher than that in 2019, and 2020 EPS of NT\$5.64. By December 31, 2020, The Company accounted for more than 1,110 stores globally.

As of end 2020, The Company retained a solid debt-to-asset ratio, current (working capital) ratio, and strong operating cash inflow during 2020, indicating The Company's solid operational and financial status.

Looking back on 2020, The Company continued its disciplined execution across all regions. Total store counts in China remained above 570 by end 2020. In the US, The Company continued with its focus on organic long-term growth and totaled 66 stores in 2020.

In addition to store expansion, The Company keeps on enhancing its organization structure, store format, product mix, and marketing strategy, evidenced by successive recognitions won by its chefs, such as the crowning of Chen Li Che in Global Pastry Chefs Challenge in previous years, and the record-breaking high marks achieved in COFFEE REVIEW a few years ago, all proofs that The Company's committment to high quality product has never wavered since its founding more than ten years ago. Looking into 2021, The Company will focus on the innovation of new products and the ramp-up of new format stores, aiming at higher average store sales and profitability. In China, the store openings will be concentrated on the scalable markets for better brand awareness. US market becomes The Company's new growth engine, following the robust sales performance and the planned accelerating store openings in the years to come. The Company will at the same time have more locations in other markets outside of the Golden State and look forward to expanding in the world's largest consumer market.

Finally, thank you, our shareholders, for your trust and long-term supports during our journey transitioning into a multinational brand. We will do our best to exceed expectations as we enter the most exciting chapter for the year ahead.

Warm regard,

Wu Cheng-Hsueh, Chairman

02. Corporate Profile

1. Company and Group Profile

1-1. Date of Incorporation and Group Profile

Gourmet Master Co. Ltd. (The Company) is an investment holding company founded on September 26, 2008 under The Company act of Cayman Islands. The Company operates the leading cafe chain "85。 C" across various regions, with major product categories including coffee, cake, and bakery goods. Building on the successful positioning "Affordable Luxury", 85。 C chained stores rapidly expanded throughout Taiwan via both self-own and franchise models, after its first store opened in Yonghe, New Taipei City back in 2004. By 2020, The Company operated more than 400 stores in Taiwan, close to 600 or so stores in China, 66 stores in the US, 15 stores in Australia, and 9 stores in Hong Kong. In 2006, 85。 C started expanding outside Taiwan and opened the first store in Sidney, Australia. Before long, 85。 C penetrated into China market and opened stores in Shanghai in 2007. In September 2008, the first 85。 C store in the United States was launched in Irvine, southern California under the join-venture entity "Golden 85 Investments, LLC." Recent years saw The Company's fast expansion and marshalling into Northern California and Texas, among others.

85。 C group kicked off the restructuring in late 2008 to consolidate the operations in various regions into the Cayman Islands registered holding company, Gourmet Master Co, Ltd., for management efficiency and the progression to public offering in capital markets.

The Company strives to provide the finest quality products in extensive selections in order to fulfill its commitment of "Affordable Luxury", by working with five-star hotel chefs and employing only the top-notch ingredients. After those exciting years, 85。 C has brought its classic combination of "coffee, cakes, and bakery goods" into bustling urban areas and many smaller towns throughout the world. With localized attentiveness and global management, 85。 C has recruited more than 3,500 master bakers worldwide and expanded from Taiwan to China, the United States, Australia, and Hong Kong. With a brand-new international look, 85。 C is sharing its exquisite foods and beverage with the world.

1-2. Group Structure

Note: Prime Scope Trading Limited and Shanghai Gourmet Master Food & Beverage Ltd. invests in 25% and 75%, respectively, of 85 Degree (Jiangsu) Food Ltd.; He-Shia Food & Beverage Ltd. and Shanghai Gourmet Master Food & Beverage Ltd. invests in 43% and 57%, respectively, of Wuhan Jing Way Food & Beverage Ltd.; Prime Scope Trading Limited and He-Shia Food & Beverage Ltd. invests in 25% and 75%, respectively, of Beijing 85 Food & Beverage Ltd.; Prime Scope Trading Limited and He-Shia Food & Beverage Ltd. invests in 61.5% and 38.5%, respectively, of Sheng-Pin (Beijing) Food Ltd. The group invests in 100% of 85 Degree (Jiangsu) Food Ltd., Wuhan Jing Way Food & Beverage Ltd., Beijing 85 Food & Beverage Ltd., and Sheng-Pin (Beijing) Food Ltd.

1-3. Risk assessment: Please refer to Chapter 07.

2. Corporate History

T ime	Event
Feb. 2005	Established Comestibles Master Co., Ltd.
Dec.	Established R&D center and central kitchen in Taichung, Taiwan.
Sep. 2006	Opened in Sydney the 1st 85C store in Australia.
Dec.	Taiwan central kitchen certified by HACCP and ISO22000.
May 2007	Ranked the 11th biggest tourism & dining company in CommonWealth Magazine's annual survey.
May	Invested in 85 Degrees Café International Pty. Ltd. in Australia.
Sep.	Invested in Golden 85 Investments, Inc. in the U.S.
Dec.	Taiwan store count reached 300.
Dec.	Opened in Shanghai the 1st 85C store in China.
Aug. 2008	Established central kitchen in Australia.
Sep.	Opened in Irvine, California the 1st 85C store in the U.S.
Sep.	Established Gourmet Master Co. Ltd. and started group reorganization.
May 2009	Ranked the 6th biggest tourism & dining company in CommonWealth Magazine's annual survey.
Dec.	Awarded by Ministry of Economic Affairs Outstanding Brand in Service Industry.
Dec.	Ranked the Best Coffee Chain by Management Magazine in 2010.
Mar. 2010	China store count reached 100.
Nov.	IPO in Taiwan Stock Exchange.
May 2011	Ranked the biggest tourism & dining company in CommonWealth Magazine's annual survey.
Jun.	China store count reached 200.
Aug.	Awarded by Ministry of Economic Affairs Top 100 Taiwan Brand in 2011.
Aug.	Opened in Hacienda Heights, California the 2nd 85C store in the U.S.
Sep.	Ranked the 11th Best Taiwan International Brand in Ministry of Economic Affairs INTERBRAND Awards.
Oct.	Provided catering service in Taiwan's 100th Anniversary for the Ministry of Foreign Affairs.
Nov.	Established Profit Sky International Ltd via joint venture

T ime	Event
	with Café de Coral, a Hong Kong listed company.
Jun. 2012	China store count reached 300.
Jul.	Opened in Kowloon the 1st 85C store in Hong Kong.
Oct.	Invested in The Hot Pot Food and Beverage Management Co., Ltd.
Dec.	Opened in West Covina, California the 3rd 85C store in the U.S.
May 2013	Awarded Gold and Silver Medal at Hong Kong International Culinary Classic.
Jul.	Opened in Chino Hill, California the 4th 85C store in the U.S.
Sep.	China store count reached 400.
Sep.	Established central kitchen in Brea, California.
Sep.	Voted by Foursquare users as one of the 10 most popular coffee shops in the U.S.
Oct.	Open in Taichung, Taiwan the first 2nd Generation Store.
Nov.	Opened in Newark and Gardena, California the 5th and 6th 85C stores in the U.S.
Nov.	Awarded for the 3rd time as one of the 20 Best Taiwan International Brands in Ministry of Economic Affairs INTERBRAND Awards.
Dec.	Opened in Garden Grove, California the 7th 85C store in the U.S.
Jan. 2014	Opened China's first 2nd Generation Store in Shanghai.
Apr.	Opened in Torrance and San Jose, California the 10th and 11th 85C stores in the U.S.
Jun.	Opened in Fullerton, California the 12th 85C store in the U.S.
Jul.	85C bakery chef, Chen Li Che won Global Pastry Chefs Challenge.
Jul.	Rolled out Alibaba's Alipay service in all of 85C China stores.
Nov.	Opened in San Diego, California the 14th 85C store in the U.S.
Dec.	Worldwide store count reached 850.
Dec.	Worked with Alibaba and successfully created Double 12 shopping frenzy in China
Dec.	85C in-house roast achieved record-breaking high marks in COFFEE REVIEW

T ime	Event
Jan. 2015	Sponsored Taichung City promoting reading culture.
Jan.	Won championships in bakery contest host by California Milk Advisory Board and California Raisin Marketing Board.
Feb.	Senior manager became Certified Golden Cup Technician, recognized by Specialty Coffee Association of America.
Aug.	Dominant mobile messaging app in Taiwan, LINE, proposed that 85C become partner in its venture into mobile payment and e-coupon service.
Oct.	Established central kitchen in Kunshan, Jiangsu, China.
Oct.	China Online Membership Program kicked off in late October.
Nov.	Taiwan remodeled stores count hit 100.
Nov.	Awarded for the 5th time as one of the 20 Best Taiwan International Brands in Ministry of Economic Affairs INTERBRAND Awards.
Dec.	IR Magazine named Gourmet Master the Winner in its Greater China 2015 Awards, Consumer Staples.
Dec.	During China's largest shopping phenomenon, Double 12 Festive, 85C was the highest-grossing bakery chain.
Dec.	China store count reached 500.
Aug. 2016	Opened in Carrollton, Texas the 1st U.S. 85C store outside of California
Nov.	Awarded for the 6th time as one of the 20 Best Taiwan International Brands in Ministry of Economic Affairs INTERBRAND Awards.
Feb. 2018	The dominant messaging App in Taiwan, LINE, announced 「coffee + cake」 that 85C combination topped the bestseller chart,
Nov.	Awarded for the 7th time as one of the 20 Best Taiwan International Brands in Ministry of Economic Affairs INTERBRAND Awards.
Nov. 2019	U.S. 85C introduced Loyalty App.
Nov. 2020	Awarded for the 9th time as one of the 20 Best Taiwan International Brands in Ministry of Economic Affairs INTERBRAND Awards.

03. Corporate Governance

1. Organization
1-1. Organization Chart

1-2. Responsibilities of Key Functions

Function	Description
Product Development	Product development, brand strategy building and execution, to assist operation and goal setting.
Regional Business	Decide on best business model in accordance with general product and operation strategy, to satisfy customers and achieve target.
Finance and Accounting	Treasury and bookkeeping, maintain financial stability, elevate decision-making quality via accurate data and information.
Internal Audit	Complete scheme of internal auditing and internal control, regular improvement in both regards, minimize operation risks and errors.

Information on Directors, and Management of the Company and Various Departments and Branches 2-1. Directors

Executives or Directors who are spouses or within two degrees	Relation	Brother-in-law	-	-	-	Brother-in-law	-	-
of kinship	Name	Zhang Wen Ji	-	-	-	Cheng Hsueh Wu	-	-
	Title	Director	-	-	-	Chairman	-	-
		CEO	-	Master Co., Ltd. Vice President Comestibles	-	Master Co., Ltd. Vice President Comestibles	-	-
Experience (Education) Other Position		University of Science Mei Wei Master Co., Comestibles Master Degree In Business Honorary Masters National Taiwan and Technology, Administration Chairman Chairman Co., Ltd. Ltd.	-	Comestibles Master Co., Ltd. Head of IT	-	Master in E-Commerce Middlesex University University of Surrey Comestibles Master Hot Pizza Co., Ltd. Management Master in manager manager	Supervisor, Gourmet Master Co. Ltd.	Harvard University PhD, Economics,
		-	-	-	-	-	-	-
Shareholding Arrangement by Nominee	Shares %	-	-	-	-	-	-	-
	%	5.48%	-	0.00%	-	0.00%	-	-
Spouse & Minor Shareholding	Shares	9,859,575	-	5,060	-	154	-	-
	%	14.50%	8.28%	-	22.95%	0.13%	-	-
Current Shareholding	Shares	26,105,400	14,910,723	-	41,307,045	240,083	-	-
Shareholding when Elected	%	14.50%	8.28%	-	22.95%	0.09%	-	-
	Shares	26,105,400	14,910,723	-	41,307,045	160,083	-	-
(Years) Term		3	3	3	3	3	3	3
Date Elected
Date First Elected		2008.09.26 2019.06.14	2010.01.16 2019.06.14	2018.03.08 2019.06.14	2010.01.16 2019.06.14	2010.01.16 2019.06.14	2016.06.03 2019.06.14	2019.06.14 2019.06.14
Name		Wu Cheng Hsueh	Yield Growth Henderson I Limited	Representative: Juristic Person Kuo Ming Hua	Emerging Markets Infinity Limited	Representative: Juristic Person Zhang Ji Wen	Li Ding Zhong	Chi Zi Yi
Nationality		Taiwan	Samoa	Taiwan	Samoa	Taiwan	Taiwan	Taiwan
Title		Chairman	Director			Director	Director	Independent director

Executives or Directors who are spouses or within two degrees	Relation	-	-
of kinship	Name	-	-
	Title	-	-
		-	-
Experience (Education) Other Position		PhD, Economics, Ohio State University	Senior Vice President, Yuanta Securities
Shareholding Arrangement by Nominee		-	-
	Shares %	-	-
	%	-	-
Spouse & Minor Shareholding	Shares	-	-
	%	-	-
Current Shareholding	Shares	-	-
Shareholding when Elected	%	-	-
	Shares	-	-
(Years) Term		3	3
Date Elected		2016.06.03 2019.06.14	2016.06.03 2019.06.14
Date First Elected
Name		Yu Ming Te	Lee Su Ying
Nationality		Taiwan	Taiwan
Title		Independent director	Independent director

Major shareholders of the institutional shareholders

April 30, 2021

Major shareholders of the institutional shareholders	5-Star Industrial Limited	5-Star Industrial Limited
Name of institutional shareholders	Infinity Emerging Markets Limited	Henderson I Yield Growth Limited

Major shareholders of the major shareholders that are juridical persons

April 30, 2021

Name of juridical persons	juridical persons Major shareholders of the
5-Star Industrial Limited	Henderson Growth Fund

Independence and Professional Expertise of Board Members

														April 30, 2021
		Meet One of the Following Professional
		Qualification Requirements, Together with at Least						Independence Criteria (Note)
		Five Years Work Experience
	An Instructor	A Judge, Public	Have Work
	or Higher	Prosecutor,	Experience
	Position in a	Attorney, Certified	in the Areas
	Department of	Public Accountant,	of											Number of
	Commerce,	or Other	Commerce,											Other Public
Criteria	Law, Finance,	Professional or	Law,											Companies in
	Accounting, or	Technical Specialist	Finance, or											Which the
	Other	Who has Passed a	Accounting,											Individual is
Name	Academic	National	or											Concurrently
	Department	Examination and	Otherwise	1	2	3	4	5	6	7	8	9	10	Serving as an
	Related to the Business Needs	been Awarded a Certificate in a	Necessary for the											Independent
	of the	Profession Necessary	Business of											Director
	Company in a	for the Business of	the
	Public or	the Company	Company
	Private Junior
	College,
	College or
	University
Wu Cheng														0
Hsueh
Henderson I
Yield Growth														0
Limited:
Kuo Ming Hua
Infinity Emerging
Markets														0
Limited:
Zhang Ji Wen
Li Ding Zhong														0
Chi Zi Yi														2
Yu Ming Te														1
Lee Su Ying														3

Note: Please tick the corresponding boxes if directors have been any of the following during the two years prior to being elected or during the term of office.

Not an employee of the Company or any of its affiliates.
1. Not a director or supervisor of the Company or any of its affiliates. The same does not apply, however, in cases where the person is an independent director of the Company, its parent company, or any subsidiary in which the Company holds, directly or indirectly, more than 50% of the voting shares.
1. Not a natural-person shareholder who holds shares, together with those held by the person's spouse, minor children, or held by the person under others' names, in an aggregate amount of 1% or more of the total number of outstanding shares of the Company or ranking in the top 10 in holdings.
1. Not a spouse, relative within the second degree of kinship, or lineal relative within the fifth degree of kinship, of any of the persons in the preceding three subparagraphs.
1. Not a director, supervisor, or employee of a corporate shareholder that directly holds 5% or more of the total number of outstanding shares of the Company or that holds shares ranking in the top five in holdings.
1. Not a director, supervisor, officer, or shareholder holding 5% or more of the share, of a specified company or institution that has a financial or business relationship with the Company.
1. Not a professional individual who, or an owner, partner, director, supervisor, or officer of a sole proprietorship, partnership, company, or institution that, provides commercial, legal, financial, accounting services or consultation to the Company or to any affiliate of the Company, or a spouse thereof.
1. Not having a marital relationship, or a relative within the second degree of kinship to any other director of the Company.
1. Not been a person of any conditions defined in Article 30 of the Company Law.
Not a governmental, juridical person or its representative as defined in Article 27 of the Company Law.

2-2. Information on the CEO, senior vice presidents, vice presidents, and division heads

April 30, 2021

Nationality	Name	Date Effective	Shareholding		Spouse & Minor Shareholding		Shareholding by Arrangement Nominee		Experience(Education)	Other Position		Managers who are Spouses or Within Two Degrees of Kinship
			Shares	%	Shares	%	Shares	%			Title	Name	Relation
									Comestibles Master Co., Ltd.
									Chairman
	Wu								Mei Wei Master Co., Ltd.
Taiwan	Cheng	2015.04.01	26,105,400	14.50%	9,859,575	5.48%	-	-`	Chairman	Chairman	-	-	-
	Hsueh								National Taiwan University of Science and
									Technology, Honorary Masters Degree In Business
									Administration
									Grand Hyatt, Chef	Perfect 85 Degrees C, Inc. Director
Taiwan	Yin Zi Li	2010.01.16	-	-	-	-	-	-	Los Angeles RJ Patisserie, Advisor	Golden 85 Investments, LLC	-	-	-
									San Francisco SK, Advisor	Director

Taiwan	Chris Lee	2016.11.09	-	-	-	-	-	-	Merrill Lynch	-	-	-	-

									National Cheng Kung University, Accounting Dept.
									National Chung Hsing University, Business
Taiwan	Zhang Ci	2011.01.01	5,009	0.001%	1,214	0.001%	-	-	Administration, Master	-	-	-	-
	Wen								Deloitte Audit Firm
									Faraday Technology Corp.

2-3. Remuneration paid to Company directors, supervisors, CEO, and senior vice presidents over the past year a. Remuneration of Directors

December 31, 2020; Unit: NT\$1,000 / 1,000 shares

	The Company's subsidiary from an invested company other than		Compensation											-
			companies All consolidated											1.66%
	Summation of A,B,C, D, E, F and G as a % of After-Tax Income		The Company											0.82%
	Received through Restricte Employe d Stock Shares Awards New e (I)		companies All consolidated The Company											-
	Received through Employe e Stock Shares Option the Plan (H)		companies All consolidated The Company											-
		All consolidated companies	Stock											-
Compensation to Directors Also Serving as Company Employees	Earnings Distribution (G)		Cash											-
		The Company	Stock											-
			Cash											-
	Pension (F)		companies All consolidated											196
			The Company											-
			companies All consolidated											13,439
	Salary, Bonuses, and Allowances (E)		The Company											5,140
	Summation of A, B, C, and D as a % of After-Tax Income		companies All consolidated											0.%
			The Company											0.%
			companies All consolidated											3,240
	Business Expenses (D)		The Company											3,240
			companies All consolidated											-
Total Remuneration	Distribution Earnings (C)		The Company											-
			companies All consolidated											-
	Pension (B)		The Company											-
	Remuneration (A)		companies All consolidated											-
			The Company											-
	Name			Wu Cheng Hsueh	Henderson I	Yield Growth	Limited	juristic person	representative:	Kuo Ming Hua	Infinity	Emerging	Markets	Limited	juristic person	representative:	Zhang Ji Wen	Li Ding Zhong	Chi Zi Yi	Yu Ming Te	Lee Su Ying
	Title			Chairman				Director						Director				Director	Independent Director	Independent Director	Independent Director

December 31, 2020

		Name
Compensation Level	Total of (A+B+C+D)		Total of (A+B+C+D+E+F+G)
	The Company	All consolidated companies	The Company	All consolidated companies
None	Wu Cheng Hsueh, Kuo Ming Hua, Zhang Ji Wen	Wu Cheng Hsueh, Kuo Ming Hua, Zhang Ji Wen	Wu Cheng Hsueh, Kuo Ming Hua, Zhang Ji Wen	-
Under NT\$ 2,000,000	Zhong, Chi Zi Yi, Yu Ming Te, Hendersion I Yield Growth Limited, Infinity Emerging Markets Limted, Li Ding Lee Su Ying	Zhong, Chi Zi Yi, Yu Ming Te, Hendersion I Yield Growth Limited, Infinity Emerging Markets Limted, Li Ding Lee Su Ying	Markets Limted, Chi Zi Yi, Yu Hendersion I Yield Growth Limited, Infinity Emerging Ming Te, Lee Su Ying	, Chi Zi Yi, Yu Ming Te, Hendersion I Yield Growth Limited, Infinity Emerging Markets Limted, Zhang Ji Lee Su Ying Wen
NT\$5,000,000 NT\$2,000,000 ~	-	-	-	Kuo Ming Wu Cheng Hsueh, Hua
NT\$10,000,000 NT\$5,000,000 ~	-	-	Li Ding Zhong	Li Ding Zhong
NT\$15,000,000 NT\$10,000,000 ~	-	-	-
NT\$30,000,000 NT\$15,000,000 ~	-	-	-	-
NT\$50,000,000 ~ NT\$30,000,000	-	-	-	-
NT\$100,000,000 NT\$50,000,000 ~	-	-	-	-
Over NT\$100,000,000	-	-	-	-
Total	9	9	9	9

b. Remuneration of Supervisors

from an Compensation	invested company other	than The Company's subsidiary	-
Summation of A, B, and C as a %		All consolidated companies	-
	of After-Tax Income	Company The	-
	(C)	consolidated companies All	-
	Business Expenses	Company The	-
Total Remuneration	(B)	consolidated companies All	-
	Earnings Distribution	Company The	-
	(A) Remuneration	All consolidated companies	-
		Company The	-
		Name	-
		Title	-

December 31, 2020

	Name
Compensation Level	Total of (A+B+C)
	The Company	All consolidated companies
Under NT\$ 2,000,000	-	-
NT\$5,000,000 NT\$2,000,000 ~	-	-
NT\$10,000,000 NT\$5,000,000 ~	-	-
NT\$15,000,000 NT\$10,000,000 ~	-	-
NT\$30,000,000 NT\$15,000,000 ~	-	-
NT\$50,000,000 ~ NT\$30,000,000	-	-
NT\$100,000,000 NT\$50,000,000 ~	-	-
Over NT\$100,000,000	-	-
Total	0	0

Compensation other than company invested from an	The	Company's subsidiary					-
Received through Restricted Stock New Shares Employee Awards		All consolidated companies					-
		The Company					-
December 31, 2020; Unit: NT\$1,000 / 1,000 shares Shares Received through the Employee Stock Option Plan		All consolidated companies					-
		The Company					-
Summation of A, B, C, and D as a % of After-Tax Income		All consolidated companies					1.03%
		The Company					-
Bonus	All consolidated companies	Stock					-
(D)		Cash					-
Profit Sharing-Employee	The Company	Stock					-
		Cash					-
Bonuses and Allowances (C)	All	consolidated	companies				-
		The Company					-
Pension (B)	All	consolidated	companies				144
		The Company			-
	All	consolidated	companies		4,255
Remuneration (A)		The Company					-
Name				Wu	Cheng	Hsueh		Yin Zi Li
Title					CEO		Head of	Overseas

c. Remuneration of CEO and Senior Vice Presidents

Business

December 31, 2020

Compensation Level	Name
	The Company	All consolidated companies
None	Wu Cheng Hsueh, Yin Zi Li	-
Under NT\$ 2,000,000	-	Yin Zi Li
NT\$5,000,000 NT\$2,000,000 ~	-	Wu Cheng Hsueh
NT\$10,000,000 NT\$5,000,000 ~	-	-
NT\$15,000,000 NT\$10,000,000 ~	-	-
NT\$30,000,000 NT\$15,000,000 ~	-	-
NT\$50,000,000 ~ NT\$30,000,000	-	-
NT\$100,000,000 NT\$50,000,000 ~	-	-
Over NT\$100,000,000	-	-
Total	2	2

2-4.	Vice Presidents in the Senior and Comparison of Remuneration for Directors, Supervisors, CEO
	Most Recent Two Fiscal Years and Remuneration Policy for Directors, Supervisors, Presidents and
Vice Presidents

a. The ratio of total remuneration paid by The Company and by all companies included in the consolidated financial statements for the most recent two fiscal years to directors, supervisors, CEO and senior vice presidents of the Company, to the net income.

					Decemb er 31, 2020
	2020	ratio of total remuneration paid to	2019	ratio of total remuneration paid to
		directors, supervisors, presidents and vice		directors, supervisors, presidents and vice
	presidents to net income (%)		presidents to net income (%)		Notes
	The Company	All consolidated companies	The Company	All consolidated companies
Directors	0.89	2.26	0.50	1.17	The standards of remuneration for directors and
Sup er visors	-	-	-	-	supervisors are clearly specified in The Company's Article of
CEO and Sen ior					Incorporation. Director and supervisors remuneration are
V ice Presid ents	0.00	1.03	0.00	0.54	mainly for other positions in The Company.

The Company went through restructuring end-2008 for Taiwan IPO, and systemized above remuneration scheme to enhance corporate governance.

b. The policies, standards, and portfolios for the payment of remuneration, the procedures for determining remuneration, and the correlation with business performance.
(1) Remuneration paid to the directors is set according to their individual performance and their contribution to The Company's operations. (2) Remuneration paid to the CEO and senior vice presidents is set according to their individual performance and their contribution to The
Company's operations. Said remuneration shall also conform to remuneration regulations and take into consideration typical remuneration levels paid by other companies.

3. Corporate Governance

3-1. Board of Directors

As of publication of the Annual Report, there had been a total of 6 meetings of the Board of Directors over the past fiscal year. Director and supervisor attendance is detailed below:

					April 30, 2020
Title	Name	Attendance in Person	By Proxy	Attendance rate (%)	Notes
Chairman	Wu Cheng Hsueh	6	0	100%	Reelected on Jun. 14, 2019
Director	Henderson I Yield Growth Limited (Representative: Kuo Ming Hua)	6	0	100%	Reelected on Jun. 14, 2019
Director	Infinity Emerging Markets Limited (Representative: Zhang Ji Wen)	6	0	100%	Reelected on Jun. 14, 2019
Director	Li Ding Zhong	6	0	100%	Reelected on Jun. 14, 2019
Independent Director	Chi Zi Yi	4	0	100%	Elected on Jun. 14, 2019
Independent Director	Yu Ming Te	6	0	100%	Reelected on Jun. 14, 2019
Independent Director	Lee Su Ying	6	0	100%	Reelected on Jun. 14, 2019

Other mentionable items:

If there are the circumstances referred to in Article 14-3 of Securities and Exchange Act and resolutions of the directors' meetings objected to by Independent Directors or subject to qualified opinion and recorded or declared in writing, the dates of meetings, sessions, contents of motions, all independents' opinion and the Company's response to independent directors' opinion should be specified: None
If there is Directors' avoidance of motions in conflict of interest, the Directors' names, contents of motions, causes for avoidance and voting should be specified: None
Measures taken to strengthen the functionality of the Board:

The Board of Directors has established a Compensation Committee to assist the Board in carrying out its various duties on 2012/1/1. The Company has Rules And Procedures Of Board Of Directors Meetings and reports directors' attendance.

The Company has elected 3 independent directors following Article 14-2 of Securities and Exchange Act and set up Audit Committee.

To enhance corporate governance, the Company fully discloses information on its operation and finance.

Note: Personal attendance rate (%) is calculated based on the actual number of meetings each director or supervisor personally attended and the number of meetings held during their term.

3-2. Attendance of Independent Direcotrs for Audit Committee Meetings

As of publication of the Annual Report, there had been a total of 4 meetings of the Audit Committee over the past fiscal year. Independent Direcotrs attendance is detailed below:

				April 30, 2020
Title	Name	Attendance in Person	Attendance rate (%)	Notes
Independent Director	Chi Zi Yi	4	100%	Elected on Jun. 14, 2019
Independent Director	Yu Ming Te	4	100%	Reelected on Jun. 14, 2019
Independent Director	Lee Su Ying	4	100%	Reelected on Jun. 14, 2019

Other mentionable items:

A. Composition and responsibilities of Company independent auditors:

Communication between independent auditors and the Company's employees and shareholders: Independent auditors are able to communicate with employees and shareholders through a variety of reports and communication channels.
Communication between independent auditors and internal audit managers and external auditors: The periodic reports compiled by the internal auditors keep the independent auditors informed of The Company's operational and auditing status. Independent auditors can also communicate with external auditors to keep tabs on the Company's financial and operational status.

B. When independent auditors address the Board to express their opinion on a certain issue, the Board Meeting date, session, content of the resolution, result of the Board vote, and the Company's response to supervisor's opinion shall be properly recorded. Communications between the independent directors, the Company's Chief Internal Auditor and CPAs : None.

Note: Personal attendance rate (%) is calculated based on the actual number of meetings each director personally attended and the number of meetings held during their term.

