Maxs Sec 17-A 2019 - Final

A 2 0 0 0 0 3 0 0 8
S.E.C. Registration Number
M A X' S G R O U P , I N C .
( f o r me r l y P a n c a k e H o u s e , I N C . )
(Company's Full Name)
2 3 0 5 C H I N O R O C E S A V E N U E E X T .
M A K A T I C I T Y
(Business Address: No. Street City/ Town/ Province)
Rebecca R. Arago (632) 784-9000

Contact Person Company Telephone Number
(Second Thursday
of May)
1 2 3 1 SEC Form 17-A (Annual Report) For the 0 5 14
Month Day period ended December 31, 2019 Month Day
Fiscal Year Annual Meeting
Secondary License Type, If Applicable
CFD
Dept. Requiring this Doc. Amended Articles Number/Section
Total Amount of Borrowings
Total No. of Stockholders Domestic Foreign
To be accomplished by SEC Personnel Concerned
File Number LCU
Document I.D. Cashier
STAMPS
SEC Number: A2000-03008
File Number
MAX’S GROUP, INC.

_________________________________________________
(Company’s Full Name)
11/F Ecoplaza Building

2305 Chino Roces Avenue Extension
Makati City
______________________________________
(Company’s Address)
(632) 8784-9000
______________________________________
(Telephone Number)
December 31, 2019

______________________________________
(Calendar Year Ending)
(month and day)
Form 17-A Annual Report

______________________________________
Form Type
______________________________________
Amendment Designation (If applicable)
December 31, 2019

______________________________________
Period Ended Date
______________________________________
(Secondary License Type and File Number)
SECURITIES AND EXCHANGE COMMISSION
SEC FORM 17-A
ANNUAL REPORT PURSUANT TO SECTION 17
OF THE SECURITIES REGULATION CODE AND SECTION 141
OF CORPORATION CODE OF THE PHILIPPINES
1. For the year ended December 31, 2019
2. SEC Identification Number A2000-03008
3. BIR Tax Identification No. 205-357-210-000
4. Exact name of registrant as specified in its charter Max’s Group, Inc.
5. Manila, Philippines
Province, Country or other jurisdiction of incorporation or organization
6. (SEC Use Only)

Industry Classification Code:
7. 11F Ecoplaza Building, 2305 Chino Roces Avenue Extension, Makati City
Address of principal office
1231
Postal Code
8. (632) 8784-9000
Registrant's telephone number including area code
9. Pancake House, Inc., 2259 Chino Roces Avenue Extension., Makati City
Former name, former address, and former fiscal year, if changed since last report
10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of
the RSA
Number of Shares of Common Stock

Title of Each Class Outstanding and Amount of Debt
Outstanding
Max’s Group, Inc. 1,037,292,224 Shares

Common Stock
11. Are any or all of these securities listed on the Philippine Stock Exchange.
Yes [ x ] No [ ]
If yes, state the name of such stock exchange and the classes of securities listed
therein:
Philippine Stock Exchange Common shares

12. Check whether the issuer:
(a) has filed all reports required to be filed by Section 17 of the SRC and SRC
Rule 17 thereunder or Section 11 of the RSA and RSA Rule 11 (a)-1
thereunder, and Sections 26 and 141 of The Corporation Code of the
Philippines during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports);
Yes [ X ] No [ ]
(b) has been subject to such filing requirements for the past 90 days.
Yes [ ] No [ X ]
13. State the aggregate market value of the voting stock held by non-affiliates of the
registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within sixty (60) days prior to the date of filing. If a
determination as to whether a particular person or entity is an affiliate cannot be
made without involving unreasonable effort and expense, the aggregate market
value of the common stock held by non-affiliates may be calculated on the basis
of assumptions reasonable under the circumstances, provided the assumptions
are set forth in this Form.
Number of Shares Owned by Non-Affiliates (Public) 265,248,410

Closing Price as of April 15, 2020 P6.58/share
Aggregate Market Value of Voting Stock Held by
P1,745,334,538
Non-Affiliates (Public) as of April 15, 2020
APPLICABLE ONLY TO ISSUERS INVOLVED IN

INSOLVENCY/SUSPENSION OF PAYMENTS PROCEEDINGS
DURING THE PRECEDING FIVE YEARS.
14. Check whether the issuer has filed all documents and reports required to be filed
by Section 17 of the Code subsequent to the distribution of securities under a
plan confirmed by a court or the Commission.
Yes [ X ] No [ ]
DOCUMENTS INCORPORATED BY REFERENCE
15. If any of the following documents are incorporated by reference, briefly describe
them and identify the part of SEC Form 17-A into which the document is
incorporated: (Not Applicable)
(a) Any annual report to security holders;
(b) Any proxy or information statement filed pursuant to SRC Rule 8.1-1.
(c) Any prospectus filed pursuant to SRC Rule 8.1-1.

MAX’S GROUP, INC.
TABLE OF CONTENTS
SEC FORM 17-A
Page
PART I - BUSINESS AND GENERAL INFORMATION
Item 1. Business 1-25

Item 2 Properties 25-27
Item 3 Legal Proceedings 27
Item 4 Submission of Matters to a Vote of Security Holders 27
PART II - OPERATIONAL AND FINANCIAL INFORMATION
Item 5 Market for Issuer’s Common Equity and Related Stockholder 28-30
Matters
Item 6 Management’s Discussion and Analysis or Plan of Operation 30-43
Item 7 Financial Statements 43
Item 8 Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure 43
PART III - CONTROL AND COMPENSATION INFORMATION
Item 9 Directors and Executive Officers of the Issuer 44-47

Item 10 Executive Compensation 47-48
Item 11 Security Ownership of Certain Beneficial Owners and
Management 48-51
Item 12 Certain Relationships and Related Transactions 51
PART IV - EXHIBITS AND SCHEDULES
Item 13 Corporate Governance 52-53

Item 14 Exhibits and Reports on SEC Form 17-C (Current Report) 53-54
Signature 55
ATTACHMENTS
A. STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR

CONSOLIDATED FINANCIAL STATEMENTS
B. INDEX TO FINANCIAL STATEMENTS AND
SUPPLEMENTARY SCHEDULES
PART I - BUSINESS AND GENERAL INFORMATION
Item 1. Business
Description of Business
In 2014, the Company underwent a change in control and significant expansion of its business
and operations. After the completion of a tender offer to acquire the shares of the public
shareholders and the disposition by Pancake House Holdings, Inc. and the Aureos Group of their
respective interests in the Company on February 24, 2014, the Max’s Group of Companies
shareholders beneficially took control of approximately 89.95% of the Company and
subsequently integrated all of their interest into the Company.
After renaming to Max’s Group, Inc. (“Company”, “MGI”), the Company conducted a follow-on
offering of 197,183,100 million common shares at an offer price of P17.75 per share last
December 12, 2014. With the combination of all 14 brands under its portfolio, the Company
secured its position as the leader in the casual dining full-service restaurant industry in the
Philippines.
Since its incorporation in March 2000, the Company’s operating history can be characterized by
a successful track record of developing, acquiring, managing and franchising restaurants under
numerous well-known brands.
The Company’s leading brands, Max’s Restaurant, Pancake House, Yellow Cab Pizza and
Krispy Kreme remain at the forefront of the business. The Company’s operation of global brands
Krispy Kreme and Jamba Juice in the Philippines also allowed these brands to gain a strong
foothold in the Philippines and even benchmark themselves internationally in terms of product
quality and development. Teriyaki Boy, Sizzlin’ Steak and Dencio’s continue to enjoy high-level
awareness and still exhibit growth potential while specialty brands Maple and Kabisera have kept
a stable following over the years. Altogether, the brands complement one another and command
growing loyalty among their respective niches in the casual dining market.
As the country’s leader in the chained full-service restaurant (FSR) class, the Company’s brands
have been the top-of-mind choice of Filipino consumers when dining out. Combining the FSR,
Pizza and Doughnut segments, the Company has an aggregated market share of 21% across
six of its brands: Max’s Restaurant, Yellow Cab Pizza Co., Pancake House, Krispy Kreme,
Teriyaki Boy and Dencio’s in terms of value sales based on the 2019 Euromonitor country report.
These reliable and iconic brands have been afforded by the market a clear “share- of-mind”
which translates to customer loyalty and cements the Company’s market-leading position.
STAR BRANDS
Max’s Restaurant
Founded in 1945, Max’s Restaurant is a proud and trusted Filipino heritage, known for its fried
chicken, a recipe that has been passed on through generations. It also counts among its
bestsellers classic local favorites such as Kare-Kare, Crispy Pata, Pansit Canton and Lumpiang
Ubod. With over seven decades of operational success, Max’s Restaurant carries a proven track
record in delivering world-class Filipino food complemented by exceptional service standards. It
1
operates across flexible formats featuring a diverse menu allowing it to cater to various consumer
tastes and preferences. Through its lasting commitment to product quality, service and value-
for-money proposition, Max’s Restaurant has kept a strong position in the chained full-service
restaurants category with a market share of 16.4% based on the 2017 Euromonitor country
report.
Max’s Restaurant started as a popular family-oriented destination that witnessed several

momentous occasions in the lives of Filipinos. It was a preferred venue for wedding banquets,
birthday parties, graduation events and family reunions. Recognizing the need for continuous
innovation to ensure brand relevance, Max’s Restaurant recently embarked on a major
transformation campaign which involved redesigning store elements to customize the celebrated
guest experience according to its location and customer profiles, particularly the younger
segment who may still be unfamiliar with the brand, while staying true to its core. It also aims to
tap the growing trend of solo-dining by offering individualized meals, prompting the launch of its
Rice Bowls, a single-serve version of its famous main dish offerings. This initiative has enabled
Max’s Restaurant to go beyond the traditionally associated formal gatherings, to one that is more
relaxed and friendly paving the way for more casual visits.
The following table shows the total number of stores from 2017 up to 2019:
Stores 2017 2018 2019

Company-Owned 101 101 98
Franchised 83 97 110
International 27 25 30
Total 211 223 238
Pancake House
In 1974, the first Pancake House restaurant opened in Magallanes and has since established
itself as a reputable food brand known for its freshly-made pancakes and waffles. Through the
years, it has remained a popular dining destination and has been equated to delicious comfort
food, personalized service and a homey dining ambiance. Aside from pancakes and waffles, the
brand also counts its tacos, spaghetti and pan chicken dishes among its bestsellers. In 2015,
Pancake House introduced a new store look which featured a cozier feel made out of natural
materials, a combination of warm and neon lights, subtle pops of color and refreshing greenery
to create a more pleasing dining experience. This concept was well-received by the market and
has translated to an uptick in sales at the store level. In addition to the physical redesign,
Pancake House also launched exciting product campaigns notably the ‘Choose Any Two’ meals
which allowed customers to select among their classic favorites while at the same time sample
new offerings. Based on the 2019 Euromonitor country report, Pancake House occupies 4.1%
market share in the chained full-service restaurants category.
2
Besides company-owned stores, Pancake House also owns and operates three joint venture
companies to hold its investments in Pancake House franchises:
Name of Joint Venture Date Established/Start of

% Joint Venture
Company/Partner Commercial Operations
PCK-MTB, Inc.
Pancake House, Inc. 60% Harbourview, Incorporated on 1/05
CCP Complex Started operations in 4/05
MTB Culinary, Inc. 40%
PCK MSC, Inc.
Pancake House, Inc. 50% Incorporated on 11/07
Cash & Carry
Makati Supermarket, Inc. 50% Started operations in 11/07
PCK Estancia Capitol Inc.

Max’s Group Inc. 60%
Estancia Mall Started operations on 01/15
3K Bfusion Corp. 40%
Stores 2017 2018 2019

Franchised 69 72 79
Joint Venture 3 3 3
International 7 7 4
Total 142 143 143
Yellow Cab Pizza
Yellow Cab Pizza is a homegrown New York-style pizza brand generously topped and made with
the finest ingredients. It opened its maiden branch in Makati Avenue back in 2001. On account
of the brand’s strong associations with its brand cues – checkers, color yellow, vespa bikes used
for delivery and the industrial-look pizza box, Yellow Cab has become the preferred dining
destination for people craving for a premium pizza experience. Targeting the younger population,
the brand recently started to customize solo meals allowing customers to choose from among its
bestsellers mixed together in a single plate. It also reinforced its chicken offerings with an
extended line-up of flavored chicken wings. Yellow Cab accounts for bulk of the Company’s
delivery revenues.
3
Stores 2017 2018 2019
Franchised 27 34 50
Joint Venture 1 1 1
International 20 25 28
Total 169 186 205
Yellow Cab Pizza operates one joint venture entity:
Name of Joint Venture % Date Established/

Company/Partner Ownership Joint Venture Start of Operations
YCPI Pizza Ventures, Inc.
Yellow Cab Food Corp. 55% Incorporated on 11/12

Laoag Started operations on
Papad, Inc. 45% 12/12
Krispy Kreme
The Company holds the exclusive license to operate Krispy Kreme in the Philippines. Krispy
Kreme is an international retailer of premium-quality sweet treats, including its hot-melt in-your-
mouth Original Glazed doughnut. Headquartered in Winston-Salem, North Carolina, USA, the
brand has offered the highest-quality doughnuts and great- tasting coffee since it was founded
in 1937. The Krispy Kreme brand has several unique elements that have helped create a special
bond with its customers. The doughnuts, the signature product of the brand, which are made
from a secret recipe, have a one of a kind taste that generations of loyal customers have grown
to love. Krispy Kreme likewise prides itself as the first drive-thru in Asia when it opened its
Greenhills branch in 2007. Moreover, Krispy Kreme International has consistently recognized
the Philippine operations for its excellence in hospitality, service, product quality, marketing, and
operations and as such has requested assistance in providing training and support for at least
seven foreign markets.
In 2019, Krispy Kreme was granted the opportunity to sub-franchise the brand in the local market.
By year end, seven (7) successful sub-franchised locations were opened. Based on the 2019
Euromonitor country report, Krispy Kreme has 0.6% market share under all chained consumer
foodservice brands.
Stores 2017 2018 2019

Sub-franchised - - 7
Total 79 83 96
INVOGORATE BRANDS
4
Teriyaki Boy
Teriyaki Boy is a pioneering concept and maintains one of the largest store network in the local
casual food-service Japanese restaurant category. Its family-oriented theme is anchored on a
wide variety of delicious and affordable Japanese food. Teriyaki Boy underwent an aggressive
rebranding program that included modernizing store architecture, streamlining menu and
upgrading service platforms. Since, the brand has kept its relevance amidst intensifying
competition in its segment with the entry of new specialty Japanese restaurants. In 2017, Teriyaki
Boy piloted a combination store format with Sizzlin’ Steak, that saw both Teriyaki boy and Sizzlin’
Steak located next to each other while sharing common dining and kitchen areas. This project
has resulted into various efficiencies leading to improved margins at the store level and is now
the preferred model for future expansion.
In 2017, Max’s Group, Inc. acquired full-interest in Teriyaki Boy Group, Inc.
TBGI has an existing Joint Venture entity:

TBOY-MS, Inc.
Teriyaki Boy Group, Inc. 50% Incorporated on 11/06
Cash & Carry Mall Started operations in
Makati Supermarket Corp. 50% 12/07
Stores 2017 2018 2019

Company-Owned 8 8 6
Franchised 4 4 4
Joint Venture 1 1 1
International - 1 4
Total 13 14 15
Dencio’s
Having popularized the restobar concept, Dencio’s has evolved into a Filipino favorite popular
among families, balikbayans and professionals alike. Its appeal is based on its signature Filipino
dishes like sisig, complemented by a variety of drinks in a relaxed ambiance making it a choice
dining destination.
Dencio’s operates one joint venture format:

DFSI-One Nakpil, Inc.
Pancake House, Inc. 60% Incorporated on 1/05
5
Harbour Started operations in
One Nakpil Global Ventures, Inc. 40% Square, CCP 4/05
Complex
Stores 2017 2018 2019

Company Owned 2 2 2
Franchised 14 12 11
Joint Venture 1 1 1
Total 17 15 14
Sizzlin’ Steak
Sizzlin’ Steak is a homegrown brand that offers high-quality beef, special sauces, and a hot-plate
system, served within an environment that puts a premium on product quality and service speed.
After piloting a new format for an existing store proved successful, stores are now being
reformatted to undertake more of the same type of operations with a new menu design.
Stores 2017 2018 2019

Company Owned 8 7 4
Franchised 3 2 0
International 1 1 4
Total 12 10 8
NICHE BRANDS
Jamba Juice
Jamba Juice is a renowned active lifestyle brand with over 800 stores worldwide. The Company
holds the exclusive rights to operate Jamba Juice in the Philippines and has positioned the brand
in response to the budding health and wellness trend. It offers better-for-you beverages such as
whole-fruit smoothies, freshly squeezed fruit juices, steel cut organic oatmeal, fruit parfaits and
baked goods.
Stores 2017 2018 2019

Company Owned 19 15 15
Franchised 4 4 4
Total 23 19 19
6
Kabisera
The Company with its brand Max’s showed its commitment to raising the flag as a standard-
bearer of Filipino cuisine through the transformation of Max’s Kabisera—a boutique experience
celebrating Filipino hospitality and culture with a highly-curated approach to casual dining
considering each aspect from the food menu to the beverage list, from the aesthetics to the
service. The refined menu of upscaled Filipino comfort food and the elegant store design make
it an inviting venue for high-end social functions and events. Max’s Kabisera’s thoughtful menu
of familiar flavors interpreted through a more cosmopolitan lens makes it accessible to both
Filipino diners and foreign guests.
Stores 2017 2018 2019

Company Owned 1 1 1
Total 1 1 1
Maple
Maple was conceptualized and introduced by the Company to seize new opportunities in a
growing affluent dining market. With a wide array of choices built on flavors found in the coastal
towns of America, Maple brings the best of elevated American comfort food to the plates of its
customers. Maple is characterized by its warm interiors, big servings and premium food offerings.
It also doubles as an incubation facility for chef-made western recipes. Maple maintains its lone
venue at San Antonio Plaza Arcade, Makati City.
Stores 2017 2018 2019

Company Owned 1 1 1
Total 1 1 1
Max’s Corner Bakery
Max’s Corner Bakery was established in the early 1960s in Sucat by Ruby Trota. It started to
produce dinner rolls which perfectly paired with the fried chicken of Max’s Restaurant. It also
created customized cakes for special occasions celebrated in Max’s Restaurant. Max’s Corner
Bakery has since expanded into other pastry products such as bread, ensaymada, food-for-the-
gods, polvoron, cookies and the famous caramel bars. While co-locating inside Max’s
Restaurant, the brand has garnered its own following as a standalone name with its growing line
of offerings. Today, Max’s Corner Bakery caters to institutional orders and supplies pastry
requirements to major food establishments in the country.
Revenue Contribution
The Company and its operating subsidiaries’ revenue sources, listed by size of contribution, are:
(i) Restaurant sales from company-owned stores (includes dine-in, take-out, delivery and
catering services); ii) Commissary sales to franchised stores; and iii) Fees from franchisees
consisting of one-time franchise fees and continuing licensing fees.
7
Revenue contributions by revenue segment for 2017 to 2019 are as follows:
(in Php thousands) 2017 2018 2019

Restaurant Sales 10,462,961 11,296,532 11,793,079
Commissary Sales 1,422,768 1,565,726 1,779,345
Franchising Income 776,194 820,410 828,921
Consolidated 12,661,923 13,682,668 14,401,346
Revenues
As of 31 December 2019, restaurant sales accounted for 82% of consolidated revenues while
commissary sales and franchising income contributed 12% and 6%, respectively. Revenues from
international operations make up less than 5% of consolidated revenues.
Supply Chain, Production and Distribution Methods
As of December 31, 2019, MGI operates three Metro Manila-based commissaries that services
all of its production, distribution and storage requirements across all brands. The Company
likewise engages global toll manufacturers to supply processed requirements for its international
business.
The commissaries are governed by the Food and Drug Administration (FDA) with yearly
evaluation and accreditation. FDA monitors the health and safety standards of food and drugs
made available to the public.
Two main production facilities maintain Hazard Analysis Critical Control Point (HACCP)
certification to guarantee conformity with best practices on food handling. This certification
prescribes a structured methodology to food processing that prevents hazards that may cause
the finished product to be unsafe for consumption. This ensures our customers are only served
with the finest and safest products.
Competition
The Company competes mainly with other well-established local and international casual dining
restaurants as well as chains such as the Bistro Group which operates Friday's and Italianni's
(including Fish & Co., Flapjacks, Bulgogi Brothers, Watami, Modern Shanghai and others);
Global Restaurant Concepts, Inc. which operates California Pizza Kitchen, IHOP, Gyu-Kaku; the
LJC Group which operates Abe's and others; Conti’s; Aristocrat; Savory; Sumo Sam; Gerry’s
Grill; Tokyo Tokyo; Pepper Lunch and Kenny Rogers Roasters which are principal direct
competitors. The Company also competes to some extent in certain market segments with local
and foreign brands such as Jollibee, McDonald’s and Kentucky Fried Chicken. In the pizza
space, Yellow Cab Pizza also competes with Greenwich, Shakey's and Pizza Hut. In the
specialty food group, Jamba Juice competes with Big Chill. In the bakery products fast-food
category, Krispy Kreme competes with Starbucks, J. Co Donuts & Coffee and Tim Horton’s.
Sources and Availability of Raw Materials
MGI has a Corporate Supply Chain Department responsible for vendor accreditation,
procurement and contract negotiations with existing and potential suppliers. The Company
maintains long-term mutually-beneficial relationships with various suppliers for essential raw
8
components. Bulk of its food and non-food requirements are acquired locally from reputable
sources.
Customer Base and Related Parties
Given the retail nature of the restaurant business, the Company does not have a customer that
accounts for at least 20% or more of existing orders or sales. The Company is likewise not
significantly dependent on any related parties for its operational requirements.
Trademarks
The Company has filed applications for its trademarks in various countries to safeguard the
identity and value of its service marks and trademarks and protect them from any infringement.
Country IP Office
Australia IP Australia, Department of Industry
Bahrain Ministry of Industry and Commerce
Brunei Brunei intellectual Property Office
Canada Canadian Intellectual Property Office
China China Trademark Office
Egypt Trademarks and Industrial Designs Office, Ministry of Trade and Industry
Hong Kong Intellectual Property Department
India Controller General of Patents Designs and Trademarks
Indonesia Directorate General of Intellectual Property Rights
Japan Ministry of Economy, Trade and Industry (METI)
Korea Korean Intellectual Property Office (KIPO)
Kuwait Ministry of Commerce and Industry
Laos Department of Intellectual Property
Malaysia Intellectual Property Corporation of Malaysia
Philippines Intellectual Property Office of Philippines (IPOPHIL)
Qatar Competent administration Intellectual Property Center, Ministry of Justice
Saudi Arabia Ministry of Culture and Information
Singapore Intellectual Property Office of Singapore (IPOS)
Taiwan Taiwan Intellectual property Office (TIPO)
Thailand Department of Intellectual Property (DIP)
Turkey Turkish Patent Institute
UAE Copyright Department, Ministry of Economy
USA United States Patent and Trademark Office (USPTO)
Vietnam National Office of Intellectual Property (NOIP)
The following are the registration details and pending applications for trademarks filed by the
Company:
9
Registration/
Registration/
Trademark Country Application Class Status
Application No.
Date
Corporate
Max's Group, November
1 Inc. Philippines 4-2014-503563 13, 2014 35 Registered
Pancake
House
June 30,
1 Orange Philippines 4-2010-501543 2011 43 Registered
Gurts Frozen
Yogurt and June 11,
2 Device Philippines 4-2010-000044 2010 43 Registered
Pancake
House
International & June 11,
Pancake
House
5 Pan Chicken Philippines 4-2001-001913 May 26, 2006 29 Registered
"We're More
Than Just
Great
6 Pancakes" Philippines 4-2003-004128 July 23, 2005 43 Registered
Pancake
House & August 28,
Pancake
House since
1974 and August 28,
Choose Any
9 Two Philippines 4-2017-015452 May 1, 2018 43 Registered
Always a Good August 23,
10 Choice Philippines 4-2018-004655 2018 43 Registered
Pancake
House
International
11 and Device Philippines 4-2019-012805 July 19, 2019 43 Pending
Pancake
House
International & March 10,
12 Device Australia 1679952 2015 43 Registered
Pancake
House
13 Device Indonesia J002015009758 2015 43 Pending
Pancake
14 House Japan 5849129 May 13, 2016 43 Registered
10
International &
Device
Pancake
House
International & April 11,
15 Device Korea 4103553960000 2016 43 Registered
Pancake
House
16 Device Malaysia 07008978 2017 43 Registered
Pancake
House
International &
17 Device Taiwan 1768205 May 1, 2016 43 Registered
Pancake
House
18 Device UAE 188355 2018 43 Registered
Pancake
House
International & January 23,
19 Device Brunei 043811 2013 43 Registered
Pancake
House
International & January 3,
20 Device Kuwait 121369 2015 43 Registered
Pancake
House
Pancake
House
22 Device UAE 291669 2018 43 Pending
Pancake
House
23 Device Qatar 104059 2017 43 Registered
Pancake
House
International & November
24 Device India 3684709 22, 2017 43 Registered
Pancake
House
25 Device Thailand 171109822 2017 43 Registered
Pancake
House
26 Device Bahrain 115311 2016 43 Registered
Pancake
House
27 Device Oman 101630 2016 43 Registered
11
House with
Chimney
smoke inside
28 Square Device KSA 1439016946 July 19, 2018 43 Registered
Dencio's
Dencio's & June 18,
1 Device Philippines 4-2019-010365 2019 43 Pending
Dencio's & March 14,
Teriyaki Boy
Teriyaki Boy April 13,
1 and Device Philippines 4-2008-008223 2009 43 Registered
Teriyaki Boy
and Device
with Chinese &
Japanese November
2 Character Philippines 4-2001-006508 10, 2005 43 Registered
Teriyaki Boy November
3 Logo Philippines 4-2001-006509 10, 2005 43 Registered
Teriyaki Boy & November
4 Device Philippines 4-2001-006510 10, 2005 43 Registered
Teriyaki Boy &
Device (with
Japanese June 18,
5 translation) Philippines 4-2019-010361 2019 43 Pending
Teriyaki Boy &
Device with
Japanese March 11,
6 Character Bangladesh C-19333 2015 43 Pending
Teriyaki Boy &
Device with
Japanese
7 Character Cambodia 71896 May 28, 2019 43 Registered
Teriyaki Boy &
Device with
Japanese March 10,
8 Character Singapore 40201504088Q 2015 43 Registered
Teriyaki Boy &
Device with
Japanese October 16,
9 Character Taiwan 1734546 2015 43 Registered
Teriyaki Boy &
Device with
Japanese March 12,
10 Character Thailand 161110526 2015 43 Registered
Teriyaki Boy &
Device
11 (Sqaure) Vietnam 128777 July 17, 2007 43 Registered
Teriyaki Boy &
Device with
Japanese January 22,
12 Character Bahrain 115312 2017 43 Registered
12
Teriyaki Boy &
Device with
Japanese February 24,
13 Character Kuwait 177795 2016 43 Pending
Teriyaki Boy &
Device with
Japanese March 27,
14 Character Oman 101631 2016 43 Registered
Teriyaki Boy &
Device with
Japanese February 22,
15 Character Qatar 104060 2016 43 Registered
Teriyaki Boy &
Device with
16 Character UAE 256514 2017 43 Registered
Teriyaki Boy &
Device with
Japanese March 10,
17 Character Vietnam 289008 2015 43 Registered
Teriyaki Boy
Max's Group
with Japanese January 11,
18 Character Bahrain 119966 2018 43 Registered
Teriyaki Boy
Max's Group
with Japanese January 21,
19 Character KSA 1439003510 2018 43 Registered
Teriyaki Boy
Max's Group
with Japanese
20 Character Kuwait 192075 July 17, 2017 43 Pending
Teriyaki Boy
Max's Group
with Japanese June 20,
21 Character Oman 111017 2017 43 Registered
Teriyaki Boy
Max's Group
with Japanese
22 Character Qatar 115584 May 24, 2018 43 Registered
Teriyaki Boy
Max's Group
with Japanese March 14,
23 Character UAE 278546 2018 43 Registered
T-BOY By
Max's & January 15,
24 Device KSA 143800973 2017 43 Registered
Teriyaki Boy &
Device with
25 Character KSA 1440030296 2020 43 Registered
13
Sizzlin' Steak
The Sizzlin'
Steak &
Japanese
Character
within a
Rectangular December
1 Device Philippines 4-2008-000194 24, 2009 43 Registered
Sizzlin' Steak September 4,
2 Cow Device Philippines 42014501853 2014 43 Registered
Sizzlin' Steak
3 Logo Philippines 42014501852 May 2, 2014 43 Pending
Sizzlin' Steak January 1,
4 & Device Philippines 42014501851 2015 43 Registered
Sizzlin' Steak
Steak Sauce
Sizzle Est
2007 and March 24,
5 Device Philippines 4/2017/00006865 2018 43 Registered
Sizzlin' Steak
with Cow's
6 Head Thailand 161106936 July 5, 2017 43 Registered
Sizzlin' Steak
with Cow's December
7 Head Cambodia KH/57953/15 25, 2015 43 Registered
Sizzlin' Steak
with Cow's March 1,
8 Head Bahrain 115313 2016 43 Pending
Sizzlin' Steak
with Cow's February 24,
9 Head Kuwait 177796 2016 43 Pending
Sizzlin' Steak
with Cow's September
10 Head USA 5296977 26, 2017 43 Registered
Sizzlin' Steak
Steak Sauce
Sizzle Est
2007 and April 12,
Sizzlin' Steak
Steak Sauce
Sizzle Est
2007 and January 12,
12 Device Cambodia 66381 2018 43 Registered
Sizzlin' Steak
Steak Sauce
Sizzle Est
2007 and January 9,
13 Device Canada 1817193 2017 43 Pending
Sizzlin' Steak
Steak Sauce February 24,
14 Sizzle Est Kuwait 178633 2016 43 Pending
14
2007 and
Device
Sizzlin' Steak
Steak Sauce
Sizzle Est
2007 and March 28,
15 Device Malaysia 2016055444 2016 43 Pending
Sizzlin' Steak
Steak Sauce
Sizzle Est
2007 and March 27,
16 Device Oman 101632 2016 43 Pending
Sizzlin' Steak
Steak Sauce
Sizzle Est
2007 and March 27,
17 Device Qatar 104930 2016 43 Pending
Sizzlin' Steak
Steak Sauce
Sizzle Est
2007 and
18 Device UAE 256515 May 8, 2017 43 Registered
SS EST 2007 March 18,
19 & Device Vietnam 315931 2019 43 Registered
Sizzlin' Steak
SS Max's
Group with
Cow's Head & January 11,
Sizzlin' Steak
SS Max's
Group with
Cow's Head & January 25,
21 Device KSA 1439003512 2018 43 Registered
Sizzlin' Steak
SS Max's
Group with
Cow's Head &
22 Device Kuwait 158969 July 17, 2017 43 Registered
Sizzlin' Steak
SS Max's
Group with
Cow's Head & June 20,
23 Device Oman 111016 2017 43 Pending
Sizzlin' Steak
SS Max's
Group with
Cow's Head & September
24 Device Qatar 115585 10, 2018 43 Registered
Sizzlin' Steak
SS Max's
Group with
Cow's Head & March 14,
15
Sizzlin’ Steak
Steak Sauce
Sizzle Est
2007 and December
26 Device KSA 1440031162 12, 2019 43 Registered
Le Coeur de
France
Le Coeur de
France
Boulangerie
Restaurant
1 Café Logo Philippines 4-2008-012108 May 25, 2009 43 Registered
Le Coeur de
2 France Logo Philippines 4-2008-012109 13 Apr 2009 43 Registered
Le Coeur de
France &
Device December
3 (Rectangle) Cambodia KH/57954/15 25, 2015 43 Registered
Le Coeur de
France &
Device January 26,
4 (Rectangle) Laos 34972 2016 43 Registered
Singkit
Singkit & March 20,
Yellow Cab
Pizza
29,
1 My Size Philippines 4-2011-500031 July 7, 2011 30 Registered
Dear Darla January 13,
2 Pizza Philippines 4-2010-500313 2011 30 Registered
New York's
3 Finest Philippines 4-2007-500336 13 Apr 2009 30 Registered
Tribeca November 3,
4 Mushroom Philippines 4-2007-500337 2008 30 Registered
Corona November 3,
5 Chicken Salsa Philippines 4-2007-500338 2008 30 Registered
Charlie Chan November 3,
6 Chicken Pasta Philippines 4-2007-500339 2008 30 Registered
Yellow Cab
Pizza and
7 Device Philippines 4-2001-007301 May 21, 2004 42 Registered
It's Better On October 23,
8 Our Crust Philippines 4-2014-502330 2014 30 Registered
August 2,
9 Pizza Gallery Philippines 4-2017-018341 2018 43 Registered
August 2,
10 Pizza Lab Philippines 4-2017-018342 2018 43 Registered
August 2,
11 Pizza Theater Philippines 4-2017-018343 2018 43 Registered
16
August 2,
12 Pizza Forum Philippines 4-2017-018344 2018 43 Registered
August 2,
13 Pizza Garden Philippines 4-2017-018345 2018 43 Registered
November
14 Pizza Camp Philippines 4-2017-018346 10, 2017 43 Pending
August 2,
15 Pizza Base Philippines 4-2017-018347 2018 43 Registered
August 2,
16 Pizza Point Philippines 4-2017-018348 2018 43 Registered
August 2,
17 Pizza Oven Philippines 4-2017-018349 2018 43 Registered
August 2,
18 Pizza Bay Philippines 4-2017-018350 2018 43 Registered
Edge-To- February 4,
19 Edge-Pizza Philippines 4-2020-001788 2020 43 Pending
Edge-To- February 4,
20 Edge-Toppings Philippines 4-2020-001789 2020 42 Pending
Yellow Cab
Pizza Co. and June 14,
21 Device Kuwait 87190 2010 43 Registered
Yellow Cab
Pizza Co. and November 8,
22 Device Qatar 37159 2009 42 Registered
Yellow Cab
Pizza Co. and October 24,
23 Device Thailand BOR37729 2017 43 Registered
Yellow Cab
Pizza Co. and December
24 Device Malaysia 06023499 21, 2006 43 Registered
Yellow Cab
Pizza Co. and August 27,
25 Device Singapore T0526899E 2007 43 Registered
Yellow Cab
Pizza Co. and June 21,
Yellow Cab
27 Device Hong Kong 300471294 2005 43 Registered
Yellow Cab
Pizza Co. and September 6,
28 Device USA 2990872 2005 43 Registered
Yellow Cab
Pizza Co. and
29 Device China 5034014 July 14, 2009 43 Registered
Yellow Cab
Pizza Co. and
30 Device India 1459362 April 7, 2006 42 Registered
Yellow Cab
Pizza Co. and September
31 Device Canada TMA809934 18, 2015 43 Registered
Yellow Cab
Pizza Co. and Saudi November
32 Device Arabia 101725 20, 2012 43 Registered
17
Yellow Cab
Yellow Cab
Pizza Co. and February 23,
34 Device Vietnam 231920 2013 43 Registered
Yellow Cab
35 Device Turkey 2013/13247 2013 43 Registered
Yellow Cab
Pizza Co. and January 23,
36 Device Brunei 43809 2013 42 Registered
Yellow Cab
37 Device Bangladesh C-188894 23, 2014 43 Pending
Yellow Cab
38 Device Cambodia KH/56773/15 18, 2015 43 Registered
Yellow Cab
39 Device Laos 33597 14, 2015 43 Registered
Yellow Cab
Pizza Co. and October 17,
40 Device Jordan 145164 2016 43 Registered
Yellow Cab
Pizza Co. and
41 Device Indonesia J002016025593 May 27, 2016 43 Pending
Yellow Cab
Pizza Co. and January 26,
42 Device Japan 6014479 2018 43 Registered
Yellow Cab
43 Device Korea 41-031779 19, 2016 43 Registered
Yellow Cab
44 Device Kuwait 177794 2016 43 Pending
Yellow Cab
Pizza Co. and March 27,
45 Device Oman 101629 2016 43 Registered
Yellow Cab
Pizza Co. and December
46 Device Taiwan 104012601 16, 2015 43 Registered
Yellow Cab January 6,
47 Pizza Co. Canada TMA1068064 2020 43 Registered
Maple
Maple & October 18,
1 Device Philippines 04-2018-018836 2018 43 Pending
June 18,
2 Maple Philippines 4-2019-010362 2019 43 Pending
Saudi August 20,
3 Maple House Arabia 1437027785 2016 43 Registered
March 24,
4 Maple House Thailand 17113193 2016 43 Registered
18
Max's
Restaurant
August 2,
1 4Sharing Philippines 4-2012-005016 2012 43 Registered
November
2 Combonations Philippines 4-2011-008979 10, 2011 43 Registered
August 2,
3 Curbside Philippines 4-2012-005015 2012 43 Registered
February 7,
4 FourSharing Philippines 4/2012/00005019 2013 43 Registered
FourSharing February 28,
5 Meals Philippines 4/2012/00005020 2013 43 Registered
30,
I Love August 27, 35,
6 Ensaimada Philippines 42015500284 2015 43 Registered
Made With June 27,
7 Love, Always Philippines 4/2012/00013522 2013 43 Registered
Max's 4
Sharing Meals February 28,
8 Logo Philippines 4/2012/00005018 2013 43 Registered
Max's Banana
9 Ketchup Philippines 4-2011-000945 May 19, 2011 30 Registered
Max's Banana
10 Ketchup Label Philippines 4-2011-000944 July 14, 2011 30 Registered
Max's Banana
11 Sauce Philippines 4-2011-000946 May 19, 2011 30 Registered
Max's Banana
12 Sauce Label Philippines 4-2011-000943 July 14, 2011 30 Registered
Max's Corner September 30,
13 Bakery Philippines 4-2009-001369 17, 2009 35 Registered
April 27, 29,
14 Max's Express Philippines 4-2009-001429 2009 43 Registered
Max's Fried November
15 Chicken Philippines 4-2009-001373 26, 2009 29 Registered
April 27, 29,
16 Max's Masarap Philippines 4-2009-001432 2009 43 Registered
Max's
Restaurant &
17 Logo Philippines 48593 18 Jul 2010 43 Registered
Max's Spring April 27, 29,
18 Chicken Philippines 4-2009-001430 2009 43 Registered
Sarap To The April 27, 29,
19 Bones Philippines 4-2009-001431 2009 43 Registered
The Bakeshop November 30,
20 - Max's Philippines 4-2008-002547 24, 2008 43 Registered
The House
That Fried 29,
21 Chicken Built Philippines 4-2009-001370 July 9, 2009 43 Registered
Chicken All September 8, 29,
22 You Can Philippines 4-2015-504435 2016 43 Registered
Max's
23 Restaurant Philippines 4-2016-503861 May 4, 2017 43 Registered
Sarap To The
24 Buns Philippines 4/2017/00006075 July 30, 2017 30 Registered
19
Sarap To The
25 Bowls Philippines 4/2017/00006076 July 30, 2017 30 Registered
4Sharing February 28,
26 Meals Philippines 4/2012/00005017 2013 43 Registered
November 4, 30,
27 Caramel-Bar Philippines 4-2009-007823 2010 35 Registered
Caramel Bar - September 30,
28 Max's Philippines 4-2009-001372 17, 2009 35 Registered
Max's Corner
Bakery & 30,
29 Device Philippines 16236 April 5, 2018 35 Registered
Max's Express
(with word 29,
30 logo) Philippines 4/2013/00000053 01 Aug 2013 43 Registered
August 4,
31 Chicken Logo Philippines 4-2019-007591 2019 43 Registered
Max's November
32 Restaurant Australia 1273246 18, 2008 43 Registered
Max's
33 Restaurant Brunei 44378 July 27, 2015 42 Registered
Max's
Restaurant 29,
Cuisine of the 35,
34 Philippines Italy 1452668 July 22, 2011 43 Registered
August 7,
35 Max's Chicken Japan T5784995 2015 43 Registered
April 16,
36 Max's Chicken Taiwan 1765827 2016 43 Registered
Max's
Restaurant
Since 1945 & August 4,
Max's
Restaurant
Since 1945 &
38 Device Singapore 40201714378P July 26, 2017 43 Registered
Max's
Restaurant
Cuisine of the June 23,
39 Philippines Malaysia 2013009386 2016 43 Registered
Max's
Restaurant 29,
Cuisine of the 35,
40 Philippines Singapore T1206469J May 4, 2012 43 Registered
Max's
Restaurant
Cuisine of the November
41 Philippines USA 3881282 23, 2010 43 Registered
Max's
Restaurant 29,
Cuisine of the United April 28, 35,
42 Philippines Kingdom 2579586 2011 43 Registered
Max's
43 Restaurant Brunei 044370 July 29, 2015 42 Registered
20
Cuisine of the
Philippines
Max's
Restaurant
Since 1945
Cuisine of the 29,
Philippines & November 35,
44 Device Europe 17989999 23, 2018 43 Pending
Max's of December
45 Manila China 3409076 18, 2002 43 Pending
Max's of December
46 Manila Hong Kong 300135530 31, 2003 43 Registered
Max's of
47 Manila Canada TMA667937 July 17, 2006 43 Registered
Max's of
48 Manila USA 2351874 May 23, 2000 43 Registered
Max's
49 Restaurant Bahrain 85501 July 2, 2013 43 Registered
16,
29,
30,
Max's 35,
50 Restaurant Canada TMA824575 May 23, 2012 40 Registered
Max's February 21,
51 Restaurant China 3766155 2006 43 Registered
Max's
52 Restaurant Cambodia KH/51552/14 July 14, 2014 43 Registered
Max's February 22, 29,
53 Restaurant Indonesia IDM000520543 2016 43 Registered
Max's March 10,
54 Restaurant Kuwait 106872 2013 43 Registered
Max's August 12,
55 Restaurant Oman 67018 2013 43 Registered
Max's April 28,
56 Restaurant Qatar 67391 2013 42 Registered
Max's Saudi December
57 Restaurant Arabia 142913194 28, 2009 43 Registered
Max's March 15,
58 Restaurant UAE 100520 2010 43 Registered
59 Max's Inasal USA 4950259 May 3, 2016 29 Registered