3-3. Corporate Governance Execution Status and Deviations from "Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Companies"

Item		Implementation Status	"Corporate Governance Best-Practice Principles for TWSE/GTSM Listed Deviations from
	Yes No	Description	Companies" and reasons
Governance Best-Practice Principles based on "Corporate 1. Does the company establish and disclose the Corporate Listed Governance Best-Practice Principles for TWSE Companies"?	V	on TWSE website. them disclosed and The Company has established the principles	None
(1) Does the company establish an internal operating procedure to deal with shareholders' suggestions, doubts, disputes and litigations, and implement based on the procedure? 2. Shareholding structure & shareholders' rights	V	(1) In addition to authorizing a share transfer agent to handle related affairs, the Company has also established a comprehensive spokesperson system and investor relations team to deal with shareholder issues.	None
(3) Does the company establish and execute the risk management (2) Does the company possess the list of its major shareholders as (4) Does the company establish internal rules against insiders and firewall system within its conglomerate structure? shares? trading with undisclosed information? well as the ultimate owners of those	V V V	(2) Through the assistance of the share transfer agent, the Company remains fully aware of its major shareholders (3) Rules are made to strictly regulate the activities between the Company and its affiliates, following government internal rules against insiders trading with undisclosed information. the Company management. changes in shareholding by directors or regulations and the Company's internal rules. (4) The Company has established and regularly files any
(1) Does the Board develop and implement a diversified policy for 3. Composition and Responsibilities of the Board of Directors the composition of its members?	V	for the composition of its members. a diversified principle (1) The Board has	None
Committee and the (4) Does the company regularly evaluate the independence of (2) Does the company voluntarily establish other functional (3) Does the company establish a standard to measure the performance of the Board, and implement it annually? Compensation committees in addition to the Audit Committee? CPAs?	V V V	to assist establish other functional committees in and uses Compensation Committee addition to the Compensation Committee and the Audit Committee. review in the future the necessity to measures the performance of the Board annually regularly evaluate the independence of CPAs. voluntarily (2) The Company will (3) The Company (4) The Company the review.
or authorized evaluation, the major deficiencies, suggestions, please describe the opinion from the Board, the result of self professional organization to conduct such evaluation? If so, 4. Has the company implemented a self-evaluation report on corporate governance or has it authorized any other or improvements.	V	regularly evaluates its corporate governance practices. The Company	None
5. Does the company establish a communication channel and build a designated section on its website for stakeholders, as well as handle all the issues they care for in terms of corporate social responsibilities?	V	(2) The Company follows TWSE rules by regularly announcing financial statements, and voluntarily announces (1) The Company has designated appropriate departments, such as Investor Relations, spokespersons, etc., to communication with customers. enable them to express their views on The communicate with stakeholders. Furthermore, the contact information providing access to the Company's encourages its employees to communicate directly with human resources department. In Corporate Social Report to respond to stakeholders on an yearly basis. monthly sales, so that investors, banks, and creditors understands its operation. spokesperson and relevant departments is available on the Company's website. to centralize has been set up to Services direct line addition, a employee direct line and mailbox (4) The Company established 0800 Customer (5) The Company discloses Company's operations. (3) The Company	None
6. Does the company appoint a professional shareholder service agency to deal with shareholder affairs?	V	a professional shareholder service agency to deal with shareholder affairs. appoints The Company	None

		Implementation Status	"Corporate Governance Best-Practice Principles Deviations from
Item	Yes No	Description	for TWSE/GTSM Listed Companies" and reasons
disclosure, creating a spokesman system, webcasting investor (1) Does the company have a corporate website to disclose designated people to handle information collection and (2) Does the company have other information disclosure channels (e.g. building an English website, appointing both financial standings and the status of corporate 7. Information Disclosure conferences)? governance?	V V	and the status of corporate (2) The Company has other information disclosure channels, such as appointing designated people to handle information collection and disclosure, creating a spokesman system, uploading investor conferences (1) The Company has a corporate website to disclose both financial standings presentation material onto corporate website. governance	None
8. Is there any other important information to facilitate a better stakeholders, directors' and supervisors' training records, the relations policies, and purchasing insurance for directors and the corporate governance practices (e.g., including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of evaluation measures, the implementation of customer implementation of risk management policies and risk understanding of supervisors)?	V	great emphasis on customer satisfaction, aiming to add value has professional (1) Employee rights and care: The Company holds itself responsible for having a proper work environment, and (2) Investor: The Company has in place spokesperson and investor relation function to communicate with shareholders. It also joins regularly investment conferences to enhance communication with institutional (4) The Company encourages its directors, CEO, senior vice presidents, finance, accounting, and internal auditing Through accounting and management system and auditing, risks are identified. Each department has risk measurement process to prevent risks. Operation level risks are controlled via internal auditing and various Corporate Social Report to respond to stakeholders interests. Other important information to facilitate a better understanding of corporate governance practices include: million for directors and important employees a. Outside factors: inventory source, competitors action, economic environment, and regulations b. Internal factors: human resource changes, financial activities, employee relations, IT systems internal audit function to ensure high-quality product and service; too team to make real-time response to customer needs. employees to take continuous training in related professional fields. The factors below are taken into account in risk management: 5 The Company purchased insurance policy of USD Customer policy execution: The Company puts The Company discloses meetings, to ensure that targets are achieved. take care of employee rights. has Stakeholder interests: for customers. Also customer service investors. (3) (5) (6) (7)	None
9. Any remedy required after the most recent survey done by TWSE: Introduced and put into practice accordingly.

3-4. Composition, responsibilities, and operation of the Compensation Committee a. Compensation Committee Members

			Has over 5 years of work experience and the below professional qualifications				Has over 5 years of work experience and the below professional qualifications
Position	Qualifi cation Name	Holds the position of lecturer (or higher) at public or private college or university in business, law, finance, accounting or company operations	Holds a license, obtained through national examination, for the position of judge, district attorney, lawyer, accountant, or similar	Work experience in business, law, finance, accounting or company operations	1	2	3	4	5	6	7	8	Number of Compensation Committee Memberships held in other public companies
Committee member	Chi Zi Yi												2
Committee member	Yu Ming Te												1
Committee member	Lee Su Ying												3

Note: For the two years prior to becoming committee members and during their term, members met the following criteria indicated with a ""

(1) Not an employee of the Company or the Company's affiliates

(2) Not a director or supervisor of the Company or the Company's affiliates. This does not apply to the independent directors of the Company, its parent company, or any of the Company's subsidiaries which the Company holds directly and indirectly over 50% stake.

(3) Not an individual shareholder who holds, or whose spouse or minor children hold, or who uses nominee accounts to hold over 1% of the Company's issued shares or is one of the top 10 shareholders.

(4) This individual's spouse, relatives within two degrees of consanguinity, and lineal relatives within five degrees also meet the criteria in the above three statements.
(5) Not a director, supervisor, or employee of an institutional shareholder that directly owns over 5% of the Company's issued shares or an institutional investor that is among the top five institutional shareholders.
(6) Not a director, supervisor, or manager of any company or organization that has business or financial relations with the Company and does not own over 5% of such a company's shares.
(7) Not an owner, partner, director, supervisor, manager or spouse of any of such individual whose sole proprietorship, partnership, company, or institution provides services or consulting advise in business, law, finance and accounting to the Company or the Company's affiliates.
(8) Does not meet any of the criteria described in Article 30 of the Company Act.

b. Operations of the Compensation Committee

(1) Compensation Committee is composed of three members.
(2) As of publication of the Annual Report, there had been a total of 2 meetings of the Compensation Committee over the past 12 months or so. Member attendance is detailed below:

Title	Name	Meetings Attended Personally	Meetings Attended by Proxy	Personal Attendance Rate	Remarks
Committe	Chi Zi Yi	2	0	100%	Elected on
e member					Jun. 14, 2019
Committee					Reelected on
member	Yu Ming Te	2	0	100%	Jun. 14, 2019
Committee					Reelected on
member	Lee Su Ying	2	0	100%	Jun. 14, 2019

Other issues to be noted:

If the Board does not adopt or amends Compensation Committee proposals, the Board meeting date, session, session, content of the resolution, result of the Board vote, and the Company´s response to the Compensation Committee's opinion shall be properly recorded: none.
Should a committee member oppose or reserve their opinion regarding any decision made by the Compensation Committee and their opinion has been recorded or submitted in a written statement, the committee meeting date, session, content of the resolution,

opinions of all members, and the response to the opinions shall be recorded: none.

		Implementation Status	Deviations from "Corporate
Item	Yes No	Description	TWSE Listed Companies" and Best-Practice Principles for Social Responsibility reasons
responsibility policy and examine the results of the declare its corporate social Implementation 1. Corporate Governance (1) Does the company implementation?	V	declare its corporate social responsibility policy and examine the results of the by disclosing Corporate Social Responsibility report. implementation (1) The Company	None
(2) Does the company provide educational training on corporate social responsibility on a regular basis?	V	training on a regular basis. provides educational (2) The Company
to be establish exclusively (or concurrently) authorized by the board first-line managers (3) Does the company dedicated	V	(3) The Company promotes social responsibility via management, public relation, customer service direct line.
social responsibility in charge of proposing the corporate and reporting to the board? policies
remuneration policy, and integrate the employee declare a reasonable salary (4) Does the company	V	makes frequent training to make employees follow social responsibility related rules, and make awards and punishment accordingly. The Company internal (4)
effective reward performance appraisal system with its corporate social responsibility policy, as well as establish an system? and disciplinary
all resources more low materials which have Development endeavor to utilize renewable Environment (1) Does the company efficiently and use 2. Sustainable	V	hires professional vendors to recycle its wastes. 1. The Company
management systems based on the characteristics of their establish proper environmental impact on the environment? (2) Does the company	V	follows related regulations in protecting work and natural environment. 2. The Company	will The Company
on its operations and conduct greenhouse gas inspections, monitor the impact of climate change energy as well as establish company strategies for (3) Does the company industries?	V		consider to evaluate the monitoring greenhouse gas feasibility of emissions.
and carbon reduction? conservation

3-5. Social Responsibility

			Implementation Status	Deviations from "Corporate
Item	Yes No		Description	TWSE Listed Companies" and Best-Practice Principles for Social Responsibility reasons
Does the company formulate appropriate management according to relevant regulations and the International Bill of Human Rights? Preserving Public Welfare and procedures policies (1) 3.	V	(1)	affairs by having related system and management rules to safeguard the legitimate interests of our employees. complies with applicable laws governing labor The Company
(2) Has the company set up an employee hotline or grievance to handle complaints with appropriate mechanism	V	(2)	enabling communication with The Company established a employee direct line and mailbox and understanding their needs. employees
for safety safe working environment and organize training on health and a healthy and provide Does the company solutions? (3)	V	(3)	work environment and regularly by regularly inspecting health education programs for employees The Company provides employees with a safe and healthy implements safety and
employees on a regular basis, as well as reasonably inform with employees of any significant changes in operations that (4) Does the company setup a communication channel its employees on a regular basis?	V	(4)	equipments, setting standard operating procedures, making sure that operators work efficiently and safely, regularly measuring the effect of following government rules, providing yearly health reasonably informs inspections for employees, having safety drills together with fire stations. with employees and sets up a communication channel The Company
(5) Does the company provide its employees with career may have an impact on them?	V		provides different trainings and encourages employees to become franchisees to employees of significant changes, if any, in operations that may have an impact on them. (5) The Company
mechanisms and appealing procedures regarding research Does the company establish any consumer protection and development, purchasing, producing, operating development and training sessions? (6)	V	(6)	protection policy and has established an by having a free-call 0800 transparent consumer complaint filing procedure The Company has established and publicized its consumer enjoy growth with The Company. effective and
services according to relevant regulations and international its goods and (7) Does the company advertise and label service?	V		its goods and services according to relevant regulations and and labels (7) The Company advertises international standards.
impact on the environment and society before taking on evaluate the records of suppliers' Does the company standards? (8)	V	(8)	The Company by maintaining good jointly upgrade CSR The Company works in collaboration with its suppliers to collaboration with them and promoting CSR with them.	will
responsibility policy and cause appreciable impact on the and its major suppliers include termination clauses which come into force once the suppliers breach the corporate social between the company environment and society? business partnerships? contracts Do the (9)		V	feasibility of adding relevant clauses in contracts. chooses suppliers following related guidelines and regularly evaluates whether they impact on the environment and breach the corporate social responsibility policy and cause major and determine whether to terminate the contracts. (9) The Company society	consider to evaluate the
on corporate social responsibility its website and the Market Observation Post System relevant and reliable Information Disclosure the company disclose its information regarding 4. Enhancing (MOPS)? Does (1)	V		None disclose Corporate Social Responsibility report on its website and the Market Observation Post System. will (1) The Company
any discrepancy between the Principles and their implementation:		none.	5. If the Company has established the corporate social responsibility principles based on "the Corporate Social Responsibility Best-Practice Principles for TWSE/TPEx Listed Companies", please describe
The Company from time to time has promotions connected with social responsibility, including giving cakes to children in need. 6. Other important information to facilitate better understanding of the company's corporate social responsibility practices: Together with family day events, making NT\$600,000 donations to school building for disabled kids. On Mother's Day's eve, making donations to single-family mothers. Making donations to Sichuan earthquake victims.
7. A clear statement shall be made below if the corporate social responsibility reports were in Taichung was certified by HACCP The Company's central kitchen			auditors. external and ISO22000, and has its Corporate Social Responsibility report verified by external certification institutions: verified by

			Implementation Status	Deviations from "the
Item	Yes	No	Description	Principles for TWSE Ethical Corporate Listed Companies Management Best-Practice
(1) Does the company declare its ethical corporate management 1. Establishment of ethical corporate management policies and documents, as well as the commitment from its board to policies and procedures in its guidelines and external programs	V		from its board to implement the The Company declare its ethical corporate management policies and procedures in its guidelines and external documents, as well as the commitment policies. (1)	None
guidelines of conduct, punishment for violation, rules of appeal, conduct with clear statements regarding relevant procedures, (2) Does the company establish policies to prevent unethical and the commitment to implement the policies? implement the policies?	V		to deter unlawful as guidelines for employees related rules (2) The Company has in place work behavior.
(3) Does the company establish appropriate precautions against unethical conducts or listed activities stated in Article 2, Paragraph 7 of the Ethical Corporate Management Listed Companies? Best-Practice Principles for TWSE/TPEx high-potential	V		(3) To ensure that ethical operation is implemented, the Company has effective accounting and internal control system which are audited by internal auditors
ethical records company establish an exclusively (or concurrently) dedicated unit supervised by the Board to be in charge of and include ethics-related clauses in business contracts? company evaluate business partners' 2. Fulfill operations integrity policy the (2) Does the (1) Does	V V		dedicated unit supervised by the Board to be in (1) The Company established evaluation mechanism for vendors and contractors to specify obligations and rights of both parties, together with confidential clauses. an concurrently charge of corporate integrity. (2) The Company established	None
interest and provide appropriate communication channels, and company establish policies to prevent conflicts of corporate integrity? (3) Does the	V		(3) With respect to conflict of interests, employees can either report to managers or senior management.
and are they audited by either internal auditors accounting and internal control to facilitate ethical corporate company established effective systems for both or CPAs on a regular basis? implement it? management, (4) Has the	V		(4) The Company has in place internal audit plan and it is executed by responsible functions.
company regularly hold internal and external educational trainings on operational integrity? (5) Does the	V		makes frequent training to make employees follow ethical guidelines. The Company (5)
integrity hotline? Can the accused be reached by the company establish both a reward/punishment 3. Operation of the integrity channel system and an (1) Does	V		punishment and and information in work related rules whistle blowing assigns related personnel for follow-up. (1) The Company has	None
(2) Does the company establish standard operating procedures for (3) Does the company provide proper whistleblower protection? confidential reporting on investigating accusation cases? an appropriate person for follow-up?	V V		procedures for employee complain which describe related process and protects interested parties in the whistle blowing process to reduce the possibility of any harm to related employees. (2) The Company has (3) The Company confidentiality.
policies and the results of its implementation on the company's (1) Does the company disclose its ethical corporate management 4. Strengthening information disclosure website and MOPS?	V		disclose its ethical corporate management policies and the results of its implementation on the company's website and MOPS. will (1) The Company	None

3-6. Ethical corporate management at the Company and related implementation

	Listed Companies, please describe any 5. If the company has established the ethical corporate management policies based on the Ethical Corporate Management Best-Practice Principles for TWSE discrepancy between the policies and their implementation: none.
	ethical corporate management policies (e.g., review and amend its policies): none. a better understanding of the company's 6. Other important information to facilitate
	based on"Corporate Governance Disclosure of corporate governance principles: The Company has established the principles 3-7.
	and disclosed them on TWSE website. Best-Practice Principles for TWSE/GTSM Listed Companies"
	Other important information to facilitate better understanding of the Company's corporate governance practices: None 3-8.





28

3-9. During the most recent year and as of the date of publication of the Annual Report, any disciplinary measures taken against the Company or its internal staff due to violations of legal requirements or taken by the Company against its own staff due to violations of the internal control system. The details of the disciplinary measures, major faults, and improvement measures should be noted: None.
3-10. Differing opinions in records or written statements from directors or supervisors regarding important resolutions made by the Board in the most recent year and through the publication of the Annual Report: None
3-11. Resignation or dismissal of Chairman, CEO, or accounting, finance, internal auditing, or R&D managers in the most recent year and through the publication of the Annual Report:
3-12. Company procedures for processing material information: The Company has established procedures for processing material information

4. External audit fees

Unit: NT\$1,000

Audit Firm	Auditor	Audit Fees			Non-Audit Related Fees
	Names		System Design	Business Registration	Human Resources	Other	Subtotal	Audit Period	Notes
Deloitte	Lu Yi Zheng, Chen Huei Ming	7,600		417		1,030	1,447	Fiscal Year 2020	-

1. Changing of auditors: None
1. If the Company's Chairman, CEO, or managers responsible for financial and accounting affairs have held any position in the accounting firm or its affiliates during the past year, all relevant information should be disclosed: None
Net Change in shareholdings and in shares pledged by directors, supervisors, management, and shareholders holding more than a 10% share in the Company

					Unit: Shares
			2020	As of April 30, 2021
Title	Name	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)	Holding Increase (Decrease)	Pledged Holding Increase (Decrease)
Chairman	Wu Cheng Hsueh	-	-	-	-
Director	Henderson I Yield Growth Limited	-	-	-	-
	Representative: Kuo Ming Hua	-	-	-	-
Director	Infinity Emerging Markets Limited	-	-	-	-
	Representative: Zhang Ji Wen	80,000	-	-	-
Director	Li Ding Zhong		-	-	-
Independent director	Chi Zi Yi	-	-	-	-
Independent director	Yu Ming Te
Independent director	Lee Su Ying
Head of Overseas Business	Yin Zi Li	-	-	-	-
Finance and Accounting Vice President	Chris Lee	-	-	-	-
Internal Audit Manager	Zhang Ci Wen	3,000	-	1,000
Major shareholder	Infinity Emerging Markets Limited	-	-	-	-
Major shareholder	Wu Cheng Hsueh	-	-	-	-

7-1. Recent changes

7-2. Shares trading information: Not applicable

7-3. Shares pledge information: None

Information Disclosing the Relationship between any of the Company's Top Ten Shareholders

NOTES
	Relation	Same Chairman	Chairman spouse	Same Chairman	Spouse	Same Chairman	Chairman spouse	-	-	-	Spouse	responsible person Spouse being the of The Company	-	Trust manager	Trust manager spouse	Trust manager	Trust manager spouse
The relationship between Top Ten Share holders any of the Company's	Name	Wu Cheng Hsueh, Henderson I Yield Growth Limited	Zhang Hua Ting	Infinity Emerging Markets Limited, Henderson I Yield Growth Limited	Zhang Hua Ting	Wu Cheng Hsueh, Infinity Emerging Markets Limited	Zhang Hua Ting	-	-	-	Wu Cheng Hsueh	Infinity Emerging Markets Limited, Henderson I Yield Growth Limited	-	Zhang Hua Ting	Wu Cheng Hsueh	Zhang Hua Ting	Wu Cheng Hsueh
Arrangement Shareholding by Nominee	%		-	-			-	-	-	-		-	-		-		-
	Shares		-	-			-	-	-	-		-	-		-		-
	%		-	5.48%			-	-	-	-		18.06%	-		-		-
Spouse & Minor	Shares		-	9,859,575			-	-	-	-		32,501,875	-		-		-
	%		22.95%	14.50%			8.28%	4.29%	2.61%	2.33%		1.92%	1.85%		1.78%		1.78%
Shareholding	Shares		41,307,045	26,105,400			14,910,723	7,723,000	4,695,000	4,198,098		3,463,100	3,334,000		3,198,239		3,198,236
Name		Infinity Emerging Markets Limited	Responsible Person: Wu Cheng Hsueh	Wu Cheng Hsueh		Henderson I Yield Growth Limited	Responsible Person: Wu Cheng Hsueh	SmallCap World Fund Inc.	Fubon Life Insurance	Westwood Global Investments		Zhang Hua Ting	Invesco		Trust Zhang Hua Ting Account	Trust Zhang Hua Ting	Account

9. Company director and manager direct and indirect ownership of shares in affiliated enterprises

December 31, 2020 Units: Shares; %

Affiliated Enterprises	Company Investment			Direct or Indirect Ownership by Directors, Supervisors, and Managers		Total Ownership
	Shares	%	Shares	%	Shares	%
85 Degree Co., Ltd.	12,899,078	100	-	-	12,899,078	100
Prime Scope Trading Limited	46,742,963	100	-	-	46,742,963	100
Perfect 85 Degrees C, Inc.	5,301,000	100	-	-	5,301,000	100
85 Degrees Café International Pty. Ltd.	1,785,000	51	-	-	1,785,000	51
Golden 85 Investments, LLC	Note	65	-	-	Note	65
Lucky Bakery Limited	811,000	100	-	-	811,000	100
WinPin 85 Investments, LLC	Note	100	-	-	Note	100
WinWin 85C Holding Co., Ltd	2,110,000	100	-	-	2,110,000	100
WinWin 85C LLC	Note	100	-	-	Note	100
WinUS 85C LLC	Note	100	-	-	Note	100
Wincase Limited	Note	100	-	-	Note	100
Worldinn Limited	Note	100	-	-	Note	100
Winstar 85C LLC	Note	100	-	-	Note	100
Comestibles Master Co., Ltd.	35,908,727	100	-	-	35,908,727	100
Mei Wei Master Co., Ltd.	3,155,893	100	-	-	3,155,893	100
Mei Wei Fu Xing Ltd. Shanghai Gourmet Master Food &	Note	60	-	-	Note	60
Beverage Ltd.	Note	100	-	-	Note	100
He-Shia Food & Beverage Ltd.	Note	100	-	-	Note	100
Sheng-Pin (Hangzhou) Food Ltd.	Note	100	-	-	Note	100
He-Shia (Nanjing) Food & Beverage Ltd.	Note	100	-	-	Note	100
Beijing 85 Food & Beverage Ltd.	Note	100	-	-	Note	100
Zhejiang 85 Food & Beverage Ltd.	Note	100	-	-	Note	100
Sheng-Pin (Beijing) Food Ltd.	Note	100	-	-	Note	100
Fuzhou 85 Food & Beverage Ltd. Shanghai Howco Jing Way Food &	Note	100	-	-	Note	100
Beverage Ltd.	Note	100	-	-	Note	100
Shenzheng 85 Food & Beverage Ltd.	Note	85	-	-	Note	85
Sheng-Pin (Jiangsu) Food Ltd.	Note	100	-	-	Note	100
Chengdu 85 Food & Beverage Ltd.	Note	100	-	-	Note	100
Sheng-Pin (Xiamen) Food Ltd.	Note	100	-	-	Note	100
Sheng-Pin (Qingdao) Food Ltd.	Note	100	-	-	Note	100
Xiamen 85 Food & Beverage Ltd. Sheng-Pin (Shenyang) Food Ltd.	Note Note	100 100	- -	- -	Note Note	100 100
85 Degree (Qingdao) Food & Beverage
Management Ltd.	Note	100	-	-	Note	100
Sheng-Pin (Wuhan) Food Ltd.	Note	100	-	-	Note	100
Wuhan Jing Way Food & Beverage Ltd.	Note	100	-	-	Note	100
Jin Wei Industrial (Shanghai) Ltd.	Note	100	-	-	Note	100
Guangzhou 85 Degree Food & Beverage Management Ltd.	Note	100	-	-	Note	100
Qingdao Jie Wei Food & Beverage Management Ltd.	Note	100	-	-	Note	100
85 Degree (Jiangsu) Food Ltd.	Note	100	-	-	Note	100
Mai-Jai (Chengdu) Food Ltd.	Note	100	-	-	Note	100
Jai Ding Jing Way Food & Beverage Ltd.	Note	100	-	-	Note	100
Kunshan 85 Degree Food & Beverage Management Ltd.	Note	100	-	-	Note	100
Sheng-Pin (Dongguan) Food Ltd.	Note	100	-	-	Note	100
Shanghai Minhang Jinxia Food & Beverage	Note	100	-	-	Note
Ltd. Xiahewei (Xiamen) Trading Ltd.	Note	100	-	-	Note
The Hot Pot Food and Beverage	5,886,051	23	-	-	5,886,051	23

Management Co., Ltd.

Note: Affiliated enterprises in the form of limited company do not issue shares.

04. Capital Overview

1. Capitalization

1-1. Shares issued

		Authorized Capital			Pai d-In Ca pi ta l	Notes
Date	Par Value	S hares	Amo u nt	S hares	Amo u nt	Source of Capital	Capital Expansion by Assets Other Than Cash	O t h e r
2008. 09.2 6	US \$1/ s ha re		1 US \$1( dol la r)		1 US \$1( dol la r)	Estab li s h	-	-
2008. 12. 30	US \$1/ s ha re		13,00 0 US \$13, 000		12,89 9 US \$12, 899	Rei ss u e	-	-
2009. 08.2 0	US \$1/ s ha re		50,00 0 US \$50, 000		13,86 9 US \$13, 869	Cash ca p ita l inc reas e	-	-
2009. 10. 05	US \$1/ s ha re		50,00 0 US \$50, 000		14,153 US \$14, 153	Cash ca p ita l inc reas e	-	-
2009. 12. 31	US \$1/ s ha re		50,00 0 US \$50, 000		21,46 4 US \$21, 464	Cap ital inc reas e from rese r ve	-	-
2010. 01. 18	NT\$1 0 / s ha re		850,0 00 NT\$8, 500, 000		70,01 2 NT\$700,1 23	US \$ pa r val ue tu rn ed to NT\$	-	-
2010. 05.2 0	NT\$1 0 / s ha re		850,0 00 NT\$8, 500, 000		113,7 50 NT\$1, 137,50 0	Cap ital inc reas e from ea rn i ng s	-	-
2010. 11. 18	NT\$1 68 / sh are		850,0 00 NT\$8, 500, 000		128,0 00 NT\$1, 280, 00 0	Cash ca p ita l inc reas e	-	Note 1
2011. 09. 01	NT\$1 0 / s ha re		850,0 00 NT\$8, 500, 000		134,4 00 NT\$1, 34 4,00 0	Cap ital inc reas e from ea rn i ng s	-	Note 2
2012. 07.1 8	NT\$1 0 / s ha re		850,0 00 NT\$8, 500, 000		141,12 0 NT\$1, 411, 200	Cap ital inc reas e from rese r ve	-	Note 3
2016. 09. 13	NT\$1 0 / s ha re		850,0 00 NT\$8, 500, 000		148, 176 NT\$1, 481,760	Cap ital inc reas e from ea rn i ng s	-
2017 .07 .25	NT\$1 0 / s ha re		850,0 00 NT\$8, 500, 000		162, 994 NT\$1, 62 9,9 36	Cap ital inc reas e from rese r ve
2018. 07.1 3	NT\$1 0 / s ha re		850,0 00 NT\$8, 500, 000		180,0 00 NT\$1, 800, 00 0	Cap ital inc reas e from rese r ve a n d ea rn i ng s

Note 1: Oct. 26, 2010 Approval Letter Chin-Kuan-Cheng-Fa-Tzu No. 0990058242 on file.

Note 2: Aug. 19, 2011 Approval Letter TWSE Tai- Cheng-Son-2-Tzu No. 10000277601 on file.

Note 3: Jul. 11, 2012 Approval Letter TWSE Tai- Cheng-Son-2-Tzu No. 1010014751 on file.

Unit: 1,000 shares

		Authorized Capital
Share Type	Issued Shares	Un-issued Shares	Total Shares	Notes
Common Stock, Inscribed	180,000	670,000	850,000	Publicly Traded

Shareholder structure



1-2.

						April 6, 2021
Tpye Amount	Government Agencies	Financial Institutions	Other Juridical Person	Natural Persons	Foreign Institutions & Natural Persons	Total
Shareholders Number of	3	6	49	5,343	220	5,621
Shares Held	624,000	5,092,000	9,369,549	53,478,202	111,436,249	180,000,000
Percentage, %	0.35%	2.83%	5.20%	29.72%	61.90%	100%

1-3. Shareholding Distribution Status

Par value NT\$10 / April 6, 2021

Percentage	0.09	3.54	1.70	0.74	0.61	0.93	0.53	0.60	2.24	2.53	5.19	2.50	1.97	2.05	74.78	100.00
Shareholding (Shares)	165,177	6,365,479	3,063,861	1,335,537	1,096,684	1,666,285	945,933	1,074,055	4,039,534	4,556,971	9,341,310	4,500,705	3,541,986	3,681,935	134,624,548	180,000,000
Number of Shareholders	1,260	3,522	396	104	60	65	27	24	55	33	34	9	5	4	23	5,621
Class of Shareholding (Unit : Share)	1~999	1,000~5,000	5,001~10,000	10,001~15,000	15,001~20,000	20,001~30,000	30,001~40,000	40,001~50,000	50,001~100,000	100,001~200,000	200,001~400,000	400,001~600,000	600,001~800,000	800,001~1,000,000	More than 1,000,001	Total

1-4. Major shareholders

Shares Shareholders	Shares	Percentage
Infinity Emerging Markets Limited	41,307,045	22.95%
Wu Cheng Hsueh	26,105,400	14.50%
Henderson I Yield Growth Limited	14,910,723	8.28%
SmallCap World Fund Inc.	7,723,000	4.29%
Fubon Life Insurance	4,695,000	2.61%
Westwood Global Investments	4,198,098	2.33%
Zhang Hua Ting	3,463,100	1.92%
Invesco	3,334,000	1.85%
Zhang Hua Ting Trust Account	3,198,239	1.78%
Zhang Hua Ting Trust Account	3,198,236	1.78%

1-5. Market Price, Net Worth, Earnings, and Dividends per Share

Item		Year	2019	2020	As of March 31, 2021
Market	Highest		245.50	168.00	180.50
Price per	Lowest		119.00	56.20	124.00
Share	Average		172.34	106.53	155.00
Net Worth	Before Distribution		56.78	59.52	-
per Share	After Distribution		53.78	(Note)	-
Earnings	Weighted Average Shares (thousand shares)		180,000	180,000	180,000
per Share		(Undiluted)	5.18	5.64
	EPS	(Diluted)	5.18	(Note)	-
	Cash Dividends		3.00	(Note)	-
	Retained Earnings	Stock Dividends from	-	-	-
Dividends per Share	Capital Surplus	Stock Dividends from	-	(Note)	-
	Accumulated Undistributed Dividends		--	-	-
		Price/Earnings Ratio	33.20	18.89
Return on		Price/Dividend Ratio	57.33	(Note)	-
Investment	Cash Dividend Yield Rate, %		1.74	(Note)	-

Note : The earnings distributions for 2020 have not yet been approved by the Shareholders' Meeting.

1-6. Dividend policy and implementation
a. Dividend policy: The Company may by an Ordinary Resolution declare dividends but no dividend shall exceed the amount recommended by the directors. The Board shall set aside out of the net profits of the Company (if any) for each financial year: (i) a reserve for payment of tax for the relevant financial year; and (ii) an amount to offset all accumulated losses; and after the aforesaid sums are set aside from the profits for such relevant financial year, the Board shall, before recommending any dividend, set aside 10% of the remaining profits of the Company for the relevant financial year as a reserve. Subject to the aforesaid, the Board may distribute the retained earnings for the relevant financial year not set aside for any specific purpose if any, according to the following manner:
- (1) up to 3% as bonus to employees, including employees of a subsidiary of the Company;
- (2) up to 1% as remuneration for the directors and supervisors; and
- (3) no less than 30% of the remaining profits after tax as dividends, provided to the extent that the Company has sufficient available funds, cash dividends shall not be less than 10% of the total amount of cash dividends and stock dividends.
b. The distribution of 2020 earnings approved by the Board of Directors will be submitted to the 2020 Annual Shareholder's Meeting for approval.
1-7. Employee bonuses and director and supervisor remuneration
a. Bonus to employees shall not exceed 3%, and remuneration for the Directors and Supervisors shall not exceed 1%, of net profits after offsetting all accumulated losses and setting aside 10% of the remaining profits as a reserve.
b. Accounting treatment of discrepancy between the estimate of employee bonuses and remuneration for directors and the supervisors and the actual amount paid out: N/A
c. Discrepancy between the estimate of employee bonuses and remuneration for directors and the supervisors and the actual amount paid out: N/A
d. The amount of any proposed distribution of employee stock bonuses, and the size of such an amount as a percentage of the sum of the after-tax net income and total employee bonuses: N/A
e.The effect upon imputed earnings per share of any proposed distribution of employee bonuses and director/supervisor compensation: N/A
f. The actual distribution of employee bonuses and director/supervisor compensation for the previous fiscal year, and, if there is any discrepancy between the actual distribution and the recognized employee bonuses and director/supervisor compensation, additionally the discrepancy, cause, and how it is treated: N/A
1-8. Share buyback: None
1. Status of corporate bonds, preferred shares, GDR, employee stock option plans, mergers, acquisitions, spin-offs, and employee restricted stock plans: N/A
1. Status of capital utilization plan Any incomplete share issuance or private placement or any completed share issuance or private placement over the past three years from which benefits have not yet been reported: None

05. Operational Highlights

1. Business Activities

1-1. Business Scope
a. Main areas of business operations

Production and selling of coffee, tea, and bakery, 85C being the brand name of chain stores.

b. Revenue distribution

Unit: NT\$ 1,000

Product	2019		2020
Category	Amount	%	Amount	%
Bread	8,583,817	37.07%	7,235,253	36.77%
Cake	7,347,424	31.73%	6,606,574	33.57%
Beverage	7,042,802	30.41%	5,697,185	28.95%
Others	182,878	0.79%	140,443	0.71%

c. Current products and service

Current main products include the following

Product	Item
Cake	World Champion Series, Birthday cakes, delicacy cakes, cake rolls, specialty cakes
Bread	Toast, Taiwanese/Japanese/European/Danish bread, sandwiches, donuts
Beverage	Coffee, tea, milk tea, smoothies, shakes, juice
Others	Pineapple cakes, nougats, egg rolls, gift boxes

d. New products development
(1) Major new products in development in Taiwan, China, Australia, and the U.S.