Max's Caramel October 25,
60 Bar USA 4046291 2011 30 Registered
Kabisera ng
Dencio’s and
61 Logo Philippines 4-2019-010364 18 June 2019 43 Pending
September
62 Kabisera Philippines 10363 15, 2019 43 Registered
Max's All
About
Chicken
Max’s All February 10,
1 About Chicken Philippines 4-2020-002130 2020 43 Pending
21
Max’s All
About Chicken February 10,
2 (stylized) Philippines 4-2020-002131 2020 43 Pending
All About March 22,
3 Chicken Philippines 4-2017-013783 2018 43 Registered
Max's All
About Chicken
with wind vane
and chicken &
4 Device Hong Kong 304585159 April 7, 2018 43 Registered
Max's All
About Chicken
with wind vane
and chicken & August 14,
5 Device China 32873802 2018 43 Pending
Max's All
6 About Chicken Bahrain 117325 May 8, 2017 43 Registered
Max’s All October 30,
7 About Chicken India 3665828 2017 43 Registered
Max's All Saudi January 16,
8 About Chicken Arabia 1437027784 2017 43 Registered
Max's All September
9 About Chicken Kuwait 183617 19, 2016 43 Pending
Max's All September
10 About Chicken Oman 104658 18, 2016 43 Pending
Max's All September
11 About Chicken Qatar 108731 18, 2016 43 Registered
Max's All December
12 About Chicken Singapore 40201621560X 16, 2016 43 Registered
Max's All January 29,
13 About Chicken UAE 256513 2017 43 Registered
Max's All January 31,
14 About Chicken USA 87777694 2018 43 Pending
Max's All
About Chicken
and Device –
round (Arabic September
15 transliteration) KSA 201368 25, 2019 43 Pending
Eco Eats
September
1 Eco EATS Philippines 4-2016-500396 22, 2017 43 Registered
Burgos Eats
November 3,
1 Burgos EATS Philippines 4-2016-500397 2016 43 Registered
The Real American

Doughnut Co., Inc.
Everyone Is An April 12,
1 Original Philippines 4-2017-005677 2018 30 Registered
Every One Is August 23,
2 An Original Philippines 4-2018-007154 2018 30 Registered
22
August 18,
3 OG Philippines 4-2019-007500 2019 30 Registered
Research and Development
The Company invests on research and development for continuous product and process
innovations, which it considers a priority in order to stay relevant in the ever-changing industry
landscape.
Manpower
As of December 31, 2019, the Company employs a total of 9,905 employees, classified as
follows:
By Position No. of Employees
Executives 7
Directors 19
Managers and Supervisors 1,008
Staff 8,871
Total 9,905
Employment Status No. of Employees
Regular 3,732
Probationary 494
Other Labor Options 5,679
Total 9,905
The Company encourages employee engagement in policies, programs, and projects related to
their roles in the Company. Employees can also communicate any concerns through the Human
Resources Department and other available channels.
Major Business Risks
Risks relating to competition
The Company operates in a highly competitive environment where formats and variety of
offerings of larger chains and specialized concepts of smaller independent operators, or even
convenience stores, may directly impact the demand for the Company’s products. The
Company’s multi-brand platform, however, enables the Company to offer more products at
various price points, thereby mitigating the effect of any decline in demand.
Risks relating to raw material sourcing
23
Any supply disruptions, price increases, or quality or safety problems could adversely affect the
Company’s operations and profitability. The Company’s business requires a number of raw
materials and other ingredients that are sourced from third-party suppliers. Accordingly,
shortages in the supply of these raw materials and ingredients in the future may be experienced
due to unforeseen events including, but not limited to, global supply and demand conditions,
weather and adverse climate conditions, customs and import duties and government regulations.
If any supplier is unwilling or unable to provide high quality raw materials or ingredients in
prescribed quantities and at acceptable prices, the Company may be unable to find alternative
suppliers that will provide the Company with raw materials or ingredients at suitable terms in a
timely manner, or at all. This could result in delays in the delivery of raw materials or ingredients
to the commissaries and may ultimately lead to product or menu stock-outs in the Company’s
restaurants and stores.
Risks relating to food quality
Any failure to maintain effective quality control of the commissaries and the Company’s stores
could have a material adverse effect on the Company’s financial condition and results of
operation. The quality of the Company’s food and service is critical to the success of the
Company’s business. Maintaining consistent food and service quality depends significantly on
the Company’s personnel and their adherence to stringent quality control policies and guidelines.
Accordingly, the Company requires its franchisees and its franchisees’ personnel to undergo
training in food handling and safety. In addition to third-party and in-house inspections of the
commissaries and the stores, quality assurance testing is likewise regularly conducted.
Risks relating to credit and paying capacity of franchisees
As the Company expands its franchise operations, it may face risks of collection from franchisees
who do not comply with or timely remit payment for franchise obligations. Any delay in collections
may affect the Company’s cash position. The Company has collection and compliance measures
in place to monitor and collect receivables from franchisees. It has also established a system
that will allow the Company to take over operations of franchisees in order to protect its cash
flows and preserve brand quality.
Risks relating to strategy for domestic and international growth
There is no assurance that the expansion plans of the Company for its domestic and international
operations could be achieved. The Company’s expansion plans and timelines are dependent on
third party actions that can cause delays or restrict the opening of stores and/or completion of
plans. These third parties include lessors, contractors, suppliers and regulatory agencies.
Risks relating to labor
Any change in law and regulations, including the issuance of new wage orders and granting
increased benefits to labor, as well as the occurrence of any labor unrest may result in disruptions
in operations and financially affect the Company’s operations, revenues and prospects. The
Company has historically kept harmonious working relations with its employees and labor
groups. The Company has not experienced any work disruption arising from labor issues, and
the Company generally considers its labor relations to be good. The Company manages the risks
posed by any change in law, regulation or labor dispute by adopting policies that ensure a healthy
working environment for its employees that comply with law and regulations.
24
Risk Management
The Company is mindful of the potential impact of various risks to its ability to deliver quality
content across multiple platforms and consequently, as a result of its operations, value to
shareholders. The Company’s corporate strategy formulation and business decision-making
processes always take into account potential risks and the steps and costs necessary to
minimize, if not eliminate, such risks. As part of its stewardship responsibility and commitment to
deliver optimum value to its stakeholders, the Company ensures that it has the proper control
systems in place, and to the extent possible, adopted global best practices, to identify, assess,
analyze and mitigate market, operating, financial, regulatory, community, reputational, and other
risks.
The Company is mindful of the possible impact of several risks that may hamper its business.
As such, risk considerations form part of strategy formulation, execution and decision-making.
The Company has the proper control systems in place, and to the extent possible, adopts global
best practices in enterprise risk management.
MGI abides by the Assess, Implement and Monitor (A.I.M.) risk model. The Company has
appointed a Corporate Systems and Risk Management Manager to institute a formal control
system designed to identify and establish measures to manage key risks. The Assess phase
starts with evaluation and planning where risks are classified based on different categories that
correspond to certain action plans. The Implement phase focuses on activating programs in
place to mitigate effects of such risks. The Company has contingency plans in place to ensure
business continuity and handle unexpected events that may adversely affect operations of the
Company. The Monitor phase observes and reviews the effectiveness of procedures in
alleviating the outcome of risks.
In 2016, the Company developed a mobile application to enable real-time monitoring of various
stages in store development. This allows the Company to efficiently track potential areas of delay
in store openings that increases risks of revenue loss opportunities, accumulated pre-operating
expenses and inventory disruption.
Item 2. Properties
The Company’s principal office is located at 11th Floor Ecoplaza Building, 2305 Chino Roces
Avenue Extension, Makati City 1231. Bulk of its properties are comprised of company-owned
stores in land or buildings leased from third party lessors.
The Company likewise maintains commissaries situated in Paranaque, Taguig and Pasig City
with a total area of approximately 8,600 square meters. All commissaries are equipped with
production, distribution and warehousing facilities to cater to the Company’s operational
requirements.
Some of the Company’s largest owned or leased properties are as follows:
25
Area
Location of Property Land Owner/Lessor
Sqm
10th and 11th Floor, Ecoplaza Building,
2305 Chino Roces Avenue Extension,
Ecotechland, Inc.
1 Makati City 5,199
(Leased)
(Corporate Head Office)
Seacom Compound, San Antonio 1,

WERCO Holdings Corp.
2 Sucat Paranaque (Square Top) 3,585
(Owned)
Maharlika East Tagaytay City Manifold Realty &
3 3,111
(Max’s Restaurant) Development Corp. (Leased)
21 Scout Tuason St. Brgy. Laging Handa,
MG Rodgers Phils.
4 Quezon City (Max’s Restaurant) 2,800
(Owned)
#98 Marcos Alvarez Ave. Talon Uno Las
Vita Realty Corp.
5 Pinas City (No Bia) 2,453
(Leased)
Dau Access Road, Mabalacat,
MTL Foods Corporation
6 Pampanga 2,132
(Leased)
(Max’s Corner Bakery)
Lot 14-A National Highway, Maharlika
Visard Development Corp.
7 East, Tagaytay City (Yellow Cab) 2,000
(Leased)
Food Terminal Inc.
#44 Malunggay St. DBP Ave. FTI
8 1,405 (Leased)
Complex Taguig City (No Bia)
Magallanes Eats- Lots 1-4 Block 3, Multi Sphere Trading
9 1,300
Paseo de Magallanes, Makati City Inc.(Owned)
Dr. A. Santos Ave. San Antonio Valley WERCO Holdings Corp.
10 Paranaque (Max’s Restaurant) 1,225 (Owned)
Pasig Buting- Lot 9-12 M. Concepcion R & R Hospitality Group Inc

11 1,200
Avenue, Brgy Buting, Pasig City (Owned)
Carmen Square Pinas Corp.
268 Alabang Zapote Road Pamplona Las
12 1,162 (Leased)
Pinas City (Max’s Restaurant)
VC Holdings Corp.
13 151 Pasig Blvd. Pineda Pasig City 1,160
(Leased)
Plaza Luisita, San Miguel, Tarlac
Robinsons Land Corp.
14 (Max’s Restaurant) 1,112
(Leased)
498 EDSA Caloocan City (Max’s
Rufinus L. Coronel
15 Restaurant) 1,024
(Leased)
B9 L6 Brgy. Batasan Commonwealth
Augusto De Jesus
16 Ave. Quezon City (Max’s Restaurant) 902
(Leased)
1123 Ma. Orosa St. Ermita Manila Trota Gimenez Realty Corp.
17 895
(Max’s Restaurant) (Owned)
26
Area
Location of Property Land Owner/Lessor
Sqm
1407 Quezon Avenue, Quezon City John Wilter Land, Inc.
18 787
(Max’s Restaurant) (Leased)
Block 2A Harbour View Square, CCP Meadson Properties Corp.
19 670
Complex, Manila (Dencio’s) (Leased)
Total rental payments of the Company for the year ended December 31, 2019 was P1.63 billion,
composed of a combination of fixed and variable components based on a certain percentage of
actual sales or minimum monthly gross sales, whichever is higher. Fixed rates are normally
subject to annual escalations ranging from 5% to 10%.
Item 3. Legal Proceedings
As of the date of the preparation of this report and during the period covered hereby,
the Company was not and has not been involved in any legal proceeding which, if resolved
unfavorably against the Company, will result in a material prejudice upon the ability of the
Company to conduct its business and/or the incurrence by the Company of a material pecuniary
liability.
Item 4. Submission of Matters to a Vote of Security Holders (not applicable)
(Space Left Intentionally Blank)
27
PART II – OPERATIONAL AND FINANCIAL INFORMATION
Item 5. Market for Issuer's Common Equity and Related Stockholder Matters
Market Information
Max’s Group, Inc. conducted a follow-on offering of 197,183,100 million common shares at an
offer price of P17.75 per share last December 12, 2014. At present, the Company’s shares are
being traded under the ticker “MAXS”. Below is the trading history of the Company for the past
three years:
Market Information (per quarter)
Year Quarter High Low Close Volume

2017 1Q 29.30 24.50 26.30 22,628,700
2017 2Q 26.40 17.46 18.92 88,106,300
2017 3Q 21.90 17.80 20.15 46,958,400
2017 4Q 20.20 17.80 18.60 13,496,200
1Q 18.74 15.98 16.04 20,399,500

2018
2Q 16.44 11.02 11.40 10,966,200
2018
3Q 14.30 10.82 11.70 38,070,000
2018
4Q 11.80 9.29 10.26 15,005,900
2018
2019 1Q 13.96 10.24 13.80 65,459,500

2019 2Q 16.20 12.24 13.80 80,099,900
2019 3Q 14.80 13.00 13.18 30,481,200
2019 4Q 13.76 11.30 12.40 12,892,400
28
The market capitalization of Max’s Group, Inc. as of 31 December 2019, based on closing
price of P12.40 per share was P13,479,817,097.60
(Last Practicable Trading Date)

Date April 16, 2020
Open 6.81
High 6.81
Low 6.21
Close 6.39
Volume 3,423,100
% Change -2.89%
Top 20 Shareholders on Record as of December 31, 2019
Name Citizenship No. of Shares %

PCD Nominee Corp. (Filipino) Filipino 682,748,222 64.806
Max’s Kitchen, Inc Filipino 100,267,952 9.224
PCD Nominee Corp. (Non- Others 95,728,076 8.806
Filipino)
The Real American Doughnut Filipino 81,543,725 7.501
Co. Inc.
Max’s Bakeshop, Inc. Filipino 63,639,861 5.854
No Bia, Inc Filipino 37,890,661 3.486
Trota Gimenez Realty Filipino 12,647,942 1.163
Corporation
MGOC Holdings, Inc Filipino 9,982,419 0.918
Joanne Que Lim Filipino 1,000,000 0.092
Wilson Jesse Q. Lim, Jr Filipino 1,000,000 0.092
Mel Macaraig Filipino 60,000 0.006
Anil Amarnani ITF: Anika Filipino 50,000 0.005
Amarnani
Matilde M. Cupido Filipino 45,600 0.004
Eduardo P. Lizares Filipino 40,000 0.004
Maria Luisa Lorenzo Filipino 40,000 0.004
Aries T. Gamboa Filipino 26,000 0.002
Zorayda Rosemarie Dela Rosa Filipino 26,000 0.002
Zarsadias
Pacifico B. Tacub Filipino 22,000 0.002
Ma. Grace Leah Banaag Filipino 20,000 0.002
Dawn Aimee Castro Filipino 20,000 0.002
Total of Top 20 Stockholders 1,086,798,458
Total Outstanding Shares 1,087,082,024
*Slight discrepancy due to rounding off.
There are approximately 102 shareholders as of December 31, 2019.
29
Dividends
Recent Sales of Unregistered Securities

Retained Total
Declaration Record Payment Amount per
Earnings as Dividends
Date Date Date Share (PHP)
of (PHP)
05/27/2011 06/15/2011 06/30/2011 12/31/2010 0.09 21,568,048
12/08/2011 12/23/2011 12/29/2011 06/30/2011 0.05 12,175,127
05/31/2012 06/15/2012 06/29/2012 12/31/2011 0.15 34,932,152
02/22/2013 03/11/2013 03/29/2013 06/30/2012 0.10 23,946,002
06/28/2013 07/12/2013 07/31/2013 12/31/2012 0.19 45,109,797
100% Stock
05/12/2014 08/22/2014 09/18/2014 - 259,210,840
Dividends
03/14/2016 03/30/2016 04/13/2016 12/31/2015 0.12 125,347,003
03/14/2017 03/30/2017 04/12/2017 12/31/2016 0.13 141,320,663
03/15/2018 04/04/2018 04/13/2018 12/31/2017 0.14 152,191,483
03/19/2019 04/03/2019 04/30/2019 12/31/2018 0.14 157,780,637
03/12/2020 03/31/2020 04/28/2020 12/31/2019 0.18 181,526,139
The Company has not sold nor traded any unregistered securities.
Item 6. Management's Discussion and Analysis or Plan of Operations
RESULTS OF OPERATIONS AND FINANCIAL CONDITION FOR 2019
For the purposes of this report, it should be noted that Philippine Financial Reporting Standards
(PFRS) 16, the new accounting standard for leases, became effective for annual reporting
periods commencing on or after 1 January 2019. Unless otherwise stated, 2019 figures used
in the discussion below are those inclusive of PFRS 16.
Consolidated Statements of Income
Max’s Group, Inc.’s (“MGI” or the “Company”) systemwide sales, which is composed of sales
from both company-owned stores and franchised stores, increased by 7.0% to P20.11 billion in
2019 from P18.80 billion in 2018. Revenues, which comprise restaurant sales, commissary sales
and franchising and other revenue rose by 5.3% year on year to P14.40 billion from P13.68
billion in 2018. Restaurant sales amounted to P11.79 billion, a 4.4% improvement from the
P11.30 billion reported in the same period last year. Due to MGI’s rapidly growing franchise base,
commissary sales increased by 13.6% to P1.78 billion from P1.57 billion. Franchising and other
revenue marginally grew by 1.0% to 828.92 million from P820.41 million for 2018.
Cost of sales, which is composed of raw materials and packaging costs, labor costs, and other
store-related and commissary-related costs such as rent, utilities, etc., increased by 4.5% to
P10.46 billion in 2019 from P10.01 billion in 2018. As a result of topline improvements outpacing
the growth of cost of sales, gross profit increased by 7.5% to P3.95 billion in 2019 from P3.67
30
billion in 2018, translating to an increase in gross margin--27.4% in 2019 from 26.8% in 2018.
Drivers for revenue growth were the deliberate increase in selling and marketing expenses to
drive mainstream brand relevance, as well as successful initiatives relating to strategic product
bundling, improved restaurant systems and effective supply chain management.
General and administrative expenses increased by 10.8% to P2.62 billion in 2019 from P2.36
billion in 2018 due to payments made to food aggregator partners, investments made for the
training of employees and retirement provisions. Sales and marketing expenses increased by
36.2% to P544.91 million in 2019 from P400.19 million in 2018.
Finance costs increased by 99.6% to P320.36 million in 2019 from P160.50 million in 2018. This
is attributed to the effect of PFRS 16, higher interest rates and higher cost of borrowing. To help
mitigate the effects of the borrowing rate environment, the Company has adopted a strategy to
expand its store network mostly through franchising. Nonetheless, the Company will continue to
work with lenders in order to secure financing, as needed, based on its expected funding
requirements and expected returns for company-owned store expansion.
Earnings Before Interest and Tax (EBIT) for the year improved to P1.24 billion, up 15.5% versus
2018’s figure of P1.08 billion, while net income rose by 17.3% to P740.28 million compared to
the P631.14 million reported for 2018. Inclusive of PFRS 16, this translates to an EBIT of 1.32
billion and net income of P724.22 million.
In 2019, MGI opened a total of 82 new stores including 22 overseas. This brings the Company’s
total store network to 760 locations, with 70 situated across various locations in North America,
the Middle East, and Asia.
Consolidated Statements of Financial Position
Cash and cash equivalents grew by 26.4% to P888.54 million in 2019 from P703.23 million in
2018 due to financing of long-term loans payable.
Trade and other receivables increased by 45.2% to P1.38 billion in 2019 from P948.38 million in
2018. The increase was due to the recognition of franchise fees and gain on conversion of
company-owned stores to franchised stores. Inventories rose by 10.8% to P644.95 million from
P581.89 million in 2018. This was attributable to the increasing number of stores and new
warehouse/distribution centers used in supply chain operations. The sustained inventory
management efficiency from the Company’s commissaries to its stores kept the Days Inventory
Outstanding flat at 21 days for 2019 and 2018.
Property and equipment grew by 10.2% to P3.69 billion in 2019 from P3.34 billion in 2018. MGI
invested on acquisitions for the new Carmona commissary and on new company-owned stores
.
Trade and other payables increased by 4.3% to P2.38 billion from P2.29 billion in 2018 with an
average collection period of 81 days.
Loans payable decreased by 64.7% to P920.64 million in 2019 from P2.61 billion in 2018 due to
the payment of short-term loans. Long-term debt increased by 163.5% to P3.10 billion in 2019
from P1.18 billion in 2018. The rise is due to the funding of additional working capital and CAPEX
for the new commissary in Carmona, Cavite.
31
Retained earnings increased by 33.1% to P2.44 billion in 2019 from P1.83 billion in 2018 due to
income generated for 2019. This increase was partially offset by the payment of dividends
amounting to P113.24 million.
Consolidated Statements of Cash Flows
Net cash provided by operating activities grew 47.9% to P1.82 billion in 2019 from P1.23 billion
in 2018. The strengthened operating cash flows for the period was primarily due to depreciation
of right-of-use assets and interest expense of lease liabilities per PFRS 16. The cash conversion
cycle of the Company improved to negative 30 days in 2019 from negative 29 days in 2018.
Net cash used by investing activities settled at P811.31 million for 2019 from P765.83 million for
2018. The Company continued to invest in the expansion of its store network and in the
acquisition of property and equipment for the new commissary in Carmona, Cavite.
Net cash used in financing activities registered at P818.67 million for 2019 from net cash
provided at P427.54 million for 2018. This is due to the availment of additional funding for working
capital and capital expenditure of the Company’s new commissary in Carmona.
Total cash provided netted at P185.32 million for the period, bringing cash and cash equivalents
to P888.54 million as of December 31, 2019 from P703.23 million as of December 31, 2018.
2020 Capital Expenditure (CAPEX) and Outlook
In 2020, MGI will continue to focus on the following strategies to sustain its growth trajectory:
- Expanding its global footprint through franchise-driven expansion;

- Driving mainstream relevance through the power of its brands;
- Diversifying and developing retail channels; and
- Ensuring resilience through supply chain sustainability and responsiveness.
We estimated to spend P600 million for our CAPEX for the construction of the new Carmona
commissary. Additional CAPEX may be allocated for store renovations and the construction of
new stores.
Key Financial Ratios
December 31, 2019 December 31, 2019 December 31, 2018

w/ PFRS 16 w/o PFRS 16
Gross Profit Margin 27.4% 26.9% 26.8%
Net Income Margin 5.0% 5.1% 4.6%
Debt to Equity Ratio 1.84x 1.35x 1.35x
Net Debt to Equity Ratio 1.69x 1.20x 1.22x
Return on Equity 12.3% 12.5% 11.5%
Notes:
32
a. Gross Profit Margin = Gross Profit / Revenues
b. Net Income Margin = Net Income / Revenues
c. Debt to Equity = Total Liabilities / Total Equity
d. Net Debt to Equity = (Total Liabilities – Cash / Total Equity)
e. Return on Equity = Net Income / Total Equity
Financial Statements
The consolidated financial statements of Max’s Group, Inc. (“MGI”) and its subsidiaries as of
December 31, 2019 and for the years ended December 31, 2018 and 2017 include the
consolidated accounts of the Company and the following subsidiaries:
Percentage of Effective Ownership (%)

Name Nature of Business 2019 2018 2017
Max’s Kitchen, Inc. (MKI) Restaurant 100 100 100
The Real American Doughnut
Bakery 100 100 100
Company, Inc. (TRADCI)5
Fresh Healthy Juice Boosters,
Restaurant - 100 100
Inc.5
No Bia, Inc. Commissary 100 100 100
Max’s Bakeshop, Inc. Bakery 100 100 100
Ad Circles, Inc. Advertising Support 100 100 100
MGOC Holdings, Inc. Investment Holding 100 100 100
Trota Gimenez Realty Real Estate 100 100 100
Corporation
Alpha (Global) Max Group Limited
Franchising 100 100 100
(Alpha Max)
eMax’s LLC (eMax) Franchising 100 100 100
Global Max Services Pte. Ltd. Management
100 100 100
(Global Max) Consultancy
Yellow Cab Food Corporation
- 100 100
(YCFC)4 Restaurant
55 55 55
YCPI Pizza Venture, Inc.
YCPC Subic, Inc. (formerly DFSI
Restaurant 100 100 100
Subic, Inc.)
Always Happy BGC, Inc. Restaurant 100 100 100
PCK-LFI, Inc. Restaurant 100 100 100
PCK-Boracay, Inc. Restaurant 100 100 100
PCK Polo, Inc. Restaurant 70 70 70
PCK-Palawan, Inc. Restaurant 60 60 60
DFSI One-Nakpil, Inc. Restaurant 60 60 60
PCK-AMC, Inc.3 Restaurant 60 60 60
PCK-Estancia, Inc. Restaurant 60 60 60
PCK-MTB, Inc. Restaurant 60 60 60
PCK-N3, Inc. (NAIA-3) Restaurant - - 51
PCK-Bel Air, Inc. Restaurant 51 51 51
PCK-MSC, Inc.1 Restaurant 50 50 50
Pancake House International, Inc. Holding Company 100 100 100
(PHII)
Teriyaki Boy International, Inc. Franchising 100 100 100
1
Although the Parent Company owns 50% or less of the voting power of these entities, it is able to govern the financial and
operating policies of the companies by virtue of agreements with the other investors of such entities. Consequently, the
Parent Company considered these entities as subsidiaries.
33
(TBII)
Yellow Cab Food Co. Franchising 100 100 100
International, Inc. (YCFCII)
Pancake House, International Restaurant 100 100 100
Malaysia Sdn Bhd (PHIM)
Pancake House Ventures, Inc.
Holding Company 100 100 100
(PHV)3
Pancake House Products, Inc.2 Holding Company 100 100 100
Golden B.E.R.R.D. Grill, Inc.3 Restaurant 100 100 100
Teriyaki Boy Group, Inc. (TBGI)3 100 100 70
TBGI-Trinoma, Inc. 60 60 60
Restaurant
TBGI-Marilao, Inc. 51 51 51
TBOY-MS, Inc.2 50 50 50
TBGI-Tagaytay, Inc.2 40 40 40
M Food Concepts, Inc. (M Food) Holding Company 100 100 100
Sizzlin’ Steak, Inc. (SSI) Restaurant 100 100 100
Boulangerie Francaise, Inc. (BFI) Restaurant 100 100 100
88 Just Asian, Inc. (88 JAI) Restaurant 80 80 80
CRP Philippines, Inc.2 Restaurant 50 50 50
All of the subsidiaries are incorporated and operating in the Philippines, except for the following
entities:
- PHII, TBII and YCFII, companies incorporated in British Virgin Islands;