Cakes

i. Watery rhythm cakes
ii. Heart-melting puffs
iii. Limited-season cakes, e.g. strawberry, taro, etc
iv. Other traditional festive products and gift boxes, e.g. Mid-Autumn, Chinese New Year, etc.

Bread

i. Yudane series
ii. BRIC toast
iii. Toast of ice and fire
iv. Expansion in European/Danish items

Drinks

i. Tiramisu smoothie
ii. Ice creams of different flavors
iii. Shake coffee
iv. Fruit tea
(2) New store format, with more seating area, better interior, and more delicate products
(3) More non-cash payment method, such as prepaid cards and mobile payment
(4) E-commerce, to explore more online-offline business

1-2. Main Competitors in Different Region

Region	Type	Name
		Starbucks
		Dante Coffee
	Coffee and dining chain	Barista Coffee
		Mr. Brown Coffee
Taiwan		Ikari Cafe
		7-11
	Convenient stores	FamilyMart
		Hi-life
		Starbucks
		Costa Coffee
	Coffee and dining chain	MAAN COFFEE
		UBC Coffee
China		DIO Coffee
		BreadTalk
		Paris Baguette
	Bakery	Ichido
		Christine
		Starbucks
	Coffee and dining chain	The Coffee Bean & Tea Leaf
		Peet's Coffee & Tea
United States		Penera Bread
	Bakery	Paris Baguette
		Einstein Bros Bagels

1-3. Technology and R&D

a. R&D Expense in recent years

		Unit: NT\$ 1,000
Item	2019	2020
R&D Expense	35,709	31,591
Sales	23,156,921	19,679,455
Percentage	0.15%	0.16%

b. Technology or Product Successfully Developed

Primary R&D office is located in Taiwan, while China and U.S. has their own R&D teams to do research on local tastes; some important results are as below.

◎ Taiwan

Year	Product	Item
	Cake	Watery rhythm, Heart-melting puffs, magic flora, choco forest
2020	Bread	Japanese crème roll, pumpkin mochi, citrus cranberry
		Beverage Latte smoothie, mango smoothie, jade lemon, ice cream

◎ Mainland China

Year	Product	Item
		Mahjong cake, code of true love, heart-shaped valentine,
	Cake	macaroon hazelnut
2020	Bread	European butter, bacon egg panini, pocket bread, pork sandwich
	Beverage Shake coffee, white gourd lemon, mango milk, berry levitation
		latte

◎ U.S. and Australia

Year	Product	Item
		Pumpkin roll, green tea red bean cake, choco banana mousse, pink
	Cake	valentine
		Yudane, turandot cranberry, red wine cheese, sandwich from
2020	Bread	down under, taro toast
		Beverage Brown sugar red bean custard milk tea, mango herbal tea, Q-plus
		milk tea, fruity smoothie

1-4. Short and mid-to-long-term operating strategies

a. Short-term

1. Roll out new format stores, and strengthen the brand image
1. Optimize store and back office IT infrastructure, to enhance real-time analysis
1. Maintain R&D capacity, solidify standardization via knowledge management to assist future store expansion.
1. Optimize menu items, rev up the supply of best-selling items and lower wastage rate
b. Mid-to-long-term
1. Expand into other markets and become international brands
1. Bring in more international talents.
1. Utilized mobile commerce and create new business.

2. Market analysis and merchandise

2-1. Market analysis
a. Main product (service) sales areas

Unit: NT\$ 1,000

		2019	2020
Area	Amount	%	Amount	%
China	13,843,651	60%	11,984,680	61%
Taiwan	3,649,665	16%	3,443,039	18%
United States	5,274,533	22%	3,982,411	20%
Others	389,072	2%	269,325	1%
Total	23,156,921	100%	19,679,455	100%

b. Competitive edge

1. Brand recognition in multiple markets and nations
1. Channel scale economics in sales and procurement
1. Multiple product categories and cross-selling
1. Systemized R&D, production, and selling for changing market needs
1. Ample resources for group companies to share
c. Positive and negative factors for future growth and strategic responses

Positive factors:

1. Stable coffee market growth in Taiwan; high growth potential in China thanks to urbanization
1. Consumer prefer on-site baking for health factor
1. Wide-spread smart phones bring consumer experience outside of brick-and-mortar stores

Negative factors and strategic responses:

1. Consumer tastes change fast Response: better market survey and R&D capacity
1. Standardization of bakery production isn't easy Response: Implementation of SOP, better training, and investment in automation
1. Changes in material costs Response: Long-term contracts and hedge measures

2-2. Key purpose of major products and the production process

a. Key purpose of major products

Major products	Key purpose
Beverage,	For sales in coffee chain stores to consumer
cakes, bread	consumption

b. Production process

2-3. Supply of raw materials

Raw Material	Supplier	Supply Condition
Coffee beans	SS Corp., LD Corp.	Good
Milk	WC Corp., WST Corp.	Good
Crème	FG Corp., NC Corp.	Good
Eggs	PL Corp., TN Corp.	Good
Flour	TF Corp., DC Corp.	Good

2-4. Major clients/suppliers

a. Information on major suppliers who have accounted for at least 10% of sales/procurement in either of the past two years: None
b. Information on major clients who have accounted for at least 10% of sales/procurement in either of the past two years: None

2-5. Sales over the last two years

Unit: NT\$ 1,000

	2019			2020
	Local	Export	Local	Export
Cake	5,560,358	1,787,066	5,100,320	1,506,253
Bread	6,056,120	2,527,697	5,400,969	1,834,284
Beverage	5,762,583	1,280,219	4,840,133	857,053
Others	114,255	68,623	86,297	54,146
Total	17,493,316	5,663,605	15,427,719	4,251,736

Note: export refers to sales to regions outside of China and Taiwan.

3. Personnel information

				Unit: Headcount; %
	Year	2019	2020	As of early this year
	Management	287	271	275
mployees	Production Line Workers	1,773	1,626	1,640
	General Staff	1,316	1,325	1,330
	Store Employees	9,362	7,928	7,367
No. of E	Part-Time	7,396	4,865	4,566
	Total	20,134	16,015	15,178
	Average Age	31.56	30.59	30.70
	Average Years of Service	1.84	2.31	2.46
	PhD	0.01	0.02	0.02
	Master	0.18	0.19	0.20
Education Level (as a % of the total)	Bachelors	23.63	26.92	26.47
	High School or Below	76.18	72.88	73.31

4. Environmental protection expenditure

4-1. Due to breaches of Related Law, total punishment amount: None
4-2. Future Response and probable expenditure: None

5. Labor relations

5-1. Employee benefit plans, continuing education, training, retirement systems, and the status of their implementation, and the status of labor-management agreements and measures for preserving employees' rights and interests
a. Employee benefits

The Company and its affiliates jointly review, revise, and integrate their HR systems to build a robust talent pool and career planning systems for the group. The result is an environment that facilitates a fair and reasonable development of in-house talents.

The Company established the Employee Benefit Committee. The Committee regularly hosts a variety of activities, organizes health check-ups for employees, and provides other benefits such as subsidies for on-the-job training, a flexible benefit program, club subsidies, discount purchasing, wedding and funeral allowances, dormitories, group insurance, employee travel allowances, and other benefits provided by Employee Benefits Committee to meet the needs of employees.

The Company provides an incentive program to encourage its employees to become franchisees so that they can grow and develop with the Company.

c. Retirement plan

Retirement policy is set according to the Labor Pension Act of the Republic of China. With the Company's sound financial system, it ensures employees a solid pension contribution and payments, which encourages employees to set long-term career plans and raises their commitment. Other regions follow local laws in retirement scheme design.

d. Labor-management negotiations

Aside from a service line manned by HR, the Company has established procedures to facilitate communications among employees regarding a range of issues at work and at home, to exchange ideas, and provide feedback to the Company.

5-2. Losses due to labor disputes

Labor dispute Down Under and the corresponding losses booked in Q4 2020.

5-3. Work environment and safety

a. The Company provides its employees with a safe and harmonious workplace that encourages positive interactions between male and female employees. To best ensure employee rights and interests, the Company has defined a set of related policies.
b. Established the health and safety procedures to review and implement health and safety affairs
c. Regularly holds an occupational safety promotion event to remind employees of the importance of work safety and encourage them to stay aware of any safety hazards.

6. Important Contracts

Agreement	Counterparty	Period	Major Contents	Restrictions
Equity investment	The Company Company B	Apr. 15, 2007	To expand in the U.S., the Company entered joint venture with Company B to establish Golden 85 Investments, Inc.	Confidentiality
Equity investment	The Company Company A	Jun. 01, 2007	To expand in Australia, the Company entered joint venture with Company A to establish 85 Degrees Café International Pty. Ltd.	Confidentiality
Software maintenance	The Company Company C	Jul. 14, 2015	Software maintenance for China office and stores	Confidentiality
Loan agreement	The Company Company D	Jun. 20, 2016	Short term borrowing	Confidentiality
Loan agreement	The Company Company D	Aug. 19, 2016	Short term borrowing	Confidentiality

06. Financial Information

Five-Year Financial Summary

1-1. Condensed Balance Sheet and Income Statement

a. Condensed Balance Sheet-IFRS

			As of
Item	Year	2016	2017	Five-Year Financial Summary 2018	2019	2020	March 31, 2021 (Note 1)
Current assets		7,015,267	8,453,832	6,968,396	7,055,253	7,915,566
Property, plant and equipment		5,057,520	5,592,612	6,143,860	5,729,366	6,228,618
Intangible assets		63,649	46,103	47,018	42,315	50,312
Other assets		1,299,612	1,715,198	3,006,409	9,783,854	7,982,767
Total assets		13,436,048	15,807,745	16,165,683	22,610,788	22,177,263
Current	Before distribution	3,935,380	5,441,085	5,109,369	6,940,429	7,162,230
liabilities	After distribution	4,676,260	6,419,047	6,009,369	7,480,429	7,162,230
	Non current liabilities	832,934	439,802	578,387	5,454,043	4,344,019
Total	Before distribution	4,768,314	5,880,887	5,687,756	12,394,472	11,506,249
liabilities	After distribution	5,509,194	6,858,849	6,587,756	12,934,472	11,506,249
owners of The Company	Equity attributable to	8,590,426	9,854,905	10,454,668	10,219,826	10,714,255	N/A
Capital		1,481,760	1,629,936	1,800,000	1,800,000	1,800,000
Capital reserve		2,681,126	2,532,950	2,369,956	2,376,605	2,376,605
Retained	Before distribution	4,522,612	5,919,807	6,602,399	6,638,207	7,113,521
earnings	After distribution	3,781,732	4,941,845	5,702,399	6,098,207	7,113,521
Other equity		(95,072)	(227,788)	(317,687)	(594,986)	(575,871)
Treasury stock		-	-	-	-	-
Non-controlling interest		77,308	71,953	23,259	(3,510)	(43,241)
Total	Before distribution	8,667,734	9,926,858	10,477,927	10,216,316	10,671,014
equity	After distribution	7,926,854	8,948,896	9,577,927	9,676,316	10,671,014

Unit: NT\$ 1,000

Note 1: Financial information regarding the first quarter of 2021 follows IFRS and is in the process of being reviewed by independent auditors when this Annual Report comes to print.

Note 2: 2020 earnings distribution is pending Annual General Shareholders Meeting resolution, thus amount after distribution is the same as before distribution.

b. Condensed Balance Sheet-ROC GAAP

Unit: NT\$ 1,000

	Year		Five-Year Financial Summary
Item		2016	2017	2018	2019	2020
Current Assets
Funds & Investments
Fixed Assets
Intangible Assets
Other Assets
Total Assets
	Before
Current	Distribution
Liabilities	After
	Distribution
Long-Term Liabilities
Other Liabilities
Total	Before Distribution
Liabilities	After
	Distribution
Capital
Capital Reserve		N/A	N/A	N/A	N/A	N/A
	Before
Retained	Distribution
Earnings	After
	Distribution
	Unrealized Gains (Loss)
from Financial Products
Accumulated
Translation
Adjustments
Net Loss Not
	Recognized as Pension
Cost
Shareholders'	Before
Equity	Distribution
	After
	Distribution

c. Condensed Income Statement-IFRS

						Unit: NT\$ 1,000
Year	Five-Year Financial Summary
Item	2016	2017	2018	2019	2020	March 31, 2021 (Note)
Revenue	22,046,504	23,018,413	24,115,084	23,156,921	19,679,455
Gross Profit	12,827,665	13,656,674	14,164,918	13,816,553	11,701,893
Operating Profit	2,363,618	2,834,686	2,284,945	1,707,507	1,590,116
Non-Operating Income (Expenses)	32,191	135,561	133,773	(222,233)	(183,426)
Net Income Before Tax	2,395,809	2,970,247	2,418,697	1,485,274	1,406,690
Net Income from Continuing Operations	1,782,555	2,154,950	1,659,945	934,440	998,224
Income (or Loss) from Discontinued Operations	-	-	-	-	-
Net Income (Loss)	1,782,555	2,154,950	1,659,945	934,440	998,224
Other Comprehensive Income (Loss) (After-Tax)	(434,231)	(134,244)	(91,697)	(279,275)	15,237	N/A
Total Comprehensive Income (Losses)	1,348,324	2,020,706	1,568,248	655,165	1,013,461
Net Income Attributable to the Parent	1,741,051	2,138,075	1,667,624	932,863	1,015,314
Net Income Attributable to Non-Controlling Interests	41,504	16,875	(7,679)	1,577	(17,090)
Total Comprehensive Income Attributable to the Parent	1,309,085	2,005,359	1,577,725	655,564	1,034,430
Total Comprehensive Income Attributable to Non-Controlling Interests	39,239	15,347	(9,477)	(399)	(20,969)
Earnings per Share (NT\$)	10.68	11.88	9.26	5.18	5.64

Note: Financial information regarding the first quarter of 2021 follows IFRS and is in the process of being reviewed by independent auditors when this Annual Report comes to print.

d. Condensed Income Statement-ROC GAAP

Unit: NT\$ 1,000
------------------	--	--	--

Year Item	Five-Year Financial Summary
	2016	2017	2018	2019	2020
Revenue
Gross Profit
Operating Profit
Non-Operating Income
Non-Operating Expenses
Pre-tax Income from
Continuing Operations
After-tax Income from
Continuing Operations	N/A	N/A	N/A	N/A	N/A
Profit/Loss from
Discontinued Operations
Extraordinary Gains/Losses
Accumulated Adjustments due to Changes of
Accounting Principles
Net Income
Earnings per Share (NT\$)

e. Names and opinions of external auditors over the past five years

Year	Auditors	Audit Firm	Audit Opinion
2016	Hsieh Ming Zhong, Li Lee Huang	Deloitte	Unqualified opinion
2017	Hsieh Ming Zhong, Li Lee Huang	Deloitte	Unqualified opinion
2018	Chi Rui Quan, Li Lee Huang	Deloitte	Unqualified opinion
2019	Lu Yi Zheng, Chen Hui Ming	Deloitte	Unqualified opinion
2020	Lu Yi Zheng, Chen Hui Ming	Deloitte	Unqualified opinion

2. Five-Year Financial Analysis

2-1. Financial analysis-IFRS

	Year		Financial information for the most recent five years (Note 1)				As of Mar. 31, 2021
Item		2016	2017	2018	2019	2020	(Note 2)
	Debt to Assets Ratio	35.49%	37.20%	35.18%	54.82%	51.88%
Financial Structure (%)	Long-Term Capital to Fixed Assets, Machinery and equipment Ratio	184.56%	185.36%	179.96%	273.51%	241.07%
	Current Ratio	171.02%	155.37%	136.38%	101.65%	110.52%
Liquidity (%)	Quick Ratio	147.08%	132.70%	113.07%	87.46%	97.41%
	Interest Coverage	15,086.94%	11,627.32%	8,752.97%	669.39%	711.38%
	Accounts Receivable Turnover (times)	76.87	69.27	71.63	74.86	63.37
	Average Collection Days	4.75	5.27	5.10	4.88	5.76
	Inventory Turnover (times)	13.43	12.36	12.71	11.94	10.52
Operating Performance	Accounts Payable Turnover (times)	7.58	7.48	7.05	6.03	5.36
	Average Inventory Turnover Days	27.18	29.53	28.72	30.56	34.69	N/A
	Fixed Assets, Machinery and equipment Turnover (times)	4.36	4.12	3.93	4.04	3.16
	Total Assets Turnover (times)	1.64	1.46	1.49	1.02	0.89
	ROA(%)	13.95%	14.87%	10.50%	5.67%	5.19%
	ROE(%)	21.79%	23.18%	16.27%	9.03%	9.56%
Profitability	Pre-tax Profit Ratio to Paid-in Capital(%)	159.51%	182.23%	134.37%	82.52%	78.15%
	Net Margin (%)	8.09%	9.36%	6.88%	4.04%	5.07%
	EPS(NT\$)	10.68	11.88	9.26	5.18	5.64
	Cash Flow Ratio(%)	80.09%	63.94%	63.47%	65.50%	54.52%
Cash Flow	Cash Flow Adequacy(%)	119.77%	135.14%	160.34%	178.97%	188.62%
	Cash Flow Reinvestment	22.48%	19.04%	16.93%	32.24%	22.82%

	Ratio(%)
	Operating Leverage	1.49	1.39	1.53	3.04	3.07
Leverage	Financial Leverage	1.01	1.01	1.01	1.18	1.17

Please explain the reasons for extraordinary changes in financial ratios over the past two years: N/A

Note 1: The Company just began using International Financial Reporting Standards (IFRS), so we have also included a table below showing financial information for the past years calculated using Taiwan Financial Accounting Standards. Note 2: Financial information regarding the first quarter of 2021 follows IFRS and is in the process of being reviewed by independent auditors when this Annual Report comes to print.

Note 3: The above ratios are calculated using the below formulas (based on IFRS):

• Financial Structure

(1) Debt to Assets Ratio = total liabilities / total assets

(2) Long-term Capital to Fixed Assets, Machinery and Equipment Ratio = (total equity + non-current liabilities) / net Fixed Assets, Machinery and Equipment

• Liquidity

(1) Current Ratio = current assets / current liabilities

(2) Quick Ratio = (current assets – inventory – prepaid expenses) / current liabilities

(3) Interest Coverage = earnings before interest and taxes / interest expenses

• Operating Performance

(1) Average Accounts Receivable Turnover (including accounts receivable and notes receivable arising from business activities) = net sales / average accounts receivable (including accounts receivable and notes receivable arising from business activities)

(2) Average Collection Days = 365 / average accounts receivable turnover

(3) Inventory Turnover = cost of goods sold / average inventory

(4) Average Accounts Payable Turnover (including accounts payable and notes payable

arising from business activities) = cost of goods sold / average accounts payable

((including accounts payable and notes payable arising from business activities)

(5) Average Inventory Turnover Days = 365 / inventory turnover ratio

(6) Fixed Assets, Machinery and Equipment Turnover = net sales / net Fixed Assets,

Machinery and Equipment

(7) Total Asset Turnover = net sales / average total assets

• Profitability

(1) Return on Assets = [net income after tax + interest expense × (1 – effective tax rate)] / average total assets

(2) Return on Equity = net income after tax / average shareholders' equity

(3) Net Margin = net income after tax / net sales

(4) Earnings per Share = (profit or loss attributable to the parent – preferred stock dividends) / weighted average number of shares outstanding

• Cash Flow

(1) Cash Flow Ratio = net cash flows from operating activities / current liabilities

(2) Cash Flow Adequacy Ratio = five year sum of net cash flows from operating activities / five year (sum of capital expenditures+ increase in inventory + cash dividends)

(3) Cash Flow Reinvestment Ratio = (net cash flows from operating activities – cash dividends) / (gross PP&E / long-term investments + other non-current assets + working capital)

• Leverage

(1)Operating Leverage = (net sales – variable costs and expenses) / operating profit

(2) Financial Leverage = operating profit / (operating profit – interest expenses)

2-2. Financial analysis-ROC GAAP

	Year(Note 1)				Financial information for the most recent five years
Item(Note 2)		2016	2017	2018	2019	2020
Financial Structure (%)	Debt to Assets Ratio Long-Term Capital to Fixed Assets, Machinery and equipment Ratio
	Current Ratio
Liquidity (%)	Quick Ratio
	Interest Coverage
Operating Performance	Accounts Receivable Turnover (times) Average Collection Days Inventory Turnover (times) Accounts Payable Turnover (times) Average Inventory Turnover Days Fixed Assets, Machinery and equipment Turnover (times) Total Assets Turnover (times)	N/A	N/A	N/A	N/A	N/A
Profitability	ROA(%) ROE(%) Ratio to Operating Income Paid-in Capital Pre-tax Profit (%) Net Margin(%) EPS(NT\$)
Cash Flow	Cash Flow Ratio(%) Cash Flow Adequacy(%) Cash Flow Reinvestment Ratio(%)
Leverage	Operating Leverage Financial Leverage
	Please explain the reasons for extraordinary changes in financial ratios over the past two years: N/A

Note 1: Financial information has been verified by independent auditors.

Note 2: The above ratios are calculated using the below formulas (based on IFRS):

• Financial Structure

(1) Debt to Assets Ratio = total liabilities / total assets

(2) Long-term Capital to Fixed Assets, Machinery and Equipment Ratio = (total equity + non-current liabilities) / net Fixed Assets, Machinery and Equipment

• Liquidity (1) Current Ratio = current assets / current liabilities

(2) Quick Ratio = (current assets – inventory – prepaid expenses) / current liabilities

(3) Interest Coverage = earnings before interest and taxes / interest expenses

• Operating Performance

(1) Average Accounts Receivable Turnover (including accounts receivable and notes

receivable arising from business activities) = net sales / average accounts receivable

(including accounts receivable and notes receivable arising from business activities)

(2) Average Collection Days = 365 / average accounts receivable turnover (3) Inventory Turnover = cost of goods sold / average inventory

(4) Average Accounts Payable Turnover (including accounts payable and notes payable
arising from business activities) = cost of goods sold / average accounts payable

((including accounts payable and notes payable arising from business activities)

(5) Average Inventory Turnover Days = 365 / inventory turnover ratio

(6) Fixed Assets, Machinery and Equipment Turnover = net sales / net Fixed Assets,

Machinery and Equipment

(7) Total Asset Turnover = net sales / average total assets • Profitability

(1) Return on Assets = [net income after tax + interest expense × (1 – effective tax rate)] / average total assets

(2) Return on Equity = net income after tax / average shareholders' equity

(3) Net Margin = net income after tax / net sales

(4) Earnings per Share = (profit or loss attributable to the parent – preferred stock dividends) / weighted average number of shares outstanding

• Cash Flow

(1) Cash Flow Ratio = net cash flows from operating activities / current liabilities

(2) Cash Flow Adequacy Ratio = five year sum of net cash flows from operating activities / five year (sum of capital expenditures+ increase in inventory + cash dividends)

(3) Cash Flow Reinvestment Ratio = (net cash flows from operating activities – cash dividends) / (gross PP&E / long-term investments + other non-current assets + working capital)

• Leverage

(1)Operating Leverage = (net sales – variable costs and expenses) / operating profit

(2) Financial Leverage = operating profit / (operating profit – interest expenses

Gourmet Master Co. Ltd. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2019 and 2018 and Independent Auditors' Report

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders Gourmet Master Co. Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Gourmet Master Co. Ltd. and its subsidiaries (collectively referred to as the "Group"), which comprise the consolidated balance sheets as of December 31, 2019 and 2018, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the "consolidated financial statements").

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2019 and 2018, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audit of the consolidated financial statements for the year ended December 31, 2019 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants, Rule No. 1090360805 issued by the Financial Supervisory Commission of the Republic of China on February 25, 2020, and auditing standards generally accepted in the Republic of China. We conducted our audit of the consolidated financial statements for the year ended December 31, 2018 in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2019. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter of the Group's consolidated financial statements for the year ended December 31, 2019 is stated as follows:

Calculation of Right-of-Use Assets and Lease Liabilities

Since the Group has many retail stores that are all rented, and the Group applies IFRS 16 "Lease" for the first time in the current year, the calculation of the right-of-use assets and lease liabilities has been identified as the key audit matter of the Group's consolidated financial statements for the year ended December 31, 2019.

Our main audit procedures performed in respect of the abovementioned key audit matter included the following:

1. We understood the management's accounting treatment and calculation method with respect to leases.
1. We assessed whether the process and basis used by management in determining the implicit interest rate of leases were appropriate.
1. We obtained the calculation information of right-of-use assets and lease liabilities, took samples of the content of lease contracts and inspected whether the content of the lease contracts was consistent with the calculation information. We acquired calculation information.
1. We took samples of the calculation information of right-of-use assets and lease liabilities and performed a recalculation to verify if these numbers were the same as the recognized numbers.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

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

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

Those charged with governance, including the audit committee, are responsible for overseeing the Group's financial reporting process.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2019 and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors' report are I-Chen Lu and Hui-Ming Chen.

Deloitte & Touche Taipei, Taiwan Republic of China

March 27, 2020

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors' report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors' report and consolidated financial statements shall prevail.

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

	2019		2018
ASSETS	Amount	%	Amount	%

CURRENT ASSETS
Cash and cash equivalents (Note 6)	\$ 3,829,288	17	\$ 2,064,104	13
Financial assets at fair value through profit or loss - current (Notes 7 and 31) Financial assets at amortized cost - current (Notes 8 and 33)	156,670 1,495,925	1 7	2,211,574 938,671	14 6
Notes receivable	3,498	-	2,420	-
Trade receivables (Notes 10, 24 and 32)	300,041	1	312,711	2
Finance lease receivables (Note 9)	70,524	-	-	-
Other receivables (Note 32)	119,698	1	84,033	-
Current tax assets	84,745	-	140,450	1
Inventories (Note 11)	770,703	3	761,614	5
Prepayments (Note 18)	214,194	1	429,798	2
Other current assets	9,967	-	23,021	-
Total current assets	7,055,253	31	6,968,396	43
NON-CURRENT ASSETS
Financial assets at fair value through profit or loss - non-current (Notes 7 and 31)	468,077	2	934,085	6
Financial assets at amortized cost - non-current (Note 8)	1,020,179	5	766,431	5
Investments accounted for using the equity method (Note 13)	95,198	-	92,839	1
Property, plant and equipment (Notes 14 and 33)	5,729,366	25	6,143,860	38
Right-of-use assets (Note 15)	6,725,151	30	-	-
Investment properties (Notes 16 and 33) Intangible assets (Note 17)	198,573 42,315	1 -	203,722 47,018	1 -
Deferred tax assets (Notes 5 and 26)	139,543	1	110,334	1
Prepaid equipment (Note 18)	256,654	1	227,084	1
Refundable deposits (Note 18)	444,234	2	478,856	3
Finance lease receivables - non-current (Note 9)	100,382	-	-	-
Other non-current assets (Note 18)	335,863	2	193,058	1
Total non-current assets	15,555,535	69	9,197,287	57
TOTAL	\$ 22,610,788	100	\$ 16,165,683	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Notes 19 and 33)	\$ 396,724	2	\$ 405,498	3
Contract liabilities - current (Note 24)	1,503,352	7	1,416,158	9
Notes payable	612	-	1,023	-
Trade payables (Note 20)	1,548,100	7	1,547,497	10
Other payables (Notes 21 and 32)	1,356,090	6	1,512,240	9
Current tax liabilities	146,572	1	177,690	1
Lease liabilities - current (Note 15)	1,950,037	8	-	-
Deferred revenue - current (Notes 21 and 28)	1,889	-	1,962	-
Other current liabilities (Note 21)	37,053	-	47,301	-
Total current liabilities	6,940,429	31	5,109,369	32
NON-CURRENT LIABILITIES
Long-term borrowings (Notes 19 and 32)	156,169	1	159,600	1
Decommission, restoration and rehabilitation provisions (Note 21)	98,055	-	91,974	-
Deferred tax liabilities (Notes 5 and 26)	162,681	1	148,046	1
Lease liabilities - non-current (Note 15)	4,856,224	21	-	-
Deferred revenue - non-current (Notes 21 and 28)	8,971	-	11,117	-
Guarantee deposits received (Note 21)	171,943	1	167,650	1
Total non-current liabilities	5,454,043	24	578,387	3
Total liabilities	12,394,472	55	5,687,756	35

EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 23)

Share capital
Ordinary shares	1,800,000	8	1,800,000	11
Capital surplus
Additional paid-in capital	2,376,605	11	2,369,956	15
Retained earnings
Legal reserve	1,145,453	5	978,691	6
Special reserve	317,687	1	227,788	2
Unappropriated earnings	5,175,067	23	5,395,920	33
Total retained earnings	6,638,207	29	6,602,399	41
Other equity	(594,986)	(3)	(317,687)	(2)
Total equity attributable to owners of the Company	10,219,826	45	10,454,668	65
NON-CONTROLLING INTERESTS	(3,510)	-	23,259	-
Total equity	10,216,316	45	10,477,927	65
TOTAL	\$ 22,610,788	100	\$ 16,165,683	100

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2019		2018
	Amount	%	Amount	%
OPERATING REVENUE (Notes 24 and 37)	\$ 23,156,921	100	\$ 24,115,084	100
OPERATING COSTS (Notes 11 and 25)	(9,340,368)	(40)	(9,950,166)	(41)
GROSS PROFIT	13,816,553	60	14,164,918	59
OPERATING EXPENSES (Note 25) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit gain (loss) (Note 10)	(11,134,894) (942,876) (35,709) 4,433	(48) (4) - -	(10,810,720) (981,313) (34,884) (53,077)	(45) (4) - -
Total operating expenses	(12,109,046)	(52)	(11,879,994)	(49)
PROFIT FROM OPERATIONS	1,707,507	8	2,284,924	10
NON-OPERATING INCOME AND EXPENSES (Notes 14, 25, 28 and 32) Other income Other gains and losses Finance costs	307,838 (285,660) (260,853)	1 (1) (1)	345,634 (204,075) (27,952)	1 (1) -
Share of profit or loss of associates and joint ventures	16,442	-	20,166	-
Total non-operating income and expenses	(222,233)	(1)	133,773	-
PROFIT BEFORE INCOME TAX	1,485,274	7	2,418,697	10
INCOME TAX EXPENSE (Note 26)	(550,834)	(3)	(758,752)	(3)
NET PROFIT FOR THE YEAR	934,440	4	1,659,945	7
OTHER COMPREHENSIVE INCOME Items that will not be reclassified subsequently to profit or loss: Exchange differences arising on translation to the presentation currency	(383,194)	(2)	(202,856)	(1) (Continued)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2019		2018
	Amount	%	Amount	%
Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations	\$ 103,919	1	\$ 111,159	-
Other comprehensive loss for the year, net of income tax	(279,275)	(1)	(91,697)	(1)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	\$ 655,165	3	\$ 1,568,248	7
NET PROFIT (LOSS) ATTRIBUTABLE TO: Owners of the Company Non-controlling interests	\$ 932,863 1,577	4 -	\$ 1,667,624 (7,679)	7 -
	\$ 934,440	4	\$ 1,659,945	7
TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO: Owners of the Company Non-controlling interests	\$ 655,564 (399)	3 -	\$ 1,577,725 (9,477)	7 -
	\$ 655,165	3	\$ 1,568,248	7
EARNINGS PER SHARE (Note 27) Basic	\$ 5.18		\$ 9.26