- PHIM, a company incorporated and operating in Malaysia;
- M Food, SSI and eMax, companies incorporated in U.S.;
- Alpha Max, a company incorporated in Hong Kong; and
- Global Max, a company incorporated in Singapore.
ACCOUNTS WITH MORE THAN 5% CHANGE IN BALANCES

(Against December 31, 2018 Balances)
Income Statement
14% increase in commissary sales

Additional 33 local franchised outlets
7% increase in gross profit
2
Companies that are dormant or have not yet started operations as at December 31, 2019 and 2018
3
On April 24, 2018, the Plan of Merger YCFC & TBGI was approved by the SEC with TBGI as the surviving entity and YCFC
was the absorbed entity.
5
On July 16, 2018, the Plan of Merger of FHJBI & TRADCI was approved by the SEC, with TRADCI as the surviving entity
and FHJBI as the absorbed entity.
34
Increase in revenue (particularly restaurant and commissary sales) and efficient management of
cost of sales
11% increase in general and administrative expenses

Payments to food aggregators, investments in training of employees and retirement provisions
36% increase in sales and marketing expenses

Maintained tactical and thematic promotions across star brands
99% increase in finance costs

Effect of PFRS 16, higher cost of borrowing and higher interest rates
220% increase in other income

Gain on sale of assets from store conversions
15% increase in net income

Improved overall profitability
Balance Sheet
26% increase in cash and cash equivalents

Financing of long-term loans payable
45% increase in trade and other receivables

Increase is due to accrual of franchise fees and gain on conversion of company-owned stores to
franchised stores
11% increase in inventories

Additional stores and new warehouse/distribution centers
102% increase in property and equipment

Due to PFRS 16 and acquisition of fixed assets for new stores and commissary
14% increase in net deferred income tax assets

Pertains to deferred tax effect of retirement benefits and impact of PFRS 16
17% increase in security, utility and other deposits

Attributable to advanced rental and leasehold for new company-owned stores
7% increase in other non-current assets

Attributable to the new company-owned stores
65% decrease in loans payable

Payment of short-term loans
163% increase in long-term debt

Increase pertains to fund for additional working capital and CAPEX for new Carmona
commissary
177% increase in net retirement liabilities

Accrual of retirement expense
35
33% increase in retained earnings
Sustained profitability in 2019
7% increase in non-controlling interests

Share in net income of non-controlling interests
155% decrease in other comprehensive income (loss)

Foreign exchange effect and re-measurement loss on retirement liabilities and plan assets
Results of Operations and Financial Condition for 2018
Consolidated Statements of Income
System-wide sales, which is composed of sales from both company-owned stores and
franchised stores, increased by 8% to P18.80 billion in 2018 from P17.34 billion in 2017. This
growth was driven by a blended same store sales growth of 4% and the incremental sales
generated by stores opened within the year. In 2018, a total of 66 new stores were opened – 25
company-owned, 31 local franchised and 11 international franchised – to bring the Company’s
total to 705 stores as of year-end. This mix of store openings is aligned with the Company’s
overall strategy to grow the business primarily through franchised stores.
Revenues, which is composed of restaurant sales, commissary sales, and franchising and other
revenue, grew by 8% to P13.68 billion in 2018 from P12.66 billion in 2017. Restaurant sales
increased by 8% to P11.30 billion in 2018 from P10.46 billion in 2017 due to a balanced growth
of both transaction count and average check in company-owned stores. This growth reflects the
ability of the Company to sustain its market-leading position in the casual-dining segment through
targeted marketing activities and attractive product offerings. Commissary sales grew by 10% to
P1.57 billion in 2018 from P1.42 billion in 2017 while franchising and other revenue grew by 6%
to P820.41 million in 2018 from P776.19 million in 2017 as a result of the larger base of
franchising operations.
Cost of sales, which is composed of raw materials and packaging costs, labor costs, and other
store-related and commissary-related costs such as rent, utilities, etc., increased by 7% to
P10.01 billion in 2018 from P9.39 billion in 2017. As a result of the growth of revenues outpacing
the growth of cost of sales, gross profit grew by 12% to P3.67 billion in 2018 from P3.28 billion
in 2017, translating to an increase in gross margin to 26.83% in 2018 from 25.87% in 2017. This
increase stems from conscious profitability efforts and initiatives within the Company relating to
strategic product bundling, improved restaurant systems, effective supply chain management,
mutually-beneficial relationships with suppliers, among others.
General and administrative expenses increased by 9% to P2.36 billion in 2018 from P2.17 billion
in 2017 as a result of increased manpower costs associated with building strategic capabilities
within the Company. Sales and marketing expenses increased by 2% to P400.19 million in 2019
from P390.62 million in 2017.
Finance costs increased by 38% to P160.50 million in 2018 from P116.36 million in 2017 due to
the increase in borrowing rates from lenders. To help mitigate the effects of the borrowing rate
environment, the Company has adopted a strategy to expand its store network mostly through
franchising. Nonetheless, the Company will continue to work with lenders in order to secure
36
financing, as needed, based on its expected funding requirements and expected returns for
company-owned store expansion.
As a result, income before income tax increased by 28% to P915.59 million in 2018 from P713.12
million in 2017. However, due to the recognition of a deferred tax benefit of P146.08 million in
2017, net income grew by only 1% to P631.14 million in 2018 from P626.69 million in 2017. This
deferred tax benefit was a result of the net operating loss carry-overs of some subsidiaries of the
Company.
Consolidated Statements of Financial Position
Cash and cash equivalents grew by 5% to P703.23 million in 2018 from P668.98 million in 2017
as a result of increased cash generated by the operating activities of the Company.
Trade and other receivables decreased by 11% to P948.38 million in 2018 from P1,063.42 million
in 2017. As a result, the Days Sales Outstanding of the Company decreased to 27 days in 2018
from 29 days in 2017.
Despite the growth of the Company’s store network, inventories decreased by 1% to P581.89
million in 2018 from P589.05 million in 2017. The sustained inventory management efficiency
from the Company’s commissaries to its stores kept the Days Inventory Outstanding flat at 21
days for 2018 and 2017.
Property and equipment grew by 7% to P3.34 billion in 2018 from P3.13 billion in 2017. The
Company invested on the set up of new stores, improvements to existing stores and
commissaries, and upgrades to strategic head office capabilities.
Trade and other payables increased by 15% to P2.27 billion in 2018 from P1.96 billion in 2017.
As a result of the Company’s ability to maintain beneficial payments terms with its partner
suppliers, Days Payable Outstanding remained flat at 77 days for 2018 and 2017.
Loans payable grew by 4% to P2.61 billion in 2018 from P2.52 billion in 2017 due to additional
short-term borrowings availed for the Company’s working capital requirements. Long-term debt
decreased by 26% to P1.18 billion in 2018 from P1.58 billion in 2017 as P405.61 million of long-
term debt was repaid in 2018.
Retained earnings increased by 11% to P1.83 billion in 2018 from P1.66 billion in 2017 due to
income generated for 2018. This increase was partially offset by the payment of dividends
amounting to P122.85 million in 2018.
Consolidated Statements of Cash Flows
Net cash provided by operating activities grew 68% to P1.23 billion in 2018 from P730.79 million
in 2017. The strengthened operating cash flow for the period was primarily due to the growth of
the core operating income of the Company and its overall improvement in working capital
management. The cash conversion cycle of the Company improved to negative 29 days in 2018
from negative 27 days in 2017.
37
Net cash used by investing activities settled at P765.83 million for 2018 from P904.04 million in
2017. While the Company continued to invest in the expansion of its store network and the
improvement of capabilities in its commissaries and head office, the Company reduced its overall
spending year-on-year as a result of the lessened capital expenditures required by the shift
towards a franchising model.
Net cash used in financing activities registered at P427.54 million for 2018 from net cash
provided at P96.44 million in 2017. The significant change was due to the partial repayment of
loans and payment of dividends, which were partially offset by the additional short-term
borrowings availed for the working capital requirements of the Company.
As a result, the total cash provided netted at P34.24 million for the period, bringing cash and
cash equivalents to P703.23 million as of December 31, 2018 from P668.98 million as of
December 31, 2017.
Key Financial Ratios
December 31, 2018 December 31, 2017

Gross Profit Margin 26.8% 25.9%
Net Income Margin 4.6% 4.9%
Debt to Equity Ratio 1.35x 1.37x
Net Debt to Equity Ratio 1.22x 1.25x
Return on Equity 11.5% 11.6%
Notes:
a. Gross Profit Margin = Gross Profit / Revenues
b. Net Income Margin = Net Income / Revenues
c. Debt to Equity = Total Liabilities / Total Equity
d. Net Debt to Equity = (Total Liabilities – Cash / Total Equity)
e. Return on Equity = Net Income / Total Equity
Financial Statements
The consolidated financial statements of Max’s Group, Inc. (“MGI”) and its subsidiaries as of
December 31, 2018 and for the years ended December 31, 2017 and 2016 include the
consolidated accounts of the Company and the following subsidiaries:
Percentage of Effective Ownership (%)

Name Nature of Business 2018 2017 2016
Max’s Kitchen, Inc. (MKI)4 Restaurant 100 100 100
The Real American Doughnut
Bakery 100 100 100
Company, Inc. (TRADCI)5
Fresh Healthy Juice Boosters,
Restaurant - 100 100
Inc.5
4
On September 17, 2015, the SEC issued the Certificate of Filing of the Articles and Plan of Merger approving the merger
executed on April 28, 2015 by MKI, as the surviving entity, and Max’s Circle, Inc. (MCI), Max’s Makati, Inc. (MMI), Max’s SM
Marikina, Inc. (MSMI), Max’s Baclaran, Inc. (MBI), Max’s Food Services, Inc.(MFSI) , Max’s (Ermita), Inc. (MEI), Max’s
Franchising, Inc. (MFI), Chicken’s R Us, Inc. (CRU), Square Top, Inc. (STI) and Max’s Express Restaurants, Inc. (MERI).
38
Trota Gimenez Realty Real Estate 100 100 100
Corporation
Alpha (Global) Max Group Limited
(Alpha Max)
Global Max Services Pte. Ltd. Management
100 100 100
(Global Max) Consultancy
Yellow Cab Food Corporation
- 100 100
(YCFC)4 Restaurant
55 55 55
YCPI Pizza Venture, Inc.
YCPC Subic, Inc. (formerly DFSI
Subic, Inc.)
Always Happy BGC, Inc. Restaurant 100 100 100
PCK Polo, Inc. Restaurant 70 70 70
PCK-AMC, Inc.3 Restaurant 60 60 60
PCK-N3, Inc. (NAIA-3) Restaurant - - 51
PCK-Bel Air, Inc. Restaurant 51 51 51
PCK-MSC, Inc.5 Restaurant 50 50 50
Pancake House International, Inc.
(PHII)
Teriyaki Boy International, Inc.
(TBII)
Yellow Cab Food Co.
International, Inc. (YCFCII)
Pancake House, International
Malaysia Sdn Bhd (PHIM)
Pancake House Ventures, Inc.
(PHV)3
Pancake House Products, Inc.6 Holding Company 100 100 100
Golden B.E.R.R.D. Grill, Inc.3 Restaurant 100 100 100
Teriyaki Boy Group, Inc. (TBGI)7 Restaurant 100 70 70
5
Although the Parent Company owns 50% or less of the voting power of these entities, it is able to govern the financial and
operating policies of the companies by virtue of agreements with the other investors of such entities. Consequently, the
Parent Company considered these entities as subsidiaries.
6
Companies that are dormant or have not yet started operations as at December 31, 2018 and 2017
7
On April 24, 2018, the Plan of Merger YCFC & TBGI was approved by the SEC with TBGI as the surviving entity and YCFC
was the absorbed entity.
5
On July 16, 2018, the Plan of Merger of FHJBI & TRADCI was approved by the SEC, with TRADCI as the surviving entity
and FHJBI as the absorbed entity.
39
TBGI-Trinoma, Inc. 60 60 42
TBGI-Marilao, Inc. 51 51 36
TBOY-MS, Inc.2 50 50 35
TBGI-Tagaytay, Inc.2 40 40 28
Sizzlin’ Steak, Inc. (SSI) Restaurant 100 100 100
Boulangerie Francaise, Inc. (BFI) Restaurant 100 100 100
88 Just Asian, Inc. (88 JAI) Restaurant 80 80 80
CRP Philippines, Inc.2 Restaurant 50 50 50
All of the subsidiaries are incorporated and operating in the Philippines, except for the following
entities:
- PHII, TBII and YCFII, companies incorporated in British Virgin Islands;

- PHIM, a company incorporated and operating in Malaysia;
- M Food, SSI and eMax, companies incorporated in U.S.;
- Alpha Max, a company incorporated in Hong Kong; and
- Global Max, a company incorporated in Singapore.
ACCOUNTS WITH MORE THAN 5% CHANGE IN BALANCES

(Against December 31, 2017 Balances)
8% increase in restaurant sales

Opening of 24 new stores and steady same store sales growth
10% increase in commissary sales

Additional 31 local franchised outlets
7% increase in cost of sales

Due to escalating prices of input materials
9% increase in general and administration expenses

Higher manpower and service related costs
44% increase in other income

Higher marketing support
229% increase in provision for income tax

Normalized income tax
5% increase in cash and cash equivalents

Cash used for dividend payments, loan settlements and purchase of inventory and equipment,
increase in Operating cash
11% decrease in trade and other receivables

Higher collection efforts in 2018 vs 2017
7% increase in property and equipment
40
Acquisition of fixed assets for new stores and Commissary
47% decrease in net retirement plan assets

Change of estimate in salary growth.
15% increase in net deferred income tax assets

Recognition of deferred tax benefits
15% increase in security deposits on lease contracts

Additional security deposits for new stores
26% decrease in long-term debt

Transfer of maturing obligations to current period and payment of Principal due
23% decrease in net retirement liabilities

Change of estimate in salary growth
5% increase in accrued rent payable

Higher operating lease related to new stores
11% increase in retained earnings

Sustained profitability in 2018
28% increase in other comprehensive loss

Foreign exchange effect and re-measurement of plan assets
639% increase in non-controlling interests

Acquisition of non-controlling interests
Equity Securities
There were no issuances, repurchases and repayments of debt and equity securities during the
period.
41
DISCUSSION OF THE COMPANY’S TOP FIVE (5) KEY PERFORMANCE INDICATORS
Number of Stores
In 2019, MGI opened a gross total of 82 new stores including 22 overseas primarily across core
brands Max’s Restaurant, Yellow Cab Pizza, Krispy Kreme and Pancake House.
Below is the breakdown of the Company’s store network as of December 31, 2019:
Company- Franchised International Joint Total

Owned Venture
Max’s Restaurant 98 110 30 - 238
Yellow Cab Pizza 126 50 28 1 205
Krispy Kreme 89 7 - - 96
Pancake House 57 79 4 3 143
Sizzlin’ Steak 4 0 4 - 8
Teriyaki Boy 6 4 4 4 15
Combination* 8 6 - - 14
Dencio’s 2 11 - 1 14
Kabisera 1 - - - 1
Maple 1 - - - 1
Jamba Juice 15 4 - - 19
Eats 1 - - - 1
Multi-brand** 5 - - - 5
Total 413 271 70 6 760
*Teriyaki Boy and Sizzlin’ Steak combination store concept
**Integrated operating formats that consist of Max’s Restaurant, Krispy Kreme, Yellow Cab
Pizza, Pancake House and Teriyaki Boy
Systemwide Sales
Systemwide Sales pertains to the total sales to customers both from company-owned and
franchised stores.
Systemwide sales amounted to P20.11 billion in 2019 up 7% from P18.80 billion in 2018.
Revenues
The Company and its operating subsidiaries generate revenues from three sources: (i)
Restaurant sales from company-owned stores; (ii) Commissary sales to franchised stores; and
(iii) Fees from franchising operations consisting of one-time franchise fees and continuing
license fees.
Consolidated revenues registered at P14.40 billion in 2019, up 5% from P13.68 billion in 2018.
42
Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA)
EBITDA measures the company’s ability to generate cash from operations. It is computed by
adding back depreciation and amortization (non-cash expenses) to earnings before interest and
income taxes are deducted.
Inclusive of IFRS 16, consolidated EBITDA stood at P2.72 billion in 2019. Without IFRS 16,
EBITDA amounted to P1.77 billion in 2019, up 10% from P1.61 billion in 2018.
Net Income Ratio
Net Income Ratio provides a measure of return for every peso of revenue earned, after all other
operating expenses and non-operating expenses, including provision for income taxes, are
deducted. It is the percentage of the company’s income after tax to net sales in a given period.
Inclusive of PFRS 16, net income ratio was 5.00%. Without PFRS 16, net income ratio was
5.10% in 2019, up 0.50% from 4.60% in 2018.
Off Balance Sheet Transactions, Arrangement, Obligation and Other Relationships
There are no off-balance sheet transactions, arrangements, obligation (including contingent

obligations), and other relationships of the Company with unconsolidated entities or other
persons created during the reporting period.
Item 7. Financial Statements
Attached is an index for the Company’s audited consolidated financial statements and
supplementary schedules as of and for the years ended December 31, 2019 and 2018 and
2017.
Item 8. Changes in and Disagreements with Accountants on Accounting and Financial

Disclosure
Stockholders of the Company appointed Reyes Tacandong & Co. as the Company’s external
auditor at the Annual Stockholders’ Meeting held on May 09, 2019. There have been no
disagreements with the external auditor with regards to any matter relating accounting principles
or practices, financial statement, disclosures or auditing scope or procedure.
43
PART III - CONTROL AND COMPENSATION INFORMATION
Item 9. Directors and Executive Officers of the Issuer
The following served as the Directors and Officers of the Company for the year 2019:
SHARON T. FUENTEBELLA, Chairperson

Sharon T. Fuentebella, age 53, Filipino, currently sits as President of The Real American
Doughnut Company, Inc., MGOC Holdings Corp. and Trota, Gimenez Realty Corp. She holds
Directorship and acts as Chairperson for most of Max’s corporations and its affiliates namely:
Max’s Kitchen, Inc., Inc. and other affiliates such as Ad Circles, Inc., No Bia, Inc., Max’s
Bakeshop, Inc., and Teriyaki Boy Group, Inc. Ms. Fuentebella holds a Bachelor of Science
degree in Business Management from the De La Salle University and has completed training
seminars/programs for managing family-owned companies conducted by the Asian Institute of
Management (AIM) and managing growing companies from Stanford University. Ms. Fuentebella
does not hold directorships in other listed companies. She has over 20 years of experience in
the food and beverage industry.
ROBERT RAMON F. TROTA, President and Chief Executive Officer

Robert Ramon F. Trota, age 52, Filipino, currently serves as President of Teriyaki Boy Group,
Inc., and Golden B.E.R.R.D. Grill, Inc. He also sits in the Board for most of the Max’s
corporations and its affiliates. He is currently the Vice Consul for the Consulate General of
Ireland. Moreover, Mr. Trota served as Chairman of the Philippine Franchise Association from
June 2009 to 2013. Mr. Trota holds a Bachelor of Science degree in Business Management from
the De La Salle University and has completed training seminars/programs for effective
management and family-owned company governance and management conducted by the Asian
Institute of Management (AIM). Mr. Trota does not hold directorships in other listed companies.
He has over 20 years of experience in the food and beverage industry.
CRISTINA T. GARCIA, Director

Cristina T. Garcia, age 54, Filipino, is currently the Resident Agent of Global Max Services Ltd.
– ROHQ and President of No Bia, Inc. She likewise holds Directorship positions in various
companies namely: Trofi Ventures Corp., Trofi Holdings Corp., Trofi Boosters Corp., Max’s
Bakeshop, Inc., Max’s Kitchen, Inc., The Real American Doughnut Company, Inc., MGOC
Holdings, Inc., Ad Circles, Inc., and Trota, Gimenez Realty Corp. Ms. Garcia holds a Bachelor of
Science degree in Business Management from the Ateneo de Manila University (1986). Ms.
Garcia does not hold directorships in other listed companies. She has over 20 years of
experience in the food and beverage industry.
CAROLYN T. SALUD, Director

Carolyn T. Salud, age 56, Filipino, holds the Directorship and President position of Max’s
corporations namely: Max’s Kitchen, Inc., and other affiliates such as Ad Circles, Inc., and Max’s
Bakeshop, Inc. She likewise serves as Chairperson of The Real American Doughnut Company,
Inc., Trofi Boosters Corp., Trofi Holdings, Corp., Trofi Ventures, Corp., Trota, Gimenez Realty
Corp. and MGOC Holdings, Corp. Ms. Salud holds a Bachelor of Science degree in Business
Administration from Assumption College. Ms. Salud does not hold directorships in other listed
companies. She has over 20 years of experience in the food and beverage industry.
44
DAVE T. FUENTEBELLA, Director
Dave T. Fuentebella, age 52, Filipino, was previously a full-time banking professional, having
held various positions in BPI Capital, Citibank, Standard Chartered Bank, and Credit Agricole
since 2001. He has been the Director and Head of Global Transaction Banking in Deutsche Bank
since 2012. He previously served as Director in Max’s Makati, Inc., Max’s Kitchen, Inc., Max’s
Sta. Mesa, Inc. and Square Top, Inc. Mr. Fuentebella holds a Bachelor of Arts degree in
Economics and Political Science from the University of California, Berkeley and completed his
Master’s Degree in Business in the Asian Institute of Management (AIM). Mr. Fuentebella does
not hold directorships in other listed companies. He has over 20 years of combined experience
in the banking and food industries.
JIM T. FUENTEBELLA, Director

Jim T. Fuentebella, age 51, Filipino, is currently a Director of Max’s Kitchen, Inc., The Real
American Doughnut Company, Inc., MGOC Holdings, Inc., Trota, Gimenez Realty Corp., Ad
Circles, Inc., No Bia, Inc., Max’s Bakeshop, Inc., and Teiryaki Boy Group, Inc.. He also acts as
a Chairperson for Golden B.E.R.R.D. Grill, Inc. Mr. Fuentebella holds a Bachelor of Arts degree
in Graphic Design with a minor in Business Administration from the Academy of Art, University
of San Francisco and has completed training seminars/programs for effective management and
family-owned company governance and management conducted by the Asian Institute of
Management (AIM). Mr. Fuentebella does not hold directorships in other listed companies. He
has over 20 years of experience in the food and beverage industry.
WILLIAM E. RODGERS, Director

William E. Rodgers, age 58, American, is the President of MG Rodgers Phil. Inc. He is a Director
for eMax’s LLC, Alpha Max Group LTD, Ad Circles, Inc., and Trota Gimenez Realty Corp. Mr.
Rodgers holds a Master’s Degree in Economic Development from Columbia University and has
completed training seminars/programs for family-owned company governance and management
conducted by the Asian Institute of Management (AIM). Mr. Rodgers does not hold directorships
in other listed companies. He has over 20 years of experience in the food and beverage industry.
ANTONIO JOSE U. PERIQUET JR., Independent Director

Antonio Jose U. Periquet Jr., age 59, Filipino, is an Independent Director of Max’s Group, Inc.
He is Chairman of Pacific Main Holdings, Inc., Campden Hill Group Inc., Campden Hill Advisors,
Inc., and BPI Asset Management and Trust Corporation. He also sits as a Director of The Straits
Wine Company, Inc., and a Trustee of Lyceum of the Philippines University. He is an
Independent Director of ABS-CBN Holdings, Inc., ABS-CBN Corporation, Ayala Corporation,
Bank of the Philippine Islands, BPI-Capital Corporation, BPI-Family Savings Bank, Inc., DMCI
Holdings, Inc., Philippine Seven Corporation, and Semirara Mining and Power Corporation. He
is also a member of the Global Advisory Board of the University of Virginia's Darden School of
Business. Mr. Periquet holds an AB Economics degree from the Ateneo de Manila University,
an MSc in Economics from Oxford University and an MBA from the University of Virginia.
JOSE VICTOR P. PATERNO, Independent Director

Jose Victor P. Paterno, age 51, Filipino, is an Independent Director of Max’s Group, Inc. He is
President/CEO and Director of Phil. Seven Corp. He also sits as a Director of Electric Commerce
Payment Network, The Straits Wine Company., Inc. He is a Board Co-Chair at ERC Phils., VP-
National Chapter Devt., of Philippine Franchise Association. He’s also a member of
Management Assoc of the Phils, Makati Business Club, and Young Presidents Organization. Mr.
Paterno holds a BS Mechanical Engineering Magna Cum Laude from Lehigh University,
Bethlehem Pennsylvania, USA.
45
Key Officers
ARIEL P. FERMIN, Group Chief Operating Officer

Ariel P. Fermin, 51, Filipino, is the newly-appointed Group Chief Operating Officer of Max’s
Group, Inc. He was also former Executive Vice President and Head of Consumer Business for
PLDT, Concurrent President of Greenwich and Chowking, Country Director for Nike Philippines
and South East Asia Category Head for Basketball of Nike. He also held various marketing and
sales positions in Coca-Cola and Unilever as well as product development roles in Procter &
Gamble. He obtained his degree in Chemical Engineering from the University of the Philippines
Diliman.
REBECCA R. ARAGO, Treasurer, Compliance Officer and Corporate Information Officer

Rebecca R. Arago, 48, Filipino, is currently the Treasurer, Compliance Officer and Corporate
Information Officer of Max’s Group, Inc. Prior to the acquisition of the of the Pancake House
Group by the Max’s Group of Companies (MGOC), Ms. Arago has also held the position of Chief
Finance Officer since 2008. Prior to joining MGOC, Ms. Arago was Assistant Vice-President for
Finance of Ubix Corporation, Comptroller of Philippine Seven Corporation, Accounting Manager
of Shoemart Inc., Chief Accountant of Puerto Azul Beach & Country Club, and Senior Auditor of
SyCip, Gorres, Velayo & Co. She obtained her Bachelor of Accountancy from the Polytechnic
University of the Philippines and is a Certified Public Accountant. She served as President of the
Association of CPAs in Commerce and Industry (ACPACI), the primary sectoral organization of
certified public accountants in the commerce and industry sector of the Philippine Institute of
Certified Public Accountants (PICPA), in 2012.
MA. ALICIA G. PICAZO-SAN JUAN, Corporate Secretary

Ma. Alicia G. Picazo-San Juan, 49, Filipino, is a practicing lawyer and Partner of Picazo Buyco
Tan Fider & Santos Law Offices and Corporate Secretary of several Philippine companies,
including SSI Group, Inc., AsianLife and General Assurance Corporation, ATR Asset
Management, Inc. and several mutual fund companies. She graduated magna cum laude with
the degree of Bachelor of Science in Management, Major in Legal Management, from the Ateneo
de Manila University in 1992, and graduated cum laude with the degree of Bachelor of Laws from
the University of the Philippines in 1996.
CARMEN-ROSE A. BASALLO-ESTAMPADOR, Assistant Corporate Secretary

Carmen-Rose A. Basallo-Estampador, 42, Filipino, is currently the General Counsel of the
Corporation. Prior to joining Max's Group, Inc., she was Legal and Compliance Director of
National Bookstore, Inc. and Assistant Vice President for Corporate Legal Affairs, Compliance
and Corporate Governance of Atlas Consolidated Mining and Development Corporation. She
obtained her Undergraduate Degree in Economics and Bachelor of Laws from the University of
the Philippines.
Family Relationships amongst Directors and Officers
From the Trota Family:

Mr. Robert F. Trota, Ms. Cristina T. Garcia and Ms. Carolyn T. Salud are siblings.
From the Fuentebella Family:

Ms. Sharon T. Fuentebella, Mr. Dave T. Fuentebella and Mr. Jim T. Fuentebella are siblings.
46
The members of both the Trota and Fuentebella families are first-degree cousins.
Mr. William E. Rodgers is an uncle of the Trota and Fuentebella families.
Legal Proceedings
As of the date of the preparation of this report and during the period covered hereby,
the Company was not and has not been involved in any legal proceeding which, if resolved
unfavorably against the Company, will result in a material prejudice upon the ability of the
Company to conduct its business and/or the incurrence by the Company of a material pecuniary
liability.
Item 10. Executive Compensation
The following table estimates and summarizes the compensation of executive directors and key
management personnel of the Company for the ensuing year 2019 and periods ended December
31, 2019 and 2018.
Name and Principal Position Year Salary Bonus Other
Robert Ramon F. Trota, President & Chief Executive Officer

Sharon T. Fuentebella, Chairperson
Carolyn T. Salud, Director
Cristina T. Garcia, Director
Dave T. Fuentebella, Director
Jim T. Fuentebella, Director
Isaias P. Fermin, Group Chief Operating Officer
2018 P66.7M
Chief Executive Officer and Highest Compensated
Executive Officers 2019 P65.9M
2020 P69.2M N/A
2018 P142.3M
All Other Officers and Directors as a Group Unnamed 2019 P176.4M
2020 P185.2M
The members of the Board of Directors of Max’s Group, Inc. each receive compensation amounting
to P75,000 for every Board meeting and P35,000 for every Board committee meeting attended.
Management Incentive Plans
The Company has established a performance-based Management Incentive Plan (MIP) to

provide key executives and management employees with a long-term incentive program
designed to promote a sense of ownership, loyalty, and focus on both short-term and long-term
income. The MIP utilizes a cash bonus system. The MIP shall grant incentive bonuses to
executives and managers of specified salary grade levels provided that the relevant financial
targets are met.
47
Employee Stock Option Plan
The Company’s stockholders, in their meeting on June 26, 2001, approved the establishment of
an Executive Stock Option Plan ("ESOP") to provide key executives and management
employees with a long-term incentive program designed to promote a sense of ownership,
loyalty, and balance on both short-term and long-term objectives. However, such plan has not
been implemented and will be subject to further review by the new majority stockholders.
Item 11. Security Ownership of Certain Record and Beneficial Owners and Management
Security Ownership of Certain Record and Beneficial Owners – as of December 31, 2019.
Name of
Title of No. of Shares %
Name Address Beneficial
Class Held Citizenship
Owner
37/F The
PCD Enterprise PSE
Common
Nominee Center, Ayala 682,748,222 Members Filipino 62.8
Shares
Corp.** Avenue, Brokers
Makati City
11/F
Ecoplaza
Trofi Building, Trofi
Common
Ventures 2305 Chino 82,021,794 Ventures Filipino 7.5
Shares
Corp.* Roces Corp.
Avenue Ext.,
Makati City
37/F The
PCD Enterprise PSE
Common
Nominee Center, Ayala 95,728,076 Members Non-Filipino 8.8
Shares
Corp.** Avenue, Brokers
Makati City
*Trofi Ventures Corporation is an affiliate of Max’s Group, Inc. and holds a total of 82,021,794
common shares, which forms part of the 682,748,222 common shares held by local shareholders
under PCD Nominee Corp. (Filipino)
**PCD Nominee Corporation represents participants (PSE member-brokers, custodian bank,

institutional investors, etc.) which have beneficial interest in the Company.
As of December 31, 2019, a total of 306,878,046 issued shares comprising 28.2% of the total
issued and outstanding shares of the Company are owned and held by wholly-owned
subsidiaries of the Company, to wit:
SUBSIDIARIES SHAREHOLDINGS
Max’s Kitchen, Inc. 101,173,438
The Real American Doughnut Company, Inc. 81,543,725
Max’s Bakeshop, Inc. 63,639,861
48
No Bia, Inc. 37,890,661
Trota Gimenez Realty Corporation 12,647,942
MGOC Holdings, Inc. 9,982,419
TOTAL 306,878,046
These shares and all the beneficial rights and interests appurtenant thereto or accruing thereon
are in substance owned and held by the Company. Otherwise stated, these shares are effectively
treasury shares and are in fact treated as treasury shares in the consolidated financial
statements of the Company. Accordingly, we are treating said shares as “treasury shares” and
are not considering the same part of the outstanding shares of the Company for purposes of
calculating the percentage to total outstanding shares of the non-public and public shares in the
Company.
On April 24, 2018, the Plan of Merger YCFC & TBGI was approved by the SEC with TBGI as the
surviving entity and YCFC was the absorbed entity.
On July 16, 2018, the Plan of Merger of FHJBI & TRADCI was approved by the SEC, with
TRADCI as the surviving entity and FHJBI as the absorbed entity
Except as stated above and in the immediately succeeding section, the Board of Directors and
Management of the Company have no knowledge of any person who, as of record date, was
indirectly or directly the beneficial owner of more than 5% of the Company’s outstanding shares
of common stock or who has voting power or investment power with respect to shares comprising
more than 5% of the outstanding common stock. There are no persons holding more than 5%
of the Company’s common stock that are under the voting trust or similar agreement.
Security Ownership of Directors and Management – as of December 31, 2019
Name of Amount and Nature of