The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

Appropriation of the 2017 earnings
Other changes in capital surplus


Other comprehensive loss for the year ended December 31, 2018,
Total comprehensive income for the year ended December 31,



Appropriation of the 2018 earnings



Other comprehensive loss for the year ended December 31, 2019,
Total comprehensive income for the year ended December 31,

				Equity Attributable to the Owners of the Company
	Number of				Retained Earnings		Differences on Other Equity Translating Exchange
	(In Thousands) Shares	Share Capital	Capital Surplus	Legal Reserve	Special Reserve	Unappropriated Earnings	Operations Foreign	Total	Non-controlling Interests	Total Equity
BALANCE AT JANUARY 1, 2018	162,994	\$ 1,629,936	\$ 2,532,950	764,883 \$	95,072 \$	\$ 5,059,852	\$ (227,788)	\$ 9,854,905	71,953 \$	\$ 9,926,858
Share dividends distributed by the Company Cash dividends distributed by the Company Appropriation of the 2017 earnings Special reserve Legal reserve	707 - - -	- - - 7,070	- - - -	213,808 - - -	- 132,716 - -	(213,808) (132,716) (977,962) (7,070)	- - - -	(977,962) - - -	- - - -	(977,962) - - -
Issuance of share dividends from the capital surplus Other changes in capital surplus	16,299	162,994	(162,994)	-	-	-	-	-	-	-
Cash dividends distributed by subsidiaries	-	-	-	-	-	-	-	-	(39,217)	(39,217)
Net profit for the year ended December 31, 2018	-	-	-	-	-	1,667,624	-	1,667,624	(7,679)	1,659,945
Other comprehensive loss for the year ended December 31, 2018, net of income tax	-	-	-	-	-	-	(89,899)	(89,899)	(1,798)	(91,697)
Total comprehensive income for the year ended December 31, 2018	-	-	-	-	-	1,667,624	(89,899)	1,577,725	(9,477)	1,568,248
BALANCE AT DECEMBER 31, 2018	180,000	1,800,000	2,369,956	978,691	227,788	5,395,920	(317,687)	10,454,668	23,259	10,477,927
Effect of retrospective application and retrospective restatement	-	-	-	-	-	2,945	-	2,945	521	3,466
BALANCE AT JANUARY 1, 2019 AS RESTATED	180,000	1,800,000	2,369,956	978,691	227,788	5,398,865	(317,687)	10,457,613	23,780	10,481,393
Cash dividends distributed by the Company Appropriation of the 2018 earnings Special reserve Legal reserve	- - -	- - -	- - -	166,762 - -	- 89,899 -	(166,762) (89,899) (900,000)	- - -	(900,000) - -	- - -	(900,000) - -
Donation from shareholders	-	-	6,649	-	-	-	-	6,649	-	6,649
Cash dividends distributed by subsidiaries	-	-	-	-	-	-	-	-	(26,891)	(26,891)
Net profit for the year ended December 31, 2019	-	-	-	-	-	932,863	-	932,863	1,577	934,440
Other comprehensive loss for the year ended December 31, 2019, net of income tax	-	-	-	-	-	-	(277,299)	(277,299)	(1,976)	(279,275)
Total comprehensive income for the year ended December 31, 2019	-	-	-	-	-	932,863	(277,299)	655,564	(399)	655,165
BALANCE AT DECEMBER 31, 2019	180,000	\$ 1,800,000	\$ 2,376,605	\$ 1,145,453	317,687 \$	\$ 5,175,067	\$ (594,986)	\$ 10,219,826	(3,510) \$	\$ 10,216,316

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

	2019	2018
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	\$ 1,485,274	\$ 2,418,697
Adjustments for:
Depreciation expenses	3,468,181	1,194,108
Amortization expenses	23,188	23,149
Expected credit loss (reversed)/recognized on trade receivables	(4,433)	53,077
Net (gain) loss on fair value changes of financial assets at fair value
through profit or loss	(18,537)	16,929
Finance costs	260,853	27,952
Interest income	(201,921)	(199,232)
Dividend income	(7,260)	(6,930)
Share of profit of associates and joint ventures	(16,442)	(20,166)
Loss on disposal of property, plant and equipment	120,027	72,787
Loss on disposal of intangible assets	-	1
Impairment loss of non-financial assets	16,072	25,689
Amortization of prepayments for leases	-	5,235
Government grants	(1,766)	(2,012)
Changes in operating assets and liabilities
Notes receivable	(1,078)	(512)
Trade receivables	18,685	(6,811)
Other receivables	5,020	39,608
Inventories	(15,583)	265
Prepayments	93,994	35,109
Other current assets	13,054	(5,250)
Other operating assets	2,113	573
Contract liabilities	87,194	58,552
Notes payable	(411)	(335)
Trade payables	603	275,475
Other payables	28,452	3,816
Provisions	6,081	(27,834)
Other current liabilities Cash generated from operations	(10,248) 5,351,112	2,250 3,984,190
Interest paid	(262,981)	(27,559)
Income taxes paid	(541,850)	(713,900)

Net cash generated from operating activities	4,546,281	3,242,731
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at amortized cost	(2,468,509)	(2,186,925)
Proceeds from redemption of financial assets at amortized cost	1,566,233	754,628
Purchase of financial assets at fair value through profit or loss	(1,513,998)	(7,578,820)
Proceeds from sale of financial assets at fair value through profit or
loss	4,115,027	8,433,368
Payments for property, plant and equipment	(819,702)	(1,296,975)
Proceeds from disposal of property, plant and equipment	4,887	40,597
		(Continued)

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

	2019	2018
Increase in refundable deposits	\$ (70,885)	\$ (104,201)
Decrease in refundable deposits	43,838	82,579
Payments for intangible assets	(19,386)	(24,891)
Decrease in finance lease receivables	64,994	-
Increase in other non-current assets	(334,815)	-
Increase in prepayments for equipment	(344,213)	(602,105)
Increase in prepayments for leases	-	(18,352)
Interest received	80,167	146,748
Dividends received from associates	14,083	15,257
Other dividends received	7,260	6,930
Net cash generated from (used in) investing activities	324,981	(2,332,162)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	220,378	268,081
Repayments of short-term borrowings	(220,378)	(598,626)
Repayments of long-term borrowings	-	(243,616)
Proceeds from guarantee deposits received	30,075	34,736
Refund of guarantee deposits received	(20,622)	(17,220)
Repayment of the principal portion of lease liabilities	(2,190,962)	-
Dividends paid to owners of the Company	(900,000)	(977,962)
Dividends paid to non-controlling interests	(26,891)	(39,217)
Donations from shareholders	6,649	-
Net cash used in financing activities	(3,101,751)	(1,573,824)
EFFECT OF EXCHANGE RATE CHANGES ON THE BALANCE OF
CASH HELD IN FOREIGN CURRENCIES	(4,327)	(67,503)
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS	1,765,184	(730,758)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR	2,064,104	2,794,862
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	\$ 3,829,288	\$ 2,064,104

The accompanying notes are an integral part of the consolidated financial statements. (Concluded)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Gourmet Master Co. Ltd. (the "Company") was incorporated in the Cayman Islands in September 2008.

The Company and its subsidiaries (collectively, the "Group") is mainly engaged in the production and wholesale of bakery products, retail and wholesale of beverages, wholesale of bakery machinery, and the operation of chain stores and franchising business.

The Company's shares have been listed on the Taiwan Stock Exchange ("TWSE") since November 22, 2010.

The functional currency of the Company is the Renminbi. For greater comparability and consistency of financial reporting, the consolidated financial statements are presented in New Taiwan dollars since the Company's shares are listed on the Taiwan Stock Exchange.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company's board of directors on March 12, 2020.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

a. Initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the "IFRSs") endorsed and issued into effect by the Financial Supervisory Commission (FSC)

Except for the following, the initial application of the amendments to the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Group's accounting policies:

IFRS 16 "Leases"

IFRS 16 provides a comprehensive model for the identification of lease arrangements and their treatment in the financial statements of both lessee and lessor. It supersedes IAS 17 "Leases", IFRIC 4 "Determining whether an Arrangement contains a Lease", and a number of related interpretations. Refer to Note 4 for information relating to the relevant accounting policies.

Definition of a lease

The Group elects to apply the guidance of IFRS 16 in determining whether contracts are, or contain, a lease only to contracts entered into (or changed) on or after January 1, 2019. Contracts identified as containing a lease under IAS 17 and IFRIC 4 are not reassessed and are accounted for in accordance with the transitional provisions under IFRS 16.

The Group as lessee

The Group recognizes right-of-use assets or investment properties if the right-of-use assets meet the definition of investment properties, and lease liabilities for all leases on the consolidated balance sheets except for those whose payments under low-value asset and short-term leases are recognized as expenses on a straight-line basis. On the consolidated statements of comprehensive income, the Group presents the depreciation expense charged on right-of-use assets separately from the interest expense accrued on lease liabilities; interest is computed using the effective interest method. On the consolidated statements of cash flows, cash payments for the principal portion of lease liabilities are classified within financing activities; cash payments for the interest portion are classified within operating activities. Prior to the application of IFRS 16, payments under operating lease contracts, were recognized as expenses on a straight-line basis. Prepaid lease payments for land use rights in China were recognized as prepayments for leases. Cash flows for operating leases were classified within operating activities on the consolidated statements of cash flows.

The Group elects to apply IFRS 16 retrospectively with the cumulative effect of the initial application of this standard recognized on January 1, 2019. Comparative information is not restated.

Lease liabilities were recognized on January 1, 2019 for leases previously classified as operating leases under IAS 17. Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate on January 1, 2019. Right-of-use assets are measured at an amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments. The Group applies IAS 36 to all right-of-use assets.

The Group also applies the following practical expedients:

1) The Group applies a single discount rate to a portfolio of leases with reasonably similar characteristics to measure lease liabilities.
2) The Group accounts for those leases for which the lease term ends on or before December 31, 2019 as short-term leases.
3) The Group excludes initial direct costs from the measurement of right-of-use assets on January 1, 2019.

The lessee's weighted average incremental borrowing rate applied to lease liabilities recognized on January 1, 2019 is 3.24%. The difference between the (i) lease liabilities recognized and (ii) operating lease commitments disclosed under IAS 17 on December 31, 2018 is explained as follows:

The future minimum lease payments of non-cancellable operating lease
commitments on December 31, 2018	\$ 7,537,669
Less: Recognition exemption for short-term leases	(232)
Less: Recognition exemption for leases of low-value assets	(540)
Undiscounted amounts on January 1, 2019	\$ 7,536,897
Discounted amounts using the incremental borrowing rate on January 1, 2019	\$ 7,280,543
Lease liabilities recognized on January 1, 2019	\$ 7,280,543

The Group as lessor

Except for sublease transactions, the Group does not make any adjustments for leases in which it is a lessor, and it accounts for those leases with the application of IFRS 16 starting from January 1, 2019.

The Group subleased its leasehold retail stores to third parties, and classified such subleases as operating leases under IAS 17. On January 1, 2019, the Group assessed that such subleases should be classified as finance leases based on the remaining contractual terms and conditions of the head leases and subleases, and accounts for the subleases as a new finance leases entered into at that date.

The impact on assets, liabilities and equity as of January 1, 2019 from the initial application of IFRS 16 is set out as follows:

	As Originally Stated on January 1, 2019	Adjustments Arising from Initial Application	Restated on January 1, 2019
Finance lease receivables - current	\$ -	\$ 81,404	\$ 81,404
Finance lease receivables - non-current	-	178,078	178,078
Prepayments for leases - current	229,630	(154,826)	74,804
Prepayments for leases - non-current	189,896	(189,896)	-
Right-of-use assets	-	7,273,543	7,273,543
Refundable deposits	438,150	(41,781)	396,369
Total effect on assets	\$ 857,676	\$ 7,146,522	\$ 8,004,198
Lease liabilities - current	\$ -	\$ 2,112,222	\$ 2,112,222
Lease payable - current	172,895	(134,167)	38,728
Lease liabilities - non-current	-	5,168,321	5,168,321
Guarantee deposits received	167,650	(3,320)	164,330
Total effect on liabilities	\$ 340,545	\$ 7,143,056	\$ 7,483,601
Retained earnings	\$ 5,395,920	\$ 2,945	\$ 5,398,865
Non-controlling interests	23,259	521	23,780
Total effect on equity	\$ 5,419,179	\$ 3,466	\$ 5,422,645

b. The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2020

New IFRSs	Effective Date Announced by IASB
Amendments to IFRS 3 "Definition of a Business" Amendments to IFRS 9, IAS 39 and IFRS 7 "Interest Rate Benchmark Reform"	January 1, 2020 (Note 1) January 1, 2020 (Note 2)
Amendments to IAS 1 and IAS 8 "Definition of Material"	January 1, 2020 (Note 3)

Note 1: The Group shall apply these amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2020 and to asset acquisitions that occur on or after the beginning of that period.

Note 2: The Group shall apply these amendments retrospectively for annual reporting periods beginning on or after January 1, 2020.

Note 3: The Group shall apply these amendments prospectively for annual reporting periods beginning on or after January 1, 2020.

As of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and interpretations will have on the Group's financial position and financial performance and will disclose the relevant impact when the assessment is completed.

c. New IFRSs in issue but not yet endorsed and issued into effect by the FSC

New IFRSs	Effective Date Announced by IASB (Note)
Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets	To be determined by IASB
between an Investor and its Associate or Joint Venture" IFRS 17 "Insurance Contracts"	January 1, 2021
Amendments to IAS 1 "Classification of Liabilities as Current or	January 1, 2022
Non-current"

Note: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and IFRSs as endorsed and issued into effect by the FSC.

b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
3) Level 3 inputs are unobservable inputs for the asset or liability.
c. Classification of current and non-current assets and liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within 12 months after the reporting period; and

3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and
3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Assets and liabilities that are not classified as current are classified as non-current.

d. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company (i.e., its subsidiaries).

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the interests of the Group and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

See Note 12 and Tables 8 and 9 for the detailed information on subsidiaries, including the percentages of ownership and main businesses.

e. Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which cases, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

For the purpose of presenting the consolidated financial statements, the functional currencies of the Company and its foreign operations (including subsidiaries, associates, joint ventures and branches in other countries or those that use currencies which are different from the currency of the Company) are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income and attributed to the owners of the Company and non-controlling interests as appropriate. The exchange differences accumulated in equity, which resulted from the translation of the assets and liabilities of the entities in the Group into the presentation currency, are not subsequently reclassified to profit or loss.

f. Inventories

Inventories consist of raw materials, supplies, finished goods and work in progress and merchandise are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the balance sheet date.

g. Investments in associates

An associate is an entity over which the Group has significant influence and which is neither a subsidiary nor an interest in a joint venture.

The Group uses the equity method to account for its investments in associates.

Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Group's share of the profit or loss and other comprehensive income of the associate. The Group also recognizes the changes in the Group's share of the equity of associates.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is deducted from the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

When a group entity transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Group' consolidated financial statements only to the extent that interests in the associate are not related to the Group.

h. Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment in the course of construction are carried at cost less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

i. Investment properties

Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties also include land held for a currently undetermined future use.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is included in profit or loss.

j. Intangible assets
1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

2) Derecognition of intangible assets

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

k. Impairment of tangible and intangible assets other than goodwill and assets related to contract costs

At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually and whenever there is an indication that the assets may be impaired.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

Before the Group recognizes an impairment loss from assets related to contract costs, any impairment loss on inventories, property, plant and equipment and intangible assets related to the contract applicable under IFRS 15 shall be recognized in accordance with applicable standards. Then, impairment loss from the assets related to the contract costs is recognized to the extent that the carrying amount of the assets exceeds the remaining amount of consideration that the Group expects to receive in exchange for related goods or services less the costs which relate directly to providing those goods or services and which have not been recognized as expenses. The assets related to the contract costs are then included in the carrying amount of the cash-generating unit to which they belong for the purpose of evaluating impairment of that cash-generating unit.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset, cash-generating unit or assets related to contract costs is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset, cash-generating unit or assets related to contract costs in prior years. A reversal of an impairment loss is recognized in profit or loss.

l. Financial instruments

Financial assets and financial liabilities are recognized when a group entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to an acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

a) Measurement categories

Financial assets of the Group are classified into the following categories: Financial assets at FVTPL and financial assets at amortized cost.

i. Financial assets at FVTPL

A financial asset is classified as at FVTPL when such a financial asset is mandatorily classified as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

Financial assets at FVTPL are subsequently measured at fair value, and any dividends or interest earned on such financial assets are recognized in other income; any remeasurement gains or losses on such financial assets are recognized in other gains or losses.

ii. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

i) The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
ii) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, trade receivables at amortized cost and others, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset, except for:

i) Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit adjusted effective interest rate to the amortized cost of such financial assets; and
ii) Financial assets that are not credit impaired on purchase or origination but have subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

b) Impairment of financial assets and contract assets

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables), investments in debt instruments that are measured at FVTOCI, lease receivables, as well as contract assets.

The Group always recognizes lifetime expected credit losses (ECLs) for trade receivables, lease receivables and contract assets. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and the carrying amounts of such financial assets are not reduced.

c) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset's carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Financial liabilities
a) Subsequent measurement

All financial liabilities of the Group are measured at amortized cost using the effective interest method.

b) Derecognition of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

m. Provisions

Provisions are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

n. Revenue recognition

The Group identifies contracts with customers, allocates the transaction price to the performance obligations, and recognizes revenue when performance obligations are satisfied.

For contracts where the period between the date on which the Group transfers a promised good or service to a customer and the date on which the customer pays for that good or service is one year or less, the Group does not adjust the promised amount of consideration for the effects of a significant financing component.

1) Revenue from the sale of goods

Revenue from the sale of goods comes from sales of beverages, cake, bread and other goods. For sales of goods through its own retail outlets, revenue is recognized when the customer purchases the goods at the retail outlet. When the customer purchases the gift vouchers and stored-value cards, the transaction price received is recognized as a contract liability until the gift vouchers and stored-value cards have been redeemed.

Under the Customer Loyalty Program, the Group offers award credits which can be used in future purchases when the customer buys goods. The award credits provide a material right to the customer. Transaction prices allocated to the award credits are recognized as contract liabilities when collected and will be recognized as revenue when the award credits are redeemed or have expired.

2) Licensing revenue

For the franchise license contract, it is the Group's customary business practice to undertake activities that will assist the franchisee in selecting the store location, staff training and store management techniques, etc. The nature of the franchise license is to provide franchise stores access to intellectual property as it exists at the point in time at which the license is granted. The franchise fee is recognized as revenue when the Group completes the obligations of the license.

o. Leases

2019

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

For a contract that contains a lease component and non-lease components, the Group allocates the consideration in the contract to each component on the basis of the relative stand-alone price and accounts for each component separately.

1) The Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

When the Group subleases a right-of-use asset, the sublease is classified by reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. However, if the head lease is a short-term lease that the Group, as a lessee, has accounted for applying the recognition exemption, the sublease is classified as an operating lease.

Under finance leases, the lease payments comprise fixed payments, and payments of penalties for terminating a lease if the lease term reflects such termination, less any lease incentives payable. The net investment in a lease is measured at (a) the present value of the sum of the lease payments receivable by a lessor and any unguaranteed residual value accrued to the lessor plus (b) initial direct costs and is presented as a finance lease receivable. Finance lease income is allocated to the relevant accounting periods so as to reflect a constant, periodic rate of return on the Group's net investment outstanding in respect of leases.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

2) The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets, except for those that meet the definition of investment properties.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, and variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee's incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.

Variable lease payments that do not depend on an index or a rate are recognized as expenses in the periods in which they are incurred.

2018

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessee

Assets held under finance leases are initially recognized as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the consolidated balance sheets as a finance lease obligation.

Finance expenses implicit in lease payments for each period are recognized immediately in profit or loss, unless they are directly attributable to qualifying assets; in which case, they are capitalized.

Operating lease payments are recognized as expenses on a straight-line basis over the lease term.

p. Borrowing costs

Borrowing costs directly attributable to an acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

Other than that which is stated above, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

q. Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become receivable.

r. Employee benefits

1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

s. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

According to the Income Tax Law, an additional tax on unappropriated earnings is provided for as income tax in the year the shareholders approve to retain earnings.

Adjustments of prior years' tax liabilities are added to or deducted from the current year's tax provision.

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences and unused loss carryforwards to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates and interests in joint arrangements, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

3) Current and deferred taxes for the year

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group's accounting policies, management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

Key Sources of Estimation Uncertainty

Income taxes

As of December 31, 2019 and 2018, the carrying amount of the deferred tax assets in relation to unused tax losses was \$37,106 thousand and \$39,193 thousand, respectively. As of December 31, 2019 and 2018, no deferred tax asset has been recognized on tax losses of \$690,735 thousand and \$644,388 thousand, respectively, due to the unpredictability of future profit streams. The realizability of deferred tax assets mainly depends on whether sufficient future profits or taxable temporary differences will be available. In cases where the actual future profit generated is less than expected, a material reversal of deferred tax assets may arise, which would be recognized in profit or loss for the period in which such a reversal takes place.

6. CASH AND CASH EQUIVALENTS

	December 31
	2019	2018
Cash on hand Checking accounts and demand deposits Cash equivalents (investments with original maturities within 3	\$ 63,979 3,589,568	\$ 74,974 1,753,538
months) Time deposits	175,741	235,592
	\$ 3,829,288	\$ 2,064,104

The market rate intervals of cash in bank at the end of the reporting period were as follows:

		December 31
	2019	2018
Bank deposits Time deposits	0.001%-0.800% 2.140%-3.400%	0.001%-0.800% 2.140%-3.400%

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

	December 31
	2019	2018
Financial assets - current
Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Domestic listed shares Mutual funds Principal protected investment products Non-principal investment products*	\$ 146,520 10,150 - - \$ 156,670	\$ 128,040 10,093 427,431 1,646,010 \$ 2,211,574
Financial assets - non-current
Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Non-principal investment products (a) Others	\$ 466,996 1,081 \$ 468,077	\$ 934,085 - \$ 934,085

* Non-principal investment products mainly refer to the investment products purchased from banks in mainland China. The total subscription amount was RMB100,000 thousand as of December 31, 2019.

8. FINANCIAL ASSETS AT AMORTIZED COST

	December 31
	2019	2018
Current
Domestic investments Time deposits with original maturities of more than 3 months (a) Restricted bank deposits	\$ 183,492 34,034 217,526	\$ 10,200 43,058 53,258
Foreign investments Time deposits with original maturities of more than 3 months (a) Restricted bank deposits Principal protected investment products (b)	454,475 23,194 800,730 1,278,399 \$ 1,495,925	111,800 31,261 742,352 885,413 \$ 938,671
Non-current
Foreign investments Time deposits with original maturities of more than 3 months (a) Principal protected investment products (b) Bond investments - China Development Bank (c)	\$ 238,928 751,222 30,029	\$ - 735,644 30,787
	\$ 1,020,179	\$ 766,431

a. The ranges of interest rates for time deposits with original maturities of more than 3 months were approximately 0.82%-3.42% and 1.09%-2.69% per annum as of December 31, 2019 and 2018, respectively.
b. The ranges of interest rates for principal protected investment products were approximately 2.10%-4.35% and 3.67%-4.35% per annum as of December 31, 2019 and 2018, respectively.
c. In May 2015, the Group bought 10-year bank debentures issued by China Development Bank with a coupon rate of 4.25%, an effective interest rate of 4.17% and a maturity date of December 2, 2024, for US\$1,006 thousand (par value of US\$1,000 thousand).
d. Refer to Note 33 for information relating to investments in financial assets at amortized cost pledged as security.

9. FINANCE LEASE RECEIVABLES

2019

	December 31, 2019
Undiscounted lease payments
Year 1	\$ 72,579
Year 2	54,562
Year 3	35,096
Year 4	12,284
Year 5	4,068
Year 6 onwards	8,616
	187,205
Less: Unearned finance income	(16,299)
Net investment in leases presented as finance lease receivables	\$ 170,906

The Group has been subleasing its retail stores located in Australia to franchisees with annual fixed lease payments of \$72,579 thousand. As the Group subleases the retail stores for all of the remaining lease terms of the main leases to the sublessees, the sublease contracts are classified as a finance leases. These subleases were originally classified as operating leases under IAS 17, refer to Notes 3 and 15 for the details.

The interest rates inherent in leases are fixed at the contract dates for the entire term of the lease. The interest rate inherent in the finance leases is approximately 5.49% per annum as of December 31, 2019.

10. TRADE RECEIVABLES

	December 31
	2019	2018
Trade receivables
At amortized cost Gross carrying amount Less: Allowance for impairment loss	\$ 350,028 (49,987)	\$ 368,713 (56,002)
	\$ 300,041	\$ 312,711

The average credit period of sales of goods was 30 to 60 days. No interest was charged on trade receivables. The Group considers any change in credit quality from the initial credit date to the balance sheet date.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix by reference to the past default experience of the debtor and an analysis of the debtor's current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date. As the Group's historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group's different customer base.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation, or when the trade receivables are past due over 361 days, whichever occurs earlier. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of trade receivables based on the Group's provision matrix.

December 31, 2019

	1 to 60 Days	61 to 90 Days	91 to 180 Days	181 to 360 Days	Over 360 Days	Total
Gross carrying amount Loss allowance (Lifetime ECLs)	\$ 291,236 -	\$ 4,979 (2,394)	\$ 7,247 (2,191)	\$ 676 (620)	\$ 45,890 (44,782)	\$ 350,028 (49,987)
Amortized cost	\$ 291,236	\$ 2,585	\$ 5,056	\$ 56	\$ 1,108	\$ 300,041
December 31, 2018
	1 to 60 Days	61 to 90 Days	91 to 180 Days	181 to 360 Days	Over 360 Days	Total
Gross carrying amount Loss allowance (Lifetime ECLs)	\$ 305,458 (3,383)	\$ 3,868 (1,672)	\$ 14,727 (7,505)	\$ 27,779 (27,685)	\$ 16,881 (15,757)	\$ 368,713 (56,002)
Amortized cost	\$ 302,075	\$ 2,196	\$ 7,222	\$ 94	\$ 1,124	\$ 312,711

The Group's expected credit loss rate ranges from 1% to 100% for receivables aged up to 360 days and 100% for receivables aged over 360 days.

The movements of the loss allowance of trade receivables were as follows:

For the Year Ended December 31
2019	2018
	\$ 5,606
	53,077
	-
(1,582)	(2,681)
\$ 49,987	\$ 56,002
	\$ 56,002 - (4,433)

11. INVENTORIES

	December 31
	2019	2018
Finished goods	\$ 76,013	\$ 77,242
Work in process	4,662	4,649
Raw materials and supplies	576,701	555,400
Merchandise	113,327	124,323
	\$ 770,703	\$ 761,614

As of December 31, 2019 and 2018, the allowance for losses on inventory valuation and obsolescence was \$19,131 thousand and \$12,637 thousand, respectively.

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2019 and 2018 was \$9,340,368 thousand and \$9,950,166 thousand, respectively.

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2019 and 2018 included inventory write-downs of \$6,994 thousand and \$6,753 thousand, respectively.

The inventory write-downs recognized as cost of goods sold for the years ended December 31, 2019 and 2018 was \$691,838 thousand and \$581,453 thousand, respectively.