Title of Beneficial Ownership No. of
Beneficial Citizenship %
Class Shares
Owner
Direct Indirect
Robert
Common
Ramon F. 33,906,034 - Filipino 33,906,034 4.3
Shares
Trota
Common Carolyn T.
32,212,460 - Filipino 32,212,460 4.1
Shares Salud
Common Cristina T.
33,292,714 - Filipino 33,292,714 4.3
Shares Garcia
Common Jim T.
26,437,890 - Filipino 26,437,890 3.4
Shares Fuentebella
Common Dave T.
25,868,860 - Filipino 25,868,860 3.3
Shares Fuentebella
49
Name of Amount and Nature of
Title of Beneficial Ownership No. of
Beneficial Citizenship %
Class Shares
Owner
Direct Indirect
Common Sharon T.
26,437,890 - Filipino 26,437,890 3.4
Shares Fuentebella
Common William E.
19,094,802 - American 19,094,802 2.4
Shares Rodgers
Common Antonio U.
3,000,002 - Filipino 3,000,002
Shares Periquet Jr. 0.4
Common Jose Victor
100 - Filipino 100 -
Shares Paterno
Other Key Officers
Common Ariel P.
332,000 Filipino 332,000 -
Shares Fermin
Common Rebecca R.
18,300 - Filipino 18,300 -
Shares Arago
Ma. Alicia
Common
G. Picazo- - - Filipino - -
Shares
San Juan
Carmen-
Common Rose A.
- - Filipino - -
Shares Basallo-
Estampador
All Directors and
200,601,052 25.6
Officers as a Group
Except as stated above, the Company has not received from any of the directors or executive
officers of the Company any statement of ownership, whether of record or beneficially, of more
than 5% of the Company’s outstanding shares of common stock. As known by the Company, the
aggregate number of common shares owned directly or indirectly by all key officers and directors
as a group as of record date was 200,601,052.
Voting Trust Holders of 5% or more
There are no persons holding more than 5% of the Company’s common stock that are under a
voting trust or similar agreement.
Changes in Control
The Company is not aware of any change in control or arrangement that may result in a change
in control of the Company since the beginning of its last fiscal year.
Item 12. Certain Relationships and Related Transactions
50
Related Party Transactions
For related party disclosures, please refer to Note 17 of the Audited Consolidated Financial
Statements of Max’s Group, Inc. for the period ended December 31, 2019.
51
PART IV – CORPORATE GOVERNANCE
Item 13. Corporate Governance
The Board of Directors and Management of Max’s Group, Inc., employees and shareholders,
believe that corporate governance is a necessary component of what constitutes sound strategic
business management and will therefore undertake every effort necessary to create awareness
within the organization as soon as possible.
The Company is committed to the principles and best practices contained in its Revised Manual
on Corporate Governance (“Manual”) and acknowledge that the same may guide the attainment
of our corporate goals.
This Manual shall institutionalize the principles of good corporate governance in the entire
organization.
Evaluation System
The Company has adopted a corporate governance self-rating method to evaluate the level of
compliance of the Company with its Manual on Corporate Governance. In addition, the
Compliance Officer reviews on a periodic basis the level of compliance of its directors, officers,
and employees with the leading practices and principles on good corporate governance as
embodied in the Company’s Manual.
Measures on Leading Practices of Good Corporate Governance
In compliance with Securities and Exchange Commission Memorandum Circular No. 19 – Series
of 2016, the Company submitted its Revised Manual on Corporate Governance on May 29, 2017.
In keeping the same, the following policies related to disclosure are observed:
Reports or disclosures required under the Company’s Revised Corporate Governance Manual
shall be prepared and submitted to the Securities and Exchange Commission and Philippine
Stock Exchange by the responsible committee or officer through the Compliance Officer.
All material information, i.e., anything that could potentially affect share price and which could
adversely affect its viability or interest of its shareholders and other stakeholders, shall be publicly
and timely disclosed. Such information shall include earnings results, acquisition or disposal of
assets, Board changes, related party transactions, shareholdings of directors and changes in
ownership.
Other information that shall always be disclosed includes remuneration (including stock options)
of all directors and senior management, corporate strategy, and off-balance sheet transactions.
All disclosed information shall be released via the approved stock exchange procedure for
company announcements as well as through the annual report.
The Board shall commit at all times to fully disclose material information dealings. It shall cause
the filing of all required information for the interest of the stakeholders.
52
Deviations from the Manual
The Company does not have any reported deviations from the Manual.
Improvement of Corporate Governance Standards
Max’s Group improved its governance score to 91.39 points in 2018 compared to 83.92 points
for 2017 compared based on the assessment of the Institute of Corporate Directors on best
practices featured in the ASEAN Corporate Governance Scorecard.
Max’s Group, Inc. will be filing its 2019 Integrated Annual Corporate Governance Report on or
before 30 May 2020.
Item 14. Exhibits and Reports on SEC Form 17-C
Reports filed for the period January 1, 2019 to December 31, 2019
Circular No. Circular Date Disclosure Subject

C00391-2019 Jan 23, 2019 Share Buy-Back Transactions
C00450-2019 Jan 25, 2019 (Amend) Share Buy-Back Transactions
Change in Directors and/or Officers (Resignation,
C00482-2019 Jan 28, 2019
Removal or Appointment, Election and/or Promotion)
Press Release: Max's Group to Accelerate
C00580-2019 Jan 31, 2019
International Business
C00624-2019 Feb 04, 2019
C01603-2019 Mar 15, 2019 Notice of Analysts’/Investors’ Briefing
C01682-2019 Change in Directors and/or Officers (Resignation,
Mar 20, 2019
C01687-2019 Mar 20, 2019 Press Release: Max's Group 2018 Earnings Results
C01694-2019 Mar 20, 2019 Declaration of Cash Dividends
C01693-2019 Mar 20, 2019 Notice of Annual Stockholders’ Meeting
Material Information/ Transactions: Results of Board
C01695-2019 Mar 20, 2019
Meeting
C01732-2019
Mar 21, 2019 (Amend) Notice of Annual Stockholders’ Meeting
C02317-2019 Apr 10, 2019
C02880-2019 May 02, 2019 Notice of Analysts’/Investors’ Briefing
C03165-2019 May 09, 2019 Results of Annual Stockholders’ Meeting
C03168-2019 Results of Organizational Meeting of Board of
May 09, 2019
Directors
C03169-2019
May 09, 2019 Amendments to Articles of Incorporation
53
Circular No. Circular Date Disclosure Subject
C03185-2019 Material Information/ Transactions: Results of Board
May 10, 2019
Meeting
C03189-2019
May 10, 2019 Press Release: First Quarter Earnings Results
C03212-2019 (Amend) Press Release: First Quarter Earnings
May 10, 2019
Results
(Amend) Change in Directors and/or Officers
C03457-2019
May 20, 2029 (Resignation, Removal or Appointment, Election
and/or Promotion)
C03617-2019 (Amend) Results of Organizational Meeting of Board of
May 24, 2019
Directors
C03654-2019 Material Informations/Transactions: Sale of Subsidiary,
May 28, 2019
Room Ventures, Corp.
Press Release: Max's Group Announces Sale of
C03655-2019 May 28, 2019
Meranti Hotel
C05169-2019 July 25, 2019 Notice of Analysts’/Investors’ Briefing
C05603-2019 Material Information/Transactions: Results of Board
Aug 09, 2019
Meeting
C05604-2019 Press Release: First Half and Second Quarter 2019
Aug 09, 2019
Earnings Results
C05980-2019
Aug 29, 2019 (Amend) Amendments to Articles of Incorporation
C06752-2019
Oct 04, 2019 Change in Corporate Contact Details and/or Website
C07073-2019 Material Information/Transactions: Approval of Material
Oct 10, 2019
Related Party Transactions Policy
C07649-2019
Nov 04, 2019 Notice of Analysts’/Investors’ Briefing
C07898-2019 Material Information/Transactions: Results of Board
Nov 11, 2019
Meeting
C07899-2019 Press Release: Nine Months and Third Quarter 2019
Nov 11, 2019
Earnings Results
C08143-2019 Material Information/ Transactions: Term Loan
Nov 19, 2019
Agreements with Development Bank of the Philippines
54
SIGNATURES
Pursuant to the requirements of Section 17 of the Code and Section 141 of the Corporation
Code, this report is signed on behalf of the issuer by the undersigned, thereunto duly
authorized, in the City of Makati on April 17, 2020.
By:
____________________________ ____________________________
Robert Ramon F. Trota Isaias P. Fermin
President and Chief Executive Officer Group Chief Operating Officer
__________________________________ ____________________________
Ma. Alicia G. Picazo-San Juan Rebecca R. Arago
Corporate Secretary Treasurer, Corporate Information &
Compliance Officer
SUBSCRIBED AND SWORN to before me this _____ day of __________ 20___, affiants
exhibiting to me their Government Issued IDs, as follows:
NAME GOVERNMENT DATE OF ISSUE PLACE OF

ISSUED ID ISSUE
Passport No.
Robert Ramon F. Trota April 03, 2018 DFA Manila
P6633788A
Passport No.
Isaias P. Fermin November 09, 2018 DFA NCR South
P9472186A
Passport No.
Rebecca R. Arago January 28, 2017 DFA Manila
P1795112A
Passport No.
Ma. Alicia G. Picazo-San Juan June 04, 2018 DFA Manila
P7431608A
Notary Public
Doc No. ____;

Page No.____;
Book No.____;
Series of 2020.
STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR CONSOLIDATED
FINANCIAL STATEMENTS
The management of Max’s Group, Inc. Doing Business Under the Names and Styles
of Pancake House, Maple, Dencio’s, and Singkit and Subsidiaries (the Group) is
responsible for the preparation and fair presentation of the financial statements including
the schedules attached therein, for the year (s) ended December 31, 2019, in
accordance with the prescribed financial reporting framework indicated therein and for
such internal control as management determines is necessary to enable the preparation
of financial statements that are free from material statement, whether due to fraud or
error.
In preparing the 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.
The Board of Directors (Trustees) is responsible for overseeing the Group’s financial
reporting process.
The Board of Directors (Trustees) reviews and approves the financial statements including
the schedules attached therein, and submits the same to the stockholders or members.
Reyes Tacandong & Co., the independent auditor appointed by the stockholders, has audited
the financial statements of the company in accordance with Philippine Standards on
Auditing, and in its report to the stockholders or members, has expressed its opinion on
the fairness of presentation upon completion of such audit.
Signature _SHARON T. FUENTEBELLA_

Chairman of the Board
Signature __ROBERT RAMON F. TROTA__

President/Chief Executive Officer
Signature REBECCA R. ARAGO_

Treasurer
Signed this 11th day of March 2020

REPUBLIC OF THE PHILIPPINES )
MAKATI CITY, METRO MANILA ) S.S.
SECRETARY’S CERTIFICATE
I, MA. ALICIA G. PICAZO-SAN JUAN, Filipino citizen, of legal age, and with office
address at the Liberty Center – Picazo Law, 104 H. V. Dela Costa Street, Salcedo Village,
Makati City, after having been duly sworn in accordance with law, hereby certify that:
1. I am the Corporate Secretary of MAX’S GROUP, INC. doing business under the
names and styles of Pancake House, Maple, Dencio’s and Singkit (the “Corporation”), a
corporation duly organized and existing under and by virtue of the laws of the Republic of the
th
Philippines, with principal office address at 11 Floor, EcoPlaza Building, 2305 Chino Roces
Avenue Extension, Makati City.
2. At a duly constituted meeting of the Board of Directors of the Corporation held 11

March 2020, during which a quorum was present and acting all throughout, the Board
unanimously passed and approved the following resolution:
“RESOLVED, AS IT IS HEREBY RESOLVED, to: [i] approve the audited

financial statements of the Corporation as of and for the year ended 31
December 2019 and [ii] authorize the filing of the same with all appropriate
regulatory authorities.”
“RESOLVED, FURTHER, that in the absence of a Chief Financial Officer,

Rebecca R. Arago be authorized, along with the Corporation’s Chairman of the
Board and Chief Executive Officer/President, to sign and execute
the Management Representation Letter to be issued to the external auditors of
the Corporation, Reyes Tacandong & Company, in relation to the finalization of
the Corporation’s Audited Financial Statements as of and for the year ended 31
December 2019, and the Statement of Management Responsibility to be
appended to the Corporation’s Audited Financial Statements as of and for the
year ended 31 December 2019.”
IN WITNESS WHEREOF, this certification has been signed this ________________ in

Makati City.
MA. ALICIA G. PICAZO-SAN JUAN

Corporate Secretary
SUBSCRIBED AND SWORN TO before me this ______________________ in Makati

City, affiant exhibited to me her Philippine Passport No. P7431608A issued on 4 June 2018 by
the Department of Foreign Affairs in Manila.
Doc. No. ____;

Page No. ____;
Book No. ____;
Series of 2020.
COVER SHEET
For
AUDITED FINANCIAL STATEMENTS
SEC Registration Number
A 2 0 0 0 - 0 3 0 0 8
COMPANY NAME
M A X ‘ S G R O U P , I N C . D o i n g b u s i n e s s u n d e r
t h e n a m e s a n d s t y l e s o f P a n c a k e H o u s e ;
M a p l e ; D e n c i o ‘ s ; a n d S i n g k i t A N D S U B S I D
I A R I E S
PRINCIPAL OFFICE (No./Street/Barangay/City/Town) Province)
1 1 / F E c o P l a z a B u i l d i n g , C h i n o R o c e s A v e
n u e E x t e n s i o n ( f o r m e r l y P a s o n g T a m o E x t
e n s i o n ) , M a k a t i C i t y , M e t r o M a n i l a
Form Type Department requiring the report Secondary License Type, If Applicable
A A C F S C R MD N / A
COMPANY INFORMATION
Company’s Email Address Company’s Telephone Number/s Mobile Number
compliance@maxsgroupinc.com (632) 8-784-9000 –
No. of Stockholders Annual Meeting (Month / Day) Fiscal Year (Month / Day)
84 2nd Thursday of May December 31
CONTACT PERSON INFORMATION

The designated contact person MUST be an Officer of the Corporation
Name of Contact Person Email Address Telephone Number/s Mobile Number
Ms. Rebecca R. Arago rrarago@maxsgroupinc.com (632) 8-784-9000 –
CONTACT PERSON’S ADDRESS
11th Floor EcoPlaza Building, Chino Roces Avenue Extension (formerly Pasong Tamo Extension), Makati City, Metro Manila
NOTE 1: In case of death, resignation or cessation of office of the officer designated as contact person, such incident shall be reported to the Commission within
thirty (30) calendar days from the occurrence thereof with information and complete contact details of the new contact person designated.
NOTE 2: All boxes must be properly and completely filled-up. Failure to do so shall cause the delay in updating the corporation’s records with the Commission
and/or non-receipt of Notice of Deficiencies. Further, non-receipt shall not excuse the corporation from liability for its deficiencies.
BOA/PRC Accreditation No. 4782 Citibank Tower
October 4, 2018, valid until August 15, 2021 8741 Paseo de Roxas
SEC Accreditation No. 0207-FR-3 (Group A) Makati City 1226 Philippines
August 29, 2019, valid until August 28, 2022 Phone : +632 8 982 9100
Fax : +632 8 982 9111
Website : www.reyestacandong.com
INDEPENDENT AUDITORS’ REPORT
The Stockholders and the Board of Directors

MAX’S GROUP, INC.
Doing business under the names and styles of
Pancake House; Maple; Dencio’s; and Singkit and Subsidiaries
11/F EcoPlaza Building
Chino Roces Avenue Extension (formerly Pasong Tamo Extension)
Makati City, Metro Manila
Opinion
We have audited the accompanying consolidated financial statements of MAX’S GROUP, INC. Doing
business under the names and styles of Pancake House; Maple; Dencio’s; and Singkit and Subsidiaries
(the Group), which comprise the consolidated statements of financial position as at December 31, 2019
and 2018, and the consolidated statements of income, consolidated statements of comprehensive
income, consolidated statements of changes in equity and consolidated statements of cash flows for the
three years ended December 31, 2019, 2018 and 2017, and notes to the consolidated financial
statements, including a summary of significant accounting policies.
In our opinion, the consolidated financial statements present fairly, in all material respects,
the consolidated financial position of the Group as at December 31, 2019 and 2018, and their
consolidated financial performance and their consolidated cash flows for the three years ended
December 31, 2019, 2018 and 2017 in accordance with Philippine Financial Reporting Standards (PFRS).
Basis for Opinion
We conducted our audits in accordance with Philippine Standards on Auditing (PSA). 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 Code of Ethics for Professional Accountants in the Philippines (Code of Ethics)
together with the ethical requirements that are relevant to the audit of the consolidated financial
statements in the Philippines, and we have fulfilled our other ethical responsibilities in accordance with
these requirements and the Code of Ethics. 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 as at and 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.
Reyes Tacandong & Co. is a member of the RSM network. Each member of the RSM network is an independent accounting and consulting firm, and practices in its own right. The RSM network is
not itself a separate legal entity of any description in any jurisdiction.
-2-
Valuation of Goodwill and Other Intangible Assets
The Group carries a significant amount of goodwill and other intangible assets as at December 31, 2019.
Under PFRS, the Group is required to test the amount of goodwill and other intangible assets with
indefinite useful lives for impairment at least annually and whenever circumstances indicate that the
carrying value maybe impaired. The Group is also required to assess those intangible assets with
definite useful lives for any indicator of impairment. The Group’s impairment tests were significant to
our audit because the assessment process requires significant judgments and assumptions involving
expected future financial performance, among others.
We reviewed the cash flow projections included in the annual impairment tests. For our audit,
we assessed and tested the assumptions, methodologies and other data used by comparing them to
external and historical data and by analyzing sensitivities in the Group’s valuation model. We evaluated
cash generating units whether a reasonably possible change in assumptions could cause the carrying
amount to exceed its recoverable amount and assessed the historical accuracy of management’s
estimates. Based on the procedures we performed, we considered management’s key assumptions to
be within a reasonable range. We also assessed the adequacy of the disclosures in Notes 2, 3 and 11 to
the consolidated financial statements.
Accounting for Leases under PFRS 16
Effective January 1, 2019, the Group adopted the requirements of PFRS 16, Leases, using the modified
retrospective approach.
PFRS 16 requires lessees to account for leases under a single on-balance sheet model and sets out the
principles for the recognition, measurement, presentation and disclosure of leases. We focused on this
area as the Group is recognizing majority of the leases as on-balance sheet liabilities with underlying
right-of-use assets. Management identified and considered the relevant lease contracts, lease terms and
options and borrowing rates used for their calculations. The accounting policy applied by the Group is
explained in Note 2 to the consolidated financial statements. Further details on the leases are disclosed
in Notes 2, 3 and 25 to the consolidated financial statements.
We evaluated the appropriateness of key decisions, judgments and accounting policies made by the
Group to ensure compliance with PFRS 16. We tested controls in place in the identification of lease
contracts and lease term inputs. We evaluated management’s method and estimates applied in
determining the borrowing rate used for the PFRS 16 calculations.
We performed a combination of test of details and substantive analytical procedures on new lease
contracts and modifications made on existing contracts that were recorded since the initial application
of this new standard. We tested the depreciation and interest expense charged for the period and
reviewed the completeness of the lease contracts and the adequacy of the related disclosures in the
consolidated financial statements.
-3-
Revenue Recognition
Revenue is one of the Group's key performance indicators. Accounting policies of the various revenue
streams should be consistent with the requirements of PFRS 15, Revenue from Contracts with
Customers. Revenue is recognized when the control of the goods or services is transferred to the
customer at a point in time or over a period of time, at the amount of consideration that the Group
expects for the exchange of those goods or services. Moreover due to the materiality of revenue in the
consolidated financial statements, it is deemed as one of the key audit matters.
We obtained an understanding and assessed the appropriateness of the Group’s accounting policies for
revenue recognition in accordance with the five-step model of PFRS 15. For restaurant and commissary
sales, we assessed the Group’s controls over the recording of revenue transactions. For franchise,
royalty and other income, we evaluated the design and operating effectiveness of the relevant controls
and review sample contracts to address any identified risks of material misstatement. We also obtained
sufficient and appropriate audit evidence through analytical procedures and journal entry testing to
identify any unusual items.
In addition, we considered the appropriateness of the related disclosures in the consolidated financial
statements. Further disclosures are included in Note 25 to the consolidated financial statements.
Other Information
Management is responsible for the other information. The other information comprises the information
included in the SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and Annual Report for
the year ended December 31, 2019, but does not include the consolidated financial statements and our
auditors’ report thereon. The SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and
Annual Report for the year ended December 31, 2019 are expected to be made available to us after the
date of this auditors’ report.
Our opinion on the consolidated financial statements does not cover the other information and we will
not express any form of assurance conclusion thereon.
In connection with our audits of the consolidated financial statements, our responsibility is to read the
other information identified above when it becomes available and, in doing so, consider whether the
other information is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audits or otherwise appears to be materially misstated.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial
Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with PFRS, 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.
-4-
Those charged with governance 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 PSA 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, these 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 PSA, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
 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.
 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.
 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
 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.
 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.
 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the group audit. We remain
solely responsible for the audit opinion.
-5-
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 audits.
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 of the current year 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 partner on the audit resulting in this independent auditors’ report is Michelle R.
Mendoza- Cruz.
REYES TACANDONG & CO.
MICHELLE R. MENDOZA-CRUZ
Partner
CPA Certificate No. 97380
Tax Identification No. 201-892-183-000
BOA Accreditation No. 4782; Valid until August 15, 2021
SEC Accreditation No. 1499-AR-1 Group A
Valid until July 17, 2021
BIR Accreditation No. 08-005144-012-2020
Valid until January 1, 2023
PTR No. 8116478
Issued January 6, 2020, Makati City
March 11, 2020

MAX’S GROUP, INC.
Pancake House; Maple; Dencio’s; and Singkit
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Amounts in Thousands)
December 31
Note 2019 2018
ASSETS
Current Assets
Cash and cash equivalents 6 P
=888,545 P
=703,226
Trade and other receivables 7 1,377,205 948,382
Inventories 8 644,950 581,890
Prepaid expenses and other current assets 9 307,456 414,778
Total Current Assets 3,218,156 2,648,276
Noncurrent Assets
Property and equipment 10 3,687,149 3,344,820
Intangible assets 11 4,921,379 4,953,876
Right-of-use (ROU) assets 25 2,897,884 –
Investment properties 10 517,818 535,648
Net retirement plan assets 21 140,992 163,754
Net deferred income tax assets 23 401,211 351,427
Security deposits on lease contracts 25 627,411 538,756
Other noncurrent assets 12 366,663 344,129
Total Noncurrent Assets 13,560,507 10,232,410
P
=16,778,663 P
=12,880,686
LIABILITIES AND EQUITY

Current Liabilities
Trade and other payables 13 P
=2,382,706 P
=2,285,260
Loans payable 14 920,637 2,606,360
Lease liabilities 25 465,578 –
Income tax payable 83,735 83,727
Total Current Liabilities 3,852,656 4,975,347
Noncurrent Liabilities
Long-term debt 15 3,104,503 1,178,080
Lease liabilities - net of current portion 25 2,545,266 –
Net deferred income tax liabilities 23 964,982 942,655
Net retirement liabilities 21 359,146 129,479
Contract liabilities 13 49,769 85,975
Accrued rent payable 25 – 78,804
Provision for share in equity in net losses of a joint venture 3,115 3,115
Total Noncurrent Liabilities 7,026,781 2,418,108
Total Liabilities 10,879,437 7,393,455
(Forward)
-2-
December 31
Note 2019 2018
Equity 16
Capital stock P
=1,087,082 P
=1,087,082
Treasury stock (794) –
Additional paid-in capital 5,353,289 5,353,289
Retained earnings 2,442,683 1,834,964
Other comprehensive loss (325,817) (127,617)
8,556,443 8,147,718
Shares held by subsidiaries (2,610,013) (2,610,013)
Non-controlling interests (47,204) (50,474)
Total Equity 5,899,226 5,487,231
P
=16,778,663 P
=12,880,686
See accompanying Notes to Consolidated Financial Statements.

MAX’S GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except for Earnings per Share)
For the Years Ended December 31

Note 2019 2018 2017
REVENUES 25
Restaurant sales P
=11,793,079 P
=11,296,532 P
=10,462,961
Commissary sales 1,779,345 1,565,726 1,422,768
Franchise, royalty and continuing license fees 828,922 820,410 776,194
14,401,346 13,682,668 12,661,923
COST OF SALES AND SERVICES 18 10,456,289 10,011,195 9,386,162
GROSS PROFIT 3,945,057 3,671,473 3,275,761
GENERAL AND ADMINISTRATIVE EXPENSES 19 (2,615,179) (2,361,386) (2,171,264)
SALES AND MARKETING EXPENSES (544,909) (400,186) (390,615)
FINANCE COSTS 14
Loans payable and long-term debt (223,693) (160,495) (116,355)
Lease liabilities (96,671) – –
OTHER INCOME - Net 22 531,619 166,187 115,581
INCOME BEFORE INCOME TAX 996,224 915,593 713,108
PROVISION FOR (BENEFIT FROM) INCOME TAX 23

Current 272,085 269,829 232,501
Deferred (87) 14,620 (146,083)
271,998 284,449 86,418
NET INCOME P
=724,226 P
=631,144 P
=626,690
NET INCOME (LOSS) ATTRIBUTABLE TO:

Equity holders of the Parent Company P
=720,956 P
=619,710 P
=628,810
Non-controlling interests 3,270 11,434 (2,120)
P
=724,226 P
=631,144 P
=626,690
Earnings per Share Attributable to the Equity

Holders of the Parent Company 24
Basic/Diluted P
=0.92 P
=0.79 P
=0.81

MAX’S GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Note 2019 2018 2017
NET INCOME P
=724,226 P
=631,144 P
=626,690
OTHER COMPREHENSIVE LOSS

Item to be reclassified to profit or loss
Exchange differences on translation of foreign
operations (7,530) (8,387) (13,350)
Item not to be reclassified to profit or loss
Remeasurement losses on net retirement liabilities
and plan assets, net of deferred income tax 21 (190,670) (73,250) (13,971)
(198,200) (81,637) (27,321)
TOTAL COMPREHENSIVE INCOME P

=526,026 P
=549,507 P
=599,369
TOTAL COMPREHENSIVE INCOME (LOSS)

ATTRIBUTABLE TO:
Equity holders of the Parent Company P
=522,756 P
=538,073 P
=601,489
Non-controlling interests 3,270 11,434 (2,120)
P
=526,026 P
=549,507 P
=599,369

MAX’S GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Note 2019 2018 2017
CAPITAL STOCK 16 P
=1,087,082 P
=1,087,082 P
=1,087,082
TREASURY STOCK
Acquisition of treasury shares 16 (794) – –
ADDITIONAL PAID-IN CAPITAL 5,353,289 5,353,289 5,353,289
RETAINED EARNINGS
Balance at beginning of year, as previously reported 1,834,964 1,655,492 1,131,932
Impact of PFRS 9, Financial Instruments 7 – (236,429) –
Impact of PFRS 15, Revenue from Contracts
with Customers – (93,960) –
Balance at beginning of year, as restated 1,834,964 1,325,103 1,131,932
Net income 720,956 619,710 628,810
Cash dividends 16 (113,237) (112,850) (101,426)
Reclassification of remeasurement adjustments on
net retirement liabilities 21 – 3,001 –
Purchase price in excess of non-controlling
interest acquired 5 – – (3,824)
Balance at end of year 2,442,683 1,834,964 1,655,492
OTHER COMPREHENSIVE INCOME (LOSS)

Item to be reclassified to profit or loss -
Cumulative translation adjustments
Balance at beginning of year (4,188) 4,199 17,549
Exchange differences on translation of foreign
operations (7,530) (8,387) (13,350)
Balance at end of year (11,718) (4,188) 4,199
Item not to be reclassified to profit or loss -
Remeasurement adjustments on net retirement
liabilities and plan assets, net of deferred income
tax 21
Balance at beginning of year (123,429) (47,178) (33,207)
Remeasurement of net retirement liabilities and
plan assets, net of deferred income tax (190,670) (73,250) (13,971)
Reclassification of remeasurement adjustments on
net retirement liabilities – (3,001) –
Balance at end of year (314,099) (123,429) (47,178)
(325,817) (127,617) (42,979)
8,556,443 8,147,718 8,052,884
(Forward)
-2-

Note 2019 2018 2017
SHARES HELD BY SUBSIDIARIES - at cost 16 (P

=2,610,013) (P
=2,610,013) (P
=2,610,013)
NON-CONTROLLING INTERESTS
Balance at beginning of year (50,474) (61,908) (8,903)
Share in total comprehensive income (loss) 3,270 11,434 (2,120)
Effect of acquisition of non-controlling interest 5 – – (43,340)
Movements in non-controlling interests – – (7,493)
Effect of disposal of investment in a subsidiary 5 – – (52)
Balance at end of year (47,204) (50,474) (61,908)
P
=5,899,226 P
=5,487,231 P
=5,380,963

MAX’S GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

Note 2019 2018 2017
CASH FLOWS FROM OPERATING ACTIVITIES

Income before income tax P
=996,224 P
=915,593 P
=713,108
Adjustments for:
Depreciation and amortization of:
ROU assets 25 874,843 – –
Property and equipment and investment
properties 10 458,478 454,795 357,743
Intangible assets 10 51,090 52,055 52,697
Gain on disposal of assets 10 (327,604) (17,950) (4,958)
Finance costs:
Loans and long-term debt 14 223,693 160,495 116,355
Lease liabilities 14 96,671 – –
Interest income 6 (1,677) (1,913) (1,101)
Gain from sale of subsidiaries 5 – – (2,873)
Operating income before working capital
changes 2,371,718 1,563,075 1,230,971
Decrease (increase) in:
Trade and other receivables (205,909) (139,464) (108,110)
Inventories (63,060) 7,155 (102,798)
Prepaid expenses and other current assets 107,322 (78,000) (5,735)
Net retirement plan assets 4,142 61,893 74,206
Increase (decrease) in:
Trade and other payables 108,671 292,348 (2,489)
Contract liabilities (36,206) (28,105) –
Net retirement liabilities 50,087 (38,757) (36,111)
Accrued rent payable – 4,062 25,046
Net cash generated from operations 2,336,765 1,644,207 1,074,980
Income taxes paid (299,447) (266,750) (228,936)
Interest paid (223,693) (151,758) (116,355)
Interest received 1,677 1,913 1,101
Net cash provided by operating activities 1,815,302 1,227,612 730,790
CASH FLOWS FROM INVESTING ACTIVITIES

Acquisitions of:
Property and equipment 10 (1,119,453) (727,481) (822,275)
Intangible assets 11 (18,593) (17,232) (15,614)
Additional shares of a subsidiary 5 – – (47,164)
Proceeds from disposal of assets 10 437,920 79,433 24,692
Decrease (increase) in:
Security deposits on lease contracts (88,654) (69,580) (47,222)
Other noncurrent assets (22,533) (30,974) 3,542
Net cash used in investing activities (811,313) (765,834) (904,041)
(Forward)
-2-

Note 2019 2018 2017
CASH FLOWS FROM FINANCING ACTIVITIES

Net proceeds from (payments of): 30
Long-term debt P
=1,926,423 (P
=405,608) (P
=111,462)
Loans payable (1,685,723) 90,923 320,798
Payment of lease liabilities 25 (945,339) – –
Cash dividends paid 16 (113,237) (112,850) (101,426)
Acquisition of treasury stock 16 (794) – –
Decrease in other noncurrent liabilities – – (3,926)
Returns to non-controlling interests – – (7,546)
Net cash provided by (used in) financing
activities (818,670) (427,535) 96,438
EFFECT OF DECONSOLIDATION – – (6,404)
NET INCREASE (DECREASE) IN CASH AND CASH

EQUIVALENTS 185,319 34,243 (83,217)
CASH AND CASH EQUIVALENTS AT BEGINNING

OF YEAR 703,226 668,983 752,200
CASH AND CASH EQUIVALENTS AT END OF

YEAR P
=888,545 P
=703,226 P
=668,983
NONCASH FINANCIAL INFORMATION

Impact of PFRS 16, Leases as of January 1, 2019 25
ROU assets P
=2,194,974 P
=– P
=–
Finance lease liabilities 2,285,006 – –
Accrued rent (90,032) – –
Receivable arising from disposal of assets 10 222,914 – –