12. SUBSIDIARIES

Subsidiaries Included in the Consolidated Financial Statements

			(%)	Proportion of Ownership
			December 31
Investor	Investee	Main Business	2019	2018	Remark
Gourmet Master Co. Ltd.	85 Degrees Co., Ltd.	Investment	100.0	100.0
	Prime Scope Trading Limited	Investment	100.0	100.0
	Perfect 85 Degrees C, Inc.	Manufacturing and sale of baked goods	100.0	100.0
	85 Degrees Café International Pty. Ltd.	Retail sale of groceries and beverages	51.0	51.0
	Lucky Bakery Limited	Investment	100.0	100.0
	WinWin 85C Holding Co., Ltd.	Investment	100.0	100.0
Perfect 85 Degrees C, Inc.	WinPin 85 Investments, LLC	Retail sale of groceries and beverages	100.0	100.0
	Golden 85 Investments, LLC	Retail sale of groceries and beverages	65.0	65.0
85 Degree Co., Ltd.	Comestibles Master Co., Ltd.	Retail sale of groceries and beverages	100.0	100.0
Comestibles Master Co., Ltd.	Mei Wei Master Co., Ltd.	Retail sale of groceries and beverages	100.0	100.0
Mei Wei Master Co., Ltd.	Mei Wei Fu Xing Ltd.	Retail sale of groceries and beverages	60.0	60.0
WinWin 85C Holding Co., Ltd.	WinWin 85C LLC	Investment	100.0	100.0
	WinUS 85C LLC	Investment	100.0	100.0
Prime Scope Trading Limited	Shanghai Gourmet Master Food & Beverage Ltd.	Retail sale of groceries and beverages	100.0	100.0
	He-Shia Food & Beverage Ltd.	Retail sale of groceries and beverages	100.0	100.0
	Sheng-Pin (Hangzhou) Food Ltd.	Manufacturing and sale of baked goods	100.0	100.0
	He-Shia (Nanjing) Food & Beverage Ltd.	Retail sale of groceries and beverages	100.0	100.0
	Beijing 85 Food & Beverage Ltd.	Retail sale of groceries and beverages	25.0	25.0
	Zhejiang 85 Food & Beverage Ltd.	Retail sale of groceries and beverages	100.0	100.0
	Sheng-Pin (Beijing) Food Ltd.	Manufacturing and sale of baked goods	61.5	61.5
	Fuzhou 85 Food & Beverage Ltd.	Retail sale of groceries and beverages	100.0	100.0
	Sheng-Pin (Jiangsu) Food Ltd.	Manufacturing and sale of baked goods	100.0	100.0
	Sheng-Pin (Xiamen) Food Ltd.	Manufacturing and sale of baked goods	100.0	100.0
	Sheng-Pin (Qingdao) Food Ltd.	Manufacturing and sale of baked goods	100.0	100.0
	Xiamen 85 Food & Beverage Ltd.	Retail sale of groceries and beverages	100.0	100.0
	Shenyang 85 Food & Beverage Ltd.	Retail sale of groceries and beverages	100.0	100.0
	Sheng-Pin (Shenyang) Food Ltd.	Manufacturing and sale of baked goods	100.0	100.0
	85 Degrees (Qingdao) Food & Beverage Management Ltd.	Retail sale of groceries and beverages	100.0	100.0
	85 Degrees (Jiangsu) Food Ltd.	Manufacturing and sale of baked goods	25.0	25.0
	Wincase Limited	Retail sale of groceries and beverages	100.0	100.0
	Worldinn Limited	Manufacturing and sale of baked goods	100.0	100.0
Shanghai Gourmet Master Food & Beverage Ltd.	Sheng-Pin (Shanghai) Food Ltd.	Manufacturing and sale of baked goods	100.0	100.0
	Shanghai Howco Jing Way Food & Beverage Ltd.	Retail sale of groceries and beverages	100.0	100.0
	Shenzheng 85 Food & Beverage Ltd.	Retail sale of groceries and beverages	85.0	85.0
	Chengdu 85 Food & Beverage Ltd.	Retail sale of groceries and beverages	100.0	100.0
	Sheng-Pin (Wuhan) Food Ltd.	Manufacturing and sale of baked goods	100.0	100.0
	Wuhan Jing Way Food & Beverage Ltd.	Retail sale of groceries and beverages	57.0	57.0
	Jianxi Jing Way Food & Beverage Ltd.	Retail sale of groceries and beverages	100.0	100.0
	Jin Wei Industrial (Shanghai) Ltd.	Grocery retail	100.0	100.0
	Guangzhou 85 Degree Food & Beverage Management Ltd.	Retail sale of groceries and beverages	100.0	100.0
	85 Degrees (Jiangsu) Food Ltd.	Manufacturing and sale of baked goods	75.0	75.0

(Continued)

			(%)	Proportion of Ownership
			December 31
Investor	Investee	Main Business	2019	2018	Remark
	Mai-Jia (Chengdu) Food Ltd.	Manufacturing and sale of baked goods	100.0	100.0
	Jia Ding Jing Way Food & Beverage Ltd.	Retail sale of groceries and beverages	100.0	100.0
	Kunshan 85 Food & Beverage Ltd.	Retail sale of groceries and beverages	100.0	100.0
	Sheng-Pin (Dongguan) Food Ltd.	Manufacturing and sale of baked goods	100.0	100.0
	Shanghai Minhang Jinxia Food & Beverage Ltd.	Manufacturing and sale of baked goods	100.0	-	a
He-Shia Food & Beverage Ltd.	Wuhan Jing Way Food & Beverage Ltd.	Retail sale of groceries and beverages	43.0	43.0
	Beijing 85 Food & Beverage Ltd.	Retail sale of groceries and beverages	75.0	75.0
	Sheng-Pin (Beijing) Food Ltd.	Manufacturing and sale of baked goods	38.5	38.5
Shenzheng 85 Food & Beverage Ltd.	Sheng-Pin (Shenzhen) Food Ltd.	Manufacturing and sale of baked goods	-	100.0	b
85 Degree (Qingdao) Food & Beverage Management Ltd.	Qingdao Jie Wei Food & Beverage Management Ltd.	Retail sale of groceries and beverages	100.0	100.0
Jin Wei Industrial (Shanghai) Ltd.	Xia He Wei (Xiamen) Trading Limited	Grocery retail	100.0	-	c
					(Concluded)

Remarks:

a. New subsidiary incorporated in October 2019.
b. In order to simplify the Group's investment structure, Sheng-Pin (Shenzhen) Food Ltd. was dissolved in 2019.
c. New subsidiary incorporated in March 2019.

13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investment in Associates

	December 31
	2019	2018
Material associate
The Hot Pot Food and Beverage Management Co., Ltd.	\$ 95,198	\$ 92,839

Material Associate

	Voting Rights	Proportion of Ownership and
	December 31
Name of Associate	2019	2018
The Hot Pot Food and Beverage Management Co., Ltd.	23.01%	23.01%

Refer to Table 8 "Information on Investees" for the nature of activities, principal place of business and country of incorporation of the associate.

Investments accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments were calculated based on financial statements that have not been audited. Management believes there is no material impact on the equity method of accounting or the calculation of the share of profit or loss and other comprehensive income from the financial statements that have not been audited.

The Hot Pot Food and Beverage Management Co., Ltd.

		December 31
	2019	2018
Current assets	\$ 448,822	\$ 370,125
Non-current assets	626,626	236,350
Current liabilities	(653,983)	(196,311)
Non-current liabilities	(7,740)	(6,690)
Equity	\$ 413,725	\$ 403,474
Proportion of the Group's ownership	23.01%	23.01%
Equity attributable to the Group	\$ 95,198	\$ 92,839
Carrying amount	\$ 95,198	\$ 92,839
	For the Year Ended December 31
	2019	2018
Revenue	\$ 1,085,441	\$ 1,011,355
Profit for the year	\$ 71,451	\$ 87,633

14. PROPERTY, PLANT AND EQUIPMENT

	Land	Buildings	Machinery Equipment	Leasehold Improvements	Transportation Equipment	Office Equipment	Other Equipment	Construction in Progress	Total
Cost
Balance at January 1, 2018 Additions Disposal Reclassifications Effect of foreign	\$ 564,497 192,126 - -	\$ 2,014,284 222,318 - (1,278)	\$ 2,563,177 428,340 (279,627) 5,426	\$ 3,347,585 545,515 (195,019) 396,499	\$ 58,965 29,370 (24,312) -	\$ 551,987 42,743 (70,386) 5,656	\$ 372,774 104,593 (38,302) (9,646)	\$ 181,810 330,249 - (396,657)	\$ 9,655,079 1,895,254 (607,646) -
currency exchange differences	3,257	(34,981)	(24,654)	(11,783)	1,672	(8,192)	2,865	3,198	(68,618)
Balance at December 31, 2018	\$ 759,880	\$ 2,200,343	\$ 2,692,662	\$ 4,082,797	\$ 65,695	\$ 521,808	\$ 432,284	\$ 118,600	\$ 10,874,069
Accumulated depreciation and impairment
Balance at January 1, 2018 Depreciation expense Impairment loss Disposal Reclassifications Effect of foreign	\$ - - - - -	\$ 361,953 110,546 - - (995 )	\$ 1,428,047 383,966 - (256,245) (178 )	\$ 1,609,478 543,949 18,191 (121,831) (286 )	\$ 35,353 9,261 - (13,805) -	\$ 431,094 73,297 - (69,418) 2,210	\$ 196,542 66,793 - (32,963) (751 )	\$ - - - - -	\$ 4,062,467 1,187,812 18,191 (494,262) -
currency exchange differences	-	(7,569)	(15,056)	(17,321)	1,011	(7,787)	2,723	-	(43,999)
Balance at December 31, 2018	\$ -	\$ 463,935	\$ 1,540,534	\$ 2,032,180	\$ 31,820	\$ 429,396	\$ 232,344	\$ -	\$ 4,730,209
Carrying amount at December 31, 2018	\$ 759,880	\$ 1,736,408	\$ 1,152,128	\$ 2,050,617	\$ 33,875	\$ 92,412	\$ 199,940	\$ 118,600	\$ 6,143,860
Cost
Balance at January 1, 2019 Additions Disposal Reclassifications Effect of foreign	\$ 759,880 - - -	\$ 2,200,343 24,592 - -	\$ 2,692,662 280,830 (200,003) 16,356	\$ 4,082,797 450,660 (290,363) 240,798	\$ 65,695 7,147 (6,015) -	\$ 521,808 40,714 (65,068) 3,026	\$ 432,284 72,735 (16,004) 1,268	\$ 118,600 199,744 - (261,448)	\$ 10,874,069 1,076,422 (577,453) -
currency exchange differences	(5,987)	(76,022)	(81,381)	(137,721)	(1,808)	(16,960)	(10,670)	(980 )	(331,529)
Balance at December 31, 2019	\$ 753,893	\$ 2,148,913	\$ 2,708,464	\$ 4,346,171	\$ 65,019	\$ 483,520	\$ 479,613	\$ 55,916	\$ 11,041,509 (Continued)

	Land	Buildings	Machinery Equipment	Leasehold Improvements	Transportation Equipment	Office Equipment	Other Equipment	Construction in Progress	Total
Accumulated depreciation and impairment
Balance at January 1, 2019	\$ -	\$ 463,935	\$ 1,540,534	\$ 2,032,180	\$ 31,820	\$ 429,396	\$ 232,344	\$ -	\$ 4,730,209
Depreciation expense	-	115,786	371,852	575,049	10,635	55,535	62,857	-	1,191,714
Impairment loss	-	-	-	9,078	-	-	-	-	9,078
Disposal	-	-	(191,817)	(182,633)	(2,986)	(63,428)	(11,675)	-	(452,539)
Effect of foreign currency exchange differences	-	(18,899)	(47,704)	(78,649)	(1,129)	(14,621)	(5,317)	-	(166,319)
Balance at December 31, 2019	\$ -	\$ 560,822	\$ 1,672,865	\$ 2,355,025	\$ 38,340	\$ 406,882	\$ 278,209	\$ -	\$ 5,312,143
Carrying amount at December 31, 2019	\$ 753,893	\$ 1,588,091	\$ 1,035,599	\$ 1,991,146	\$ 26,679	\$ 76,638	\$ 201,404	\$ 55,916	\$ 5,729,366 (Concluded)

Impairment losses recognized on property, plant and equipment for the years ended December 31, 2019 and 2018 amounted to \$9,078 thousand and \$18,191 thousand, respectively, which was mainly attributable to the decrease in expected future cash inflow of some of the stores, plant and equipment. The carrying amounts of the machinery equipment and leasehold improvements were assessed to be less than their recoverable amounts, and the impairment loss has been recognized under other gains and losses in the consolidated statements of comprehensive income.

The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings
Main buildings	20-49 years
Power system engineering	11 years
Furnishing	4-20 years
Machinery equipment	1-11 years
Leasehold improvements	1-8 years
Transportation equipment	1-10 years
Office equipment	1-10 years
Other equipment	1-15 years

Property, plant and equipment pledged as collateral for bank borrowings are set out in Note 33.

15. LEASE ARRANGEMENTS

a. Right-of-use assets - 2019

	December 31, 2019
Carrying amounts
Land	\$ 176,013
Buildings	6,494,850
Transportation equipment	22,981
Other equipment	31,307
	\$ 6,725,151

		For the Year Ended December 31, 2019
	Additions to right-of-use assets	\$ 2,354,043
	Depreciation charge for right-of-use assets Land Buildings Transportation equipment Other equipment	\$ 5,081 2,243,104 11,266 13,064 \$ 2,272,515
b.	Lease liabilities - 2019
		December 31, 2019
	Carrying amounts
	Current Non-current	\$ 1,950,037 \$ 4,856,224
	Range of discount rate for lease liabilities was as follows:
		December 31, 2019

Land	-
Buildings	1.00%-5.49%
Transportation equipment	1.00%
Other equipment	1.00%

c. Material lease activities and terms (the Group is lessee)

The Group leases land and buildings for the use of plants, offices and retail stores with lease terms of 1 to 50 years. Variable lease payments of lease contracts for some of the retail stores are determined at a specific percentage of sales generated from the respective stores. The Group does not have bargain purchase options to acquire the leasehold land and buildings at the end of the lease terms. In addition, the Group is prohibited from subleasing or transferring all or any portion of the underlying assets without the lessor's consent.

In order to cope with retail demand, the Group entered into a large number of lease arrangements for the purposes of renting commercial space for the establishment of retail stores. Lease terms are negotiated by the management of each respective area and includes a wide range of payment terms. Variable payment terms are used for a variety of reasons, including minimizing the fixed cost base for newly established stores and for reasons of margin control and operational flexibility. Variable lease payment terms vary widely across the Group:

The majority of variable payments are calculated based on the specified percentage of each store's total sales.

Variable lease payments account for approximately 0% to 100% of the total lease payments of each individual item of property.
Some variable lease payment terms include minimum or cap clauses.

Variable payment terms lead to the incurrence of higher rental costs for stores with higher sales. However, the use of variable payment terms help to facilitate the management of margins across the Group.

Variable rental expenses are expected to continue to represent a similar proportion of store sales in future years.

d. Subleases

In addition to the sublease transactions described in Note 9, the other sublease transactions are set out below.

Subleases of lease arrangements under operating leases - 2018

The total future minimum sublease payments expected to be received under non-cancellable subleases as of December 31, 2018 amounted to \$290,396 thousand.

e. Other lease information

2019

	For the Year Ended December 31, 2019
Expenses relating to short-term leases	\$ 25,003
Expenses relating to low-value asset leases	\$ 11,242
Expenses relating to variable lease payments not included in the measurement of
lease liabilities	\$ 121,325
Total cash outflow for leases	\$ (2,721,644)

The Group leases certain warehouses which qualify as short-term leases and certain office equipment which qualify as low-value asset leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

2018

The future minimum lease payments of non-cancellable operating lease commitments are as follows:

	December 31, 2018
Not later than 1 year	\$ 2,138,153
Later than 1 year and not later than 5 years	4,543,466
Later than 5 years	856,050
	\$ 7,537,669

16. INVESTMENT PROPERTIES

	Completed Investment Properties
Cost
Balance at January 1, 2018 Effect of foreign currency exchange differences	\$ 271,008 (1,621)
Balance at December 31, 2018	\$ 269,387
Accumulated depreciation and impairment
Balance at January 1, 2018 Depreciation expense Effect of foreign currency exchange differences	\$ (60,586) (6,296) 1,217
Balance at December 31, 2018	\$ (65,665)
Carrying amount at December 31, 2018	\$ 203,722
Cost
Balance at January 1, 2019 Effect of foreign currency exchange differences	\$ 269,387 (3,488)
Balance at December 31, 2019	\$ 265,899
Accumulated depreciation and impairment
Balance at January 1, 2019 Depreciation expense Effect of foreign currency exchange differences	\$ (65,665) (3,952) 2,291
Balance at December 31, 2019	\$ (67,326)
Carrying amount at December 31, 2019	\$ 198,573

The investment properties are depreciated using the straight-line method over their estimated useful lives as follows:

Main buildings	20-49 years
----------------	-------------

The carrying amount of the investment properties located in Taichung, Taiwan was \$167,731 thousand. The fair values of the investment properties were not assessed by independent appraisers, instead, they were assessed by the management of the Company taking into account the situation of use of the assets frequently used by market participants and the market prices. The valuation was arrived at by reference to market evidence of transaction prices of similar properties.

		December 31
	2019	2018
Fair value	\$ 215,056	\$ 185,907

The carrying amount of the investment properties located in Shenyang City, Liaoning Province, China was \$30,842 thousand. The fair value of the investment properties at December 31, 2017 was measured by independent qualified professional valuers using Level 3 inputs, and the valuation was arrived at by reference to market evidence of transaction prices of similar properties. Management of the Company had assessed and determined that there were no significant changes in the fair value at December 31, 2019 as compared to that at December 31, 2017.

	December 31
	2019	2018
Fair value	\$ 37,423	\$ 38,874

All of the Group's investment properties are held under freehold interests. The investment properties pledged as collateral for bank borrowings are set out in Note 33.

17. OTHER INTANGIBLE ASSETS

	Goodwill	Trademarks	Computer Software	Others	Total
Cost
Balance at January 1, 2018 Additions Disposals Effect of foreign currency	\$ 745 - -	\$ 7,890 484 -	\$ 172,504 22,960 (506)	\$ - 1,447 -	\$ 181,139 24,891 (506)
exchange differences	-	14	(2,247)	(26)	(2,259)
Balance at December 31, 2018	\$ 745	\$ 8,388	\$ 192,711	\$ 1,421	\$ 203,265
Accumulated amortization and impairment
Balance at January 1, 2018 Amortization expense Disposals Impairment losses Effect of foreign currency	\$ - - - 745	\$ 2,130 892 - -	\$ 132,906 21,594 (505) -	\$ - 663 - -	\$ 135,036 23,149 (505) 745
exchange differences	-	2	(2,168)	(12)	(2,178)
Balance at December 31, 2018	\$ 745	\$ 3,024	\$ 151,827	\$ 651	\$ 156,247
Carrying amount at December 31, 2018	\$ -	\$ 5,364	\$ 40,884	\$ 770	\$ 47,018
Cost
Balance at January 1, 2019 Additions Disposals Effect of foreign currency	\$ 745 - (745)	\$ 8,388 1,807 -	\$ 192,711 17,579 -	\$ 1,421 - -	\$ 203,265 19,386 (745)
exchange differences	-	(22)	(6,352)	(53)	(6,427)
Balance at December 31, 2019	\$ -	\$ 10,173	\$ 203,938	\$ 1,368	\$ 215,479 (Continued)

	Goodwill	Trademarks	Computer Software	Others	Total
Accumulated amortization and impairment
Balance at January 1, 2019 Amortization expense Disposals	\$ 745 - (745)	\$ 3,024 966 -	\$ 151,827 21,512 -	\$ 651 710 -	\$ 156,247 23,188 (745)
Effect of foreign currency exchange differences	-	(4)	(5,472)	(50)	(5,526)
Balance at December 31, 2019	\$ -	\$ 3,986	\$ 167,867	\$ 1,311	\$ 173,164
Carrying amount at December 31, 2019	\$ -	\$ 6,187	\$ 36,071	\$ 57	\$ 42,315 (Concluded)

Other intangible assets are amortized on a straight-line basis over their estimated useful lives as follows:

Trademark	1-10 years
Computer software	1-10 years
Others	2 years

18. OTHER ASSETS

	December 31
		2019		2018
Current
Prepayments for rent	\$	49,007	\$	229,630
Prepayments		40,758		59,707
Offset against business tax payable		65,398		85,097
Other prepayments		59,031		55,364
	\$	214,194	\$	429,798
Non-current
Prepayments for equipment	\$	256,654	\$	227,084
Refundable deposits		444,234		478,856
Prepayments for property, plant and equipment		334,815		-
Long-term prepayments for leases		-		189,896
Others		1,048		3,162
	\$	1,036,751	\$	898,998

a. Prepayments for rent mainly refers to prepaid rent for the leasing of stores in accordance with the contracts.
b. Prepayments for equipment are generated due mainly to the purchase of equipment for the factories.
c. Refundable deposits are for rentals of stores and factories.
d. Long-term prepayments for leases are for land use rights in China.
e. Prepayments for property, plant and equipment are due to the acquisition of a factory in New Taipei City.

19. BORROWINGS

a. Short-term borrowings

		December 31
	2019	2018
Secured borrowings (Note 33)
Bank loans	\$ 396,724	\$ 405,498

The range of weighted average effective interest rates of bank loans was 2.85%-3.74% and 2.35%-3.74% per annum as of December 31, 2019 and 2018, respectively.

b. Long-term borrowings

	December 31
Secured borrowings (Note 33)	2019	2018
Long-term debt payable - related parties* (Note 32)	\$ 156,169	\$ 159,600

* Long-term debt payable to related parties of the Group is payable to directors. An interest rate of 3.75% per annum was charged on the outstanding balance during the years ended December 31, 2019 and 2018.

20. TRADE PAYABLES

The average credit period of purchases of certain goods was 45 days. The Group has financial risk management policies in place to ensure that all payables are paid within the pre-agreed credit terms.

21. OTHER LIABILITIES

	December 31
	2019	2018
Current
Other payables
Accrued payroll and bonuses	\$ 481,692	\$ 474,585
Utilities	63,220	64,586
Insurance	80,894	83,154
Rent	52,893	172,895
Payables for purchases of equipment	181,886	303,414
Others (shipping expense, repair expense, etc.)	495,505	413,606
	\$ 1,356,090	\$ 1,512,240
		(Continued)

	December 31
	2019	2018
Deferred revenue Arising from government grants (Note 28)	\$ 1,889	\$ 1,962
Other liabilities	\$ 37,053	\$ 47,301
Non-current
Decommission, restoration and rehabilitation provisions Guarantee deposits received Deferred revenue Arising from government grants (Note 28)	\$ 98,055 171,943 8,971	\$ 91,974 167,650 11,117
	\$ 278,969	\$ 270,741 (Concluded)

Guarantee deposits mainly consist of the deposits for the franchise, decoration work and the tender performance bond of logistics companies and other manufacturers.

22. RETIREMENT BENEFIT PLANS

Defined Contribution Plans

Comestibles Master Co., Ltd., Mei Wei Master Co., Ltd. and Mei Wei Fu Xing Ltd. of the Group adopted a pension plan under the Labor Pension Act (the "LPA") of the R.O.C., which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees' individual pension accounts at 6% of monthly salaries and wages.

The employees of the Group's subsidiaries in China are members of a state-managed retirement benefit plan operated by the government of China. The subsidiaries are required to contribute a specified percentage of the payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions.

23. EQUITY

Share Capital

Ordinary shares

	December 31
	2019	2018
Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued	850,000 \$ 8,500,000 180,000 \$ 1,800,000	850,000 \$ 8,500,000 180,000 \$ 1,800,000

Fully paid ordinary shares, which have a par value of \$10, carry one vote per share and carry a right to dividends.

Capital Surplus

The capital surplus arising from shares issued in excess of par (including share premium from the issuance of ordinary shares) may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to capital (limited to a certain percentage of the Company's capital surplus and once a year).

Retained Earnings and Dividend Policy

According to Company's Articles of Incorporation, the Company may declare dividends in the form of an ordinary resolution, but its amount must not exceed the amount recommended by the board of directors. Where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as a legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company's board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders' meeting for the distribution of dividends and bonuses to shareholders. The Company's reserve is used for operational or investment purposes in a manner deemed appropriate by the board of directors, and the investment does not need to be part of the reserve separately from other investments. After meeting the aforementioned requirements, the remaining retained earnings should be appropriated in the following order after approval has been obtained from the shareholders:

a. Bonus for employees (including subsidiaries' employees) at 3% or less;
b. Remuneration of directors and supervisors at 1% or less; and
c. The earnings appropriated should not be less than 30% of the after-tax earnings, and cash dividends distributed should not be less than 10% of the total cash dividends and share dividends distributed.

In accordance with the amendments to the Company Act of the ROC in May 2015, the recipients of dividends and bonuses are limited to shareholders and do not include employees. Because the Company is incorporated in the Cayman Islands, the Company Act of the ROC is not applicable to the Company. The Company does not need to propose amendments to its Articles of Incorporation.

For the years ended December 31, 2019 and 2018, there were no accruals of bonuses for employees and remuneration of directors and supervisors. Material differences between estimated amounts and the amounts proposed by the board of directors on or before the consolidated financial statements are authorized for issue are adjusted in the year the bonuses and remuneration were recognized. If there is a change in the proposed amounts after the consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate. If share bonuses are resolved to be distributed to employees, the number of shares is determined by dividing the amount of the share bonuses by the fair value of the shares. The fair value of the shares is stated at the closing price (after considering the effect of cash and share dividends) of the shares on the day immediately preceding the shareholders' meeting.

Items referred to under Rule No. 1010012865, Rule No. 1010047490 and Rule No. 1030006415 issued by the FSC and the directive titled "Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs", shall be appropriated to or reversed from a special reserve by the Company. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and may thereafter be distributed.

The appropriations of earnings for 2018 and 2017 approved in the shareholders' meetings on June 14, 2019 and June 5, 2018, respectively, were as follows:

		Appropriation of Earnings For the Year Ended December 31			Dividends Per Share (NT\$)
	2018		2017	2018	2017
Reserve	\$ 166,762		\$ 213,808	\$ -	\$ -
Special reserve		89,899	132,716	-	-
Cash dividends	900,000		977,962	5.00	6.00
Share dividends		-	7,070	-	0.04

The Company's shareholders also resolved to issue share dividends from the capital surplus of \$162,994 thousand in the shareholders' meeting on June 5, 2018.

The Company held their regular shareholders' meetings on June 14, 2019 and June 5, 2018 and resolved that there would be no distribution of bonuses to employees and remuneration of directors and supervisors for 2018 and 2017, respectively.

The appropriation of earnings for 2019 was proposed by the Company's board of directors on March 12, 2020. The appropriations and dividends per share were as follows:

	Appropriation of Earnings	Dividends Per Share (NT\$)
Reserve	\$ 93,286	\$ -
Special reserve	277,299	-
Cash dividends	540,000	3

The appropriation of earnings for 2018 is subject to the resolution of the shareholders in the shareholders' meeting to be held on June 5, 2019.

There was no difference between the amounts of bonuses for employees and the remuneration of directors and supervisors approved in the shareholders' meetings held on June 14, 2019 and June 5, 2018 and the amounts recognized in the financial statements for the years ended December 31, 2018 and 2017, respectively.

Information on the bonuses for employees and the remuneration of directors and supervisors proposed by the Company's board of directors is available on the Market Observation Post System website of the Taiwan Stock Exchange.

24. REVENUE

	For the Year Ended December 31
	2019	2018
Revenue from contracts with customers Revenue from the sale of goods Licensing revenue	\$ 23,082,066 74,855	\$ 24,078,969 36,115
	\$ 23,156,921	\$ 24,115,084

a. Disaggregation of revenue

Refer to Note 37 for information about the disaggregation of revenue.

b. Contract balances

	December 31,	December 31,	January
	2019	2018	1, 2018
Trade receivables	\$	\$	\$
(Note 10)	300,041	312,711	356,296
Contract liabilities	\$	\$	\$
Sale of goods	1,292,805	1,241,603	1,230,587
Customer loyalty program	210,547	174,555	127,019
Contract liabilities -	\$	\$	\$
current	1,503,352	1,416,158	1,357,606

The changes in the contract liability balances primarily result from the timing difference between the Group's satisfaction of performance obligations and the customer's payment.

Revenue recognized in their respective reporting periods from the contract liabilities at the beginning of the year for the years ended December 31, 2019 and 2018 were \$1,528,004 thousand and \$1,315,113 thousand, respectively.

25. OTHER COMPREHENSIVE INCOME (LOSS) FROM CONTINUING OPERATIONS

a. Other income

	For the Year Ended December 31
	2019	2018
Interest income	\$ 201,921	\$ 199,232
Dividend income	7,260	6,930
Income from government grants	38,285	39,459
Rental income	18,626	19,370
Others	41,746	80,643
	\$ 307,838	\$ 345,634

b. Other gains and losses

	For the Year Ended December 31
	2019	2018
Net foreign exchange losses	\$ (20,203)	\$ (53,422)
Loss on disposal of property, plant and equipment	(120,027)	(72,787)
Net gain (loss) arising from financial assets held for trading	18,537	(16,929)
Impairment loss	(9,078)	(18,936)
Estimated compensation losses from litigations	(78,602)	-
Others	(76,287)	(42,001)
	\$ (285,660)	\$ (204,075)

c. Finance costs

	For the Year Ended December 31
	2019	2018
Interest on lease liabilities	\$ (238,153)	\$ -
Interest on bank loans	(16,794)	(22,031)
Interest on loans from related parties (Note 32)	(5,906)	(5,921)
	\$ (260,853)	\$ (27,952)

d. Depreciation and amortization

	For the Year Ended December 31
	2019	2018
Property, plant and equipment	\$ 1,191,714	\$ 1,187,812
Investment properties	3,952	6,296
Right-of-use assets	2,272,515	-
Intangible assets	23,188	23,149
	\$ 3,491,369	\$ 1,217,257
An analysis of depreciation by function
Operating costs	\$ 247,613	\$ 209,882
Operating expenses	3,220,568	984,226
	\$ 3,468,181	\$ 1,194,108
An analysis of amortization by function
Operating costs	\$ 710	\$ 664
Selling and marketing expenses	8,717	2,020
General and administrative expenses	13,761	20,465
	\$ 23,188	\$ 23,149

e. Employee benefits expense

	For the Year Ended December 31
	2019	2018
Post-employment benefits
Defined contribution plans	\$ 57,871	\$ 58,546
Other employee benefits	6,904,638	6,740,844
	\$ 6,962,509	\$ 6,799,390
An analysis of employee benefits expense by function
Operating costs	\$ 1,018,246	\$ 1,052,051
Operating expenses	5,944,263	5,747,339
	\$ 6,962,509	\$ 6,799,390

f. Impairment loss on non-financial assets

	For the Year Ended December 31
	2019	2018
Other intangible assets (included in other gains and losses) Property, plant and equipment (included in other gains and losses) Inventories (included in operating costs)	\$ - (9,078) (6,994)	\$ (745) (18,191) (6,753)
	\$ (16,072)	\$ (25,689)

26. INCOME TAX

a. Income tax recognized in profit or loss

The major components of tax expense were as follows:

		For the Year Ended December 31
	2019	2018
Current tax
In respect of the current year	\$ 473,008	\$ 614,543
Adjustments for prior year	(14,242)	11,694
	458,766	626,237
Deferred tax
In respect of the current year	92,068	125,890
Adjustments to deferred tax attributable to changes
in tax rates and laws	-	6,625
	92,068	132,515

Income tax expense recognized in profit or loss	\$ 550,834	\$ 758,752

A reconciliation of accounting profit and income tax expense is as follow:

	For the Year Ended December 31
		2019		2018
Profit before income tax	\$	1,485,274	\$	2,418,697
Income tax expense calculated at the statutory rate	\$	342,740	\$	587,007
Nondeductible expenses in determining taxable income		7,786		10,298
Tax-exempt income		(11,102)		(12,309)
Deferred tax effect of earnings of subsidiaries		156,842		68,345
Withholding tax on remitted overseas earnings		-		114,196
Income tax on unappropriated earnings		24,247		-
Unrecognized deductible temporary differences		(4,867)		(4,619)
Unrecognized loss carryforwards		49,430		(22,485)
Effect of tax rate changes		-		6,625
Adjustments for prior years' tax		(14,242)		11,694
Income tax expense recognized in profit or loss	\$	550,834	\$	758,752

The Income Tax Act in the ROC was amended in 2018, and the corporate income tax rate was adjusted from 17% to 20%. In addition, the rate of the corporate surtax applicable to the 2018 unappropriated earnings has been reduced from 10% to 5%.

The USA also amended the Income Tax Law, and starting from 2018, the maximum corporate income tax rate will be reduced from 35% to 21%.