MAX’S GROUP, INC.
Doing business under the names and styles of Pancake House;
Maple; Dencio’s; and Singkit
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in Thousands Except as Otherwise Stated)
1. Corporate Information
MAX’S GROUP, INC. Doing business under the names and styles of Pancake House; Maple; Dencio’s;
and Singkit (the Parent Company) was incorporated in the Philippines and registered with the
Securities and Exchange Commission (SEC) on March 1, 2000. The Parent Company’s shares are
publicly traded in the Philippine Stock Exchange (PSE). The Parent Company and its subsidiaries
(collectively referred to as “the Group”) are primarily engaged in the business of catering food and
establishing, operating and maintaining restaurants, coffee shops, refreshments parlors and cocktail
lounges.
The Parent Company’s primary purpose also includes dealing in the business of acquiring and
developing any and all trade names, brand names and master franchises, including other intellectual
property rights necessary to commence and operate the relevant business enterprises, as well as to
grant the use of such trade names, brand names and master franchises for and in consideration of
the payment of fees and royalties, and in connection therewith, establish management services for
the expansion of the business enterprises.
The Group operates under the trade names “Max’s”, “Pancake House,” “Yellow Cab,” “Krispy
Kreme,” “Jamba Juice,” “Max’s Corner Bakeshop,” “Dencio’s,” “Max’s Kabisera”, ”Teriyaki Boy,”
“Singkit,” “Sizzlin’ Steak,” “Le Coeur de France,” and “Maple”.
On August 9, 2019, the SEC approved the change in the corporate name of the Parent Company
from “MAX’S GROUP, INC. Doing business under the names and styles of Pancake House; Maple;
Dencio’s; Kabisera ng Dencio’s; and Singkit” to “MAX’S GROUP, INC. Doing business under the
names and styles of Pancake House; Maple; Dencio’s; and Singkit”.
The Parent Company’s principal place of business is at 11/F EcoPlaza Building, Chino Roces Avenue
Extension (formerly, Pasong Tamo Extension), Makati City, Metro Manila.
The consolidated financial statements include the accounts of the Parent Company and the
following subsidiaries:
Percentage of
Nature of Effective Ownership
Company Name Business 2019 2018 2017
Max’s Kitchen, Inc. (MKI) Restaurant 100 100 100
The Real American Doughnut Company, Inc.(TRADCI) [d] Bakery 100 100 100
Fresh Healthy Juice Boosters, Inc.(FHJBI) [d] Restaurant – – 100
Trota Gimenez Realty Corporation Real Estate 100 100 100
(Forward)
-2-
Percentage of
Nature of Effective Ownership
Company Name Business 2019 2018 2017
Alpha (Global) Max Group Limited (Alpha Max) Franchising 100 100 100
Global Max Services Pte. Ltd. (Global Max) Management
Consultancy 100 100 100
YCPC Subic, Inc. (formerly DFSI Subic, Inc.) Restaurant 100 100 100
Always Happy BGC, Inc. [b] Restaurant 100 100 100
PCKPolo, Inc. [b] Restaurant 70 70 70
PCK-AMC, Inc.[b] Restaurant 60 60 60
PCK Bel-Air, Inc. Restaurant 51 51 51
PCK-MSC, Inc.[a] Restaurant 50 50 50
Pancake House International, Inc. (PHII) Holding Company 100 100 100
Teriyaki Boy International - Inc. (TBII) Franchising 100 100 100
Yellow Cab Food Co. International - Inc. (YCFII) Franchising 100 100 100
Pancake House, International
Malaysia SdnBhd (PHIM) Restaurant 100 100 100
Pancake House Ventures, Inc. (PHVI)[b] Holding Company 100 100 100
Pancake House Products, Inc. [b] Holding Company 100 100 100
Golden B.E.R.R.D. Grill, Inc. [b] Restaurant 100 100 100
Teriyaki Boy Group, Inc. (TBGI) [c] Restaurant 100 100 70
Yellow Cab Food Corporation (YCFC) [c] Restaurant – – 100
TBGI-Trinoma, Inc. [b] Restaurant 60 60 60
TBGI-Marilao, Inc. [b] Restaurant 51 51 51
TBOY-MS, Inc.[a] Restaurant 50 50 50
TBGI-Tagaytay, Inc. [a] [b] Restaurant 40 40 40
YCPI Pizza Venture, Inc. Restaurant 55 55 55
Sizzlin’ Steak, Inc. Restaurant 100 100 100
Boulangerie Francaise, Inc. (BFI) [b] Restaurant 100 100 100
88 Just Asian, Inc. (88JAI) [b] Restaurant 80 80 80
CRP Philippines, Inc.[a] Restaurant 50 50 50
RooM Ventures Corp. (RVC) [e] Hotel – 100 100
[a]
Although the Parent Company owns 50% or less of the voting power of these entities, it is able to govern the financial and operating
policies of the companies by virtue of agreements with the other investors of such entities. Consequently, the Parent Company
considered these entities as subsidiaries.
[b]
Companies that are dormant or have not yet started operations as at December 31, 2019 and 2018.
[c]
On April 24, 2018, the Plan of Merger of YCFC and TBGI was approved by the SEC, with TBGI as the surviving entity and YCFC as the
absorbed entity.
[d]
On July 16, 2018, the Plan of Merger of FHJBI and TRADCI was approved by the SEC, with TRADCI as the surviving entity and FHJBI as the
absorbed entity.
[e]
On May 31, 2019, the Parent Company sold its shares in RVC for P
=240.0 million.
-3-
All of the subsidiaries are incorporated and operating in the Philippines and registered with the SEC,
except for the following entities:
• PHII, TBII and YCFII, companies incorporated in British Virgin Islands;

• PHIM, a company incorporated and operating in Malaysia;
• M Food, SSI and eMax, companies incorporated in U.S.;
• Alpha Max, a company incorporated in Hongkong; and
• Global Max, a company incorporated in Singapore.
The consolidated financial statements of the Group as at December 31, 2019 and 2018 and for the
three years ended December 31, 2019, 2018 and 2017 were approved and authorized for issue by
the Board of Directors (BOD) of the Parent Company on March 11, 2020.
2. Summary of Significant Accounting Policies
Basis of Preparation
The consolidated financial statements have been prepared in accordance with Philippine Financial
Reporting Standards (PFRS) issued and approved by the Philippine Financial Reporting Standards
Council and adopted by the SEC, including SEC pronouncements. This financial reporting framework
includes PFRS, Philippine Accounting Standards (PAS) and Philippine Interpretation from
International Financial Reporting Interpretations Committee (IFRIC).
Measurement Bases
The consolidated financial statements are presented in Philippine Peso, which is the Parent
Company’s functional and presentation currency. All amounts are rounded to the nearest
thousands except when otherwise indicated.
The consolidated financial statements of the Group have been prepared under the historical cost
basis. Historical cost is generally based on the fair value of the consideration given in exchange for
assets and the fair value of consideration received in exchange for incurring a liability.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:
• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to the Group.
The fair value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their best
economic interest.
A fair value measurement of a nonfinancial asset takes into account a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.
-4-
The Group uses valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximizing the use of relevant observable inputs
and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the consolidated financial
statements are categorized within the fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a whole:
• Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
• Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable.
• Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
For assets and liabilities that are recognized in the consolidated financial statements on a recurring
basis, the Group determines whether transfers have occurred between levels in the hierarchy by
re-assessing categorization (based on the lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting date.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities
on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair
value hierarchy as explained above.
Further information about the assumptions made in measuring fair value is included in Note 26.
Adoption of New and Amended PFRS

The accounting policies adopted are consistent with those of the previous financial year, except for
the adoption of the following new and amended PFRS which the Group adopted effective for annual
periods beginning on or after January 1, 2019:
• PFRS 16, Leases
PFRS 16 replaced PAS 17, Leases, IFRIC 4, Determining whether an Arrangement contains a
Lease, Standards Interpretation Committee (SIC)-15, Operating Leases-Incentives, and SIC-27,
Evaluating the Substance of Transactions Involving the Legal Form of a Lease. PFRS 16 requires
lessees to account for all leases under a single on-balance sheet model similar to the accounting
for finance leases under PAS 17 and sets out the principles for the recognition, measurement,
presentation and disclosure of leases. The standard provides two recognition exemptions for
lessees from this PFRS – leases of low-value assets and short-term leases (i.e., leases with a
lease term of 12 months or less).
On January 1, 2019, the Group adopted the requirements of PFRS 16, which have substantial
impact on the Group’s consolidated financial statements. The Group recognized right-of-use
(ROU) assets and lease liabilities in relation to leases which had previously been classified as
operating leases under PAS 17 and Philippine Interpretations IFRIC 4. The adoption of PFRS 16
resulted to the recognition of ROU assets and lease liabilities amounting to P
=2,195.0 million and
P
=2,285.0 million, respectively, and derecognition of accrued rent payable amounting to
P
=90.0 million as at January 1, 2019 (see Note 25).
-5-
Below table outlines the reconciliation between the two standards:
(in thousands)
Operating lease commitments - December 31, 2018 P
=3,385,097
Discounting impact using the incremental borrowing rate (1,100,091)
Lease liabilities - January 1, 2019 P
=2,285,006
The Group applied the modified retrospective method, which requires the recognition of the
cumulative effect of initially applying PFRS 16 to the beginning retained earnings. Accordingly,
the comparative information presented for 2018 and 2017 were not restated.
The Group used different practical expedients as permitted by PFRS 16. It has elected to
measure the ROU asset at an amount equal to the lease liability, adjusted by the amount of any
prepaid or accrued lease payments relating to the leases recognized in the consolidated
financial statements immediately before the date of initial application. Since the Group
recognized the ROU assets at the amount equal to the lease liabilities, there was no impact to
the retained earnings.
The Group elected to use the exemption requirement of the standard for low value assets.
Options such as extensions or terminations on lease contracts are considered on a case to case
basis following a regular management assessment. The Group’s weighted average incremental
borrowing rate used for PFRS 16 purposes ranges from 5.5% to 6.0%, depending on the lease
term.
Lessor accounting under PFRS 16 is substantially unchanged from accounting under

PAS 17. The lessor shall continue to classify leases using the same classification principle as in
PAS 17 to distinguish the two types of leases: operating and finance leases.
• Philippine Interpretation IFRIC 23, Uncertainty Over Income Tax Treatments – The interpretation
provides guidance on how to reflect the effects of uncertainty in accounting for income taxes
under PAS 12, Income Taxes, in particular (i) matters to be considered in accounting for
uncertain tax treatments separately, (ii) assumptions for taxation authorities’ examinations,
(iii) determinants of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and
tax rates, and (iv) effect of changes in facts and circumstances.
• Amendments to PFRS 9, Financial Instruments - Prepayment Features with Negative

Compensation – The amendments clarify that a financial asset passes the “solely payments of
principal and interest” criterion regardless of an event or circumstance that causes the early
termination of the contract and irrespective of which party pays or receives reasonable
compensation for the early termination of the contract. Consequently, financial assets with
termination provisions can now be measured at amortized cost [or, depending on the business
model, at fair value through other comprehensive income (FVOCI)].
• Amendments to PAS 19, Employee Benefits - Plan Amendment, Curtailment or Settlement –

The amendments specify how companies remeasure a defined benefit plan when a change -
an amendment, curtailment or settlement - to a plan takes place during a reporting period.
It requires entities to use the updated assumptions from this remeasurement to determine
current service cost and net interest cost for the remainder of the reporting period after the
change to the plan.
-6-
• Amendments to PAS 28, Investments in Associates and Joint Ventures - Long-term Interests in
Associates and Joint Ventures – The amendments require entities to use PFRS 9 in accounting for
its long-term interests (i.e., preference shares and long-term receivables or loans for which
settlement is neither planned nor likely to occur in the foreseeable future) in an associate or
joint venture in which the equity method under PAS 28 is not applied. The clarification is
relevant because the expected credit loss model under PFRS 9 shall be applied to these long-
term interests.
• Annual Improvements to PFRS 2015 to 2017 Cycle:
o Amendments to PFRS 3, Business Combinations and PFRS 11, Joint Arrangements -

Previously Held Interest in a Joint Operation – The amendments to PFRS 3, Business
Combinations, clarify that when an entity obtains control of a business that is a joint
operation, the acquirer applies the requirements for a business combination achieved in
stages, including remeasuring previously held interests in the joint operation at its
acquisition-date fair value.
The amendment to PFRS 11, Joint Arrangements, clarifies that when an entity obtains joint
control of a business that is a joint operation, the previously held interests in that business
are not remeasured.
o Amendments to PAS 12 - Income Tax Consequences of Payments on Financial Instruments

Classified as Equity – The amendments require entities to recognize the income tax
consequences of dividends as defined in PFRS 9 when the liability to pay dividends are
recognized. The income tax consequences of dividends are recognized either in profit or
loss, other comprehensive income or equity, consistently with the transactions that
generated the distributable profits. This requirement applies to all income tax
consequences of dividends, such as withholding taxes.
o Amendments to PAS 23, Borrowing Costs - Borrowing Costs Eligible for Capitalization –
The amendments clarify that an entity treats as part of its general borrowings any specific
borrowings made to develop a qualifying asset when substantially all of the activities
necessary to prepare that asset for intended use or sale are complete.
The adoption of the foregoing new and amended PFRS did not have any material effect on the
consolidated financial statements, except for PFRS 16 as discussed in the foregoing. Additional
disclosures have been included in the notes to consolidated financial statements, as applicable.
Amended PFRS in Issue But Not Yet Effective

Relevant amended PFRS which are not yet effective for the year ended December 31, 2019 and have
not been applied in preparing the financial statements are summarized below.
Effective for annual periods beginning on or after January 1, 2020:
• Amendments to References to the Conceptual Framework in PFRS – The amendments include a

new chapter on measurement; guidance on reporting financial performance; improved
definitions and guidance-in particular the definition of a liability; and clarifications in important
areas, such as the roles of stewardship, prudence and measurements uncertainty in financial
reporting. The amendments should be applied retrospectively unless retrospective application
would be impracticable or involve undue cost or effort.
-7-
• Amendments to PFRS 3 - Definition of a Business – This amendment provides a new definition of

a “business” which emphasizes that the output of a business is to provide goods and services to
customers, whereas the previous definition focused on returns in the form of dividends, lower
costs or other economic benefits to investors and others. To be considered a business, ‘an
integrated set of activities and assets’ must now include ‘an input and a substantive process that
together significantly contribute to the ability to create an output’. The distinction is important
because an acquirer may recognize goodwill (or a bargain purchase) when acquiring a business
but not a group of assets. An optional simplified assessment (the concentration test) has been
introduced to help companies determine whether an acquisition is of a business or a group of
assets.
• Amendments to PAS 1, Presentation of Financial Statements and PAS 8, Accounting Policies,

Changes in Accounting Estimates and Errors - Definition of Material – The amendments clarify
the definition of “material” and how it should be applied by companies in making materiality
judgments. The amendments ensure that the new definition is consistent across all PFRS.
Based on the new definition, an information is “material” if omitting, misstating or obscuring it
could reasonably be expected to influence the decisions that the primary users of general
purpose financial statements make on the basis of those financial statements.
Deferred effectivity –
• Amendments to PFRS 10, Consolidated Financial Statements, and PAS 28 - Sale or Contribution
of Assets Between an Investor and its Associate or Joint Venture – The amendments address a
conflicting provision under the two standards. It clarifies that a gain or loss shall be recognized
fully when the transaction involves a business, and partially if it involves assets that do not
constitute a business. The effective date of the amendments, initially set for annual periods
beginning on or after January 1, 2016, was deferred indefinitely in December 2015 but earlier
application is still permitted.
Under prevailing circumstances, the adoption of the foregoing amended PFRS is not expected to
have any material effect on the consolidated financial statements of the Group. Additional
disclosures will be included in the consolidated financial statements, as applicable.
Basis of Consolidation
The consolidated financial statements of the Group comprise the financial statements of the Parent
Company and its subsidiaries. Control is achieved when the Parent Company is exposed, or has
rights, to variable returns from its involvement with the investee and has the ability to affect those
returns through its power over the investee (i.e. existing rights that give it the current ability to
direct the relevant activities of the investee).
When the Parent Company has less than majority of the voting or similar rights of an investee,
the Parent Company considers all relevant facts and circumstances in assessing whether it has
power over an investee, including:
• The contractual arrangement with the other vote holders of the investee;
• Rights arising from other contractual arrangement; and,
• The Parent Company’s voting rights and potential voting rights.
-8-
The Parent Company re-assesses whether or not it controls an investee if facts and circumstances
indicate that there are changes to one or more of the three elements of control. Consolidation of a
subsidiary begins when the Parent Company obtains control over the subsidiary and ceases when
the Parent Company loses control of the subsidiary. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the year are included in the consolidated statements of
income from the date the Parent Company gains control until the date the Parent Company ceases
to control the subsidiary.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity
holders of the Parent Company and to the non-controlling interests, even if this results in the non-
controlling interests having a deficit balance.
Non-controlling interests represent the portion of net results and net assets not held by the Parent
Company. These are presented in the consolidated statements of financial position within equity,
apart from equity attributable to equity holders of the Parent Company and are separately disclosed
in the consolidated statements of income and consolidated statements of comprehensive income.
Non-controlling interests consist of the amount of those interests at the date of original business
combination and the non-controlling interests’ share on changes in equity since the date of the
business combination.
The financial statements of the subsidiaries are prepared for the same reporting year as the Parent
Company. Consolidated financial statements are prepared using uniform accounting policies for
similar transactions and other events in similar circumstances. Intercompany balances and
transactions, including intercompany profits and losses, are eliminated.
A change in the ownership interest of a subsidiary, without loss of control, is accounted for as an
equity transaction. If the Parent Company loses control over a subsidiary, it:
• Derecognizes the assets (including goodwill) and liabilities of the subsidiary;

• Derecognizes the carrying amount of any non-controlling interests;
• Derecognizes the cumulative translation differences recorded in equity, if any;
• Recognizes the fair value of the consideration received;
• Recognizes the fair value of any investment retained;
• Recognizes surplus or deficit in profit or loss; and
• Reclassifies the Parent Company’s share of component previously recognized in OCI to profit or
loss or retained earnings, as appropriate, as would be required if the Parent Company had
directly disposed of the related assets or liabilities.
The assets and liabilities of foreign subsidiaries are translated into presentation currency of the
Parent Company at the rate of exchange as at reporting date while the income and expense
accounts are translated at the weighted average exchange rates for the year. The resulting
translation differences are included in equity under the account “Cumulative translation
adjustments.”
-9-
Business Combinations and Goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is
measured as the aggregate of the consideration transferred, measured at acquisition date fair value,
and the amount of any non-controlling interest in the acquiree. For each business combination,
the acquirer measures the non-controlling interest in the acquiree pertaining to instruments that
represent present ownership interests and entitle the holders to a proportionate share of the net
assets in the event of liquidation either at fair value or at the proportionate share of the acquiree’s
identifiable net assets. All other components of non-controlling interest are measured at fair value
unless another measurement basis is required by PFRS. Acquisition-related costs incurred are
expensed and included in general and administrative expenses.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date, including the separation of
embedded derivatives in host contracts by the acquiree, if any.
If the business combination is achieved in stages, any previously held interest is remeasured at its
acquisition date fair value and any resulting gain or loss is recognized in the consolidated statements
of income. It is then considered in the determination of goodwill.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration which is
deemed to be an asset or liability will be recognized in accordance with PFRS 9 either in
consolidated statements of income or as a change to other comprehensive income. If the
contingent consideration is not within the scope of PFRS 9, it is measured in accordance with
appropriate PFRS. Contingent consideration that is classified as equity is not remeasured until it is
finally settled and accounted for within equity.
If necessary information, such as fair value of assets and liabilities acquired, is not available by the
end of the reporting period in which the business combination occurs, provisional amounts are used
for a period not exceeding one year from the date of acquisition or the measurement period.
During this period, provisional amounts recognized for a business combination may be
retrospectively adjusted if relevant information has been obtained or becomes available.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred and the amount recognized for non-controlling interest, and any previous interest held,
over the net fair value of the identifiable assets acquired and liabilities assumed. If the fair value of
the net assets acquired is in excess of the aggregate consideration transferred, the Group reassesses
whether it has correctly identified all of the assets acquired and all of the liabilities assumed and
reviews the procedure used to measure the amounts to be recognized at the acquisition date. If the
reassessment still results in an excess of the fair value of net assets acquired over the aggregate
consideration transferred, then gain is recognized in consolidated statements of income.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Group’s cash-generating units (CGU) that are expected to
benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are
assigned to those units.
- 10 -
Where goodwill forms part of a CGU and part of the operation within CGU unit is disposed of,
the goodwill associated with the operation disposed of is included in the carrying amount of the
operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in
this circumstance is measured based on the relative values of the operation disposed of and the
portion of the CGU retained.
If the Group reorganizes its reporting structure in a way that changes the composition of one or
more CGU to which goodwill has been allocated, the goodwill shall be reallocated to the units
affected.
Common Control Business Combinations and Group Reorganizations

Where there are group reorganizations and business combinations in which all the combining
entities within the Group are ultimately controlled by the same ultimate parent before and after the
business combination and the control is not transitory, the Group accounts for such group
reorganizations and business combinations similar to a pooling-of-interests method. The assets and
liabilities of the acquired entities and that of the Group are reflected at their carrying values at the
stand-alone financial statements of the investee companies.
Under the pooling-of-interests method:

• The assets and liabilities of the combining entities are reflected at their carrying amounts;
• No adjustments are made to reflect fair values, or recognize any new assets or liabilities at the
date of the reorganization;
• No “new” goodwill is recognized as a result of the reorganization; and
• The consolidated income statement in the year of reorganization reflects the results of the
combining entities for the full year, irrespective of when the reorganization took place.
Financial Assets and Liabilities
Date of Recognition. Financial assets and liabilities are recognized in the consolidated statements of
financial position when the Group becomes a party to those contractual provisions of a financial
instrument. In the case of a regular way purchase or sale of financial assets, recognition and
derecognition, as applicable, is done using settlement date accounting.
Initial Recognition. Financial instruments are recognized initially at fair value, which is the fair value
of the consideration given (in case of an asset) or received (in case of a liability). The initial
measurement of financial instruments, except for those designated at fair value through profit and
loss (FVPL), includes transaction cost.
“Day 1” Difference. Where the transaction in a non-active market is different from the fair value of
other observable current market transactions in the same instrument or based on a valuation
technique whose variables include only data from observable market, the Group recognizes the
difference between the transaction price and fair value (a “Day 1” difference) in profit or loss. In
cases where there is no observable data on inception, the Group deems the transaction price as the
best estimate of fair value and recognizes “Day 1” difference in profit or loss when the inputs
become observable or when the instrument is derecognized. For each transaction, the Group
determines the appropriate method of recognizing the “Day 1” difference.
- 11 -
Classification of Financial Instruments. The Group classifies its financial assets at initial recognition
under the following categories: (a) financial assets at amortized cost, (b) financial assets at FVOCI
and, (c) financial assets at FVPL. The classification of a financial instrument largely depends on the
Group’s business model and its contractual cash flow characteristics. Financial liabilities, on the
other hand, are classified under the following categories: (a) financial liabilities at amortized cost,
(b) financial liabilities at FVPL.
As at December 31, 2019 and 2018, the Group does not have financial assets at FVOCI and financial
assets and liabilities at FVPL.
Financial Assets at Amortized Cost. A financial asset shall be measured at amortized cost if both of
the following conditions are met:
• the financial asset is held within a business model whose objective is to hold financial assets in
order to collect contractual cash flows; and
• 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.
After initial recognition, financial assets at amortized cost are subsequently measured at amortized
cost using the effective interest method, less allowance for impairment, if any. Amortized cost is
calculated by taking into account any discount or premium on acquisition and fees that are an
integral part of the effective interest rate. Gains and losses are recognized in profit or loss when the
financial assets are derecognized and through amortization process. Financial assets at amortized
cost are included under current assets if realizability or collectability is within 12 months after the
reporting period. Otherwise, these are classified as noncurrent assets.
The Group’s cash and cash equivalents, trade and other receivables (excluding advances to officers
and employees settled through liquidation), security deposits on lease contracts, receivables from
disposal of interest, utilities and other deposits and other noncurrent receivables (included under
“Other noncurrent assets” account) are classified under this category.
Financial Liabilities at Amortized Cost. Financial liabilities are categorized as financial liabilities at
amortized cost when the substance of the contractual arrangement results in the Group having an
obligation either to deliver cash or another financial asset to the holder, or to settle the obligation
other than by the exchange of a fixed amount of cash or another financial asset for a fixed number
of its own equity instruments.
These financial liabilities are initially recognized at fair value less any directly attributable transaction
costs. After initial recognition, these financial liabilities are subsequently measured at amortized
cost using the effective interest method. Amortized cost is calculated by taking into account any
discount or premium on the issue and fees that are an integral part of the effective interest rate.
Gains and losses are recognized in profit or loss when the liabilities are derecognized or through the
amortization process.
This category includes trade and other payables (excluding statutory liabilities, gift certificates
payable, contract liabilities and accrued rent payable), lease liabilities, loans payable and long-term
debt.
- 12 -
Reclassification
The Group reclassifies its financial assets when, and only when, it changes its business model for
managing those financial assets. The reclassification is applied prospectively from the first day of
the first reporting period following the change in the business model (reclassification date).
For a financial asset reclassified out of the financial assets at amortized cost category to financial
assets at FVPL, any gain or loss arising from the difference between the previous amortized cost of
the financial asset and fair value is recognized in profit or loss.
For a financial asset reclassified out of the financial assets at amortized cost category to financial
assets at FVOCI, any gain or loss arising from a difference between the previous amortized cost of
the financial asset and fair value is recognized in OCI.
Impairment of Financial Assets at Amortized Cost

The Group recognizes an allowance for expected credit loss (ECL) for financial assets carried at
amortized cost. ECL is based on the difference between the contractual cash flows due in
accordance with the contract and all the cash flows that the Group expects to receive. The
difference is then discounted at an approximation to the asset’s original effective interest rate.
For trade and other receivables, the Group has applied the simplified approach in measuring ECL.
Simplified approach requires that ECL should always be based on the lifetime ECL. The Group has
established a provision matrix that is based on its historical credit loss experience, adjusted for
forward-looking factors specific to the debtors and the economic environment and an assessment of
both the current as well as the forecast direction of conditions at the reporting date, including time
value of money where appropriate.
For other financial assets at amortized cost which mainly comprise of cash and cash equivalents,
security deposits on lease contracts, related party transactions, receivables from disposal of
interest, utilities and other noncurrent receivables, the Group applied the general approach in
measuring the ECL. The ECL is based on the 12-month ECL, which pertains to the portion of lifetime
ECL resulting from default events of a financial instrument that are possible within 12 months after
the reporting date. However, when there is a significant increase in credit risk from the initial
recognition, the allowance is based on the lifetime ECL.
The Group considers the financial the financial capacity of the counterparts to pay the obligations as
they fall due.
Derecognition of Financial Assets and Liabilities
Financial Assets. A financial asset (or where applicable, a part of a financial asset or part of a group
of similar financial assets) is derecognized when:
• the right to receive cash flows from the asset has expired;
• the Group retains the right to receive cash flows from the financial asset, but has assumed an
obligation to pay them in full without material delay to a third party under a “pass-through”
arrangement; or
- 13 -
• the Group has transferred its right to receive cash flows from the financial asset and either (a)
has transferred substantially all the risks and rewards of the asset, or (b) has neither transferred
nor retained substantially all the risks and rewards of the asset, but has transferred control of
the asset.
When the Group has transferred its right to receive cash flows from a financial asset or has entered
into a pass-through arrangement, and has neither transferred nor retained substantially all the risks
and rewards of ownership of the financial asset nor transferred control of the financial asset, the
financial asset is recognized to the extent of the Group’s continuing involvement in the financial
asset. Continuing involvement that takes the form of a guarantee over the transferred financial
asset is measured at the lower of the original carrying amount of the financial asset and the
maximum amount of consideration that the Group could be required to repay.
Financial Liabilities. A financial liability is derecognized when the obligation under the liability is
discharged, cancelled or has expired. When an existing financial liability is replaced by another from
the same lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability and
the recognition of a new liability, and the difference in the respective carrying amounts is recognized
in the consolidated statements of income.
Classification of Financial Instrument between Liability and Equity

A financial instrument is classified as liability if it provides for a contractual obligation to:
• Deliver cash or another financial asset to another entity;
• Exchange financial assets or financial liabilities with another entity under conditions that are
potentially unfavorable to the Group; or
• Satisfy the obligation other than by the exchange of a fixed amount of cash or another financial
asset for a fixed number of own equity shares.
If the Group does not have an unconditional right to avoid delivering cash or another financial asset
to settle its contractual obligation, the obligation meets the definition of a financial liability.
Offsetting of Financial Assets and Liabilities

Financial assets and financial liabilities are offset and the net amount reported in the consolidated
statements of financial position if, and only if, there is a currently enforceable legal right to offset
the recognized amounts and there is intention to settle on a net basis, or to realize the asset and
settle the liability simultaneously. This is not generally the case with master netting agreements,
and the related assets and liabilities are presented gross in the consolidated statements of financial
position.
Inventories
Inventories consist of food, beverage and processed inventories, and store and kitchen supplies and
equipment. Inventories are valued at the lower of cost and net realizable value (NRV).
Cost is determined using the weighted average method. Cost of processed inventories include
direct materials, labor and proportional manufacturing overhead cost based on normal capacity.
- 14 -
NRV of food, beverage and processed inventories is the estimated selling price in the ordinary
course of business less the estimated costs to complete and estimated costs necessary to make the
sale. NRV of store and kitchen supplies is the current replacement cost. In determining NRV, the
Group considers any adjustment necessary for spoilage, breakage and obsolescence.
Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets mainly include prepayments, advances to suppliers,
creditable withholding taxes (CWTs) and input value-added tax (VAT).
Prepayments. Prepayments are carried at cost and are amortized on a straight-line basis over the
period of expected usage, which is equal to or less than twelve months or within the normal
operating cycle.
Advances to Suppliers. Advances to suppliers represent advance payments on goods or services to

be purchased in connection with the Group’s operations. These are charged as an expense in the
consolidated statements of income upon actual receipt of goods or services, which is normally
within twelve months or within the normal operating cycle.
CWTs. CWTs represent the amount withheld by the Group’s customers in relation to its restaurant
and commissary sales. These are recognized upon collection of the related sales and are utilized as
tax credits against income tax due as allowed by the Philippine taxation laws and regulations.
Input VAT. Input VAT represents tax imposed on the Group by its suppliers and contractors for the
purchase of goods and services, as required under Philippine taxation laws and regulations.
The portion of input VAT that will be used to offset the Group’s current VAT liabilities is presented
as a current asset in the consolidated statements of financial position.
Deferred Input VAT. In accordance with the Revenue Regulations No. 16-2005, input VAT on
purchases or imports of the Group of capital goods (depreciable assets for income tax purposes)
with an aggregate acquisition cost (exclusive of input VAT) in each of the calendar months exceeding
P
=1.0 million are claimed as credit against output VAT over 60 months or the estimated useful lives of
capital goods whichever is shorter.
Where the aggregate acquisition cost (exclusive of VAT) of the existing or finished depreciable
capital goods purchased or imported during any calendar month does not exceed P =1.0 million, the
total input VAT will be allowable as credit against output VAT in the month of acquisition.
Property and Equipment

Property and equipment, except for land, is stated at cost less accumulated depreciation and
amortization and any allowance for impairment in value. Land is stated at cost less any impairment
loss.
The initial cost of property and equipment comprises its purchase price, including import duties and
nonrefundable purchase taxes and any directly attributable costs of bringing the property and
equipment to its working condition and location for its intended use. Expenditures incurred after
the property and equipment have been put into operations, such as repairs and maintenance, are
normally charged to expense in the period the costs are incurred. In situations where it can be
clearly demonstrated that the expenditures have resulted in an increase in the future economic
benefits expected to be obtained from the use of an item of property and equipment beyond its
originally assessed standard of performance, the expenditures are capitalized as an additional cost
of property and equipment.
- 15 -
Each part of an item of property and equipment with a cost that is significant in relation to the total
cost of the item is depreciated and amortized separately.
Depreciation and amortization is computed using the straight-line method over the estimated useful
lives of the assets.
The estimated useful lives of the assets are as follows:
Category Number of Years

Building 10 to 35
Leasehold improvements 5 to 12 or lease term,
whichever is shorter
Store and kitchen equipment 5 to 12
Furniture, fixtures and equipment 3 to 5
Transportation equipment 3 to 5
The estimated useful lives, depreciation and amortization methods are reviewed periodically to
ensure that the periods and methods of depreciation and amortization are consistent with the
expected pattern of economic benefits from items of property and equipment.
When assets are retired or otherwise disposed of, both the cost and related accumulated
depreciation and amortization are removed from the accounts and any resulting gain or loss is
recognized in the consolidated statements of income.
Fully-depreciated and amortized assets are retained as property and equipment until these are no
longer in use.
Construction-in-progress, included in property and equipment, is stated at cost. This includes cost
of construction and other direct costs. Construction-in-progress is not depreciated until such time
as the relevant assets are completed and available for use. These are reclassified to a specific
category of property and equipment when the construction and other related activities necessary to
prepare the assets for their intended use are completed and the assets are available for use.
Investment Properties
Investment properties are carried at cost less accumulated depreciation and any impairment in
value except for land which is carried at cost less any impairment in value. When the investment
properties are sold or retired, the cost and any impairment in value are eliminated from the
accounts and any resulting gain or loss is recognized in the consolidated statements of income.
Depreciation is calculated on a straight-line basis over the useful life of the investment properties of
5 to 12 years. The useful life of each of the Group’s investment properties is estimated based on the
periods over which the asset is expected to be available for use. Such estimation is based on a
collective assessment of industry practice and experience with similar assets.
Investment properties are derecognized when either they have been disposed of or when the
investment properties are permanently withdrawn from use and no future economic benefit is
expected from its disposal. Any gain or loss on the retirement or disposal of investment properties
are recognized in the consolidated statements of income in the year of retirement or disposal.
- 16 -
Transfers are made to investment properties when, and only when, there is a change in use,
evidenced by ending of owner-occupation or commencement of an operating lease to another
party. Transfers are made from investment property when, and only when, there is a change in use,
evidenced by commencement of owner-occupation or commencement of development with a view
to sale.
The carrying value of investment properties is reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not be recoverable.
The investment properties’ useful lives and depreciation method are reviewed, and adjusted if
appropriate, at each reporting period.
Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. The cost of
intangible assets acquired in a business combination is the fair value as at the date of acquisition.
Following initial recognition, intangibles are carried at cost less any accumulated amortization and
any accumulated impairment losses. Internally generated intangibles, excluding brand development
costs, are not capitalized and expenditures are reflected in the consolidated statements of income in
the year the expenditure is incurred.
Trademarks and Franchise Fees. Trademarks and franchise fees are measured initially at cost.
The cost of trademarks and franchise fees acquired in business combinations is its fair value at the
date of acquisition. Following initial recognition, trademarks and franchise fees are carried at cost
less accumulated amortization and accumulated impairment losses, if any.
Trademarks with indefinite useful lives are not amortized but are tested for impairment annually
either individually or at the cash generating unit level. The useful life of an intangible asset is
assessed as indefinite if it is expected to contribute net cash inflows indefinitely and is reviewed
annually to determine whether the indefinite life assessment continues to be supportable. If not,
the change in the useful life assessment from indefinite to finite is made on a prospective basis. The
Max’s, eMax and Max’s Corner Bakery trademarks are determined to have indefinite useful lives
because considering all of the relevant factors, there is no foreseeable limit to the period over which
the asset is expected to generate cash inflows for the Group.
Other trademarks or franchise fees with finite useful life are amortized over 30 years or term of the
trademark or franchise agreement, whichever is shorter, using the straight-line method. The useful
life and amortization method for trademarks and franchise fees are reviewed at least at each
reporting date. A change in the expected useful life or the expected pattern of consumption of
future economic benefits embodied in the trademarks and franchise fees are accounted for by
changing the useful life and amortization method, as appropriate, and treated as a change in
accounting estimates. The amortization expense on trademarks and franchise fees is recognized in
the consolidated statements of income under the general and administrative expense category
consistent with its function.
- 17 -
Software License. Software license is measured initially at cost which is the amount of the purchase
consideration. Following initial recognition, software license is carried at cost less accumulated
amortization and accumulated impairment losses, if any. The Group’s software license has a term of
five years and is amortized over such period using the straight-line method. The useful life and
amortization method for software license are reviewed at least at each reporting date. A change in
the expected useful life or the expected pattern of consumption of future economic benefits
embodied in the software is accounted for by changing the useful life and amortization method, as
appropriate, and treated as a change in accounting estimates. The amortization expense on
software is recognized in the consolidated statements of income under general and administrative
expense category consistent with its function.
Brand Development Costs. Brand development costs pertain to capitalized expenditures incurred
for the development of methods and materials for use in the operation of the Group. Brand
development costs are measured on initial recognition at cost. Following initial recognition, brand
development costs are carried at cost less accumulated amortization and accumulated impairment
losses, if any. Amortization is recognized upon opening of new stores. During the period of
development, the asset is tested for impairment annually. The amortization expense on brand
development costs is recognized in the consolidated statements of income under the general and
administrative expense category consistent with its function.
Impairment of Nonfinancial Assets

The Group assesses at each reporting date whether there is an indication that nonfinancial assets
may be impaired. If any such indication exists, or when annual impairment testing for an asset is
required, the Group estimates the recoverable amount of these nonfinancial assets. An asset’s
recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value
in use and is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets. Where the carrying amount
of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use, the estimated future cash flows are
discounted to their present value using a discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. In determining fair value less costs of
disposal, an appropriate valuation model is used. Impairment losses are recognized in the
consolidated statements of income.
An assessment is made for nonfinancial assets at each reporting date to determine whether there is
any indication that previously recognized impairment losses may no longer exist or may have
decreased. If such indication exists, the Group makes an estimate of recoverable amount. Any
previously recognized impairment loss is reversed only if there has been a change in the estimates
used to determine the asset’s recoverable amount since the last impairment loss was recognized. If
that is the case, the carrying amount of the asset is increased to its recoverable amount. That
increased amount cannot exceed the carrying amount that would have been determined, net of
depreciation and amortization, had no impairment loss been recognized for the asset in prior years.
Such reversal is recognized in the consolidated statements of income.
Trademarks with Indefinite Useful Lives and Goodwill. Trademarks with indefinite useful lives and
goodwill are tested for impairment annually and when circumstances indicate that the carrying
amount may be impaired.
- 18 -
Impairment is determined for trademarks with indefinite useful lives and goodwill by assessing the
recoverable amount of each CGU, to which they relate. When the recoverable amount of the CGU is
less than its carrying amount, an impairment loss is recognized. Impairment losses relating to
trademarks with indefinite useful lives and goodwill cannot be reversed in future periods.
Capital Stock and Additional Paid-in Capital

Capital stock is measured at par value for all shares issued. Additional paid-in capital represents the
excess of the investors’ total contribution over the stated par value of shares. Incremental costs
directly attributable to the issue of new capital stock are shown in equity as a deduction, net of tax,
from the additional paid-in capital, if any.
Treasury Stock
Treasury stock represents own equity instruments which are reacquired by the Group. These are
recognized at cost and deducted from equity. No gain or loss is recognized in profit or loss on the
purchase, sale, issue or cancellation of the Group’s own equity instruments. Any difference
between the carrying amount and the consideration, if reissued, is recognized as additional paid-
in capital. Voting rights related to treasury shares are nullified and no dividends are allocated to
them.
Retained Earnings
Retained earnings include accumulated profits attributable to the Parent Company’s stockholders
and reduced by dividends. Dividends are recognized as liabilities and deducted from equity when
they are declared. Dividends for the year that are approved after the reporting date are dealt with
as an event after the reporting date. Retained earnings may also include effect of changes in
accounting policy as may be required by the transitional provisions of new and amended standards.
Other Comprehensive Loss

Other comprehensive loss comprises items of income and expenses that are not recognized in
consolidated statements of income for the year. This includes cumulative translation adjustments
and remeasurement adjustments on net retirement liabilities and plan assets, net of deferred
income tax.
Shares Held by Subsidiaries

Shares of the Parent Company held by subsidiaries are carried at cost and are deducted from equity.
No gain or loss is recognized on the purchase, sale, issue or cancellation of the Parent Company’s
own equity instruments. When the shares are retired, the capital stock account is reduced by its par
value and the excess of cost over par value upon retirement is debited to additional paid-in capital
to the extent of the specific or average additional paid-in capital when the shares were issued and to
retained earnings for the remaining balance.
Revenue Recognition
Revenue from contract with customers is recognized when the performance obligation in the
contract has been satisfied, either at a point in time or over time.
The Group also assesses its revenue arrangements to determine if it is acting as a principal or as an
agent. The Company has assessed that it acts as a principal in all of its revenue source.
- 19 -
The following specific recognition criteria must also be met before revenue is recognized.
Restaurant Sales. Revenue is recognized when the related orders are served.
Commissary Sales. Revenue is recognized upon delivery of goods.
Initial Franchise Fees. Revenue is recognized upon the delivery to the franchisee of information and
materials pertaining to the restaurant system being franchised. The franchisee is granted the right
to use fully such information and materials at the time of the inception of the franchise agreement
for the purpose of planning its investment in the franchised restaurant.
Based on the terms of the franchise agreements executed prior to the initial application of PFRS 15,
the services that the Group provides in consideration of its receipt of initial franchise fees and
renewal fees from franchisees do not constitute performance obligations that are distinct and
separable from the grant of franchise rights. Thus, the revenues corresponding to the fees were
amortized over the term of the franchise agreements. PFRS 15 requires any unamortized portion of
the fees received to be presented in the consolidated statements financial position as a contract
liability.
Unamortized portion of the franchise fees and the excess of cash received from franchisees over
satisfied performance obligation or for which obligation has not yet been performed are recorded as
“Contract liabilities” account in the consolidated statements of financial position. Contract liabilities
are reduced by the amounts of revenue recognized over the term of the franchise.
Initial Support Services. Revenue is recognized when the Group has performed substantially all the
services to be rendered by the Group before the opening of stores as specified in the agreement.
Royalty Fees. Revenue from royalty fees pertains to continuing license fees. Revenue is recognized
as the royalty accrues based on certain percentages of the franchisee’s net sales during the term of
the franchise.
Marketing Support. Revenue is recognized upon performance or rendering of actual service, taking
into consideration contractually defined terms and conditions.
Rental Income. Rental income is recognized on a straight-line basis over the lease term.
Interest Income. Revenue is recognized as the interest accrues using the effective interest rate
method.
Other Income. Other income is recognized when earned.
Costs and Expenses Recognition

Costs and expenses are decreases in economic benefits during the accounting period in the form of
outflows or decrease of assets or incurrence of liabilities that result in decreases in equity, other
than those relating to distributions to equity participants.
Cost of Sales. Cost of sales mainly pertains to purchases of food and beverages, direct labor and
overhead directly attributable into the generation of sales. These are generally recognized when
related goods are sold.
- 20 -
Cost of Services. Cost of services is recognized as expense when the related services are rendered.
General and Administrative. General and administrative expenses represent cost of administering
the business and are recognized when the services are used or the expenses arise.
Sales and Marketing. Sales and marketing expenses, which represent advertising and other selling
costs, are generally expensed as incurred.
Finance Costs. Finance costs are recognized as the interest accrues using the effective interest rate
method.
Employee Benefits
Short-term Benefits. The Group recognizes a liability net of amounts already paid and an expense
for services rendered by employees during the accounting period. A liability is also recognized for
the amount expected to be paid under short-term cash bonus or profit sharing plans if the Group
has a present legal or constructive obligation to pay this amount as a result of past service provided
by the employee, and the obligation can be estimated reliably.
Short-term employee benefit liabilities are measured on an undiscounted basis and are expensed as
the related service is provided.
Retirement Benefits. The net defined benefit liability or asset is the aggregate of the present value
of the defined benefit obligation at the end of the reporting period reduced by the fair value of plan
assets, adjusted for any effect of limiting a net defined benefit asset to the asset ceiling. The asset
ceiling is the present value of any economic benefits available in the form of refunds from the plan
or reductions in future contributions to the plan.
The cost of providing benefits under the defined benefit plans is actuarially determined using the
projected unit credit method.
Defined benefit costs comprise the following:

• Service cost
• Net interest on the net defined benefit liability or asset
• Remeasurements of net defined benefit liability or asset
Service costs which include current service costs, past service costs and gains or losses on non-
routine settlements are recognized as expense in the consolidated statements of income. Past
service costs are recognized when plan amendment or curtailment occurs. These amounts are
calculated periodically by independent qualified actuaries.
Net interest on the net defined benefit liability or asset is the change during the period in the net
defined benefit liability or asset that arises from the passage of time which is determined by
applying the discount rate based on government bonds to the net defined benefit liability or asset
that have terms to maturity approximating the terms of the related retirement liability.
Net interest on the net defined benefit liability or asset is recognized as expense or income in the
- 21 -
Remeasurements comprising actuarial gains and losses, return on plan assets and any change in the
effect of the asset ceiling (excluding net interest on defined benefit liability) are recognized
immediately in OCI in the period in which these arise. Remeasurements are not reclassified to the
consolidated statements of income in subsequent periods.
Plan assets are assets that are held by the long-term employee benefit fund. Plan assets are not
available to the creditors of the Group, nor can these be paid directly to the Group. Fair value of
plan assets is based on market price information. When no market price is available, the fair value
of plan assets is estimated by discounting expected future cash flows using a discount rate that
reflects both the risk associated with the plan assets and the maturity or expected disposal date of
those assets (or, if they have no maturity, the expected period until the settlement of the related
obligations). If the fair value of the plan assets is higher than the present value of the defined
benefit obligation, the measurement of the resulting defined benefit asset is limited to the present
value of economic benefits available in the form of refunds from the plan or reductions in future
contributions to the plan.
The Group’s right to be reimbursed of some or all of the expenditure required to settle a defined
benefit obligation is recognized as a separate asset at fair value when and only when
reimbursement is virtually certain.
Leases
a. Accounting policies prior to January 1, 2019
The determination of whether an arrangement is, or contains, a lease is based on the substance
of the arrangement at inception date of whether the fulfillment of the arrangement is
dependent on the use of a specific asset or assets or the arrangement conveys a right to use the
asset.
A reassessment is made after inception of the lease only if one of the following applies:
i. there is a change in contractual terms, other than a renewal or extension of the
arrangement;
ii. a renewal option is exercised or extension granted, unless the term of the renewal or
extension was initially included in the lease term;
iii. there is a change in the determination of whether fulfillment is dependent on a specified
asset; or
iv. there is a substantial change to the asset.
Where reassessment is made, lease accounting shall commence or cease from the date when
the change in circumstances gave rise to the reassessment for scenarios (i), (ii) or (iv) and at the
date of renewal or extension period for scenario (ii).
The Group as a Lessee. Operating leases represent those leases under which substantially all
risks and rewards of ownership of the leased assets remain with the lessors. Non-cancellable
operating lease payments are recognized as expense in the consolidated statements of income
on a straight-line basis. The difference between the straight-line recognition basis and the
actual payments made in relation to the operating lease agreements are recognized under
“Trade and other payables” (if current) and “Accrued rent payable” (if noncurrent) accounts in
the consolidated statements of financial position.
- 22 -
b. Accounting policies beginning January 1, 2019
The Group assesses whether the contracts is, or contains, a lease. To assess whether a contract
conveys the right to control the use of an identified assets for a period of time, the Group
assesses whether, throughout the period of use, it has both of the following:
i. the right to obtain substantially all of the economic benefits from the use of the identified
asset; and
ii. the right to direct the use of the identified asset.
If the Group has the right to control the use of an identified asset for only a portion of the term
of the contract, the contract contains a lease for that portion of the term.
The Group as a Lessee. Leases are recognized as a ROU asset and a corresponding liability at the
date at which the leased asset is available for use by the group, except for leases with terms of
12 months or less (short-term leases) and leases for which the underlying asset is of low value in
which the case the lease payments are recognized as expense on as straight-line basis.
ROU Assets. At commencement date, the Group measures ROU assets at cost. The cost
comprises:
i. the amount of the initial measurement of lease liabilities;

ii. any lease payments made at or before the commencement date less any lease incentives
received;
iii. any initial direct costs; and
iv. an estimation of costs to be incurred by the Group in dismantling and removing the
underlying asset, when applicable.
The ROU assets are recognized at the present value of the liability at the commencement date
of the lease, adding any directly attributable costs. After the commencement date, the ROU
assets are carried at cost less any accumulated amortization and accumulated impairment
losses, and adjusted for any remeasurement of the related lease liabilities. The ROU assets are
amortized over the lease terms including renewals or the useful lives of the underlying assets
ranging from 5 to 12 years.
Lease Liabilities. At commencement date, the Group measures a lease liability at the present
value of future lease payments using the interest rate implicit in the lease, if that rate can be
readily determined. Otherwise, the Group uses its incremental borrowing rate.
Lease payments included in the measurement of a lease liability comprise the following:
i. fixed payments, including in-substance fixed payments;
ii. variable lease payments that depend on an index or a rate, initially measured using the
index or rate as at the commencement date;
iii. amounts expected to be payable by the lessee under residual value guarantees; and
iv. the exercise price under a purchase option that the Group is reasonably certain to exercise;
lease payments in an optional renewal period if the Group is reasonably certain to exercise
an extension option; and penalties for early termination of a lease unless the Group is
reasonably certain not to terminate early.
- 23 -
A lease liability is subsequently measured at amortized cost. Interest on the lease liability and
any variable lease payments not included in the measurement of lease liability are recognized in
profit or loss unless these are capitalized as costs of another asset. Variable lease payments not
included in the measurement of the lease liability are recognized in profit or loss when the
event or condition that triggers those payments occurs.
If there is a change in the lease term or if there is a change in the assessment of an option to
purchase the underlying asset, the lease liability is remeasured using a revised discount rate
considering the revised lease payments on the basis of the revised lease term or reflecting the
change in amounts payable under the purchase option. The lease liability is also remeasured
using the revised lease payments if there is a change in the amounts expected to be payable
under a residual value guarantee or a change in future lease payments resulting from a change
in an index or a rate used to determine those payments.
The Group as a Lessor. Leases where the Group retains substantially all the risks and benefits of
ownership of the asset are classified as operating leases. Initial direct costs incurred in
negotiating an operating lease are added to the carrying amount of the leased asset and
recognized on a straight-line basis over the lease term on the same basis as rental income.
Contingent rents are recognized as revenue in the period in which these are earned.
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized
as part of the cost of the respective assets. All other borrowing costs are expensed in the period
these occur. Borrowing costs consist of interest and other costs that an entity incurs in connection
with the borrowing of funds.
Foreign Currency Translation

The functional currency of the entities of the Group is the Philippine Peso except for PHII and its
subsidiaries, eMax, M Food and SSI with United States dollar (US$), Alpha Max with Hong Kong
dollar (HK$), PHIM with Malaysian Ringgit (MYR) and Global Max with Singapore dollar (SGD). Each
entity in the Group determines its own functional currency and items included in the financial
statements of each entity are measured using that functional currency.
The assets and liabilities of PHII, Alpha Max and eMax are translated into Philippine Peso at the rate
of exchange ruling at the reporting date and income and expenses are translated to Philippine Peso
at monthly average exchange rates. The exchange differences arising on the translation are taken
directly to OCI and presented as a separate component of equity under the “Cumulative translation
adjustment” account.
Transactions in foreign currencies are initially recorded using the prevailing exchange rate at the
date of transaction. Monetary assets and liabilities denominated in foreign currencies are restated
at the functional currency rate of exchange at the reporting date. All differences are taken to the
Income Taxes
Current Income Tax. Current income tax liabilities for the current and prior periods are measured at
the amount expected to be paid to the taxation authorities. The income tax rates used to compute
the amount are those that are enacted or substantively enacted at the reporting date.
- 24 -
Deferred Income Tax. Deferred income tax is provided, using the balance sheet liability method,
on all temporary differences at the reporting date between the tax bases of assets and liabilities and
their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognized for all taxable temporary differences, except:
• where the deferred income tax liability arises from the initial recognition of goodwill or of an
asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
• in respect of taxable temporary differences associated with investments in subsidiaries, where

the timing of the reversal of the temporary differences can be controlled and it is probable that
the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognized for all deductible temporary differences, carryforward of
unused tax credits from excess of minimum corporate income tax (MCIT) over regular corporate
income tax (RCIT) and unused net operating loss carryover (NOLCO) to the extent that it is probable
that taxable profit will be available against which the deductible temporary differences and
carryforward of unused tax credits from excess MCIT and unused NOLCO can be utilized, except:
• where the deferred income tax asset relating to the deductible temporary difference arises from
the initial recognition of an asset or liability in a transaction that is not a business combination
and, at the time of the transaction, affects neither the accounting profit nor taxable profit or
loss; and
• in respect of deductible temporary differences associated with investments in subsidiaries,

deferred income tax assets are recognized only to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available
against which the temporary differences can be utilized.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or
part of the deferred income tax assets to be utilized. Unrecognized deferred income tax assets are
reassessed at each reporting date and are recognized to the extent that it has become probable that
future taxable profit will allow the deferred income tax assets to be recovered.
Deferred income tax assets and liabilities are measured at the tax rate that is expected to apply to
the period when the asset is realized or the liability is settled, based on tax rates that have been
enacted or substantively enacted at the reporting date.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable
right exists to set off current income tax assets against current income tax liabilities and the
deferred income taxes relate to the same taxable entity and the same taxation authority.
Earnings Per Share (EPS) Attributable to the Equity Holders of the Parent
Basic EPS is computed by dividing net income for the year attributable to common shareholders by
the weighted average number of common shares outstanding during the year excluding shares held
by subsidiaries, with retroactive adjustments for any stock dividends declared and stock split.
Diluted EPS is calculated by adjusting the weighted average number of ordinary shares outstanding
to assume conversion of all dilutive potential ordinary shares.
- 25 -
Where the EPS effect of potential dilutive ordinary shares would be anti-dilutive, basic and diluted
EPS are stated at the same amount.
Operating Segments
The Group operates using its different trade names wherein operating results are regularly
monitored by the chief operating decision maker (CODM) for the purpose of making decisions about
resource allocation and performance assessment. The Chief Executive Officer of the Group has
been identified as the CODM. However, as permitted by PFRS 8, Operating Segments, the Group
has aggregated these segments into a single operating segment to which it derives its revenues and
incurs expenses as these segments have the same economic characteristics and are similar in the
following respects:
a. the nature of products and services;

b. the nature of production processes;
c. the type or class of customer for the products and services; and
d. the methods used to distribute their products and services.
Related Parties
Parties are considered to be related if one party has the ability, directly or indirectly, to control the
other party, exercise significant influence over the other party in making financial and operating
decisions or a member of the key management personnel of the reporting entity. Parties are also
considered to be related if they are subject to common control or common significant influence.
An entity is also considered as a related party if the entity is a post-employment benefit plan for the
benefit of employees of either the reporting entity or an entity related to the reporting entity. If the
reporting entity is itself such a plan, the sponsoring employers are also related to the reporting
entity.
A related party transaction is considered material and/or significant if, either individually or in the
aggregate, of these transactions during the year with the same related party, is 10% or higher of the
Group’s total consolidated assets.
Provisions
Provisions, if any, are recognized when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the
obligation. If the effect of the time value of money is material, provisions are determined by
discounting the expected future cash flows at a pretax rate that reflects current market
assessment of the time value of money and, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognized as
a finance cost.
Contingencies
Contingent liabilities are not recognized in the consolidated financial statements. These are
disclosed unless the possibility of an outflow of resources embodying economic benefits is remote.
Contingent assets are not recognized in the consolidated financial statements but disclosed in the
notes to consolidated financial statements when an inflow of economic benefits is probable.
- 26 -
Events After the Reporting Date

Post year-end events that provide additional information about the Group’s financial position at the
reporting date (adjusting events) are reflected in the consolidated financial statements. Post year-
end events that are non-adjusting events are disclosed in the notes to consolidated financial
statements when material.
3. Significant Judgment, Accounting Estimates and Assumptions
The preparation of consolidated financial statements requires management to exercise judgment,

make accounting estimates and assumptions that affect amounts reported in the consolidated
financial statements and related notes. The judgment and estimates used in the consolidated
financial statements are based upon management’s evaluation of relevant facts and circumstances
as of the date of the consolidated financial statements. Actual results could differ from such
estimates.
Judgment and estimates are continually evaluated and are based on historical experiences and
other factors, including expectations of future events that are believed to be reasonable under the
circumstances.
Judgment
In the process of applying the Group’s accounting policies, management has made the following
judgment, apart from those involving estimates, which have the most significant effect on the
amounts recognized in the consolidated financial statements.
Identifying Performance Obligations and Timing of Satisfaction of Revenues. The Group enters into
contracts with its customers to sell goods where revenue from company-owned outlets and sale of
goods are recognized. The Group determined that all the goods prior to transfer to its respective
customers are in its full ownership. The Group concluded that it transfers control over its goods and
services, at a point in time, upon receipt of the goods and services by the customer.
For revenue from franchise fee, the performance obligation under the franchise agreement is the
delivery to the franchisee of information and materials pertaining to the restaurant system
necessary to operate the franchise store, as this is deemed to be the time that the franchisee
obtains control of the promised goods and therefore the benefits of unimpeded access. Accordingly,
revenue is recognized upon the delivery of such information and materials.
Classifying Lease Commitments prior to January 1, 2019 - Group as a Lessee. The Group has entered
into commercial property leases on its restaurant and commissary premises and administrative
office location. The Group has determined that all the significant risks and benefits of ownership of
these properties remain with the lessors. Accordingly, these leases are accounted for as operating
leases.
Classifying Lease Commitments beginning January 1, 2019 - Group as a Lessee. The Group has
entered into commercial property leases for its stores, commissary and administrative offices. For
the Group’s non-cancellable lease, the Group recognizes ROU assets and lease liabilities measured
at the present value of lease payments to be made over the lease term using the Group’s
incremental borrowing rate. The Group elected to use the exemption requirement of the standard.
ROU assets and lease liabilities amounted to P

=2,897.9 million and P
=3,010.8 million, respectively, as
at December 31, 2019 (see Note 25).
- 27 -
Classifying Lease Commitments - Group as a Lessor. Lessor accounting under PFRS 16 is substantially
unchanged from accounting under PAS 17. The Group entered into commercial property sublease
agreements. The Group has determined, based on the evaluation of terms and conditions of
agreement, that the lessor retains all the significant risks and rewards of ownership of the food park
spaces. Thus, the agreement is accounted for as an operating lease.
Determining the Classification of Financial Instruments. The Group exercises judgment in classifying
a financial instruments on initial recognition either as a financial asset or a financial liability in
accordance with the substance of the contractual arrangement and the definitions of a financial
asset, a financial liability or an equity instrument. The substance of a financial instrument, rather
than its legal form, governs its classification in the consolidated statements of financial position.
The Group determines that the primary business model in relation to the management of its
financial assets is to hold the financial asset to collect contractual cash flows solely for principal and
interest.
Establishing Control over Subsidiaries. The Parent Company determines that it has control over its
subsidiaries by considering, among others, its power over the investee, exposure or rights to
variable returns from its involvement with the investee, and the ability to use its power over the
investee to affect its returns. The following factors are also considered:
• The contractual arrangement with the other vote holders of the investee
• Rights arising from other contractual agreements
• The Parent Company’s voting rights and potential voting rights
Determining Functional Currency. Management has determined that the functional and
presentation currency of the Parent Company and its Philippine-based subsidiaries is the Philippine
Peso, being the currency of the primary environment in which the Parent Company and its major
subsidiaries operate. The functional currencies of its foreign operations are determined as the
currency in the country where the subsidiary operates. For consolidation purposes, the foreign
subsidiaries’ balances are translated to Philippine peso which is the Parent Company’s functional
and presentation currency.
Determining Operating Segments. Although each trade name represents a separate operating
segment, management has concluded that there is basis for aggregation into a single operating
segment as allowed under PFRS 8 because the segments have similar characteristics. This is
evidenced by a consistent range of gross margin across all brand outlets. Moreover, all the trade
names have the following business characteristics:
(a) Similar nature of products/services offered and methods to distribute products and provide
services, that is, food service through casual dining experience;
(b) Similar nature of production processes through establishment of central commissary that caters
to all brands for all store outlets of the Group;
(c) Similar class of target customers; and
(d) Primary place of operations.
- 28 -
Estimates and Assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the
financial reporting date, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed below.
Assessing Expected Credit Losses on Financial Assets at Amortized Cost. The Group estimates
expected credit losses on trade receivables from restaurant, commissary sales and franchise fees
using a provision matrix that is based on days past due for groupings of various customer
segments that have similar loss patterns. Depending on the diversity of its debtor’s base, the
Group uses its historical credit loss experience adjusted for forward-looking factors, as
appropriate.
For other financial assets at amortized cost, the Group applies the general approach in measuring
the expected credit losses. The Group assessed that cash and cash equivalents are deposited with
reputable counterparty banks that possess good credit ratings. For security deposits on lease
contracts, utilities and other deposits, the Group considered the financial capacity of the lessors
to refund the deposits once the lease agreement has been terminated. For related party
transactions, receivable from disposal of interest and other current and noncurrent receivables,
the Group considered the available liquid assets of the related parties, letter of guarantee from
the stockholders and the mitigation of credit exposure through legally enforceable rights.
The Group assesses that a financial asset is considered credit impaired when one or more events
that have a detrimental effect on the estimated future cash flows of the asset have occurred such
as significant financial difficulty on the part of the franchisee or debtor cessation of operations.
Provision for impairment losses amounted to P=11.3 million, P=15.1 million and P=11.0 million in 2019,
2018 and 2017, respectively (see Note 20).
The carrying amounts of financial assets at amortized cost are as follows:
(In Thousands)
Note 2019 2018
Trade and other receivables 7 P
=1,377,205 P
=948,382
Security deposits on lease contracts 25 627,411 538,756
Receivable from disposal of interest 12 143,571 143,571
Utilities and other deposits 12 72,092 72,148
Other noncurrent receivables 12 41,594 13,536
Estimating Allowance for Inventory Obsolescence. The Group estimates the allowance for inventory
losses related to store and kitchen supplies whenever the realizable value of these inventories
becomes lower than cost due to damage, physical deterioration or obsolescence. Due to the nature
of the food and beverage inventories, the Group conducts monthly inventory count and any
resulting difference from quantities that are currently recognized is charged to expense or related
provision, as applicable.
No write-down for inventory losses was recognized in 2019, 2018 and 2017. Inventories at cost
amounted to P =645.0 million and P
=581.9 million as at December 31, 2019 and 2018, respectively
(see Note 8).
- 29 -
Estimating the Useful Lives of Property and Equipment (Excluding Land), Intangible Assets with
Definite Useful Lives and Investment Properties. The Group reviews annually the estimated useful
lives of property and equipment (excluding land), intangible assets with definite useful lives and
investment properties based on expected asset utilization as anchored on business plans and
strategies that also consider expected future technological developments and market behavior.
The estimated useful lives are reviewed periodically and are updated if expectations differ from
previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or
other limits on the use of these assets. In addition, estimation of the useful lives is based on
collective assessment of industry practice, internal technical evaluation and experience with similar
assets. It is possible that future results of operations could be materially affected by changes in
these estimates brought about by changes in the factors mentioned. The amount and timing of
recorded expenses for any period would be affected by changes in these factors and circumstances.
There were no changes in the estimated useful lives of property and equipment (excluding land),
investment properties and intangible assets with definite useful lives in 2019, 2018 and 2017.
The carrying amounts of these assets are as follows:
(In Thousands)
Note 2019 2018
Property and equipment* 10 P
=3,493,760 P
=3,138,770
Investment properties* 10 510 596
Intangible assets** 11 396,846 429,343
*Excluding land.
**Excluding goodwill and trademarks with indefinite useful lives.
Assessing Nonfinancial Assets for Impairment. The Group also assesses impairment on nonfinancial
assets whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. The factors that the Group considers important which could trigger an impairment
review include the following:
• Significant underperformance relative to expected historical or projected future operating

results;
• Significant changes in the manner of use of the acquired assets or the strategy for overall
business; and
• Significant negative industry or economic trends.
In determining the present value of estimated future cash flows expected to be generated from the
continued use of the assets, the Group is required to make judgments and estimates that can
materially affect the consolidated financial statements. The carrying amount of nonfinancial assets
as at December 31, 2019 and 2018 are as follows:
(In Thousands)
Note 2019 2018
Property and equipment 10 P
=3,687,149 P
=3,344,820
Investment properties 10 517,818 535,648
Intangible assets* 11 396,846 429,343
Prepayments and other current assets 9 307,456 414,778
Other noncurrent assets** 12 109,406 114,874
*Excluding trademarks with indefinite useful lives and goodwill.
**Excluding receivable from disposal of interest, utilities and other deposits and other noncurrent receivables.
- 30 -
Assessing Impairment of Trademarks with Indefinite Useful Lives and Goodwill. The Group tests
annually whether any impairment in trademarks with indefinite useful lives and goodwill is to be
recognized, in accordance with the related accounting policy in Note 2. The recoverable amounts of
CGUs have been determined based on the higher of fair value less costs of disposal and value in
use calculations which require the use of estimates. Based on the impairment testing conducted,
the recoverable amounts of the CGUs as at December 31, 2019 and 2018 calculated based on value
in use are greater than the corresponding carrying amounts (including goodwill) of the CGUs as at
the same dates. The aggregate carrying amount of trademarks with indefinite useful lives and
goodwill amounted to P=4,524.5 million as at December 31, 2019 and 2018 (see Note 11).
Estimating Retirement Benefit Costs. The determination of the Group’s obligation and pension cost
is dependent on the selection of certain assumptions used in calculating such amounts, which are
described in Note 21 to the consolidated financial statements.
Retirement benefit costs amounted to P =39.2 million, P

=32.9 million and P
=38.3 million in 2019, 2018
and 2017, respectively. Net retirement plan assets amounted to P =141.0 million and P
=163.8 million
as at December 31, 2019 and 2018, respectively. Net retirement liabilities amounted to
P
=359.1 million and P
=129.5 million as at December 31, 2019 and 2018, respectively (see Note 21).
Assessing Realizability of Deferred Income Tax Assets. The Group reviews the carrying amounts of
deferred income tax assets at each reporting date and reduces the amounts to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax assets to be utilized in the future. The amount of deferred income tax assets that are
recognized is based upon the likely timing and level of future taxable profits together with future tax
planning strategies to which the deferred income tax assets can be utilized.
The Group has unrecognized deferred tax assets with gross carrying amount of P =16.4 million and
P
=46.0 million as at December 31, 2019 and 2018. Management believes that it is not probable that
sufficient taxable income will be available to allow all of the deferred tax assets to be utilized.
The carrying amount of deferred income tax assets amounted to P