As the status of the 2020 appropriation of earnings is uncertain, the potential income tax consequences of the 2019 unappropriated earnings are not reliably determinable.

b. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities are as follows:

For the year ended December 31, 2019

			Recognized				Paid in the
Deferred Tax Assets	Opening Balance		in Profit or Loss		Exchange Differences		Current Year	Closing Balance
Temporary differences
Unrealized foreign exchange losses	\$	873 \$	(434)	\$	-	\$	-	\$	439
Salaries and wages payable	10,248		(10,223)		(25)		-		-
Inventory write-downs	2,336		1,491		(91)		-		3,736
Operating leases	19,992		(19,842)		(150)		-		-
Property, plant and equipment	13,211		2,032		(482)		-		14,761
Right-of-use assets		-	54,890		(1,218)		-		53,672
Deferred revenue	23,702		5,679		(924)		-		28,457
Others		779	644		(51)		-		1,372
	71,141		34,237		(2,941)		-		102,437
Tax losses	39,193		(1,053)		(1,034)		-		37,106
	\$ 110,334	\$	33,184	\$	(3,975)	\$	-		\$ 139,543
			Recognized				Paid in the

Deferred Tax Liabilities	Opening in Profit or Balance Loss		Exchange Differences	Current Year	Closing Balance
Temporary differences
Unrealized foreign exchange losses	\$ (837)	\$ 833	\$ 4	\$ -	\$ -
Unappropriated earnings of subsidiaries	(66,803)	(156,842)	3,302	106,015	(114,328)
Property, plant and equipment	(75,592)	26,588	1,263	-	(47,741)
Salaries and wages payable	(4,814)	4,169	33	-	(612)
	\$ (148,046)	\$ (125,252)	\$ 4,602	\$ 106,015	\$ (162,681)

For the year ended December 31, 2018

Deferred Tax Assets	Opening Balance	Recognized in Profit or Loss	Effect of Tax Rate Changes	Exchange Differences	Closing Balance
Temporary differences
Unrealized foreign exchange losses	\$ 2,023	\$ (1,486)	\$ 357	\$ (21)	\$ 873
Salaries and wages payable	-	10,484	-	(236)	10,248
Inventory write-downs	3,996	(1,836)	211	(35)	2,336
Operating leases	14,807	8,239	(3,617)	563	19,992
Property, plant and equipment	16,114	(673)	(2,028)	(202)	13,211
Deferred revenue	21,393	4,050	(1,548)	(193)	23,702
Others	177	620	-	(18)	779
	58,510	19,398	(6,625)	(142)	71,141
Tax losses	37,908	1,075	-	210	39,193
	\$ 96,418	\$ 20,473	\$ (6,625)	\$ 68	\$ 110,334

Deferred Tax Liabilities	Opening Balance	Recognized in Profit or Loss	Effect of Tax Rate Changes		Exchange Differences	Closing Balance
Temporary differences
Unrealized foreign exchange losses	\$ -	\$ (836)	\$	-	\$ (1)	\$ (837)
Unappropriated earnings of subsidiaries	-	(68,345)		-	1,542	(66,803)
Property, plant and equipment	-	(72,257)		-	(3,335)	(75,592)
Salaries and wages payable	-	(4,925)		-	111	(4,814)
	\$ -	\$ (146,363)	\$	-	\$ (1,683)	\$ (148,046)

c. Items for which no deferred tax assets have been recognized in the consolidated balance sheets

	December 31
		2019
	Applicable Tax Rate 25%	Applicable Tax Rate 20%	Applicable Tax Rate 16.5% and 30%	Applicable Tax Rate 25%	2018 Applicable Tax Rate 17%	Applicable Tax Rate 16.5% and 30%
Loss carryforwards
Expiry in 2019	\$ -	\$ -	\$ -	\$ 56,519	\$ 9,369	\$ -
Expiry in 2020	20,010	2,012	-	20,786	2,012	-
Expiry in 2021	57,209	-	-	76,017	-	-
Expiry in 2022	11,044	1,352	-	11,473	1,352	-
Expiry in 2023	24,140	113	-	24,643	113	-
Expiry in 2024	76,869	76,911	-	-	76,911	-
Expiry in 2025	-	81,061	-	-	81,061	-
Expiry in 2026	-	12,921	-	-	12,921	-
Expiry in 2027	-	24,434	-	-	24,434	-
Expiry in 2028	-	12,814	-	-	13,373	-
Expiry in 2029	-	36,034	-	-	-	-
No expiration date	-	-	253,811	-	-	233,404
	\$ 189,272	\$ 247,652	\$ 253,811	\$ 189,438	\$ 221,546	\$ 233,404

d. Information about unused loss carryforwards

Loss carryforwards as of December 31, 2019 comprised:

		Unused Amount
		Applicable
Applicable Tax	Applicable Tax	Tax Rate
Rate 25%	Rate 20%	16.5% and 30%	Total	Expiry Year
\$ 25,176	\$ 2,012	\$ -	\$ 27,188	2020
62,375	-	-	62,375	2021
11,044	1,352	-	12,396	2022
38,247	113	-	38,360	2023
119,869	76,911	-	196,780	2024
-	81,061	-	81,061	2025
-	12,921	-	12,921	2026
-	24,434	-	24,434	2027
-	12,814	-	12,814	2028
-	36,034	-	36,034	2029
-	-	376,511	376,511	No expiration date
\$ 256,711	\$ 247,652	\$ 376,511	\$ 880,874

e. Income tax assessments

With respect to the income tax assessments of the Company and its subsidiaries, except for the Company which is not subject to income tax, the income tax returns of Comestibles Master Co., Ltd., Mei Wei Master Co., Ltd. and Mei Wei Fu Xing through 2017 have been assessed by the tax authorities in the ROC. The companies in other jurisdictions have been assessed based on their local tax laws.

27. EARNINGS PER SHARE

		For the Year Ended December 31
	2019	2018
Basic earnings per share From continuing operations	\$ 5.18	\$ 9.26

The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share were as follows:

Net Profit for the Year

		For the Year Ended December 31
	2019	2018
Earnings used in the computation of basic earnings per share	\$ 932,863	\$ 1,667,624

Weighted Average Number of Ordinary Shares Outstanding (In Thousands of Shares)

	For the Year Ended December 31
	2019	2018
Weighted average number of ordinary shares used in the computation of basic and diluted earnings per share	180,000	180,000

28. GOVERNMENT GRANTS

The amounts of project subsidies and incentives received for the years ended December 31, 2019 and 2018 were \$36,519 thousand and \$37,447 thousand, respectively. The government grants were recognized in non-operating income and expenses - other income in the consolidated statements of comprehensive income.

In January 2017, the Group received a government grant of \$19,574 thousand for its construction of a manufacturing plant. The amount was recognized as deferred revenue and subsequently transferred to profit or loss over the useful life of the related asset. This policy resulted in a credit to income of \$1,766 thousand and \$2,012 thousand for the years ended December 31, 2019 and 2018, respectively.

29. NON-CASH TRANSACTIONS

For the years ended December 31, 2019 and 2018, the Group entered into the following non-cash investing activities which were not reflected in the consolidated statements of cash flows:

a. The Group acquired property, plant and equipment with an aggregate fair value of \$1,076,422 thousand, with a cash payment of \$819,702 thousand, an offset of prepayments for equipment of \$306,849 thousand reduced from prepaid equipment, and \$50,129 thousand was reduced from payables for equipment for the year ended December 31, 2019 (refer to Note 14).
b. The Group acquired property, plant and equipment with an aggregate fair value of \$1,895,254 thousand, with a cash payment of \$1,296,975 thousand, an offset of prepayments for equipment of \$590,678 thousand reduced from prepaid equipment, \$59,400 thousand was reduced from prepayments for property, plant and equipment, and \$51,799 thousand was reduced from payables for equipment for the year ended December 31, 2018 (refer to Note 14).

30. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance.

The capital structure of the Group consists of net debt (borrowings offset by cash and cash equivalents) and equity attributable to owners of the Company (comprising issued capital, reserves, retained earnings and other equity).

The Group is not subject to any externally imposed capital requirements.

Key management personnel of the Group review the capital structure on a quarterly basis. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Group may adjust the amount of dividends paid to shareholders, the number of new shares issued and the amount of existing debt redeemed.

31. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments

Fair value of financial instruments not carried at fair value

The management considers the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements to approximate their fair values.

b. Fair value of financial instruments measured at fair value on a recurring basis
1) Fair value hierarchy

December 31, 2019

	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL
Listed shares and emerging
market shares	\$ 146,520	\$ -	\$ -	\$ 146,520
Mutual funds	10,150	-	-	10,150
Non-principal protected products	-	-	466,996	466,996
Other	-	-	1,081	1,081
	\$ 156,670	\$ -	\$ 468,077	\$ 624,747
December 31, 2018
	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL
Listed shares and emerging
market shares	\$ 128,040	\$ -	\$ -	\$ 128,040
Mutual funds	10,093	-	-	10,093
Principal protected products	-	-	427,431	427,431
Non-principal protected products	-	-	2,580,095	2,580,095
	\$ 138,133	\$ -	\$ 3,007,526	\$ 3,145,659

There were no transfers between Levels 1 and 2 in the current and prior periods.

2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2019

	Debt Instruments
Balance at January 1, 2019	\$ 3,007,526
Recognized in profit or loss (other income)	70,774
Additions	1,513,998
Repayments/settlements	(4,115,027)
Effect of foreign currency exchange differences	(9,194)
Balance at December 31, 2019	\$ 468,077

For the year ended December 31, 2018

	Debt Instruments
Balance at January 1, 2018	\$ 3,855,123
Recognized in profit or loss (other income)	156,378
Additions	7,578,820
Repayments/settlements	(8,522,450)
Effect of foreign currency exchange differences	(60,345)
Balance at December 31, 2018	\$ 3,007,526

c. Categories of financial instruments

	December 31
	2019	2018
Financial assets
Fair value through profit or loss (FVTPL)
Mandatorily classified as at FVTPL	\$ 624,747	\$ 3,145,659
Financial assets at amortized cost (Note 1)	6,768,629	4,168,370
Financial liabilities
Amortized cost (Note 2)	2,976,003	3,151,273

Note 1: The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, debt investments, notes receivable, trade receivables and other receivables.
Note 2: The balances include financial liabilities measured at amortized cost, which comprise short-term borrowings, trade payables, notes payable, other payables and long-term borrowings.
d. Financial risk management objectives and policies

The Group's major financial instruments include equity and debt investments, trade receivables, trade payables and borrowings. The Group's corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk.

1) Market risk

The Group's activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below).

a) Foreign currency risk

The Group has foreign currency denominated deposits and loans, which exposes the Group to foreign currency risk. There has been no change to the Group's exposure to market risk in relation to financial instruments or the manner in which these risks are managed and measured.

The carrying amounts of the Group's foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) at the end of the reporting period are set out in Note 35.

Sensitivity analysis

The Group was mainly exposed to the U.S. dollar.

The following table details the Group's sensitivity to a 1% increase and decrease in the Renminbi (the functional currency) against the relevant foreign currencies. The sensitivity analysis included only outstanding foreign currency denominated monetary items and foreign currency forward contracts designated as cash flow hedges and adjusts their translation at the end of the reporting period for a 1% change in foreign currency rates. A positive number below indicates an increase in pre-tax profit associated with the Renminbi weakening 1% against the relevant currency. For a 1% strengthening of the Renminbi against the relevant currency, there would be an equal and opposite impact on pre-tax profit and the balances below would be negative.

	U.S. Dollar Impact
	For the Year Ended December 31
	2019	2018
Profit or loss	\$ 1,505	\$ 2,643

* This was mainly attributable to the exposure on outstanding U.S. dollar denominated bank deposits which were not hedged at the end of the reporting period.
b) Interest rate risk

The Group was exposed to interest rate risk because entities in the Group borrowed funds at floating interest rates.

The carrying amounts of the Group's financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

	December 31
	2019		2018
Fair value interest rate risk Financial liabilities	\$ 156,169	\$	159,600
Cash flow interest rate risk Financial assets Financial liabilities	468,077 396,724		3,007,526 405,498

Sensitivity analysis

The sensitivity analysis below was determined based on the Group's exposure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liabilities outstanding at the end of the reporting period was outstanding for the whole year. A 1% increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management's assessment of the reasonably possible change in interest rates.

If interest rates had been 1% higher/lower and all other variables were held constant, the Group's pre-tax profit for the years ended December 31, 2019 and 2018 would increase/decrease by \$714 thousand and \$26,020 thousand, respectively, which would be mainly attributable to the Group's exposure to interest rates on its variable-rate bank borrowings.

The Group's sensitivity to interest rates increased during the current year mainly due to the increase in variable rate debt investments.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group.

At the end of the reporting period, the Group's maximum exposure to credit risk which would cause a financial loss to the Group due to failure to discharge an obligation by the counterparties arose from the carrying amount of the respective recognized financial assets as stated in the consolidated balance sheets.

Most of the Group's counterparties are franchisees with whom the Group has business relationships with for a long time, and the Group monitors trade receivables from such franchisees continuously. Thus, impairment loss recognized on these trade receivables was not significant. Trade receivables cover a large number of customers spread across diverse industries and geographical areas. Therefore, the Group assessed that the concentration of credit risk was limited.

The concentration of credit risk with such counterparties was never more than 10% of the Group's monetary assets.

Other than the abovementioned franchisees, because the counterparties of liquid funds were banks monitored by regulators in the People's Republic of China and Republic of China, such credit risk was limited.

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group's operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Group relies on bank borrowings as a significant source of liquidity. As of December 31, 2019 and 2018, the Group had available unutilized bank loan facilities set out below.

		December 31
	2019	2018
Unsecured bank loan facilities:
Amount used	\$ -	\$ -
Amount unused	230,000	30,000
	\$ 230,000	\$ 30,000
Secured bank loan facilities:
Amount used	\$ 396,724	\$ 405,498
Amount unused	1,741,400	1,171,768
	\$ 2,138,124	\$ 1,577,266

32. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Besides as disclosed elsewhere in other notes, details of transactions between the Group and other related parties are disclosed below:

a. Name and relationship of related parties

Related Party Name	Related Party Category
The Hot Pot Food and Beverage Management Co., Ltd. Xiang Tian (Shanghai) Food and Beverage Management Co., Ltd The Hot Pot (Shanghai) Food and Beverage Management Co., Ltd Infinity Emerging Markets Limited	Associates Related parties Related parties Directors

b. Other transactions

		For the Year Ended December 31
Line Item	Related Party Category	2019	2018
Rental income	Associates Related parties	\$ 699 -	\$ 698 1,321
		\$ 699	\$ 2,019
Interest expense	Directors	\$ 5,906	\$ 5,921

The rent paid by the related parties for the rent of commercial space for operational purposes is paid on a monthly basis at the agreed price.

c. Receivables from related parties (excluding loans to related parties)

		December 31
Line Item	Related Party Category	2019	2018
Trade receivables	Associates Related parties	\$ 2 -	\$ 564 2
		\$ 2	\$ 566
Other receivables	Associates Related parties	\$ 828 449	\$ 1,693 235
		\$ 1,277	\$ 1,928

The outstanding trade receivables from related parties are unsecured. For the years ended December 31, 2019 and 2018, no impairment loss was recognized for trade receivables from related parties.

d. Payables to related parties (excluding loans from related parties)

			December 31
	Line Item	Related Party Category	2019	2018
	Other payables	Directors	\$ 342	\$ 2,095
		The outstanding other payables from related parties are unsecured.
e.	Loans from related parties
			For the Year Ended December 31
	Related Party Category/Name		2019	2018
	Directors

The Group obtained unsecured loans from related parties at rates comparable to market interest rates.

Infinity Emerging Markets Limited \$ 156,169 \$ 159,600

The loans from the director were unsecured.

f. Other transactions with related parties

The Group performed technical services for associates and related parties. For the years ended December 31, 2019 and 2018, income from technical services amounted to \$737 thousand and \$5,613 thousand, respectively.

g. Compensation of key management personnel

	For the Year Ended December 31
	2019	2018
Short-term benefits	\$ 29,059	\$ 23,809

The remuneration of directors and key executives was determined by the remuneration committee based on the performance of individuals and market trends.

33. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral to banks for bank borrowings:

		December 31
	2019	2018
Property, plant and equipment
Land	\$ 293,761	\$ 330,189
Buildings	14,814	40,755
Financial assets at amortized cost - current	57,228	74,319
Investment properties	60,192	60,726
	\$ 425,995	\$ 505,989

34. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Group as of December 31, 2019 and 2018 were as follows:

a. Significant commitments

Unrecognized commitments were as follows:

	December 31
	2019	2018
Acquisition of property, plant and equipment	\$ 819,824	\$ 81,925

b. Contingencies

Employees of the Group's subsidiary in the United States violated the US labor related regulations. Based on legal advice, as of the date of issue of the consolidated financial statements, the litigation procedures are still ongoing, and the compensation amount which was estimated as US\$2,250 thousand by the attorney had been recognized as compensation losses and accounted for under other gains and losses.

35. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The group entities' significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between the foreign currencies and the respective functional currencies were as follows:

December 31, 2019

	Foreign Currency	Exchange Rate	Carrying Amount
Financial assets
Monetary items
USD	\$ 1,679	6.9762 (USD:RMB)	\$ 50,418
USD	3,332	30.0325 (USD:NTD)	100,063
AUD	1,674	4.8792 (AUD:RMB)	35,163
Financial liabilities
Monetary items
NTD	120,148	0.0476 (NTD:AUD)	120,148
NTD	26,879	0.0333 (NTD:USD)	26,879

December 31, 2018

	Foreign Currency	Exchange Rate	Carrying Amount
Financial assets
Monetary items
USD	\$ 6,420	6.8632 (USD:RMB)	\$ 197,044
USD	2,192	30.6922 (USD:NTD)	67,291
NTD	2,263	0.2236 (NTD:RMB)	2,263
AUD	201	4.8446 (AUD:RMB)	4,352
Financial liabilities
Monetary items
NTD	92,175	0.0462 (NTD:AUD)	92,175
NTD	86,491	0.2236 (NTD:RMB)	86,491

For the years ended December 31, 2019 and 2018, realized and unrealized net foreign exchange losses were \$20,203 thousand and \$53,422 thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of the group entities.

36. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions and investees
1) Financing provided to others (Table 1)
2) Endorsements/guarantees provided (Table 2)
3) Marketable securities held (excluding investment in subsidiaries, associates and joint controlled entities) (Table 3)
4) Marketable securities acquired or disposed of at costs or prices of at least NT\$300 million or 20% of the paid-in capital (Table 4)
5) Acquisition of individual real estate at costs of at least NT\$300 million or 20% of the paid-in capital (None)
6) Disposal of individual real estate at prices of at least NT\$300 million or 20% of the paid-in capital (None)
7) Total purchases from or sales to related parties amounting to at least NT\$100 million or 20% of the paid-in capital (Table 5)
8) Receivables from related parties amounting to at least NT\$100 million or 20% of the paid-in capital (Table 6)
9) Trading in derivative instruments (None)
10) Intercompany relationships and significant intercompany transactions (Table 7)
11) Information on investees (Table 8)
b. Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of the investee, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and the limit on the amount of investment in the mainland China area (Table 9)
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: (None)
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period
- c) The amount of property transactions and the amount of the resultant gains or losses
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes
- e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds
- f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receipt of services

37. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance focuses on the types of goods or services delivered or provided. The Group's principal geographical areas are China, Taiwan and the United States (USA).

a. Revenue from major products and services

The following is an analysis of the Group's revenue from continuing operations categorized by major products and services:

	For the Year Ended December 31
	2019	2018
Beverages	\$ 7,042,802	\$ 7,313,196
Cakes	7,347,424	7,731,051
Bread	8,583,817	8,885,642
Others	182,878	185,195
	\$ 23,156,921	\$ 24,115,084

b. Geographical information

The Group's revenue from continuing operations from external customers by location of operations is detailed below:

	Customers	Revenue from External
	For the Year Ended December 31
	2019	2018
China	\$ 13,843,651	\$ 15,055,452
Taiwan	3,649,665	3,851,746
United States	5,274,533	4,808,055
Others	389,072	399,831
	\$ 23,156,921	\$ 24,115,084

c. Significant customer information

The Group has no customer who contributes over 10% to the Group's total revenue for the years ended December 31, 2019 and 2018.

TABLE 1

GOURMET MASTER CO. LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

- \$ - - - - - - - \$ - - - - - - - - - - - - - - - - \$ - Working capital - Working capital - Working capital - Working capital - Working capital - Working capital - Working capital - Working capital loan loan loan loan loan loan loan \$ For short-term For short-term For short-term financing financing	- - - - - - - Working capital - Working capital loan loan loan	- - - - - - - - - - - - - - - - Working capital - Working capital - Working capital - Working capital - Working capital loan loan loan loan	- - - - - - - - - - - - - - - - Working capital - Working capital - Working capital - Working capital - Working capital loan loan loan loan loan loan



2.00 2.00 2.00 2.00 2.00 2.00 10,000) 15,000) -) -) -) 43,050 64,575 - - - -	For short-term For short-term For short-term For short-term For short-term For short-term For short-term financing financing financing financing financing financing financing financing 2.00 2.00 -) 10,000) 20,000) 43,050 86,100	For short-term For short-term For short-term For short-term For short-term financing financing financing financing 3.50 3.50 3.50 2.00 2.00 -) -) -) 12,000) - - - 51,660 -	For short-term For short-term For short-term For short-term For short-term financing financing financing financing financing financing 2.00 4.35 2.00 3.50 3.50 -) 7,000) -) 5,000) -) -) 30,135 - 21,525 - -
(RMB (RMB (RMB (RMB 20,000) -) -) -) - - - - (RMB (RMB (RMB (RMB 20,000) 20,000) 86,100	(RMB (RMB (RMB -) 20,000) 20,000) 86,100 86,100 (RMB (RMB (RMB	(RMB (RMB (RMB (RMB -) -) -) 15,000) - - - 64,575 - (RMB (RMB (RMB (RMB	(RMB (RMB (RMB (RMB (RMB (RMB -) 7,000) -) 5,000) -) -) 30,135 - 21,525 - - (RMB (RMB (RMB (RMB (RMB (RMB
20,000) 20,000) 86,100 86,100 86,100 (RMB (RMB Yes Yes Yes Other receivables - Other receivables - related parties related parties	20,000) 20,000) 20,000) 86,100 86,100 (RMB (RMB (RMB Yes Yes	20,000) 15,000) 15,000) 15,000) 86,100 64,575 64,575 64,575 86,100 (RMB (RMB (RMB (RMB Yes Yes Yes Yes Yes	20,000) 7,000) 30,000) 5,000) 30,000) 30,000) 30,135 21,525 129,150 129,150 129,150 (RMB (RMB (RMB (RMB (RMB (RMB Yes Yes Yes Yes Yes
Other receivables - 85 Degrees (Jiangsu) Food Ltd.	Other receivables - Other receivables - related parties related parties related parties	Other receivables - Other receivables - Other receivables - Other receivables - Other receivables - related parties related parties related parties related parties	Other receivables - Other receivables - Other receivables - Other receivables - related parties related parties related parties related parties related parties related parties
85 Degrees (Jiangsu) Food Ltd.	85 Degrees (Jiangsu) Food Ltd.	Sheng-Pin (Xiamen) Food Ltd. Sheng-Pin (Xiamen) Food Ltd. Prime Scope Trading Limited Prime Scope Trading Limited Prime Scope Trading Limited	Wuhan Jing Way Food & Beverage Ltd. Other receivables - Guangzhou 85 Degree Food & Beverage Prime Scope Trading Limited Prime Scope Trading Limited Gourmet Master Co. Ltd. Management Ltd.

	Note
	Financing Limit Aggregate	2,794,823 Note 1,f	2,794,823 Note 1,f	2,794,823 Note 1,f
	Financing Limit for Each Borrower	2,794,823 \$	2,794,823	2,794,823
	Value	- \$	-	-
Collateral		\$
	Item	-	-	-
	Impairment Loss Allowance for	- \$	-	-
	Reasons for Short-term Financing	- Working capital loan	- Working capital	- Working capital loan loan
	Transaction Business Amounts	\$
	Nature of Financing	For short-term financing	For short-term	For short-term financing financing
	Interest Rate	5.49	5.49	5.49
Actual Amount	currencies in Borrowed thousands) (Foreign	1,000) 21,005 (AUD \$	-	-) -) - (AUD (AUD
	Ending Balance currencies in thousands) (Foreign	1,000) 21,005 (AUD	21,005	1,000) -) - (AUD (AUD
Highest Balance	for the Period currencies in thousands) (Foreign	\$ 1,000) 21,005	21,005	1,000) 1,000) 21,005
	Related Party	(AUD \$ Yes	Yes	(AUD (AUD Yes
	Financial Statement Account	Other receivables - related parties	Other receivables -	Other receivables - related parties related parties
	Borrower	85 Degrees Café International Pty. Ltd.	85 Degrees Café International Pty. Ltd.	85 Degrees Café International Pty. Ltd.
	Lender	Prime Scope Trading Limited
	No.	5

Note 1: The aggregate financing limits and financing limits for each individual borrower with short-term financing needs are calculated as follows:

a. The aggregate financing limit shall not exceed \$10,219,826 (in thousands) x 40% = \$4,087,930 (in thousands) of the net worth of Gourmet Master Co. Ltd. The financing limit for each individual borrower shall not exceed \$10,219,826 (in thousands) x 40% = \$4,087,930 (in thousands) of the net worth of Gourmet Master Co. Ltd. (net worth based on the financing b. The aggregate financing limit shall not exceed \$1,881,342 (in thousands) x 60% = \$1,128,805 (in thousands) of the net worth of Shanghai Gourmet Master Food & Beverage Ltd. The financing limit for each individual borrower shall not exceed \$1,881,342 (in thousands) x 40% = \$752,537 (in thousands) of the net worth of Shanghai Gourmet Master Food & Beverage c. The aggregate financing limit shall not exceed \$1,074,123 (in thousands) x 60% = \$644,474 (in thousands) of the net worth of He-Shia Food & Beverage Ltd. The financing limit for each individual borrower shall not exceed \$1,074,123 (in thousands) x 40% = \$429,649 (in thousands) of the net worth of He-Shia Food & Beverage Ltd. (net worth based on the financing d. The aggregate financing limit shall not exceed \$1,830,341 (in thousands) x 40% = \$732,136 (in thousands) of the net worth of Comestibles Master Co., Ltd. The financing limit for each individual borrower shall not exceed \$1,830,341 (in thousands) x 40% = \$732,136 (in thousands) of the net worth of Comestibles Master Co., Ltd. (net worth based on the financing e. The aggregate financing limit shall not exceed \$1,479,945 (in thousands) x 40% = \$591,978 (in thousands) of the net worth of Perfect 85 Degrees C, Inc. The financing limit for each individual borrower shall not exceed \$1,479,945 (in thousands) x 40% = \$591,978 (in thousands) of the net worth of Perfect 85 Degrees C, Inc. (net worth based on the financing company's f. The aggregate financing limit shall not exceed \$6,987,058 (in thousands) x 40% = \$2,794,823 (in thousands) of the net worth of Prime Scope Trading Limited. The financing limit for each individual borrower shall not exceed \$6,987,058 (in thousands) x 40% = \$2,794,823 (in thousands) of the net worth of Prime Scope Trading Limited. (net worth based on the financing

company's latest audited financial statements)
Ltd. (net worth based on the financing company's latest audited financial statements)
company's latest audited financial statements)
company's latest audited financial statements)
latest audited financial statements)
company's latest audited financial statements)
Note 2: The above transactions have been eliminated in these consolidated financial statements.

(Concluded)

TABLE 2

GOURMET MASTER CO. LTD. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

j








ï

Note
Given on Behalf of Companies Endorsement/ in Mainland Guarantee China	N	N		N N		N	N	N	N		N	N	N	N	N	N	N	N	N		N	N		N	N	N
Subsidiaries on Endorsement/ Guarantee Given by Behalf of Parent	N	N		N N		N	N	N	N		N	Y	Y	Y	N	N	N	N	N		N	N		N	N	N
Endorsement/ Subsidiaries Guarantee Parent on Given by Behalf of	Y	Y		Y Y		Y	Y	Y	Y		Y	N	N	N	N	N	N	N	N		N	N		N	N	N
Guarantee Limit Endorsement/ Aggregate (Note 3)	\$ 5,109,913	5,109,913		5,109,913 5,109,913		5,109,913	5,109,913	5,109,913	5,109,913		5,109,913	915,171	915,171	915,171	915,171	915,171	915,171	915,171	915,171		3,493,529	3,493,529		3,493,529	3,493,529	3,493,529
Guarantee to Net Equity in Latest Statements (%) Accumulated Endorsement/ Financial Ratio of	5.88	1.47		1.96 1.47		1.76	2.94	1.47	1.47		0.88	0.08	6.56	8.18	4.84	9.76	9.85	4.92	0.34		6.45	6.45		2.58	4.30	6.45
Guaranteed by Collaterals Endorsed/ Amount	- \$	-		- -		-	-	-	-		-	-	159,012	209,755	-	-	209,755	-	-		-	-		-	-	-
Actual Amount Thousand) Borrowed (US\$ in	- \$	-) - (US\$	-) (US\$	- -	-) (US\$	-) - (US\$	-	-) - (US\$	-) - (US\$	-) (US\$	-) - (US\$	-	-) - (US\$	-) - (US\$	-	-) - (US\$	-) - (US\$	-) - (US\$	-) 6,302 (US\$	300) (US\$	-	-) - (US\$	-) (US\$	-) - (US\$	-	-) 390,429 (US\$	(US\$ 13,000)
Guarantee at the End of the Period Endorsement/ Outstanding Thousand) (US\$ in	- \$	-) - (US\$	-) (US\$	- -	-) (US\$	-) - (US\$	-	-) - (US\$	-) - (US\$	-) (US\$	-) - (US\$	1,502	50) 120,132 (US\$	4,000) 149,802 (US\$	88,597	2,950) - (US\$	-) 180,198 (US\$	6,000) 90,099 (US\$	3,000) 6,302 (US\$	300) (US\$	450,495	(US\$ 15,000) 450,495	(US\$ 15,000)	6,000) 180,198 (US\$	300,330	(US\$ 10,000) 450,495	(US\$ 15,000)
nteed During the Endorsed/Guara Maximum Thousand) Amount (US\$ in Period	600,660 \$	(US\$ 20,000) 150,165	5,000) (US\$	200,000 150,165	5,000) (US\$	6,000) 180,198 (US\$	300,330	(US\$ 10,000) 150,165	5,000) 150,165 (US\$	5,000) (US\$	3,000) 90,099 (US\$	1,502	50) 120,132 (US\$	4,000) 149,802 (US\$	88,597	2,950) 178,696 (US\$	5,950) 180,198 (US\$	6,000) 90,099 (US\$	3,000) 6,302 (US\$	300) (US\$	450,495	(US\$ 15,000) 450,495	(US\$ 15,000)	6,000) 180,198 (US\$	300,330	(US\$ 10,000) 450,495	(US\$ 15,000)
Guarantee Given Endorsement/ on Behalf of Each Party Limits on (Note 3)	\$ 2,043,965	2,043,965		2,043,965 2,043,965		2,043,965	2,043,965	2,043,965	2,043,965		2,043,965	366,068	366,068	366,068	366,068	366,068	366,068	366,068	366,068		1,397,412	1,397,412		1,397,412	1,397,412	1,397,412
Relationship (Note 2)	b	b		b b		b	b	b	b		b	c	c	c	d	d	d	d	a		d	d		d	d	d
Endorsee/Guarantee Name	Perfect 85 Degrees C, Inc.	Comestibles Master Co., Ltd.		Comestibles Master Co., Ltd. Comestibles Master Co., Ltd.		Comestibles Master Co., Ltd.	Comestibles Master Co., Ltd.	Perfect 85 Degrees C, Inc.	WinPin 85 Investments, LLC		WinPin 85 Investments, LLC	Gourmet Master Co. Ltd.	Gourmet Master Co. Ltd.	Gourmet Master Co. Ltd.	WinPin 85 Investments, LLC	WinPin 85 Investments, LLC	Perfect 85 Degrees C, Inc.	Perfect 85 Degrees C, Inc.	85 Degrees Café International Pty. Ltd.		Comestibles Master Co., Ltd.	Comestibles Master Co., Ltd.		Comestibles Master Co., Ltd.	Comestibles Master Co., Ltd.	Perfect 85 Degrees C, Inc.
Endorser/Guarantor	Gourmet Master Co. Ltd.											Comestibles Master Co., Ltd.									Prime Scope Trading Limited
(Note 1) No.	0											1									2

Note 2: Relationships between the endorser and endorsee are represented as follows:

d. The endorser and its group of companies have a combined shareholding percentage of at least 90% of the endorsee's voting shares, either directly or indirectly.

e. The endorser and endorsee are in the same industry or are joint builders in the construction projects and provide mutual endorsements to each other based on the contractual provisions.

f. All the capital contributing shareholders of the endorser provides endorsements to the endorsee in proportion to their shareholding percentages. g. The endorser and endorsee are in the same industry and provide joint endorsements for each other for the performance guarantee of the sales contract for pre-construction homes pursuant to the Consumer Protection Act.