=1,328.6 million and P
=405.6 million
as at December 31, 2019 and 2018, respectively (see Note 23).
Estimating Contingencies. The estimate of probable costs for the resolution of possible claims has
been developed in consultation with the internal and external counsel handling the Group’s defense
in these matters and is based upon analysis of potential results. No provision for probable losses
arising from legal contingencies was recognized in the Group’s consolidated financial statements as
at December 31, 2019 and 2018 (see Note 29).
4. Business Combination
Merger of TBGI and YCFC

On April 24, 2018, the SEC approved the Certificate of Filing of the Articles and Plan of Merger of
two subsidiaries, with TBGI as the surviving entity and YCFC as the absorbed entity. On the same
date, the SEC approved the increase in authorized capital stock of TBGI to accommodate the merger
from 3,360,200 shares at P=100 par value to 5,500,000 shares at P =100 par value. TBGI absorbed all
respective rights, businesses and net assets of YCFC in exchange for 212,031 shares out of the
increase in authorized capital stock.
- 31 -
Merger of TRADCI and FHJBI

On July 16, 2018, the SEC approved the Certificate of Filing of the Articles and Plan of Merger of two
subsidiaries, with TRADCI as the surviving entity and FHJBI as the absorbed entity. On the same
date, the SEC approved the increase in authorized capital stock of TRADCI to accommodate the
merger from 119,975,000 common shares at P =1 par value and 25,000 preferred shares with P =1 par
value to 199,975,000 common shares at P =1 par value and 25,000 preferred shares with P =1 par value.
TRADCI absorbed all respective rights, businesses and net assets of FHJBI in exchange for 54,741,925
shares out of the increase in authorized capital stock.
TBGI, YCFC, TRADCI and FHJBI are under common control of the Parent Company before and after
the merger transactions. The said transactions were treated as a reorganization of entities under
common control and were accounted for similar to the pooling-of-interests method in the surviving
companies’ books. The merger transactions did not have a financial impact on the consolidated
financial statements.
The primary purpose of the mergers is to integrate the administrative facilities of the surviving
entities with the absorbed entities. This will result in economies of scale and efficiency of
operations, procurement of financing and credit facilities under more favorable terms and more
productive use of the properties of the constituent corporations.
5. Partly-Owned Subsidiary, Acquisition of Non-controlling Interests and Disposal of Subsidiaries
Partly-Owned Subsidiary
As at December 31, 2019 and 2018, there are 15 subsidiaries in the Group with non-controlling
interests. Related information are no longer disclosed due to immateriality.
Acquisition of Non-controlling Interests

In March 2017, the Group acquired the remaining non-controlling interests of TBGI with a carrying
amount of P=43.3 million for P
=47.2 million. The excess of acquisition cost over the carrying amount of
non-controlling interest recognized directly to retained earnings amounted to P =3.8 million in 2017.
Disposal of Subsidiaries
In June 2019, the Parent Company sold its investment in shares of RVC for P
=240.0 million. The
carrying amount of net assets as at disposal date and related gain on disposal amounted to
P
=14.5 million, respectively (see Note 22).
In May 2017, the Parent Company sold its 51% ownership interest in NAIA-3 for P =3.0 million.
The carrying amount of net assets as at disposal date and related gain on disposal amounted to
P
=0.1 million and P=2.9 million, respectively (see Note 22). Effect of disposal in the non-controlling
interests of the Group amounted to P =0.1 million.
The related accounts of RVC and NAIA‐3 have been excluded in the consolidated financial
statements from disposal date.
The receivable from disposal of interest in 2014 amounting to P

=143.6 million as at December 31,
2019 and 2018 is due and demandable and the credit exposure is considered by the Group to be
mitigated through legally enforceable right (see Note 12).
- 32 -
6. Cash and Cash Equivalents
This account consists of:
(In Thousands)
2019 2018
Cash on hand P
=32,517 P
=32,190
Cash in banks 744,498 471,312
Cash equivalents 111,530 199,724
P
=888,545 P
=703,226
Cash on hand consists of funds kept in different branches. Cash in banks earns interest at the
prevailing bank deposit rates. Cash equivalents include demand deposits which can be withdrawn at
any time depending on the immediate cash requirements of the Group and earn interest at the
prevailing short-term investment rates.
Interest income earned from cash and cash equivalents amounted to P

=1.7 million, P
=1.9 million and
P
=1.1 million in 2019, 2018 and 2017, respectively (see Note 22).
7. Trade and Other Receivables
(In Thousands)
Note 2019 2018
Trade P
=584,982 P
=530,119
Nontrade 501,373 460,182
Due from stockholders 17 133,179 133,367
Receivable from sale of asset group 105,843 52,922
Advances to officers and employees 52,760 65,167
Others 501,730 197,993
1,879,867 1,439,750
Less allowance for impairment losses 502,662 491,368
P
=1,377,205 P
=948,382
Trade receivables, which include credit card receivables and commissary sales billed to franchisees,
are secured, noninterest-bearing and are normally settled on a 15-30 day term. The franchisees
provide certain amount of deposits as guarantee on the receivable. These deposits are presented
under “Trade and other payables” account in the consolidated statements of financial position
(see Note 13). The deposits are applied against the franchisees’ overdue purchases.
Nontrade receivables pertain to royalties and service fees, among others.
Receivable from sale of asset group represents outstanding receivable from the sale, assignment
and transfer of the net assets attributable to certain entities and a portion of property and
equipment relating to the company-owned outlets in 2010. As at December 31, 2019 and 2018, this
receivable is fully provided with allowance.
- 33 -
Advances to officers and employees are noninterest-bearing and are settled through liquidation and
salary deduction for a specified period of time.
Other receivables primarily pertain to the conversion of company-owned stores to franchised stores
and to noninterest-bearing reimbursable costs incidental to the operations of the franchised stores
and are normally settled within a year.
Movements of allowance for impairment losses are as follows:
(In Thousands)
Note 2019 2018 2017
Balance at beginning of year,
as previously reported P
=491,368 P
=228,694 P
=224,821
Impact of PFRS 9 – 250,123 –
Balance at beginning of year,
as restated 491,368 478,817 224,821
Provisions 20 11,294 12,551 3,873
Balance at end of year P
=502,662 P
=491,368 P
=228,694
Adoption of PFRS 9 resulted in an increase of the allowance for expected credit losses on trade and
other receivables (current and noncurrent receivables) of P =274.6 million, with a corresponding
decrease in retained earnings (net of tax) of P
=236.4 million as at January 1, 2018.
8. Inventories
Inventories carried at cost, consist of:
(In Thousands)
2019 2018
Food, beverages and processed inventories P
=541,775 P
=492,964
Store and kitchen supplies and equipment 103,175 88,926
P
=644,950 P
=581,890
Costs of inventories charged to cost of sales are as follows (see Note 18):
(In Thousands)
2019 2018 2017
Food and beverages P
=5,404,829 P
=5,060,018 P
=4,755,711
Supplies and equipment sold 51,827 16,553 21,341
P
=5,456,656 P
=5,076,571 P
=4,777,052
- 34 -
9. Prepaid Expenses and Other Current Assets

(In Thousands)
2019 2018
Prepayments P
=164,561 P
=186,446
Advances to suppliers 74,074 135,525
CWTs 53,437 45,519
Input VAT 13,888 45,886
Others 6,467 6,373
312,427 419,749
Less allowance for impairment losses 4,971 4,971
P
=307,456 P
=414,778
Prepayments consist mainly of rent, insurance, taxes and marketing expenses such as billboard
rentals, sponsorship and events that are being amortized for one year or less.
Advances to suppliers pertain to advance payments for goods pending delivery.
Others mainly include unused office supplies and advanced freight costs.
Movement in the allowance for impairment losses are as follows:
(In Thousands)
Note 2019 2018 2017
Balance at beginning of the year P
=4,971 P
=2,445 P
=–
Provision for impairment losses 20 – 2,526 2,445
Balance at end of the year P
=4,971 P
=4,971 P
=2,445
10. Property and Equipment and Investment Properties
Movements in the property and equipment are as follows:
(In Thousands)
2019
Store and Furniture,
Leasehold Kitchen Fixtures and Transportation Construction
Land Building Improvements Equipment Equipment Equipment In-Progress Total
Cost
Balances at beginning
of year P
=206,050 P
=260,200 P
=3,625,667 P
=1,837,249 P
=992,026 P
=236,815 P
=258,949 P
=7,416,956
Additions – – 184,980 162,256 88,120 5,336 678,761 1,119,453
Disposals (12,661) (191,039) (119,816) (42,847) (46,428) (12,372) (5,866) (431,029)
Transfers – – 88,513 731 – – (89,244) –
Balances at end of year 193,389 69,161 3,779,344 1,957,389 1,033,718 229,779 842,600 8,105,380
Accumulated Depreciation
and Amortization
of year – 73,035 1,873,008 1,198,872 718,623 208,598 – 4,072,136
Depreciation and
amortization – 4,285 244,154 108,334 89,066 12,553 – 458,392
Disposals – (21,265) (26,640) (24,331) (28,889) (11,172) – (112,297)
Balances at end of year – 56,055 2,090,522 1,282,875 778,800 209,979 – 4,418,231
Net Carrying Amount P
=193,389 P
=13,106 P
=1,688,822 P
=674,514 P
=254,918 P
=19,800 P
=842,600 P
=3,687,149
- 35 -
(In Thousands)
2018
Store and Furniture,
Leasehold Kitchen Fixtures and Transportation Construction
Land Building Improvements Equipment Equipment Equipment In-Progress Total
Cost
of year P
=206,050 P
=259,602 P
=3,370,444 P
=1,744,547 P
=918,914 P
=275,044 P
=93,453 P
=6,868,054
Additions – 598 301,697 126,871 96,458 5,843 196,014 727,481
Disposals – – (76,955) (33,896) (23,656) (44,072) – (178,579)
Transfers – – 30,481 (273) 310 – (30,518) –
Balances at end of year 206,050 260,200 3,625,667 1,837,249 992,026 236,815 258,949 7,416,956
Accumulated Depreciation
and Amortization
of year – 63,074 1,703,942 1,140,834 602,567 224,106 – 3,734,523
Depreciation and
amortization – 9,961 212,361 79,059 131,144 22,184 – 454,709
Disposals – – (43,279) (21,043) (15,082) (37,692) – (117,096)
Transfers – – (16) 22 (6) – – –
Balances at end of year – 73,035 1,873,008 1,198,872 718,623 208,598 – 4,072,136
=206,050 P
=187,165 P
=1,752,659 P
=638,377 P
=273,403 P
=28,217 P
=258,949 P
=3,344,820
Construction-in-progress pertains to ongoing construction of a new commissary warehouse in

Carmona, Cavite that is expected to be completed in 2020. On November 14, 2019, NBI entered
into a long-term debt agreement with a local bank amounting to P=1,000.0 million to finance the
construction (see Note 15).
In 2019, disposal of property and equipment includes the assets of RVC. In 2019, 2018 and 2017,
the recognized gain on disposal of property and equipment amounting to P =327.6 million,
P
=18.0 million and P
=7.9 million, respectively, were presented as part of “Gain on disposal of assets”
account (see Note 22).
Cost of fully depreciated property and equipment that are still used in operations amounted to
P
=2,605.0 million, P
=2,323.5 million and P=2,192.2 million as at December 31, 2019 and 2018,
respectively.
Movements in the investment properties are as follows:
(In Thousands)
2019
Building and Condominium
Land Improvements Units Total
Cost
Balances at beginning and end of year P
=535,052 P
=7,475 P
=5,938 P
=548,465
Disposal (17,744) – – (17,744)
Balances at end of year 517,308 7,475 5,938 530,721
Accumulated Depreciation and
Amortization
Balances at beginning of year – 6,879 5,938 12,817
Depreciation and amortization – 86 – 86
Balances at end of year – 6,965 5,938 12,903
=517,308 P
=510 P
=– P
=517,818
- 36 -
(In Thousands)
2018
Building and Condominium
Land Improvements Units Total
Cost
Balances at beginning and end of year P
=535,052 P
=7,475 P
=5,938 P
=548,465
Amortization
Balances at beginning of year – 6,793 5,938 12,731
Depreciation and amortization – 86 – 86
Balances at end of year – 6,879 5,938 12,817
=535,052 P
=596 P
=– P
=535,648
Investment properties were initially measured at their acquisition-date fair values but subsequently
measured at cost less accumulated depreciation and amortization.
In 2019, the recognized gain on disposal of investment properties amounting to P

=42.4 million was
presented as part of “Gain on disposal of assets” account (see Note 22).
Rent income earned from investment properties amounted to P =6.6 million, P

=8.3 million and
P
=8.6 million in 2019, 2018 and 2017, respectively, presented under “Other income - net” account in
the consolidated statements of income.
Direct costs related to rental income from investment properties amounted to P

=1.1 million,
P
=1.3 million and P
=1.1 million in 2019, 2018 and 2017, respectively.
The fair value of investment properties is estimated at P

=558.5 million as at December 31, 2019 and
2018.
The fair value measurement used is categorized as Level 3 (significant unobservable inputs) using
Market Approach. Management has assessed that there were no conditions present in 2019, 2018
and 2017 that would significantly reduce the appraisal value of the investment properties.
The unobservable inputs to determine the market value of the investment properties include
location characteristics, size, time element, quality and marketability. In the absence of appraisal
report,
the references are made to statutory publication of current values.
Depreciation and amortization charged to profit or loss are as follows:
(In Thousands)
Note 2019 2018 2017
Right-of-use assets 25 P
=874,843 P
=– P
=–
Property and equipment 458,392 454,709 357,556
Intangible assets 11 51,090 52,055 52,697
Investment properties 86 86 187
P
=1,384,411 P
=506,850 P
=410,440
- 37 -
11. Intangible Assets

(In Thousands)
2019 2018
Trademarks P
=2,724,199 P
=2,738,913
Goodwill 1,964,379 1,964,379
Franchise fees 152,029 174,973
Software license 80,772 72,984
Brand development costs – 2,627
P
=4,921,379 P
=4,953,876
Trademarks, Franchise Fees, Software License, Brand Development Costs and Lease Rights
Movements of trademarks, franchise fees, software license, brand developments costs and lease
rights are as follows:
(In Thousands)
2019
Brand
Franchise Software Development
Note Trademarks Fees License Costs Total
Cost
Balances at beginning of year P
=3,117,030 P
=255,609 P
=183,072 P
=4,522 P
=3,560,233
Additions – – 18,593 – 18,593
Disposals – – (354) – (354)
Balances at end of year 3,117,030 255,609 201,311 4,522 3,578,472
Accumulated Amortization
Balances at beginning of year 378,117 80,636 110,088 1,895 570,736
Amortization 10 14,714 22,944 10,805 2,627 51,090
Disposals – – (354) – (354)
Balances at end of year 392,831 103,580 120,539 4,522 621,472
=2,724,199 P
=152,029 P
=80,772 P
=– P
=2,957,000
(In Thousands)
2018
Brand
Franchise Software Development
Note Trademarks Fees License Costs Total
Cost
=3,117,030 P
=249,068 P
=172,575 P
=4,522 P
=3,543,195
Additions – 6,541 10,691 – 17,232
Disposals – – (194) – (194)
Balances at end of year 3,117,030 255,609 183,072 4,522 3,560,233
Accumulated Amortization
Balances at beginning of year 358,613 79,302 79,120 1,840 518,875
Amortization 10 19,504 1,334 31,162 55 52,055
Disposals – – (194) – (194)
Balances at end of year 378,117 80,636 110,088 1,895 570,736
=2,738,913 P
=174,973 P
=72,984 P
=2,627 P
=2,989,497
- 38 -
Trademarks acquired through business combination have been attributed to the following brands:
(In Thousands)
2019 2018
With Indefinite Useful Lives
Max’s P
=2,405,000 P
=2,405,000
eMax 104,154 104,154
Max’s Corner Bakeshop 51,000 51,000
With Definite Useful Lives:
Teriyaki Boy 105,470 115,308
Pancake House 58,575 63,451
P
=2,724,199 P
=2,738,913
Trademarks and franchise fees arising from business combination were adjusted to their
corresponding fair values as required by PFRS 3, Business Combinations. The fair values were
determined using a combination of valuation approaches such as the Multi-Period Excess Earnings
Method (MPEEM) and Relief from Royalty Method (RFR), which are both income approaches and
measured at Level 3 (significant unobservable inputs).
Valuation using RFR

Revenues from franchise and royalty fees, which contribute to the total value of the Max’s
trademark, were subjected to the RFR method. The RFR method determines the value of the
intangible asset as the present value of the cost savings realized as a result of not having to pay a
stream of royalty payments to another party. These cost savings are calculated based on the
hypothetical royalty payment that a licensee would be required to pay in exchange for the use of the
asset, reduced by the tax savings realized by the licensee on the royalty payments.
The following are the key inputs used for the valuation of the intangible assets using RFR:
a. Prospective financial information - Management-prepared prospective financial information for

the prospective revenues and earnings relating to the intangible assets.
b. Royalty rate - In estimating a hypothetical rate, certain qualitative factors and the existing royalty
agreements were considered. The qualitative factors include age longevity, consumer
recognition, market share, profitability and growth and geographic coverage among others.
c. Discount rate - The discount rate used in computing the present value of the incremental after-
tax cash flows based on a computed required return of the intangible asset.
Valuation using MPEEM

The Group’s trademarks on eMax and Max’s Corner Bakeshop, and franchise fees on Krispy Kreme
and Jamba Juice, were valued using the MPEEM approach. The MPEEM determines the value of an
intangible asset by discounting the incremental after-tax cash flows attributable only to the
intangible asset. The net cash flows attributable to the intangible asset is based on a forecast of its
related cash inflows and outflows, less contributory asset charges (CAC) for economic returns of and
returns on all monetary, tangible, and other intangible assets necessary to realizing the cash flows.
- 39 -
The following are the key inputs used for the valuation of the intangible assets using the MPEEM:
a. Prospective financial information - Management-prepared prospective financial information for

the prospective revenues and earnings relating to the intangible assets.
b. CAC - Charges based on the normalized fair market values of the contributing assets and the
amount of return each asset class would require from the viewpoint of a market participant.
c. Discount rate - The discount rate used in computing the present value of the incremental after-
tax cash flows based on a computed required return of the intangible asset.
A summary of the significant unobservable inputs used in RFR and MPEEM is shown below.
Max’s MCB eMax Krispy Kreme

Terminal growth rate 3.7% 3.7% 1.9% Not applicable
Contributory asset charges*:
Fixed assets 19.3% 4.2% 9.5% 21.9%
Land 1.7% Not applicable Not applicable 0.1%
Assembled workforce 0.2% 0.01% Not applicable 0.3%
Discount rate 15.8% 16.8% 19.0% 16.8%
*Percentage of Revenues
Goodwill
Goodwill acquired through business combination has been attributed to the following brands which
are considered to be separate CGUs of the Group:
(In Thousands)
2019 2018
Krispy Kreme* P
=743,665 P
=743,665
Yellow Cab 708,785 708,785
Max’s* 255,909 255,909
MCB* 122,786 122,786
Global Max** 72,579 72,579
Dencio’s 60,655 60,655
P
=1,964,379 P
=1,964,379
*Goodwill from these CGUs resulted from the acquisition of the Max’s entities in 2014.
** Goodwill resulted from the acquisition of the Global Max in 2015.
In 2018, the SEC approved the plan to merge FHJBI with TRADCI. The merger resulted to cost
efficiencies particularly on manpower and general and administrative expenses since costs will then
be shared by the two brands, Krispy Kreme and Jamba Juice. As a result, the carrying amount of
assets tagged under Jamba Juice is combined with Krispy Kreme to form one CGU. Consequently,
the goodwill initially allocated to Jamba Juice was reallocated to Krispy Kreme.
- 40 -
As at December 31, 2019 and 2018, the recoverable amount of each CGU calculated through value
in use exceeded the carrying amount of the CGU including goodwill. Value in use was derived using
cash flow projections based on financial budgets approved by senior management covering a five-
year period. Cash flows beyond the five-year period are extrapolated using a zero percent growth
rate. Discount rate applied to the cash flow projections in determining recoverable amount is
14.21%, 13.49% and 12.79% in 2019, 2018 and 2017, respectively.
The calculations of value in use of goodwill are most sensitive to the following assumptions:
a. Discount rates - Discount rates were derived from the Group’s weighted average cost of capital
and reflect management’s estimate of risks within the CGUs. This is the benchmark used by the
management to assess operating performance and to evaluate future investment proposals.
In determining appropriate discount rates, regard has been given to various market information,
including, but not limited to, ten-year government bond yield, bank lending rates and market
risk premium and country risk premium.
b. Growth rate estimates - The long-term rate used to extrapolate the budget for the investee
companies excludes expansions and possible acquisitions in the future. Management also
recognizes the possibility of new entrants, which may have significant impact on existing growth
rate assumptions. Management however, believes that new entrants will not have a significant
adverse impact on the forecast included in the budget.
Sensitivity Analysis. Generally, an increase (decrease) in the incremental after-tax cash flows will
result in an increase (decrease) in the fair value of intangible assets. An increase (decrease) in
discount rate will result in a decrease (increase) in the fair value of intangible assets.
12. Other Noncurrent Assets
(In Thousands)
Note 2019 2018
Receivable from disposal of interest 5 P
=143,571 P
=143,571
Deferred input VAT 106,450 111,901
Utilities and other deposits 72,092 72,148
Other noncurrent receivables 66,059 38,001
Others 2,956 2,973
391,128 368,594
Allowance for impairment losses 7 24,465 24,465
P
=366,663 P
=344,129
- 41 -
13. Trade and Other Payables
(In Thousands)
2019 2018
Trade P
=703,769 P
=636,746
Nontrade 637,285 667,048
Accrued expenses:
Service and professional fees 167,264 113,735
Payroll and employee benefits 77,874 68,459
Utilities 64,341 63,262
Inventories and supplies 54,173 46,060
Freight and trucking 35,088 19,459
Advertising and marketing 29,867 39,649
Repairs and maintenance 16,643 9,754
Others 67,438 144,579
Statutory liabilities 155,937 188,874
Deposits 7 154,497 82,398
Contract retention 59,574 48,491
Gift certificates payable 40,256 35,743
Current portion of contract liabilities 26,523 20,149
Accrued rent payable 25 21,748 15,485
Others 70,429 85,369
P
=2,382,706 P
=2,285,260
Trade payables are noninterest-bearing and are generally on 30-60 day term.
Nontrade payables pertain mainly to the unpaid billings from contractors for the construction of
new stores and for various renovation activities on existing stores and unpaid billing from agencies
for contractual personnel requirements, among others. These are normally settled within the next
financial year.
Accrued expenses include Group purchases that are already received as at reporting date but have
not yet been billed, payroll and other benefits as at cut-off date that are not yet due for payment
and electricity and other utilities, among others.
Statutory liabilities consist of withholding taxes and other payables to government agencies which
are payable within 30 days.
Deposits include deposits on ingredients representing the amount received by the Group from its
franchisees as stipulated in the franchise agreements equivalent to 40% of the projected 15-day
food and beverage sales to cover for all the ingredients initially advanced by the Group for the
commencement of the franchise outlets’ commercial operations. These are carried at cost and
subject to a semi-annual review and is correspondingly adjusted based on the revised projected
monthly sales of the franchise outlet.
- 42 -
Contract retention payable is the amount withheld by the Group from the billings of contractors as
security in case the Group incurs costs during the defects and liability period for the works done,
which is usually one year after a project’s completion. This is subsequently released to the
contractors after the said period.
Gift certificates payable pertains to issued gift certificates but not yet redeemed.
Royalty fees consists of fees payable to the Group’s franchisor abroad ranging from 3.0% to 5.5% of
net sales that are generally settled within the following year.
Contract liabilities are the unamortized portion of franchise fees received from the franchisees and
are amortized over the term of the franchise. Noncurrent portion of the contract liabilities
amounted to P =49.8 million and P
=86.0 million as at December 31, 2019 and 2018, respectively.
14. Loans Payable
(In Thousands)
2019 2018
Short-term loans P=860637 P
=2,546,360
Revolving promissory notes 60,000 60,000
P
=920,637 P
=2,606,360
Short-term Loans
The Group obtained Peso-denominated short-term loans from local banks to finance its working
capital requirements. The short-term loans from the banks bear annual interest rates ranging from
4% to 7%, 3% to 6% and 2.5% to 3.0% in 2019, 2018 and 2017, respectively. The loans will mature
during the succeeding year.
Revolving Promissory Notes

The Group has revolving promissory notes from a local bank amounting to P =60.0 million as at
December 31, 2019 and 2018. These notes are payable in six to 12 months and bear annual interest
rates ranging from 3% to 6% in 2019 and 3.0% to 4.0% in 2018 and 2017.
Finance costs charged to profit or loss follows:
(In Thousands)
Note 2019 2018 2017
Loans payable P
=123,901 P
=101,938 P
=73,332
Long-term debt 15 98,848 57,798 42,384
Amortization of deferred
transaction costs 15 944 759 639
223,693 160,495 116,355
Lease liabilities 25 96,671 – –
P
=320,364 P
=160,495 P
=116,355
- 43 -
15. Long-term Debt
(In Thousands)
2019 2018
Long-term Loan with the Development Bank of the
Philippines (DBP) P
=2,000,000 =–
P
Omnibus Loan and Security Agreement (OLSA) with the
Bank of the Philippine Islands (BPI) 636,663 826,071
Long-term Loan with Banco de Oro (BDO) 483,000 333,000
Others – 20,276
3,119,663 1,179,347
Less debt issue costs 15,160 1,267
P
=3,104,503 P
=1,178,080
Long-term Loan with the DBP

On November 14, 2019, the Parent Company and NBI both availed of a long-term debt amounting to
P
=1,000.0 million each with the DBP. The proceeds of the loan will be used by the Parent Company to
finance the capital expenditures of the Group while NBI will be financing an ongoing construction of
a new commissary warehouse in Carmona, Cavite (see Note 10). Both long-term debt bears an
interest of 4.625% per annum which will mature on November 15, 2024 for the Parent Company and
on November 18, 2029 for NBI.
The loan does not impose any significant financial or nonfinancial covenants to the Group. It is
secured by the Continuing Suretyship of the Parent Company.
OLSA with BPI

On February 21, 2014, the 10 Max’s Entities entered into a loan agreement for P =4,274.1 million with
BPI. The proceeds of the loan were used to acquire shares of stock of the Parent Company. The
loan bears an interest rate based on the prevailing market rate and matures on January 21, 2021.
On December 12, 2014, the Max’s Entities paid P =3,000.0 million of the loan from the proceeds of the
sale of shares of stock during the follow-on offering of the Parent Company’s shares.
This loan agreement contains restrictive covenants which include, among others, maintenance of
certain level of long-term debt-to-equity ratio and debt service coverage ratio based on the
consolidated financial statements of the Max’s Entities.
As at December 31, 2019 and 2018, the Max’s Entities are in compliance with all the debt covenants.
The loan is secured by the Continuing Suretyship of the Parent Company if availment is made by the
borrowing subsidiaries under the OLSA. Otherwise, it is clean.
Long-term Loan with BDO

On April 7, 2015, the Parent Company availed of a P =1,000.0 million long-term debt from BDO to
finance capital expenditures and working capital requirements of the Group. The long-term debt
has a term of three years and bears interest of 2.5% to 3.0% per annum. In 2015 and 2017, the
Parent Company paid in advance P =657.0 million and P
=10.0 million, respectively, of the principal
amount. Management refinanced the term loan which will mature in 2022 for another three years
at prevailing market interest rate.
- 44 -
The loan does not impose any significant financial or nonfinancial covenants to the Group.
Interest expense on long-term debt including amortization of deferred transaction costs amounted
to P
=99.8 million, P
=58.6 million and P
Long-term debt is presented net of deferred transaction costs. A rollforward analysis of debt issue
costs is shown below:
(In Thousands)
Note 2019 2018 2017
Balance at beginning of year P
=1,267 P
=2,026 P
=2,665
Additions 14,837 – –
Amortization 14 (944) (759) (639)
Balance at end of year P
=15,160 P
=1,267 P
=2,026
Maturity profile of long-term debt is as follows:
(In Thousands)
2019 2018
Due within one year P
=250,214 P
=94,950
Due beyond one year 2,854,289 1,083,130
P
=3,104,503 P
=1,178,080
16. Equity
Capital Stock
The Parent Company’s capital stock as at December 31, 2019 and 2018 consists of:
2019 2018
Amount Amount
No. of Shares (In Thousands) No. of Shares (In Thousands)
Authorized
P
=1 par value 1,400,000,000 P
=1,400,000 1,400,000,000 P
=1,400,000
Issued
Balance at beginning and end of year 1,087,082,024 P
=1,087,082 1,087,082,024 P
=1,087,082
Outstanding
Balance at beginning of year 1,087,082,024 P
=1,087,082 1,087,082,024 P
=1,087,082
Reacquisition (64,200) (794) – –
Balance at end of year 1,087,017,824 P
=1,086,288 1,087,082,024 P
=1,087,082
Shares held by subsidiaries

Balance at beginning and end of year 306,878,044 P
=2,610,013 306,878,044 P
=2,610,013
- 45 -
Below is the track record of issuance of the Parent Company’s securities:
Number of shares
Date of Approval Nature Authorized Issued/Subscribed Issue/Offer Price
December 2000 Listing of shares 400,000,000 188,636,364 P
=1.48
June 2007 Note conversion 400,000,000 4,000,000 4.49
November 2010 Note conversion 400,000,000 45,159,091 4.10
January 2014 Note conversion 400,000,000 21,415,385 6.18
June 2014 Share swap 400,000,000 540,491,344 7.35
August 2014 Stock dividends 1,400,000,000 259,210,840 1.00
December 2014 Follow-on Offering 1,400,000,000 28,169,000 17.75
The Parent Company has 84 and 104 stockholders as at December 31, 2019 and 2018, respectively.
Treasury Stock
On March 15, 2018, the Parent Company’s BOD approved a 2-year share buy-back program wherein
the Parent Company may acquire its own shares in the open market up to an aggregate value of
P
=350.0 million worth of Parent Company’s shares.
Details of the buy-back transaction are as follows:
Number of Shares Average Price Amount

Date of Transaction Purchased per Share (In Thousands)
January 22, 2019 30,000 12.58 P
=377
January 23, 2019 30,000 12.15 365

January 24, 2019 4,200 12.30 52
64,200 P
=794
On March 11, 2020, the Parent Company’s BOD approved the amendment of the share buy-back
program to increase the amount of shares which may be acquired to an aggregate value of
P
=1.0 billion worth of the Parent Company’s shares until March 13, 2022, under such terms and
conditions deemed beneficial by the Parent Company’s management.
Shares Held By Subsidiaries

Shares held by subsidiaries pertain to Parent Company shares of stock held by 10 Max’s entities
which were acquired on February 24, 2014.
Retained Earnings
The following are the dividends declared and paid by the Parent Company:
Dividend
Dividend Type Date of Declaration Date of Record Date Paid Amount per Share
Cash March 19, 2019 April 03, 2019 April 30, 2019 P
=157,781 P
=0.15
Cash March 15, 2018 April 04, 2018 April 13, 2018 156,672 0.14
Cash March 15, 2017 March 30, 2017 April 13, 2017 141,321 0.13
The amount includes cash dividends amounting to P =44.5 million, P

=43.8 million and P
=39.9 million to
subsidiaries that own Parent Company shares in 2019, 2018 and 2017, respectively.
- 46 -
17. Related Party Disclosures
The Group has transactions within and among the consolidated entities and other related parties
which are normally settled through cash. Transactions between members of the Group and the
related balances are eliminated at consolidation and are no longer included in the following
disclosures.
(i) The Group has the following transactions with related parties:
(In Thousands)
Outstanding
Nature Year Transactions Balance Terms Condition
Stockholders Due from shareholders 2019 P
=– P
=133,179 On demand Unsecured
2018 13,379 133,367 On demand Unsecured
Due from stockholders are covered by shareholders’ guarantee which shall be continuing and
irrevocable, and shall provide indemnity to the Group for the indebtedness.
(ii) The Retirement Plan of some subsidiaries holds Parent Company shares with fair values of
P
(iii) Compensation of key management personnel are as follows:

(In Thousands)
2019 2018 2017
Short-term benefits P
=192,402 P
=191,637 P
=185,735
Post-employment benefits 8,268 7,891 9,178
P
=200,670 P
=199,528 P
=194,913
The Group has no material and/or significant transactions with its related parties in 2019.
18. Cost of Sales and Services

(In Thousands)
Note 2019 2018 2017
Food and beverages 8 P
=5,404,829 P
=5,060,018 P
=4,755,711
Salaries, wages and employee
benefits 20 2,039,736 1,939,262 1,890,416
Depreciation and amortization 20 1,246,705 404,113 305,300
Light and water 558,608 585,092 493,081
Rentals 25 460,910 1,308,731 1,242,821
Fuel and oil 197,580 209,703 183,178
Repairs and maintenance 185,770 172,713 165,081
Supplies used 161,982 164,604 172,272
Supplies and equipment sold 8 51,827 16,553 21,341
Communications 50,603 45,532 49,689
Transportation and travel 50,055 61,426 54,933
Dues and subscription 19,658 9,913 7,809
Amortization of intangible assets 20 8,016 9,671 7,422
Others 20,010 23,864 37,108
P
=10,456,289 P
=10,011,195 P
=9,386,162
- 47 -
Others consist of research and development and other costs.
19. General and Administrative Expenses