Note 1: Numbers in the No. column are represented as follows:
a. Number 0 represents the issuer. b. Number 1 (onwards) represents the investee.
a. The endorser and endorsee have business dealings with each other.
b. The endorser directly or indirectly owns over 50% of the endorsee's voting shares.
c. The endorsee directly or indirectly owns over 50% of the endorser's voting shares.
Note 3: The endorsement/guarantee limit is calculated as follows:
e. The total amount of guarantee shall not exceed 50% of the net worth of Prime Scope Trading Limited: \$6,987,058 × 50% = \$3,493,529 (in thousands).

a. The total amount of guarantee shall not exceed 50% of the net worth of Gourmet Master Co. Ltd.: \$10,219,826 × 50% = \$5,109,913 (in thousands).

b. The total amount of guarantee provided by Gourmet Master Co. Ltd. to any individual entity shall not exceed 20% of the net worth of Gourmet Master Co. Ltd.: \$10,219,826× 20% = \$2,043,965 (in thousands).

c. The total amount of guarantee shall not exceed 50% of the net worth of Comestibles Master Co., Ltd.: \$1,830,341 × 50% = \$915,171 (in thousands).

d. The total amount of guarantee provided to any individual entity shall not exceed 20% of the net worth of Comestibles Master Co., Ltd.: \$1,830,341× 20% = \$366,068 (in thousands).

f. The total amount of guarantee provided to any individual entity shall not exceed 20% of the net worth of Prime Scope Trading Limited: \$6,987,058× 20% = \$1,397,412 (in thousands).

(Concluded)

MARKETABLE SECURITIES HELD DECEMBER 31, 2019

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

						December 31, 2019
Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account	Number of Thousands) Shares (In	Carrying Amount	Ownership (%) Percentage of	Market Price	Note
Comestibles Master Co., Ltd.	China Development Bank Bank debentures	-	non-current - Financial assets at amortized cost	-	30,029 \$	-	30,029 \$
	Tehmag Foods Corporation Shares	-	Financial assets at fair value through profit or current loss -	660	146,520	1.96	146,520
	Taishin 1699 Money Market Fund	-	Financial assets at fair value through profit or current loss -	-	10,150	-	10,150
Prime Scope Trading Limited and subsidiaries	Non-principal protected products Zeng Li series	-	Financial assets at fair value through profit or non-current loss -	-	466,996	-	466,996
	Negotiable certificates of deposit for 3 years Product Bank of China Financial Guaranteed products	- -	non-current current Financial assets at amortized cost - Financial assets at amortized cost -	- -	751,222 800,730	-	751,222 800,730

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT\$300 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars and foreign currencies)

					Beginning Balance		Acquisition			Disposal			Ending Balance
Company Name	Marketable Securities Type and Name of	Financial Statement Account Counterparty Relationship			Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount	Carrying Amount	Gain (Loss) on Disposal	Number of Shares	Amount
Limited and subsidiaries Prime Scope Trading	Guaranteed products Structured products	Financial assets at amortized	-	-	-	RMB 166,000	-	- \$	-	RMB 166,000	RMB 166,000	- \$	-	- \$
	Bank of China Structured Deposits	Financial assets at amortized cost cost	-	-	-	-	-	RMB 186,000	-	-	-	-	-	RMB 186,000
	Principal protected products Ying Qing series	Financial assets at fair value	-	-	-	RMB 80,000	-	-	-	RMB 80,000	RMB 80,000	-	-	-
	Ri Yi Yue Xin series	Financial assets at fair value through profit or loss through profit or loss	-	-	-	-	-	RMB 147,000	-	RMB 147,000	RMB 147,000	-	-	-
	Non-principal protected Zeng Li series products	Financial assets at fair value	-	-	-	RMB 373,500	-	-	-	RMB 273,500	RMB 273,500	-	-	RMB 100,000
	Bubu Sheng Jin series	Financial assets at fair value through profit or loss through profit or loss	-	-	-	RMB 190,850	-	RMB 190,100	-	RMB 380,950	RMB 380,950	-	-	-

TABLE 5

GOURMET MASTER CO. LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars)

				Transaction Detail			Abnormal Transaction		Notes/Accounts Payable or Receivable
Seller	Related Party	Relationship	Purchases/ Sales	Amount		% of Total Payment Terms	Unit Price	Payment Term	Account	Ending Balance % of Total		Note
Comestibles Master Co., Ltd.	Mei Wei Master Co., Ltd.	Subsidiary	Sales	\$ 233,765	6	25 days	Based on the Group's transfer pricing policy	-	Trade receivables	2,418 \$	1	Note
	Perfect 85 Degrees C, Inc.	Affiliated company	Sales	177,506	5	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	23,175	6	Note
	Jin Wei Industrial (Shanghai) Ltd. Shanghai Gourmet Master Food	Parent	Sales	825,075	13	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	93,584	15	Note
	& Beverage Ltd.
	Beijing 85 Food & Beverage Ltd. Affiliated company He-Shia Food & Beverage Ltd.	Affiliated company	Sales Sales	766,130 291,896	12 5	60 days 60 days	Based on the Group's transfer pricing policy Based on the Group's transfer pricing policy	- -	Trade receivables Trade receivables	85,403 71,463	13 11	Note Note
	He-Shia (Nanjing) Food &	Affiliated company	Sales	1,311,567	21	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	142,080	22	Note
	Zhejiang 85 Food & Beverage Beverage Ltd.	Affiliated company	Sales	357,243	6	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	37,815	6	Note
	Ltd.
	Fuzhou 85 Food & Beverage Ltd. Affiliated company		Sales	557,077	9	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	61,577	10	Note
	Xiamen 85 Food & Beverage Ltd. Affiliated company		Sales	372,869	6	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	7,348	1	Note
	Shenzhen 85 Food & Beverage Ltd.	Affiliated company	Sales	488,757	8	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	55,407	9	Note
	Chengdu 85 Food & Beverage Ltd.	Affiliated company	Sales	244,140	4	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	19,107	3	Note
	Guangzhou 85 Degree Food & Beverage Management Ltd.	Affiliated company	Sales	100,566	2	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	10,197	2	Note
	Wuhan Jing Way Food & Beverage Ltd.	Affiliated company	Sales	178,025	3	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	12,111	2	Note
Xia He Wei (Xiamen) Trading Limited	Xiamen 85 Food & Beverage Ltd. Affiliated company		Sales	306,340	96	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	67,379	87	Note
	Sheng-Pin (Hangzhou) Food Ltd. Jin Wei Industrial (Shanghai) Ltd. Affiliated company		Sales	369,726	100	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	34,036	100	Note
Sheng-Pin (Xiamen) Food Ltd.	Jin Wei Industrial (Shanghai) Ltd. Affiliated company		Sales	180,264	77	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	11,053	50	Note
85 Degrees (Jiangsu) Food Ltd.	Jin Wei Industrial (Shanghai) Ltd. Affiliated company		Sales	1,808,262	95	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	191,872	93	Note
	Sheng-Pin (Dongguan) Food Ltd. Jin Wei Industrial (Shanghai) Ltd. Affiliated company		Sales	152,121	100	60 days	Based on the Group's transfer pricing policy	-	Trade receivables	14,957	100	Note
Perfect 85 Degrees C, Inc.	WinPin 85 Investments, LLC Golden 85 Investments, LLC	Subsidiary Subsidiary	Sales Sales	1,982,438 140,945	93 7	30 days 30 days	Based on the Group's transfer pricing policy Based on the Group's transfer pricing policy	- -	Trade receivables Trade receivables	61,698 -	83 -	Note Note

Note: Transactions have been written off in these consolidated financial statements.

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL

					Overdue		Amounts
Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Amount	Actions Taken	Subsequent Received in Period	Allowance for Impairment Loss
Comestibles Master Co., Ltd.	Prime Scope Trading Limited Mei Wei Master Co., Ltd. Gourmet Master Co. Ltd.	Affiliated company Subsidiary Parent	100,000 125,000 118,375 \$	(Note) (Note) (Note)	- - - \$	- - -	- - - \$	- - - \$
Shanghai Gourmet Master Food & Beverage Ltd.	Chengdu 85 Food & Beverage Ltd. 85 Degrees (Jiangsu) Food Ltd.	Affiliated company Affiliated company	129,150 129,150	(Note) (Note)	- -	- -	- -	- -
He-Shia Food & Beverage Ltd.	Shanghai Gourmet Master Food & Beverage Ltd.	Affiliated company	125,746	(Note)	-	-	-	-
Jin Wei Industrial (Shanghai) Ltd.	He-Shia (Nanjing) Food & Beverage Ltd.	Affiliated company	142,080	9	-	-	-	-
He-Shia (Nanjing) Food & Beverage Ltd.	Shanghai Gourmet Master Food & Beverage Ltd.	Affiliated company	214,969	(Note)	-	-	-	-
Fuzhou 85 Food & Beverage Ltd.	Shanghai Gourmet Master Food & Beverage Ltd.	Affiliated company	101,798	(Note)	-	-	-	-
Xiamen 85 Food & Beverage Ltd.	Shanghai Gourmet Master Food & Beverage Ltd.	Affiliated company	126,191	(Note)	-	-	-	-
85 Degrees (Jiangsu) Food Ltd.	Jin Wei Industrial (Shanghai) Ltd.	Affiliated company	191,872	9	-	-	-	-

Note: The ending balance is primarily comprised of other receivables, which are not applicable in the calculation of the turnover ratio.

	INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS GOURMET MASTER CO. LTD. AND SUBSIDIARIES FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars)

						Intercompany Transactions
(Note 1) No.	Investee Company	Counterparty	Relationship (Note 2)	Financial Statement Account	Amount	Payment Terms	% of Total Sales or (Note 3) Assets
1	Comestibles Master Co., Ltd.	85 Degrees Café International Pty. Ltd. Prime Scope Trading Limited Mei Wei Master Co., Ltd. Gourmet Master Co. Ltd.	b c c c	Other receivables Other receivables Other receivables Other receivables	100,000 125,000 118,375 29,856 \$	Financing provided, annual interest rate 1% Financing provided, annual interest rate 1% - -	- 1 1 -
		Mei Wei Master Co., Ltd.	c	others Selling and marketing expenses -	78,431	-	-
2	Mei Wei Master Co., Ltd.	Comestibles Master Co., Ltd.	c	Purchases	233,765	25 days	1
3	Shanghai Gourmet Master Food & Beverage Ltd.	Chengdu 85 Food & Beverage Ltd. Jin Wei Industrial (Shanghai) Ltd. Jin Wei Industrial (Shanghai) Ltd. Sheng-Pin (Dongguan) Food Ltd. 85 Degrees (Jiangsu) Food Ltd. Sheng-Pin (Xiamen) Food Ltd.	c c c c c c	Other receivables Other receivables Other receivables Other receivables Trade payables Purchases	825,075 93,584 64,575 129,150 51,660 129,150	Financing provided, annual interest rate 2% Financing provided, annual interest rate 2% Financing provided, annual interest rate 2% Financing provided, annual interest rate 2% 60 days 60 days	4 - - 1 - 1
4	He-Shia Food & Beverage Ltd.	Shanghai Gourmet Master Food & Beverage Ltd. Wuhan Jing Way Food & Beverage Ltd. Jin Wei Industrial (Shanghai) Ltd. Jin Wei Industrial (Shanghai) Ltd.	c c c c	Other receivables Other receivables Trade payables Purchases	766,130 85,403 30,135 125,746	Financing provided, annual interest rate 2% - 60 days 60 days	3 - - 1
5	Food & Beverage Ltd. Beijing 85	Shanghai Gourmet Master Food & Beverage Ltd. Jin Wei Industrial (Shanghai) Ltd. Jin Wei Industrial (Shanghai) Ltd.	c c c	Other receivables Trade payables Purchases	291,896 71,463 55,741	- 60 days 60 days	1 - -
6	He-Shia (Nanjing) Food & Beverage Ltd.	Shanghai Gourmet Master Food & Beverage Ltd. Jin Wei Industrial (Shanghai) Ltd. Jin Wei Industrial (Shanghai) Ltd.	c c c	Other receivables Trade payables Purchases	1,311,567 142,080 214,969	- 60 days 60 days	6 1 1
7	Zhejiang 85 Food & Beverage Ltd.	Shanghai Gourmet Master Food & Beverage Ltd. Jin Wei Industrial (Shanghai) Ltd. Jin Wei Industrial (Shanghai) Ltd.	c c c	Other receivables Trade payables Purchases	357,243 37,815 64,324	- 60 days 60 days	2 - -
8	Fuzhou 85 Food & Beverage Ltd.	Shanghai Gourmet Master Food & Beverage Ltd. Jin Wei Industrial (Shanghai) Ltd. Jin Wei Industrial (Shanghai) Ltd.	c c c	Other receivables Trade payables Purchases	557,077 61,577 101,798	- 60 days 60 days	2 - -
							(Continued)

Sales or (Note 3) Assets 2 1 - 1 2 - - - 1 - - 1 - - 2 1 8 - 1 - - - 1 - - 9 - 1 1 - 1 - Financing provided, annual interest rate 3.75% Payment Terms - - - - - 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 60 days 30 days 30 days 30 days 60 days 60 days 372,869 306,340 67,379 126,191 488,757 55,407 96,462 36,827 244,140 100,566 29,875 178,025 93,289 84,056 369,726 180,264 1,808,262 96,272 152,121 52,189 63,014 77,642 191,872 34,036 52,587 1,982,438 61,698 246,906 140,945 85,655 177,506 84,301 Amount \$ others Financial Statement Account Selling and marketing expenses - Other receivables Other receivables Other receivables Other receivables Other receivables Trade payables Trade payables Trade payables Trade payables Trade payables Trade payables Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Relationship (Note 2) c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c c
Shanghai Gourmet Master Food & Beverage Ltd. Shanghai Gourmet Master Food & Beverage Ltd. Shanghai Gourmet Master Food & Beverage Ltd. Shanghai Gourmet Master Food & Beverage Ltd. Xia He Wei (Xiamen) Trading Limited. Xia He Wei (Xiamen) Trading Limited. Jin Wei Industrial (Shanghai) Ltd. Jin Wei Industrial (Shanghai) Ltd. Jin Wei Industrial (Shanghai) Ltd. Jin Wei Industrial (Shanghai) Ltd. Jin Wei Industrial (Shanghai) Ltd. Jin Wei Industrial (Shanghai) Ltd. Jin Wei Industrial (Shanghai) Ltd. Jin Wei Industrial (Shanghai) Ltd. Sheng-Pin (Dongguan) Food Ltd. Sheng-Pin (Hangzhou) Food Ltd. Sheng-Pin (Hangzhou) Food Ltd. Sheng-Pin (Qingdao) Food Ltd. 85 Degrees (Jiangsu) Food Ltd. 85 Degrees (Jiangsu) Food Ltd. Sheng-Pin (Xiamen) Food Ltd. Sheng-Pin (Xiamen) Food Ltd. Sheng-Pin (Beijing) Food Ltd. Sheng-Pin (Wuhan) Food Ltd. Mai-Jia (Chengdu) Food Ltd. Comestibles Master Co., Ltd. Comestibles Master Co., Ltd. Perfect 85 Degrees C, Inc. Perfect 85 Degrees C, Inc. Perfect 85 Degrees C, Inc. Perfect 85 Degrees C, Inc. WinUS 85C LLC 85 Degree (Qingdao) Food & Beverage Xia He Wei (Xiamen) Trading Limited. Kunshan 85 Food & Beverage Ltd. Xiamen 85 Food & Beverage Ltd. Jin Wei Industrial (Shanghai) Ltd. WinPin 85 Investments, LLC Golden 85 Investments, LLC Perfect 85 Degrees C, Inc. Management Ltd.	Investee Company	Counterparty	% of Total

	Shenzhen 85 Food & Beverage Ltd.
	Chengdu 85 Food & Beverage Ltd.
	Guangzhou 85 Degree Food & Beverage Management Ltd.
	Wuhan Jing Way Food & Beverage Ltd.








	85 Degrees Café International Pty. Ltd.

Note 1: Intercompany relationships and significant intercompany transactions information are represented within the number column as follows:

a. Number 0 represents the parent company. b. Number 1 to 21 represents subsidiaries.
Note 2: The flow of transactions between the counterparties of the transactions are represented as follows:

a. "a" represents transactions from parent company to subsidiary. b. "b" represents transactions from subsidiary to parent company. c. "c" represents transactions between subsidiaries. Note 3: The amounts of asset accounts and liability accounts are calculated as a percentage of the consolidated total assets. The amounts of income accounts are calculated as a percentage of the consolidated total sales.

(Concluded)

TABLE 8

GOURMET MASTER CO. LTD. AND SUBSIDIARIES

INFORMATION ON INVESTEES

FOR THE YEAR ENDED DECEMBER 31, 2019	(In Thousands of New Taiwan Dollars, Unless Specified Otherwise)













	The Hot Pot Food and Beverage Management Co., Ltd.

				Original Investment Amount			As of December 31, 2019		Net Income
Investor Company	Investee Company	Location	Main Businesses and Products	December 31, 2019	December 31, 2018	Number of Shares	%	Carrying Amount	(Loss) of the Investee	Share of Profit (Loss)	Note

Gourmet Master Co. Ltd.	85 Degree Co., Ltd.	Malaysia	Investment	553,447 \$	553,447 \$	12,899,078	100	1,782,189 \$	419,344 \$	419,344 \$
	Prime Scope Trading Limited	Hong Kong	Investment	1,403,810	1,403,810	46,742,963	100	6,987,058	433,976	433,976 Note 1
				46,743) (US\$	46,743) (US\$
	Perfect 85 Degrees C, Inc.	USA	Manufacturing and sale of baked goods	226,823	226,823	5,301,000	100	1,479,945	113,317	113,317 Note 1
				7,553) (US\$	7,553) (US\$
	85 Degrees Café International Pty. Ltd.	Australia	Retail sale of groceries and beverages	37,494	37,494	1,785,000	51	(54,260)	(34,865)		(17,781) Notes 1 and 2
				1,785) (AUD	1,785) (AUD
	Lucky Bakery Limited	Samoa	Investment	112,281	112,281	811,000	100	32,808	6,899		6,899 Notes 1 and 2
	WinWin 85C Holding Co., Ltd.	Cayman Islands	Investment	3,739) 63,369 (US\$	3,739) 63,369 (US\$	2,110,000	100	42,570	(1,187)		(1,187) Notes 1 and 2
				2,110) (US\$	2,110) (US\$
WinWin 85C Holding Co., Ltd. WinWin 85C LLC		USA	Investment	39,042	39,042	-	100	34,523	4,261		4,261 Notes 1 and 2
				1,300) (US\$	1,300) (US\$
	WinUS 85C LLC	USA	Investment	22,825	22,825	-	100	7,522	(5,082)		(5,082) Notes 1 and 2
				760) (US\$	760) (US\$
Prime Scope Trading Limited	Wincase Limited	Hong Kong	Retail sale of groceries and beverages	131,422	131,422	-	100	15,008	(41)		(41) Notes 1 and 2
				(HK\$ 34,144) (HK\$ 34,144)
	Worldinn Limited	Hong Kong	Manufacturing and sale of baked goods	(HK\$ 35,646) (HK\$ 35,646) 137,202	137,202	-	100	21,229	3,900		3,900 Notes 1 and 2

Perfect 85 Degrees C, Inc.	Golden 85 Investments, LLC	USA	Retail sale of groceries and beverages	1,971) (US\$ 59,207 (US\$	1,971) 59,207	-	65	36,339	47,714		31,014 Notes 1 and 2
	WinPin 85 Investments, LLC	USA	Retail sale of groceries and beverages	8,800) 264,286 (US\$	8,800) 264,286 (US\$	-	100	943,395	100,789	100,789 Note 1
85 Degree Co., Ltd.	Comestibles Master Co., Ltd.		Taichung City, Taiwan (R.O.C.) Retail sale of groceries and beverages	493,447	493,447	35,908,727	100	1,830,341	476,687	476,687
Comestibles Master Co., Ltd.	The Hot Pot Food and Beverage Mei Wei Master Co., Ltd. Management Co., Ltd.		Taichung City, Taiwan (R.O.C.) Retail sale of groceries and beverages Taichung City, Taiwan (R.O.C.) Retail sale of groceries and beverages	129,349 58,679	129,349 58,679	3,155,893 5,864,660	100 23	(49,097) 95,198	(30,510) 71,451	16,441 Note 2 (30,510)
Mei Wei Master Co., Ltd.	Mei Wei Fu Xing Ltd.		Taichung City, Taiwan (R.O.C.) Retail sale of groceries and beverages	1,800	1,800	-	60	385	(805)	(483) Note 2

Note 1: The exchange rate was US\$1=NT\$30.03; RMB1=NT\$4.305; AUD1=NT\$21.01; HK\$1=NT\$3.849 as of December 31, 2019.

Note 2: The carrying amount was based on the net assets of the investee whose financial statements were not audited as of December 31, 2019.

Note 3: For information of investments in mainland China, refer to Table 9

TABLE 9

GOURMET MASTER CO. LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2019 (In Thousands of New Taiwan Dollars, Unless Specified Otherwise)

	Note		- Note 1	- Note 1		- Notes 1 and 2	- Note 1	- Notes 1 and 2	- Notes 1 and 2	- Notes 1 and 2	- Note 1	- Notes 1 and 2	- Notes 1 and 2		- Notes 1 and 2	- Note 1	- Notes 1 and 2	- Notes 1 and 2	- Notes 1 and 2	- Note 1			- Notes 1 and 2	- Notes 1 and 2	- Notes 1 and 2	- Notes 1 and 2
Accumulated	Repatriation of December 31, Income as of Investment 2019		\$
	Carrying Amount December 31, as of 2019		1,881,342 \$	1,074,123		131,913	682,896	39,297	201,871	97,514	223,239	112,185	67,119		55,372	549,195	105	70,682	76,010	199,206			19,605	18,301	163,192	32,140
	Gain (Loss) Investment		233,260 \$	56,156		21,125	31,605	(2,616)	7,672	2,528	90	12,497	1,254		5,218	131,693	(36)	15,259	(7,525)	16,071			53	(940)	12,804	(47,723)
	% Ownership of Direct or Investment Indirect		100.0	100.0		100.0	100.0	25.0	100.0	62.0	100.0	100.0	100.0		100.0	100.0	100.0	100.0	100.0	25.0			100.0	100.0	85.0	100.0
	Net Income (Loss) of the Investee		233,260 \$	56,156		20,708	31,605	(10,463)	7,672	3,788	90	12,497	1,151		5,350	131,693	(36)	15,259	(7,525)	63,176			53	(940)	15,064	(47,723)
Accumulated	Investment from Remittance for December 31, Taiwan as of Outward 2019		- \$	-		-	-	-	-	-	-	-	-		-	-	-	-	-	-			-	-	-	-
	Inward		- \$	-		-	-	-	-	-	-	-	-		-	-	-	-	-	-			-	-	-	-
Remittance of Funds	Outward		- \$	-		-	-	-	-	-	-	-	-		-	-	-	-	-	-			-	-	-	-
	Investment from January 1, 2019 Accumulated Taiwan as of Outflow of		- \$	-		-	-	-	-	-	-	-	-		-	-	-	-	-	-			-	-	-	-
	Method of Investment		Direct investment	Direct investment		Direct investment	Direct investment	Direct investment	Direct investment	Direct investment	Direct investment	Direct investment	Direct investment		Direct investment	Direct investment	Direct investment	Direct investment	Direct investment	Direct investment			Direct investment	Direct investment	Direct investment	Direct investment
	Total Amount of Paid-in Capital Thousands) (RMB in		239,960 \$	7,990) 66,072 (US\$	2,200) (US\$	2,000) 60,065 (US\$	2,000) 60,065 (US\$	240,260	8,000) 60,065 (US\$	2,000) 195,211 (US\$	6,500) 15,016 (US\$	500) 135,146 (US\$	4,500) 60,065 (US\$	2,000) (US\$	2,500) 75,081 (US\$	30,033	1,000) 30,033 (US\$	1,000) 120,130 (US\$	4,000) 60,065 (US\$	2,000) 690,749 (US\$	23,000) (US\$		(RMB 18,000) 77,490 \$	8,610	2,000) 57,529 (RMB	(RMB 13,363) 114,470	(RMB 26,590)
	Main Businesses and Products		Retail sale of groceries	Retail sale of groceries and beverages	and beverages	Manufacturing and sale of baked goods	Retail sale of groceries and beverages	Retail sale of groceries	Retail sale of groceries and beverages	Manufacturing and sale of and beverages	Retail sale of groceries baked goods	Manufacturing and sale of and beverages	Manufacturing and sale of baked goods	baked goods	Manufacturing and sale of baked goods	Retail sale of groceries	Retail sale of groceries and beverages	Manufacturing and sale of and beverages	Retail sale of groceries baked goods	Manufacturing and sale of and beverages	baked goods		Manufacturing and sale of baked goods	Retail sale of groceries	Retail sale of groceries and beverages	Retail sale of groceries and beverages	and beverages
	Investee Company	Prime Scope Trading Limited	Shanghai Gourmet Master Food &	He-Shia Food & Beverage Ltd. Beverage Ltd.		Sheng-Pin (Hangzhou) Food Ltd.	He-Shia (Nanjing) Food & Beverage Ltd.	Beijing 85 Food & Beverage Ltd.	Zhejiang 85 Food & Beverage Ltd.	Sheng-Pin (Beijing) Food Ltd.	Fuzhou 85 Food & Beverage Ltd.	Sheng-Pin (Jiangsu) Food Ltd.	Sheng-Pin (Xiamen) Food Ltd.		Sheng-Pin (Qingdao) Food Ltd.	Xiamen 85 Food & Beverage Ltd.	Shenyang 85 Food & Beverage Ltd.	Sheng-Pin (Shenyang) Food Ltd.	85 Degree (Qingdao) Food &	85 Degrees (Jiangsu) Food Ltd. Beverage Management Ltd.		Shanghai Gourmet Master Food & Beverage Ltd.	Sheng-Pin (Shanghai) Food Ltd.	Shanghai Howco Jing Way Food &	Shenzhen 85 Food & Beverage Ltd. Beverage Ltd.	Chengdu 85 Food & Beverage Ltd.

(Continued)

Note		- Notes 1 and 2	- Notes 1 and 2	- Notes 1 and 2	- Note 1	- Notes 1 and 2	- Notes 1 and 2	- Note 1	- Notes 1 and 2	- Notes 1 and 2	- Notes 1 and 2	- Notes 1 and 2		- Notes 1 and 2		- Notes 1 and 2		- Notes 1 and 2	- Notes 1 and 2	- Notes 1 and 2		- Notes 1 and 2
Repatriation of Accumulated Investment	December 31, Income as of 2019	\$
Carrying Amount as of	December 31, 2019	47,573 \$	52,372	820	426,850	25,167	94,685	676,349	14,627	46,074	292,557	578		-		5,807		40,286	117,890	61,046		25,671
Investment	Gain (Loss)	6,545	(26,989)	1	236,023	(24,174)	(416)	47,722	4,604	(1,715)	(7,534)	603		7		(1,519)		(20,761)	(7,847)	1,582		26,762
% Ownership of Direct or	Investment Indirect	\$ 100.0	57.0	100.0	100.0	100.0	100.0	75.0	100.0	100.0	100.0	100.0		85.0		100.0		43.0	75.0	38.0		100.0.0
Net Income (Loss)	of the Investee	6,287 \$	(47,751)	1	236,100	(24,174)	(681)	63,176	4,604	(1,715)	(7,542)	603		7		(1,519)		(47,751)	(10,463)	3,788		26,762
Investment from Remittance for Accumulated Outward	December 31, Taiwan as of 2019	- \$	-	-	-	-	-	-	-	-	-	-		-		-		-	-	-		-
	Inward	- \$	-	-	-	-	-	-	-	-	-	-		-		-		-	-	-		-
Remittance of Funds	Outward	- \$	-	-	-	-	-	-	-	-	-	-		-		-		-	-	-		-	Upper Limit on the Amount of Investment	NA
Investment from Accumulated Outflow of	January 1, 2019 Taiwan as of	- \$	-	-	-	-	-	-	-	-	-	-		-		-		-	-	-		-	Stipulated by the Investment Commission, MOEA
Method of	Investment	Direct investment	Direct investment	Direct investment	Direct investment	Direct investment	Direct investment	Direct investment	Direct investment	Direct investment	Direct investment	Direct investment		Direct investment		Direct investment		Direct investment	Direct investment	Direct investment		Direct investment
Total Amount of Paid-in Capital	Thousands) (RMB in	68,880 \$	(RMB 16,000) 198,030	(RMB 46,000) 25,830	6,000) 8,610 (RMB	2,000) 68,880 (RMB	(RMB 16,000) 106,549	(RMB 24,750) 690,749	23,000) 4,305 (US\$	1,000) 43,050 (RMB	(RMB 10,000) 301,350	(RMB 70,000) -) - (RMB		-) - (RMB		1,500) 6,458 (RMB		198,030	(RMB 46,000) 240,260	8,000) 6,500) 195,211 (US\$ (US\$		-) - (RMB	Investment Amounts Authorized by the Investment Commission, MOEA	NA
Main Businesses and	Products	Manufacturing and sale of	Retail sale of groceries baked goods	and beverages	and beverages Grocery sale	Retail sale of groceries	Manufacturing and sale of and beverages	Manufacturing and sale of baked goods	Retail sale of groceries baked goods	Retail sale of groceries and beverages	Manufacturing and sale of and beverages	Manufacturing and sale of baked goods baked goods		Manufacturing and sale of baked goods		Retail sale of groceries and beverages		Retail sale of groceries	Retail sale of groceries and beverages	Manufacturing and sale of and beverages baked goods		Grocery sale
Investee Company		Sheng-Pin (Wuhan) Food Ltd.	Wuhan Jing Way Food & Beverage	Jianxi Jing Way Food & Beverage Ltd. Retail sale of groceries Ltd.	Jin Wei Industrial (Shanghai) Ltd.	Guangzhou 85 Degree Food &	Beverage Management Ltd. Mai-Jia (Chengdu) Food Ltd.	85 Degrees (Jiangsu) Food Ltd.	Jia Ding Jing Way Food & Beverage	Kunshan 85 Food & Beverage Ltd. Ltd.	Sheng-Pin (Dongguan) Food Ltd.	Shanghai Minhang Jinxia Food & Beverage Ltd.	Shenzhen 85 Food & Beverage Ltd.	Sheng-Pin (Shenzheng) Food Ltd.	Beverage Management Ltd. 85 Degree (Qingdao) Food &	Qingdao Jie Wei Food & Beverage Management Ltd.	He-Shia Food & Beverage Ltd.	Wuhan Jing Way Food & Beverage	Beijing 85 Food & Beverage Ltd. Ltd.	Sheng-Pin (Beijing) Food Ltd.	Jin Wei Industrial (Shanghai) Ltd.	Xia He Wei (XiaMen) Trading Limited.	Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2019	NA

Note 1: The exchange rate was US\$1=NT\$30.03, RMB1=NT\$4.305 as of December 31, 2019.

Note 2: The carrying amount was based on the net assets of the investee whose financial statements were not audited as of December 31, 2019.

(Concluded)

Any cash flow difficulties during the most recent year and as of April 30, at the Company and its affiliates: None

07. Review of Financial Conditions, Operating Results, and Risk Management

1. Analysis of Financial Status
------------------------------------

				Unit: NT\$ 1,000
Year				Difference
Item	2019	2020	Amount	%
Current assets	7,055,253	7,915,566	860,313	12
Long-term investments	95,198	107,398	12,200	13
Property, plant, and equipment	5,729,366	6,228,618	499,252	9
Intangible assets	42,315	50,312	7,997	19
Other assets	9,688,656	7,875,369	(1,813,287)	(19)
Total assets	22,610,788	22,177,263	(433,525)	(2)
Current liabilities	6,940,429	7,162,230	221,801	3
Long-term liabilities	5,454,043	4,344,019	(1,110,024)	(20)
Total liabilities	12,394,472	11,506,249	(888,223)	(7)
Capital	1,800,000	1,800,000	0	0
Capital reserves	2,376,605	2,376,605	0	0
Retained earnings	6,638,207	7,113,521	475,314	7
Other equities	(594,986)	(575,871)	19,115	3
Non-controlling interests	(3,510)	(43,241)	(39,731)	1,132
Total shareholders' equity	10,216,316	10,671,014	454,698	5
Explanation for extraordinary variance: Net change of current assets and other assets combined is less than extraordinary.

2. Analysis of Operating Results

Year			Difference
Item	2019	2020	Amount	%
Operating revenue	23,156,921	19,679,455	(3,477,466)	(15)
Operating costs	9,340,368	7,977,562	(1,362,806)	(15)
Gross operating profit	13,816,553	11,701,893	(2,114,660)	(15)
Operating expenses	12,109,046	10,111,777	(1,997,269)	(16)
Operating profits	1,707,507	1,590,116	(117,391)	(7)
Non-operating income and expense	(222,233)	(183,426)	38,807	17
Income before income tax	1,485,274	1,406,690	(78,584)	(5)
Less: income tax	550,834	408,466	(142,368)	(26)
Net income	934,440	998,224	63,784	7

3. Analysis of Cash Flow

3-1. Cash Flow Analysis for the Most Recent Year

				Unit: NT\$ 1,000; %
Year Item	2019	2020	Difference	%
Operating activities	4,546,281	3,905,028	(641,253)	(14)
Investing activities	324,981	(1,211,568)	(1,536,549)	(473)
Financing activities	(3,101,751)	(2,110,242)	991,509	32

Variance analysis:

Operating activities: Partly due to Covid-19.
Investing activities: Cash flow turning negative because of less financial assets disposal.
Financing activities: Short term liabilities increase.

3-2. Remedy for Cash Deficit and Liquidity Analysis

N/A

4. Major capital expenditures over the past fiscal year and their impact

The Company's expenditure on property, plant, and equipment totaled NT\$819,702 thousand and NT\$1,369,863 thousand for 2019 and 2020, respectively, because the Company continued expansion in stores and production capacity, and the expenditure was mainly covered by operating cash inflow, and no adverse impact on financial and operation stability was produced.

Turnover	2018	2019	2020
Fixed Assets Turnover (times)	3.93	4.04	3.16
Total Assets Turnover (times)	1.49	1.02	0.89

5. Analysis of investments in affiliated enterprises over the past fiscal year

5-1. Affiliated enterprise investment policy

Re-investment policy of the Company is focused on basic food-related business and does not involve other industries. Related internal control system is followed by relevant functions, which are resolved and approved by Board of Directors or Shareholders' Meeting.

5-2. Reasons for profits or losses at Investee Companies

		Unit: NT\$ 1,000
	Investment
	profit / loss
Investee Company	in the most	Main reasons for profit / loss
	recent year
Prime Scope Trading Limited	618,535	Result of business development in Mainland China
85 Degree Co., Ltd.	445,649	Reflection of progress and opportunities in R.O.C.
85 Degrees Café International Pty. Ltd	(50,558)	Reflecting progress and opportunities Down Under
Perfect 85 Degrees C, Inc.	(50,556)	Reflection of progress and opportunities in the U.S.
Golden 85 Investments,LLC	(21,549)	Reflection of progress and opportunities in the U.S.
WinPin 85 Investments, LLC	23,362	Reflection of progress and opportunities in the U.S.
WinWin 85C Holding Co., Ltd	(136,791)	Reflection of progress and opportunities in the U.S.
WinWin 85C LLC	3,324	Reflection of progress and opportunities in the U.S.
WinUS 85C LLC	3,795	Reflection of progress and opportunities in the U.S.
Comestibles Master Co., Ltd	(221)	Reflection of progress and opportunities in R.O.C.
Mei Wei Master Co., Ltd.	395,820	Reflection of progress and opportunities in R.O.C.
The Hot Pot Food and Beverage Management
Co., Ltd.	(20,110)	Reflecting progress of the hot pot business
Mei Wei Fu Xing Co., Ltd	89,749	Reflection of progress and opportunities in R.O.C.
Shanghai Gourmet Master Food & Beverage
Ltd.	(883)	Result of business development in Mainland China
He-Shia Food & Beverage Ltd.	359,545	Result of business development in Mainland China
Sheng-Pin (Shanghai) Food Ltd.	48,150	Result of business development in Mainland China
Shanghai Howco Jing Way Food & Beverage Ltd.	5	Result of business development in Mainland China
Sheng-Pin (Hangzhou) Food Ltd.	1,416	Result of business development in Mainland China
He-Shia (Nanjing) Food & Beverage Ltd. Beijing 85 Food & Beverage Ltd.	10,179 76,700	Result of business development in Mainland China Result of business development in Mainland China
Zhejiang 85 Food & Beverage Ltd.	(11,814)	Result of business development in Mainland China
Shenzheng 85 Food & Beverage Ltd.	23,918	Result of business development in Mainland China
Sheng-Pin (Shenzheng) Food Ltd.	2,456	Result of business development in Mainland China
Sheng-Pin (Beijing) Food Ltd.	9,157	Result of business development in Mainland China
Fuzhou 85 Food & Beverage Ltd.	(28,494)	Result of business development in Mainland China
Sheng-Pin (Jiangsu) Food Ltd.	8,024	Result of business development in Mainland China
Chengdu 85 Food & Beverage Ltd.	(27,339)	Result of business development in Mainland China
Lucky Bakery Limited	8,174	Reflecting progress and opportunities in Hong Kong
Wincase Limited	(227)	Reflecting progress and opportunities in Hong Kong
Worldinn Limited	262	Reflecting progress and opportunities in Hong Kong
Sheng-Pin (Xiamen) Food Ltd.	7,400	Result of business development in Mainland China
Sheng-Pin (Qingdao) Food Ltd.	11,584	Result of business development in Mainland China
Xiamen 85 Food & Beverage Ltd.	122,848	Result of business development in Mainland China
Shenyang 85 Food & Beverage Ltd.	(13)	Result of business development in Mainland China
Sheng-Pin (Shenyang) Food Ltd.	9,010	Result of business development in Mainland China
85 Degree (Qingdao) Food & Beverage Management Ltd.	(26,760)	Result of business development in Mainland China
Sheng-Pin (Wuhan) Food Ltd.	(9,074)	Result of business development in Mainland China
Wuhan Jing Way Food & Beverage Ltd.	(17,027)	Result of business development in Mainland China
Jianxi Jing Way Food & Beverage Ltd.	3	Result of business development in Mainland China
Jin Wei Industrial (Shanghai) Ltd.	348,681	Result of business development in Mainland China
Guangzhou 85 Degree Food & Beverage	(20,123)	Result of business development in Mainland China
Management Ltd.
Qingdao Jie Wei Food & Beverage Management Ltd.	(978)	Result of business development in Mainland China
Jia Ding Jing Way Food & Beverage Ltd.(still in
process of preparation)	4,039	Result of business development in Mainland China
85 Degree (Jiangsu) Food Ltd.	59,355	Result of business development in Mainland China
Kunshan 85 Degree Food & Beverage	3,215	Result of business development in Mainland China
Management Ltd. Sheng-Pin (Dongguan) Food Ltd.	(9,556)	Result of business development in Mainland China
Xiahewei (Xiamen) Trading Ltd.	67,329	Result of business development in Mainland China
Shanghai Minhang Jinxia Food & Beverage Ltd.	177	Result of business development in Mainland China
Mai-Jai (Chengdu) Food Ltd.	86	Result of business development in Mainland China

5-3. Investment Plans for the Coming Year

Based on actual operation needs, subsidiaries will make detailed plans and propose to the

Company for evaluation and approval.

6. Risk assessment

6-1. Risk management policies and structure

The Company endeavors to maintain a comprehensive risk management system that works to manage risks for the entire organization including subsidiaries. The Board of Directors, managers at all levels, and employees work together to promote proper implementation of risk management. In addition to observing relevant regulations, the Company identifies, analyzes, measures, monitors, responds to, reports, and mitigates all potential risks that could arise from operating activities based on the characteristics and impact of such risks. While working to achieve the Company's strategic goals, we can also effectively maintain and control potential risk. The Company's primary risk management structure and the various business units responsible for risk management and its implementation are as below:

a. Strategic and operational risks: Each business unit and subsidiary is responsible for the planning and risk assessment of any new investments or operational decisions. The Company's Office of the CEO regularly conducts related indicator analysis and tracks performance at the Company and affiliated enterprises monthly exchange meetings to ensure each business entity's operating strategy is in line with its operational goals and strategic vision.
b. Financial, liquidity, and credit risks: To respond to changes in related regulations, policies, and the market, the Company's Finance and Accounting function defines a range of strategies, procedures, and indicators to perform regularly-scheduled analysis and evaluation of changes in risk status and respond appropriately in order to mitigate potential risks for the entire company.
c. Market risks: Each business unit analyses and assesses major government policies, laws, and technological advances and formulates appropriate response measures to reduce potential future risks.
d. Through risk assessment and regulatory reviews, the Internal Audit function draws up an annual audit plan and self-inspection procedures and methods, which, when implemented, help to control aforementioned risks. The results of these inspections shall be reported periodically to the Board of Directors.
6-2. Impact on company profits and responses to fluctuations in interest rates, foreign exchange rates, and inflation
a. Interest rate fluctuation: The interest expense of 2019 and 2020 was NT\$16,794 thousand and NT\$9,721 thousand, and amounted to less than 1% of operating profits, which are relatively minor.
b. Exchange rate fluctuation: Response measures for possible future exchange rate risks include:
- (1)Finance function closely watches changes in foreign exchange rates and decides on proper positions for operations needs.
- (2)Following related internal rules, derivative positions can be built to offset risks.
- (3)Establish specific account for foreign currency to reduce impact from exchange rate changes.
c. Inflation/deflation: Changes in raw material prices are being watched closely, and proper procurement quantity is pre-determined to reduce price impacts.
6-3. Policies regarding engagement in highly risky or highly leveraged investments, loans to others, endorsements, or derivatives trading; reasons for profits or losses from such activities; and proposed response measures
a. Policies regarding engagement in highly risky or highly leveraged investments; reasons for profits or losses from such activities; and proposed response measures:

The Company focuses on the main business and does not cross over to other high-risk industries and involve no high-leverage investments.

b. Policies regarding loans to others; reasons for profits or losses from such activities; and proposed response measures:

The Company makes no loans to others except subsidiaries, which follow related internal rules and produced no major impacts on profit and losses.

c. Policies regarding engagement in endorsements; reasons for profits or losses from such activities; and proposed response measures:

The Company makes no endorsements to others except subsidiaries, which follow related internal rules and produced no major impacts on profit and loss.

d. Policies regarding engagement in derivatives trading; reasons for profits or losses from such activities; and proposed response measures:

Engagement will follow related internal rules and depends on hedge needs.

6-4. R&D Plans and Projected Investment

R&D expense for 2019 and 2020 amounted to NT\$35,709 thousand and \$31,591 thousand, which was 0.15% and 0.16% of sales, respectively.

6-5. Financial impacts of and responses to major changes to domestic and overseas laws and government policies

If policies, tax scheme, and economic environment in Taiwan and China see major changes and affect customers and suppliers, the Company's business will probably be impacted.

6-6. Financial impacts of and responses to technological and industry changes

The Company has continually paid close attention to the rise of new trends. In that case, related developments occurring over this past year did not significantly impact the Company's financial operations.

6-7. Impacts of changes in corporate image on corporate crisis management and related response measures

The Company does its utmost to provide the public with safe, convenient, high-quality products and services and currently incurs no events impacting corporate image and creating crisis.

6-8. Anticipated benefits, risks of M&A activity and appropriate responses

The Company has no M&A plans in the most recent year. If future M&A is considered, it cannot be guaranteed to produce no negative impacts on operation.

6-9. Anticipated benefits, risks of factory expansion and appropriate responses

The Company is in the process of fast expansion in China and the U.S., and will evaluate costs and benefits, test market size, minimize the risk of oversupply, and maximize the capacity utilization of central kitchens.

6-10. Anticipated risks of concentrating purchasing and distribution and appropriate

responses: N/A

6-11. Possible effects and risks caused by large transfers or changing hands of shares by directors, supervisors, or major shareholders who hold an over 10% stake in the Company and proposed responses: N/A
6-12. Possible benefits and risks to the Company due to a change in operating rights and proposed responses: N/A
6-13. All major litigation, non-litigation disputes, and administrative disputes that involve the Company, the Company's Directors, Supervisors, CEO, responsible parties, major shareholders with over 10% stake, or affiliated enterprises should be disclosed as long as the outcome may have a significant impact on shareholder equity or share prices, whether said dispute has been settled or is still pending. The disclosure should include the factual matters of the dispute, underlying monetary values, date actions commenced, the main parties involved, and response measures taken as of the Annual Report publication date: Labor dispute in the U.S. and the corresponding losses booked in Q4 2019; those incurred Down Under booked in Q4 2020.
6-14. Other major risks and proposed responses: None
1. Other important items: None

08. Special Notes

1. Information about Affiliated Enterprises

1-1. Affiliated Enterprises

Note: Prime Scope Trading Limited and Shanghai Gourmet Master Food & Beverage Ltd. invests in 25% and 75%, respectively, of 85 Degree (Jiangsu) Food Ltd.; He-Shia Food & Beverage Ltd. and Shanghai Gourmet Master Food & Beverage Ltd. invests in 43% and 57%, respectively, of Wuhan Jing Way Food & Beverage Ltd.; Prime Scope Trading Limited and He-Shia Food & Beverage Ltd. invests in 27% and 73%, respectively, of Beijing 85 Food & Beverage Ltd.; Prime Scope Trading Limited and He-Shia Food & Beverage Ltd. invests in 61.5% and 38.5%, respectively, of Sheng-Pin (Beijing) Food Ltd.

1-2. Rosters of Directors, Supervisors, Presidents, and Operational Highlights of Affiliates

1,000	EPS		13.23	35.16	-14.53	10.08	-4.08	-
December 31, 2020 Unit: Shares; %; NT\$	Net income / loss		618,535	445,649	-50,558	8,174	-21,549	-136,791
	Operating Income		-24,151	-3,280	-16,346	-39	-104,802	-61,886
	Operating Revenues		185,211	2,0525	127,369	-	1,615,920	3,701,073
	Net worth		6,387,191	2,235,745	-166,114	48,605	1,386,942	767,539
	Liabilities Total		978,815	40,605	447,075	-	518,482	2,015,739
	Total assets		7,366,006	2,276,350	280,961	48,605	1,905,424	2,783,278
	Paid-in capital		1,334,955	553,447	76,825	106,773	215,698	251,323
		Percentage	100%	100%	51%	100%	100%	100%
	Shares held	Shares	46,742,963	12,899,078	1,785,000	811,000	5,301,000	Note
	Name and representing		Ltd.-Representative: Wu Cheng Hsueh Gourmet Master Co.	Ltd.-Representative: Wu Cheng Hsueh Gourmet Master Co.	Ltd.-Representative: Wu Cheng Hsueh Gourmet Master Co.	Ltd.-Representative: Wu Cheng Hsueh Gourmet Master Co.	Ltd.-Representative: Wu Cheng Hsueh Gourmet Master Co.	Inc-Representative: Kuo Ming Hua Perfect 85 Degrees C,
			Director	Director	Director	Director	Director	Director
	Position Prime Scope Trading Affiliate Limited			85 Degree Co., Ltd.	International Pty. Ltd 85 Degrees Café	Lucky Bakery Limited	Perfect 85 Degrees C, Inc.	Investments, LLC WinPin 85

Affiliate	Position	Name and representing		Shares held	Paid-in capital	Total assets	Liabilities Total	Net worth	Operating Revenues	Operating Income	Net income / loss	EPS
			Shares	Percentage
Investments, Inc. Golden 85	Director	Inc-Representative: Kuo Ming Hua Perfect 85 Degrees C,	Note	65%	86,620	156,623	126,442	30,181	276,903	24,014	23,362	-
WinWin 85C Holding Co., Ltd.	Director	Ltd.-Representative: Wu Cheng Hsueh Gourmet Master Co.	2,110,000	100%	60,261	43,768	-	43,768	-	-259	3,324	1.6
WinWin 85C LLC	Director	Ltd.-Representative: Wu Cheng Hsueh WinWin 85C Holding Co.,	Note	100%	37,127	185,933	149,351	36,582	-	-5,354	3,795	-
WinUS 85C LLC	Director	Ltd.-Representative: Wu Cheng Hsueh WinWin 85C Holding Co.,	Note	100%	21,705	99,824	92,890	6,934	-	-4,750	-221	-
Comestibles Master Co., Ltd	Director	85 Degree Co., Ltd.-Representative: Wu Cheng Hsueh	35,908,727	100%	493,447	3,352,352	1,118,402	2,233,950	3,366,948	462,930	395,820	11.24
Mei Wei Master Co., Ltd.	Director	Ltd.-Representative: Wu Ming Long Comestibles Master Co.,	3,155,893	100%	129,349	348,392	417,599	-69,207	469,401	-17,396	-20,110	-6.37
The Hot Pot Food and Management Co., Ltd. Beverage	Director	Ltd.-Representative: Wu Ming Long Comestibles Master Co.,	5,886,051	23%	255,000	1,088,196	623,126	465,070	1,188,965	128,089	89,893	3.53

Affiliate	Position	Name and representing	Shares held		Paid-in capital	Total assets	Liabilities Total	Net worth	Operating Revenues	Operating Income	Net income / loss	EPS
			Shares	Percentage
Mei Wei Fu Xing Co.,	Director	Ltd.-Representative: Wu Ming Long Mei Wei Master Co.,	Note	60%	3,000	7636	7877	-241	11,500	-851	-883	-
Shanghai Gourmet Master Food & Beverage Ltd.	Director	-Representative: Wu Cheng Hsueh Prime Scope Trading Limited	Note	100%	228,190	4,217,833	2,616,139	1,601,694	1,609,215	8,620	359,545	-
He-Shia Food & Beverage Ltd.	Director	-Representative: Wu Cheng Hsueh Prime Scope Trading Limited	Note	100%	62,831	1,212,766	690,271	522,495	1,494,069	59,647	48,150	-
Sheng-Pin (Shanghai) Food Ltd.	Director	Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & Chin	Note	100%	78,786	-	-	-	-	-	5	-
Way Food & Beverage Shanghai Howco Jing Ltd.	Director	Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & Chin	Note	100%	8,754	33,884	13,831	20,053	44,283	-509	1,416	-
Sheng-Pin (Hangzhou) Food Ltd.	Director	-Representative: Wu Cheng Hsueh Prime Scope Trading Limited	Note	100%	57,119	283,099	137,220	145,879	326,025	11,262	10,179	-
Food & Beverage Ltd. He-Shia (Nanjing)	Director	-Representative: Wu Cheng Hsueh Prime Scope Trading Limited	Note	100%	57,119	1,543,989	990,162	553,827	2,352,442	108,553	76,700	-

EPS		-	-	-	-	-	-	-
Net income / loss		-11,814	23,918	2,456	9,157	-28,494	8,024	-27,339
Operating Income		2,825	48,070	21,766	6,515	-9,537	9,183	-6,830
Operating Revenues		500,840	688,097	1,003,531	81,041	1,073,944	17,991	410,824
Net worth		147,747	142,143	184,579	171,665	197,862	122,259	4,747
Liabilities Total		280,907	297,550	459,089	56,987	513,604	1,121	282,160
Total assets		428,654	439,693	643,668	228,652	711,466	123,380	286,907
Paid-in capital		228,476	57,119	49,717	185,753	14,280	128,518	116,384
	Percentage	25% 75%	100%	85%	61.5% 38.5%	100%	100%	100%
Shares held	Shares	Note	Note	Note	Note	Note	Note	Note
Name and representing		-Representative: Wu Cheng Hsueh -Representative: Wang Jian Yao He-Shia Food & Beverage Ltd. Prime Scope Trading Limited	-Representative: Wu Cheng Hsueh Prime Scope Trading Limited	Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & Chin	-Representative: Wu Cheng Hsueh -Representative: Wang Jian Yao He-Shia Food & Beverage Ltd. Prime Scope Trading Limited	-Representative: Wu Cheng Hsueh Prime Scope Trading Limited	-Representative: Wu Cheng Hsueh Prime Scope Trading Limited	Beverage Ltd.-Representative: Wu Yu & Shanghai Gourmet Master Food Chin
Position		Director	Director	Director	Director	Director	Director	Director
Affiliate		Beijing 85 Food & Beverage Ltd.	Zhejiang 85 Food & Beverage Ltd.	Shenzheng 85 Food & Beverage Ltd.	Sheng-Pin (Beijing) Food Ltd.	Fuzhou 85 Food & Beverage Ltd.	Sheng-Pin (Jiangsu) Food Ltd.	Chengdu 85 Food & Beverage Ltd.

EPS Net income / loss Operating Income			- -227 -62	- 262 237	- 7,400 9,323	- 11,584 12,883	- 122,848 179,502	- -13 -13
		-		19,295	223,663	66,349	1,531,835	-
14,095 17,529			20,501 24,544		79,962 94,647	68,768 14,836	508,805 608,148	94 91
		31,624	45,045		174,609	83,604	1,116,953	185
		125,412	130,928		57,119	71,399	28,559	28,559
	Percentage	100%	100%		100%	100%	100%	100%
	Shares	Note	Note		Note	Note	Note	Note
Name and representing		Ltd.-Representative: Wu Cheng Hsueh Profit Sky International	Ltd.-Representative: Wu Cheng Hsueh Profit Sky International		-Representative: Wu Cheng Hsueh Prime Scope Trading Limited	-Representative: Wu Cheng Hsueh Prime Scope Trading Limited	-Representative: Wu Cheng Hsueh Prime Scope Trading Limited	-Representative: Wu Cheng Hsueh Prime Scope Trading Limited
Position		Director	Director		Director	Director	Director	Director
		Wincase Limited	Worldinn Limited				Sheng-Pin (Qingdao) Sheng-Pin (Xiamen) Xiamen 85 Food & Beverage Ltd. Food Ltd. Food Ltd.	Shenyang 85 Food & Beverage Ltd.

EPS		-	-	-	-	-	-	-
Net income / loss		-26,760	59,355	4,039	-9,074	-17,027	3	348,681
Operating Income		-13,576	74,244	3,999	-9,489	-3,255	-	360,874
Operating Revenues		229,245	1,624,539	31,948	-	261,611	-	5,328,242
Net worth		49,942	965,067	18,999	39,705	76,812	836	796,781
Liabilities Total		174,152	476,692	2,600	4,757	131,566	-	921,567
Total assets		224,094	1,441,759	21,599	44,462	208,378	836	1,718,348
Paid-in capital		57,119	656,868	4,377	70,032	201,342	26,262	8,754
	Percentage	100%	25% 75%	100%	100%	57% 43%	100%	100%
Shares held	Shares	Note	Note	Note	Note	Note	Note	Note
Name and representing		-Representative: Wu Cheng Hsueh Prime Scope Trading Limited	Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & -Representative: Wu Cheng Hsueh Prime Scope Trading Limited Chin	Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & Chin	Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & Chin	Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & -Representative: Wang Jian Yao He-Shia Food & Beverage Ltd. Chin	Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & Chin	Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & Chin
Position		Director	Director	Director	Director	Director	Director	Director
Affiliate		85 Degree (Qingdao) Management Ltd. Food & Beverage	85 Degree (Jiangsu) Food Ltd.	Jai Ding Jing Way & Beverage Ltd. Food	Sheng-Pin (Wuhan) Food Ltd.	Wuhan Jing Way Food & Beverage Ltd.	Jianxi Jing Way Food & Beverage Ltd.	Jin Wei Industrial (Shanghai) Ltd.

EPS		-	-	-	-	-	-	-
Net income / loss		-20,123	86	-978	3,215	-9,556	177	67,329
Operating Income		-14,248	95	-176	6,435	-1,936	599	88,951
Operating Revenues		169,372	61,622	32,903	238,206	144,332	20,965	726,299
Net worth		5,029	97,304	4,904	50,130	289,679	768	94,885
Liabilities Total		123,967	10,194	23,805	96,298	91,069	24,292	113,718
Total assets		128,996	107,498	28,709	146,428	380,748	25,060	208,603
Paid-in capital		70,032	108,331	6,566	43,770	306,390	-	-
	Percentage	100%	100%	100%	100%	100%	100%	100%
Shares held	Shares	Note	Note	Note	Note	Note	Note	Note
Name and representing		Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & Chin	Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & Chin	Ltd.-Representative: Wang Jian Yao 85 Degree (Qingdao) Food & Beverage Management	Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & Chin	Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & Chin	Beverage Ltd.-Representative: Wu Yu Shanghai Gourmet Master Food & Chin	Ltd.-Representative: Wu Yu Chin Jin Wei Industrial (Shanghai)
Position		Director	Director	Director	Director	Director	Director	Director
Affiliate		Guangzhou 85 Degree Management Ltd. Food & Beverage	Mai-Jai (Chengdu) Food Ltd.	Qingdao Jie Wei Food Management Ltd. & Beverage	Kunshan 85 Degree Management Ltd. Food & Beverage	Sheng-Pin (Dongguan) Food Ltd.	Shanghai Minhang Jinxia Food & Beverage Ltd.	Xiahewei (Xiamen) Trading Ltd.

Note: Limited Companies do not issue shares.

Private Placement Securities in 2020 and as of the Date of this Annual Report: None.
Status of Common Shares Acquired, Disposed of, and Held by Subsidiaries: None.

4. Special Notes

4-1. Major differences in the Company's articles of association and R.O.C. regulations on shareholders protection:

Articles of Association	2010 dictates the latter half of R.O.C. regulations on Tai-Zheng-Shan-Zhi 0991701319 and opinion of Cayman Islands attorney, the Company's articles of association 13 April Exchange shareholders protection. Stock Taiwan Per	depositary, custodian and/or trustee (or its/their Company or at any meeting of any class of Members and class of shares in respect of which each such entitled to exercise the same rights and powers on behalf Per Article 39(c) and (d) of the Company's articles of association, where a Member is a clearing house, nominee(s) and, in each case, being a corporation, "Third Party Holder"), it may authorize such persons as it thinks fit to act as its representatives at any meeting of the provided that the authorization shall specify the number Each person so authorized under the provisions of these Articles shall be of the Third Party Holder as if such person was the registered holder of the shares of the Company held by the Third Party Holder in respect of the number and class of shares specified in the relevant authorization. To the extent permissible under the laws of the Cayman Islands and these Articles, the qualifications, scopes, methods, procedures, and other details for the Member to exercise the voting rights shall be in compliance with the representative is so authorized. Applicable Law.
Cayman Islands regulations	A resolution shall be a special resolution when it has been passed at a general meeting of the Company by a majority of not less than two-thirds of the votes	Per the Company's articles of association, no person shall be recognized by the Company as holding any Share upon compelled in any way to recognize any equitable, contingent, future or partial interest in any Share or any other rights in respect of any Share, and a shareholder is a person who is registered in the Register of Members as the holder of any Share in the Company. Thus, where a Member is a clearing house, depositary, custodian and/or trustee (or its/their nominee(s) and, in each case, being a corporation, "Third Party Holder"), it such persons as it thinks fit to act as its representatives at any meeting of the Company or at any any trust, and the Company shall not be bound by or be meeting of any class of Members. may authorize defined as
Differences	Definition of special resolution: In the case of a company shareholders' meeting, by a majority of the shareholders present who represent two-thirds or more of the total number of its outstanding shares. In the event the total number of shares represented by the shareholders present at a shareholders' meeting of a company whose shares have been issued in public is less than the percentage of the total shareholdings required in the preceding paragraph, the resolution may be adopted by two-third of the voting rights exercised by the shareholders present at the shareholders' meeting who represent a majority of the outstanding shares of The limited by shares: a resolution adopted, at a Company.	a shareholder holds shares for other persons, The provisions of R.O.C. regulations shall be he/she can assert the exercise of split voting. complied with when exercising split voting. If 1. 2.

Any Events in 2020 and as of the Date of this Annual Report that Had Significant Impacts on Shareholders' Right or Security Prices as Stated in Item 2 Paragraph 2 of Article 36 of Securities and Exchange Law of Taiwan: None.

AI assistant

Gourmet — Annual Report 2020

52189_rns_2021-07-02_a6952d71-3258-47ff-ada1-0f4ee0b1c499.pdf

01. Letter to shareholders

02. Corporate Profile

1. Company and Group Profile

1-1. Date of Incorporation and Group Profile

1-2. Group Structure

1-3. Risk assessment: Please refer to Chapter 07.

2. Corporate History

03. Corporate Governance

1-2. Responsibilities of Key Functions

Major shareholders of the major shareholders that are juridical persons

Independence and Professional Expertise of Board Members

December 31, 2020

3. Corporate Governance

3-1. Board of Directors

3-2. Attendance of Independent Direcotrs for Audit Committee Meetings

3-4. Composition, responsibilities, and operation of the Compensation Committee a. Compensation Committee Members

b. Operations of the Compensation Committee

4. External audit fees

9. Company director and manager direct and indirect ownership of shares in affiliated enterprises

04. Capital Overview

1. Capitalization

1-1. Shares issued

1-3. Shareholding Distribution Status

1-4. Major shareholders

1-5. Market Price, Net Worth, Earnings, and Dividends per Share

05. Operational Highlights

1. Business Activities

b. Revenue distribution

c. Current products and service

1-2. Main Competitors in Different Region

1-3. Technology and R&D

◎ Mainland China

◎ U.S. and Australia

1-4. Short and mid-to-long-term operating strategies

a. Short-term

2. Market analysis and merchandise

b. Competitive edge

2-2. Key purpose of major products and the production process

b. Production process

2-3. Supply of raw materials

2-4. Major clients/suppliers

2-5. Sales over the last two years

3. Personnel information

4. Environmental protection expenditure

5. Labor relations

5-2. Losses due to labor disputes

5-3. Work environment and safety

6. Important Contracts

06. Financial Information

1-1. Condensed Balance Sheet and Income Statement

b. Condensed Balance Sheet-ROC GAAP

c. Condensed Income Statement-IFRS

d. Condensed Income Statement-ROC GAAP

e. Names and opinions of external auditors over the past five years

2. Five-Year Financial Analysis

• Financial Structure

• Liquidity

• Operating Performance

• Profitability

• Cash Flow

• Leverage

2-2. Financial analysis-ROC GAAP

• Operating Performance

• Cash Flow

• Leverage

Gourmet Master Co. Ltd. and Subsidiaries

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Calculation of Right-of-Use Assets and Lease Liabilities

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2019 AND 2018 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Gourmet Annual Report 2020