(In Thousands)
Note 2019 2018 2017
Salaries, wages and employee benefits 20 P
=833,223 P
=795,158 P
=685,069
Outside services 464,519 369,854 418,796
Taxes and licenses 247,426 190,783 206,909
Royalties 25 147,907 133,048 121,910
Rentals 25 141,101 156,830 112,197
Input VAT on exempt sales 90,734 85,344 68,514
Transportation and travel 89,013 77,888 78,562
Depreciation and amortization 20 86,616 50,682 52,443
Professional fees 73,179 65,343 65,717
Membership dues 62,189 47,038 37,084
Supplies used 52,050 50,420 46,213
Amortization of intangibles assets 20 43,074 42,384 45,275
Retirement benefit costs 21 39,213 32,865 38,346
Light and water 35,327 30,162 26,002
Communications 27,821 31,403 32,425
Research and development 23,421 26,508 7,380
Repairs and maintenance 21,317 22,176 17,493
Representation and entertainment 17,871 35,683 39,774
Provision for impairment losses 20 11,294 15,077 11,046
Credit card charges 10,608 13,964 7,194
Insurance 7,720 8,251 9,214
Others 89,556 80,525 43,701
P
=2,615,179 P
=2,361,386 P
=2,171,264
Others consist of subscription and other fees.
20. Classification of Expenses
Depreciation and amortization included in the consolidated statements of income are as follows:
(In Thousands)
Note 2019 2018 2017
Included in cost of sales: 18
Depreciation and amortization P
=1,246,705 P
=404,113 P
=305,300
Amortization of intangible assets 8,016 9,671 7,422
Included in general and administrative
expenses: 19
Depreciation and amortization 86,616 50,682 52,443
Amortization of intangible assets 43,074 42,384 45,275
P
=1,384,411 P
=506,850 P
=410,440
- 48 -
Personnel costs included in the consolidated statements of income are as follows:
(In Thousands)
Note 2019 2018 2017
Included in cost of sales: 18
benefits P
=2,039,736 P
=1,939,262 P
=1,890,416
Included in general and administrative
expenses: 19
benefits 833,223 795,158 685,069
Retirement benefit costs 21 39,213 32,865 38,346
P
=2,912,172 P
=2,767,285 P
=2,613,831
Provision for impairment losses included in the consolidated statements of income is as follows:
(In Thousands)
Note 2019 2018 2017
Included in general and administrative 19
expenses:
Trade and other receivables 7 P
=11,294 P
=12,551 P
=3,873
Other current assets 9 – 2,526 2,445
Security deposits on lease contracts 25 – – 4,728
P
=11,294 P
=15,077 P
=11,046
21. Retirement Benefits

The Group has a funded defined benefit pension plan covering substantially all of its qualified
employees.
The following tables summarize the retirement benefit cost recognized in the consolidated
statements of income and the funded status and the amounts recognized in the consolidated
statements of financial position and other information about the plan based on the latest actuarial
valuation as at December 31, 2019.
(In Thousands)
2019 2018 2017
Current service costs P
=41,819 P
=48,114 P
=50,647
Net interest income (14,110) (26,082) (75,104)
Interest on effect of asset ceiling 11,504 18,007 62,803
Past service cost - curtailment – (7,174) –
P
=39,213 P
=32,865 P
=38,346
Retirement benefit costs are included under employees’ benefits in the “General and administrative
expense” account in the consolidated statements of income (see Note 19).
- 49 -
Components of net retirement plan assets recognized in the consolidated statements of financial
position are as follows:
(In Thousands)
2019 2018
Fair value of plan assets P
=545,931 P
=468,033
Present value of defined benefit obligation (379,076) (151,482)
Funded status - surplus 166,855 316,551
Effect of asset ceiling (25,863) (152,797)
P
=140,992 P
=163,754
Components of net retirement liabilities recognized in the consolidated statements of financial

position are as follows:
(In Thousands)
2019 2018
Present value of defined benefit obligation P
=405,728 P
=153,260
Fair value of plan assets (46,582) (23,781)
P
=359,146 P
=129,479
Changes in the fair value of plan assets are as follows:
(In Thousands)
2019 2018
=491,814 P
=851,260
Actual return excluding amount included in net interest 69,513 (365,199)
Interest income 37,028 48,421
Benefits paid from plan assets (16,143) (64,927)
Actual contributions 6,752 24,805
Effect of asset ceiling 3,550 (2,546)
Balances at end of year P
=592,514 P
=491,814
Changes in the present value of the defined benefit obligation are as follows:
(In Thousands)
2019 2018
=304,742 P
=390,069
Retirement benefit costs:
Current service costs 41,819 48,114
Interest costs 22,918 22,339
Past service cost - curtailment – (7,174)
64,737 63,279
Remeasurement in other comprehensive income:
Actuarial gain due to changes in financial assumptions 351,873 (43,368)
Actuarial loss (gain) due to experience adjustments 89,727 (28,549)
Actuarial loss due to changes in demographic
assumptions 6,166 –
447,766 (71,917)
Benefits paid directly from book reserve (32,441) (77,617)
Effect of business combination – 928
Balances at end of year P
=784,804 P
=304,742
- 50 -
Movements of remeasurement adjustments on net retirement liabilities and plan assets are as
follows:
(In Thousands)
2019 2018 2017
Balance at beginning of year (P
=123,966) (P
=47,715) (P
=33,744)
Remeasurement gains (losses) due to:
Return on assets excluding amount included
in net interest 69,513 (365,199) (304,717)
Changes in the effect of asset ceiling 105,867 188,639 158,915
Changes in financial assumptions (351,873) 43,368 160,372
Experience adjustments (89,727) 28,549 (14,934)
Demographic assumptions (6,166) – (19,594)
(272,386) (104,643) (19,958)
Less deferred income tax (81,716) (31,393) (5,987)
Remeasurement losses, net of deferred income
tax (190,670) (73,250) (13,971)
Reclassification of remeasurement
adjustments on net retirement liability – (3,001) –
(190,670) (76,251) (13,971)
(P
=314,636) (P
=123,966) (P
=47,715)
Reameasurement loss attributable to NCI amounted to P

=0.5 million.
Changes in the effect of asset ceiling are as follows:
(In Thousands)
2019 2018
Balances at beginning of year (P
=152,797) (P
=319,143)
Changes in the effect of asset ceiling 126,934 166,346
Balances at end of year (P
=25,863) (P
=152,797)
The Plan is administered and managed by a Trustee bank. The Trustee is responsible for the
management, investment and reinvestment of the plan assets in accordance with the powers
granted.
The major categories of plan assets as a percentage of the fair value of total plan assets are as
follows:
(In Thousands)
2019 2018
Investment securities 64.4% 68.0%
Debt instruments and other funds 34.2% 22.5%
Cash in banks 1.4% 9.5%
100.0% 100.0%
The overall expected rate of return on plan assets is determined based on the market prices
prevailing on that date, applicable to the period over which the obligation is to be settled.
- 51 -
The principal assumptions used in determining the defined benefit obligation are as follows:
2019 2018
Discount rate 5.2% 8.0%
Salary increase rate 4.0% to 6.0% 4.0% to 6.0%
The sensitivity analysis below is based on reasonably possible changes of each significant
assumption on the defined benefit obligation as at December 31, 2019 and 2018, assuming all other
assumptions were held constant:
Increase (decrease) (In Thousands)

in basis points 2019 2018
Discount rate 100 (P
=102,557) (P
=35,428)
(100) 125,824 42,380
Future salary increases 100 123,494 43,402
(100) (102,741) (36,702)
The Group’s retirement plan is funded by the Parent Company and its subsidiaries.
Maturity profile of the undiscounted benefit payments as at December 31, 2019 are as follows:
(In Thousands)
Plan Year Expected benefit payment
Less than one year P
=22,814
More than one year to five years 119,842
More than five years to 12 years 379,819
The average duration of the defined benefit obligation is 17.0 and 16.1 years as at December 31,
2019 and 2018, respectively.
22. Other Income - Net
This account consists of the following:
(In Thousands)
Note 2019 2018 2017
Gain on disposal of assets P
=327,604 P
=17,950 P
=7,831
Rental income 25 64,833 21,235 18,802
Marketing support 32,818 38,320 39,285
Interest income 6 1,677 1,913 1,101
Others 104,687 86,769 48,562
P
=531,619 P
=166,187 P
=115,581
Gain on disposal of assets includes gain on conversion of company-owned stores to franchised

stores, disposal of property and equipment and investment properties, gain on sale of hotel
business and retirement of ROU assets (see Notes 5, 10 and 25).
Others include mainly of call center charges, sale of scrap materials, rebates and prompt discount.
- 52 -
23. Income Taxes
The current provision for income tax represents the Parent Company’s and certain subsidiaries’ RCIT
and MCIT.
The reconciliation of the provision for income tax computed at the statutory income tax rate to the
provision for income taxes shown in the consolidated statements of income follows:
2019 2018 2017

Provision for income tax computed at the statutory
income tax rate 30.0% 30.0% 30.0%
Tax effects of:
Change in unrecognized deferred tax assets
and others (3.0%) (1.0%) (7.0%)
Nondeductible expenses – 1.0% –
Expired NOLCO and MCIT – 1.0% 7.2%
Write-off of receivables – – (18.1%)
27.0% 31.0% 12.1%
The components of the Group’s recognized deferred tax assets and liabilities represent the tax
effects of the following temporary differences:
(In Thousands)
2019 2018
Net Deferred Net Deferred Net Deferred Net Deferred
Tax Assets Tax Liabilities Tax Assets Tax Liabilities
Deferred tax assets on:
Lease liabilities P
=903,253 P
=– P
=– P
=–
Net retirement liabilities 200,804 – 88,634 –
Allowance for impairment losses 123,408 – 120,020 –
NOLCO 58,266 – 99,939 –
Contractual liabilities 22,888 – 31,837 –
Excess MCIT over RCIT 8,047 – 29,824 –
Accrued rent payable 6,524 – 26,076 –
Others 5,388 – 9,317 –
1,328,578 – 405,647 –
Deferred tax liabilities on:
Fair value adjustment
of identifiable net assets – (964,958) – (942,637)
ROU assets (869,365)
Net retirement plan assets (49,039) – (52,044) –
Unamortized debt issue costs (4,548) – (380) –
Others (4,415) (24) (1,796) (18)
(927,367) (964,982) (54,220) (942,655)
Net deferred tax assets (liabilities) P
=401,211 (P
=964,982) P
=351,427 (P
=942,655)
- 53 -
No deferred income tax assets were recognized for the following temporary differences, unused tax
credits from excess MCIT over RCIT and unused NOLCO of certain subsidiaries as it is not probable
that there will be sufficient taxable profit against which the benefit of the deferred income tax
assets can be utilized in the future.
(In Thousands)
2019 2018
Allowance for impairment losses P
=7,336 P
=10,464
NOLCO 4,048 33,124
Excess MCIT 1,586 896
Accrued rent payable 1,172 879
Accrued retirement liability 62 255
Others 2,215 362
P
=16,419 P
=45,980
As at December 31, 2019, the details of the Group’s NOLCO that can be claimed as deduction from
future taxable profit during the stated validity are as follows:
(In Thousands)
Year Incurred Beginning Incurred Applied Expired Ending Expiry Date
2019 P
=– P
=5,707 P
=– P
=– P
=5,707 2022
2018 26,423 25,845 – 578 2021
2017 405,711 204,283 – 201,428 2020
2016 11,410 5,960 5,450 – 2019
P
=443,544 P
=5,707 P
=236,088 P
=5,450 P
=207,713
Details of MCIT are as follows:
(In Thousands)
Year Incurred Beginning Incurred Applied Expired Ending Expiry Date
2019 P
=– P
=133 P
=– P
=– P
=133 2022
2018 14,793 6,134 – 8,659 2021
2017 14,556 13,715 – 841 2020
2016 1,371 1,032 339 – 2019
P
=30,720 P
=133 P
=20,881 P
=339 P
=9,633
24. Earnings Per Share
Basic/diluted earnings per share are computed as follows:
2019 2018 2017

Net income attributable to the equity holders of the
Parent Company (In thousands) P
=720,956 P
=619,710 P
=628,810
Divide by weighted average number of common
shares, excluding treasury stock and shares held by
subsidiaries 780,139,778 780,203,978 780,203,978
Basic/diluted earnings per share P
=0.92 P
=0.79 P
=0.81
There have been no transactions involving common shares or potential common shares that
occurred subsequent to the reporting date.
- 54 -
25. Significant Contracts and Agreements
Disaggregation of Revenues
The table below shows the disaggregation of revenues of the Group by major sources for the years
ended December 31:
(In Thousands)
2019 2018 2017
Restaurant sales P
=11,793,079 P
=11,296,532 P
=10,462,961
Commissary sales 1,779,345 1,565,726 1,422,768
Franchise fees:
Royalty fees 479,433 448,256 404,965
Initial fee 155,787 120,647 80,097
Initial support services 70,808 56,533 33,681
Other revenue 122,894 194,974 257,451
P
=14,401,346 P
=13,682,668 P
=12,661,923
Other revenue pertains to delivery and service income.
Franchise Agreements
The Group as Franchisor
The Group has granted its franchisees the right to use the information and materials pertaining to
the restaurant system being franchised under the terms and conditions specified in the franchise
agreements. The agreements provide for an initial franchise fee payable upon the execution of the
agreement and monthly royalty fees.
Initial support services comprise mainly of services to be rendered before opening of stores as
specified in the agreement.
The following table presents the royalty fee rates and the aggregate amounts of royalty fees
recognized in each brand:
Royalty Fee Rates* 2019 2018 2017

Max’s 5% P
=148.0 million P
=135.4 million P
=127.1 million
Pancake House 10% 117.2 million 107.6 million 92.9 million
Yellow Cab 3%-6% 66.0 million 57.2 million 41.9 million
Dencio’s 8%-9% 15.6 million 24.4 million 24.7 million
Teriyaki Boy 10% 12.6 million 13.6 million 12.7 million
Krispy Kreme 10% 5.7 million – –
*As a percentage of Net Sales of franchised store outlets
- 55 -
The Group as Franchisee
A. Krispy Kreme Brand
Development Agreement (DA)

On April 26, 2006, TRADCI was granted the exclusive right to develop a system for the operation
of the store facilities called “Krispy Kreme Stores” that offer and serve a variety of doughnuts
and certain other quality food products under the trademark and service mark “Krispy Kreme”
within defined geographic areas.
As prescribed by the DA, TRADCI agrees to have the agreed number of Krispy Kreme Stores
opening in the development area within the required time period.
Franchise Agreement
In relation to the foregoing DA, TRADCI was granted the franchise to (a) develop and operate
the Krispy Kreme Stores; (b) to use specific operating methods of the Krispy Kreme including,
but not limited to, menus, service styles, signs, equipment, theming, layouts, advertising
standards and recipes, and display certain trademarks, service marks, trade names, trade dress,
logos and art works embodying, expressing characters, characterizations, designs and visual
representations (the Trademarks) that were developed and are used in connection with the
Krispy Kreme stores; and (c) to use and exploit the Trademarks on a non-exclusive basis, in
connection with the sale of certain articles of merchandise solely at the stores.
Moreover, TRADCI was granted the right to use the Krispy Kreme system and shall pay royalty
based on a certain percentage of gross revenue. Moreover, TRADCI is obliged to contribute to
the “Brand Fund” for a certain percentage of the gross sales. This brand fund was established
for the advertising, promotional, marketing and public relations programs and materials. The
term of the franchise agreement is up to 2021.
B. Jamba Juice Brand
On April 18, 2011, FHJBI entered into a Franchise Agreement with Jamba Juice Company
(the “Franchisor”), a company based in the United States of America for a period of ten years,
renewable for two successive ten-year periods. Under the Franchise, the Franchisor grants to
FHJBI the exclusive right to use the system and proprietary marks to establish and operate
stores in the Philippines and to sublicense to others the right to use the system and the
proprietary marks to establish and operate stores in the territory under the Subfranchise
Agreements. The Franchise is renewable subject to a condition that FHJBI must have developed
a minimum of thirty-six stores open and operating during the initial term, as defined.
As provided for in the Master Development Agreement, FHJBI shall pay to the Franchisor a
development fee amounting to P =6.6 million (US$150,000) as consideration for expenses
previously incurred by the Franchisor in connection with the agreement and consultancy fees
amounting to P =6.6 million (US$150,000) for preliminary and continuing consulting services, as
defined. The aforementioned fees are non-refundable upon payment. In addition, the Group
shall pay P
=0.4 million (US$10,000) as initial franchise fee and a royalty fee equal to 5.5% of net
sales every accounting period.
The aggregate royalty fee incurred amounted to P =147.9 million, P

=133.0 million and
P
- 56 -
Operating Lease Agreements
Group as Lessee. The Group leases its restaurant and commissary premises and offices it occupies
with various lessors with the intention to continue for periods ranging from one to 12 years. The
lease agreements provide for a fixed rental and/or a monthly rental based on a certain percentage
of actual sales or minimum monthly gross sales.
Security deposits on lease contracts amounting to P =627.4 million and P

=538.8 million as at
December 31, 2019 and 2018, respectively, are equivalent to one to three months rental. The
Group provided allowance for impairment losses on security deposits related to closed stores
amounting to P
=4.7 million in 2017 (see Note 20). Allowance for impairment losses on security
deposits amounted to P
=19.9 million as at December 31, 2019 and 2018.
Rental expense charged to cost of sales and general and administrative expenses are as follows:
(In Thousands)
Note 2019 2018 2017
Cost of sales 18 P
=460,910 P
=1,308,731 P
=1,242,821
General and administrative
expenses 19 141,101 156,830 112,197
P
=602,011 P
=1,465,561 P
=1,355,018
In 2019 and 2018, accrued rent (current and noncurrent portion) aggregating P=21.7 million and
P
=94.3 million, respectively, pertains to straight-line method (see Note 13).
Group as Lessee - Long-term Lease

The balance of and movements in ROU assets as at December 31, 2019 follow:
Note Total
Cost
Balance at beginning of year 2 P
=2,194,974
Additions 1,609,668
Disposals (42,107)
Balance at end of year 3,762,535
Amortization
Depreciation and amortization 10 874,843
Disposals (10,192)
Balance at end of year 864,651
Carrying Amount P
=2,897,884
- 57 -
The balance and movements in lease liabilities as at December 31, 2019 follow:
Note Total
Balance at beginning of year 2 P
=2,285,006
Additions 1,609,668
Rental payments (945,339)
Interest 14 96,671
Disposals (35,162)
Balance at end of year 3,010,844
Less current portion 465,578
Noncurrent portion P
=2,545,266
The incremental borrowing rate applied to the lease liabilities is 6.0%. ROU assets were measured
at the amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease
payments.
The amounts recognized in profit or loss in 2019 follows:
Note
Depreciation and amortization of ROU assets P
=874,843
Variable lease payments 340,298
Expense relating to leases of low value assets 261,713
Interest expense on lease liabilities 14 96,671
P
=1,573,525
The future minimum lease payments and present value as at December 31, 2019 is as follows:
Minimum Lease
Payments Present Value
Within one year P
=493,512 P
=465,578
More than one year bus less than five
years 2,023,402 1,473,604
More than five years 1,943,467 1,071,662
P
=4,460,381 P
=3,010,844
Group as Lessor. The Parent Company and YCFC entered into sublease agreements with third
parties for periods ranging from one to 10 years, renewable upon mutual agreement between the
Parent Company/YCFC and their lessees. The lease agreements provide for a fixed monthly rental or
monthly rentals subject to an annual escalation rate of 5% beginning on the second year from the
start of the lease period. Rental income attributable to the Group amounted to P =64.8 million,
P
=21.2 million and P
- 58 -
26. Financial Instruments
Financial Risk Management Objectives and Policies

The Group’s financial instruments consist of cash and cash equivalents, trade and other receivables
(excluding advances to officers and employees), security deposits on lease contracts, receivable
from disposal of interest and utilities and other deposits (included under “Other noncurrent assets”
account), other noncurrent receivables, trade and other payables (excluding statutory liabilities, gift
certificates payable, contract liabilities and accrued rent payable), lease liabilities, loans payable and
long-term debt.
The BOD is mainly responsible for the overall risk management approach and for the approval of risk
strategies and principles of the Group. It also has the overall responsibility for the development of
risk strategies, principles, frameworks, policies and limits.
The main risks arising from the use of financial instruments are liquidity risk, credit risk, foreign
currency risk and interest rate risk. The BOD reviews and approves the policies for managing each
of these risks which are summarized below.
Liquidity Risk. Liquidity risk is the risk that the Group will not be able to meet its financial obligations
as they fall due. The Group’s objectives to managing liquidity risk is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or risking adverse effect to the Group’s
credit standing.
The Group seeks to manage its liquid funds through cash planning on a weekly basis. The Group
uses historical figures and experiences and forecasts from its collections and disbursements. As part
of its liquidity risk management, the Group regularly evaluates its projected and actual cash flows. It
also continuously assesses conditions in the financial markets for opportunities to pursue fund
raising activities.
The Group’s objective is to maintain a balance between continuity of funding and flexibility through
the use of bank loans, loans from related parties, convertible notes and other long-term debts.
The Group considers its available funds and its liquidity in managing its long-term financial
requirements. For its short-term funding, the Group’s policy is to ensure that there are sufficient
operating inflows to match repayments of loans payable.
The table below summarizes the maturity profile of the Group’s financial liabilities as at
December 31, 2019 and 2018 based on contractual undiscounted payments:
(In Thousands)
2019
Less than
On demand 3 months 3 to 12 months 1 to 5 years Total
Trade and other payables* P
=2,138,242 P
=– P
=– P
=– P
=2,138,242
Loans payable – 920,637 – – 920,637
Long-term debt – – – 3,104,503 3,104,503
Lease liabilities – – 465,578 2,545,266 3,010,844
Other noncurrent liabilities – – – 3,115 3,115
P
=2,138,242 P
=920,637 P
=465,578 P
=5,652,884 P
=9,177,341
* Excluding statutory liabilities, gift certificates payable, contract liabilities and accrued rent payable amounting to P
=244.5 million.
- 59 -
(In Thousands)
2018
Less than
On demand 3 months 3 to 12 months 1 to 5 years Total
Trade and other payables* P
=2,059,009 P
=– P
=– P
=– P
=2,059,009
Loans payable – 2,606,360 – – 2,606,360
Long-term debt – – – 1,178,080 1,178,080
Other noncurrent liabilities – – – 3,115 3,115
P
=2,059,009 P
=2,606,360 P
=– P
=1,181,195 P
=5,846,564
*Excluding statutory liabilities, gift certificates payable, contract liabilities and accrued rent payable amounting to P
=260.3 million.
Credit Risk. Credit risk is the risk of financial loss to the Group if a customer or counterparty to a
financial instrument fails to meet its contractual obligations.
Concentrations arise when a number of counterparties are engaged in similar business activities, or
activities in the same geographic region, or have similar economic features that would cause their
ability to meet contractual obligations to be similarly affected by changes in economic, political or
other conditions. Concentrations indicate the relative sensitivity of the Group’s performance to
developments affecting a particular industry.
The Group has no significant concentrations of credit risk with any single counterparty or group of
counterparties having similar characteristics. Since the Group trades only on a cash or credit card
basis and with recognized third parties, there is no requirement for collateral. It is the Group’s
policy that all customers who wish to trade on credit terms are subject to credit verification
procedures. In addition, receivable balances are monitored on an ongoing basis with the result that
Group’s exposure to bad debts is not significant.
The Group’s exposure to credit risk on trade and other receivables arise from default of the
counterparty, with a maximum exposure equal to the carrying amounts of these receivables.
Credit risk from cash is mitigated by transacting only with reputable banks duly approved by
management.
The tables below summarize the analysis of the Group’s financial assets:
(In Thousands)
2019
Neither Past Impaired
Due nor Past due but not Impaired Financial
Total Impaired 30 days 30-60 days 60-90 days Over 90 days Assets
Cash and cash equivalents P
=856,028 P
=856,028 P
=– P
=– P
=– P
=– P
=–
Trade and other receivables** 1,827,107 1,324,445 – – – – 502,662
Security deposits on lease
contracts 647,348 627,411 – – – – 19,937
Receivables from disposal of
interest*** 143,571 – – – – 143,571 –
Utilities and other deposits*** 72,092 72,092 – – – – –
Other noncurrent
receivables*** 66,059 41,594 – – – – 24,465
P
=3,612,205 P
=2,921,570 P
=– P
=– P
=– P
=143,571 P
=547,064
*Excluding cash on hand amounting to =P32.5 million.
**Excluding advances to officers and employees amounting to =P52.8 million.
***Presented under “Other noncurrent assets” account.
- 60 -
(In Thousands)
2018
Neither Past Impaired
Due nor Past due but not Impaired Financial
Total Impaired 30 days 30-60 days 60-90 days Over 90 days Assets
=671,036 P
=671,036 P
=– P
=– P
=– P
=– P
=–
Trade and other receivables** 1,374,583 883,215 – – – – 491,368
Security deposits on lease
contracts 558,693 538,756 – – – – 19,937
Receivables from disposal of
interest*** 143,571 – – – – 143,571 –
Utilities and other deposits*** 72,148 72,148 – – – – –
Other noncurrent
receivables*** 38,001 13,536 – – – – 24,465
P
=2,858,032 P
=2,178,691 P
=– P
=– P
=– P
=143,571 P
=535,770
*Excluding cash on hand amounting to =P32.2 million.
**Excluding advances to officers and employees amounting to =P65.2 million.
***Presented under “Other noncurrent assets” account.
The Group evaluates credit quality on the basis of the credit strength of the security and/or
counterparty/issuer. High grade financial assets are those whose collectability is assured based on
past experience. Standard grade financial assets are considered moderately realizable and some
accounts which would require some reminder follow-ups to obtain settlement from the
counterparty.
The Group considers its financial assets which are neither past due but not impaired as high grade.
Foreign Currency Risk. The Group’s policy is to maintain foreign currency exposure within
acceptable limits and within existing regulatory guidelines. The Group believes that its profile of
foreign currency exposure on its assets and liabilities is within conservative limits based on the type
of business and industry in which the Group is engaged. The Group’s exposure to foreign currency
exchange risk as at December 31, 2019 and 2018 pertains to the following:
• Financial position and performance of PHII and its subsidiaries, Alpha Max, PHIM and Global
Max which were presented in US$, HK$, MYR, and SGD, respectively; and
• Foreign exchange risk also arises for the payment of royalty fees to international franchisors of
TRADCI and FHJBI and purchases of imported goods for TRADCI, NBI and FHJBI.
The Group’s $-denominated and MYR-denominated financial assets and liabilities as at

December 31, 2019 and 2018 are considered immaterial in relation to the consolidated financial
statements. Thus, management believes that the Group’s exposure to foreign currency risk is
insignificant.
Interest Rate Risk. The Group’s exposure to market risk for changes in interest rates relates
primarily to its loans payable and long-term debt. To manage this risk, the Group determines the
mix of its debt portfolio as a function of the level of current interest rates, the required tenor of the
loan and the general use of the proceeds of its fund raising activities.
- 61 -
The following table demonstrates the sensitivity to a reasonable possible change in interest rates,
with all other variables held constant, of the Group’s income before tax:
Increase (decrease) in Effect on income before tax

basis points (In Thousands)
December 31, 2019 +162 (P
=314,132)
-162 314,132
December 31, 2018 +66 (40,110)
-66 40,110
Fair Value Information and Categories of Financial Instruments

The carrying amounts and fair values of the categories of financial assets and liabilities presented in
the consolidated statements of financial position are as follows:
2019 2018
Carrying Values Fair Values Carrying Values Fair Values
Financial Assets
=888,545 P
=888,545 P
=703,226 P
=703,226
Trade and other receivables* 1,324,445 1,324,445 883,215 883,215
Security deposits on lease contracts 627,411 627,411 538,756 538,756
Receivables from disposal of interest** 143,571 143,571 143,571 143,571
Utilities and other deposits** 72,092 72,092 72,148 72,148
Other noncurrent receivables** 41,594 41,594 13,536 13,536
P
=3,097,658 P
=3,097,658 P
=2,354,452 P
=2,354,452
Financial Liabilities
Trade and other payables*** P
=2,138,242 P
=2,138,242 P
=2,025,009 P
=2,025,009
Loans payable 920,637 920,637 2,606,360 2,606,360
Long-term debt 3,104,503 3,104,503 1,178,080 1,178,080
Lease liabilities 3,010,844 3,010,844 – –
Other noncurrent liabilities 3,115 3,115 3,115 3,115
P
=9,177,341 P
=9,177,341 P
=5,812,564 P
=5,812,564
*Excluding advances to officers and employees amounting to P =52.8 million and P =65.2 million as at December 31, 2019 and 2018,
respectively.
**Presented under “Other noncurrent assets” account.
***Excluding statutory liabilities, gift certificates payable, contract liabilities and accrued rent payable amounting to P
=244.5 million and
P
The following methods and assumptions were used to estimate the fair value of each class of
financial instrument for which it is practicable to estimate such value.
Cash and Cash Equivalents, Trade and Other Receivables (Excluding Advances to Officers and
Employees), Trade and Other Payable (Excluding Statutory Liabilities, Gift Certificates Payable,
Contract Liabilities and Accrued Rent Payable) and Loans Payable. The carrying amounts of cash and
cash equivalents, trade and other receivables (excluding advances to officers and employees)
(classified as financial assets at amortized cost), and trade and other payables (excluding statutory
liabilities, gift certificates payable, contract liabilities and accrued rent payable) and loans payable
(classified as financial liabilities at amortized cost) approximate their fair values due to their short-
term maturities.
- 62 -
Security Deposits on Lease Contracts, Receivables from Disposal of Interest, Utilities and Other
Deposits and Other Noncurrent Receivables. The carrying amounts of security deposits on lease
contracts, receivables from disposal of interest, utilities and other deposits and other noncurrent
receivables (classified as financial assets at amortized cost) approximate their fair values.
Long-term Debt. The fair value of the long-term debt (classified as financial liabilities at amortized
cost) is based on the discounted value of future cash flows using the applicable rates of 5.25% and
5.75% in 2019 and 2018, respectively.
Lease Liabilities. The fair value of the Group’s lease liabilities is measured at the present value of the
remaining lease payments, discounted at the Group’s incremental borrowing rate of 6%.
27. Capital Management
The Group considers the equity attributable to the Parent Company presented in the consolidated
statements of financial position as its capital. The primary objective of the Group’s capital
management is to ensure that it maintains a strong credit rating and healthy capital ratios in order
to support its business and maximize shareholder value.
The Group manages its capital structure and makes adjustments when there are changes in the
economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend
payment to shareholders, return capital to stockholders or issue new shares. No changes were
made in the objectives, policies or processes in 2019 and 2018.
The Group monitors capital using the debt-to-equity ratio. The Group’s policy is to maintain debt-
to-equity ratio in order to comply with the restrictive loan covenants of the banks (see Note 15).
28. Operating Segment Information
For management purposes, the Group is organized into operating segments based on trade names.
However, due to the similarity in the economic characteristics, the segments were aggregated into a
single operating segment for external reporting purposes (see Note 3).
Restaurant sales, commissary sales and franchise and royalty fees reflected in the consolidated
statements of income are mainly from external customers and franchisees within the Philippines,
which is the Group’s domicile and primary place of operations. Additionally, the Group’s noncurrent
assets are also primarily acquired, located and used within the Philippines.
Restaurant sales are attributable to revenues from the general public, which are generated through
the Group’s store outlets. Commissary sales and franchise and royalty fees are derived from various
franchisees of the Group’s trade names. Consequently, the Group has no concentrations of
revenues from a single customer or franchisee in 2019, 2018 and 2017.
The Group’s international operations of the Max’s brand (through Alphamax and eMax) and
Pancake House brand (through PHII) are considered to be immaterial in relation to the consolidated
financial statements. Total assets and revenues are 1.64% and 1.10% in 2019 and 1.65% and 1.24%
in 2018, of the consolidated assets and revenues, respectively, of the Group.
- 63 -
29. Contingencies
The Group is involved in litigations, claims and disputes which are normal to its business.
Management believes that the ultimate liability, if any, with respect to these litigations, claims and
disputes will not materially affect the financial position and financial performance of the Group.
30. Note to the Consolidated Statements of Cash Flows
The reconciliation of the Group’s liabilities arising from financing activities is presented below:
2018 Loan availment Loan payment 2019

Loans payable P
=2,606,360 P
=– (P
=1,685,723) P
=920,637
Long-term debt 1,178,080 2,000,000 (73,577) 3,104,503
P
=3,784,440 P
=2,000,000 (P
=1,759,300) P
=4,025,140
2017 Loan availment Loan payment 2018

Loans payable P
=2,515,437 P
=495,000 (P
=404,077) P
=2,606,360
Long-term debt 1,583,688 – (405,608) 1,178,080
P
=4,099,125 P
=495,000 (P
=809,685) P
=3,784,440
Fax : +632 8 982 9111
REPORT OF INDEPENDENT AUDITORS

TO ACCOMPANY CONSOLIDATED FINANCIAL STATEMENTS FOR FILING WITH THE
SECURITIES AND EXCHANGE COMMISSION

MAX’S GROUP, INC.
Chino Roces Avenue Extension (formerly Pasong Tamo Extension)
We have audited the accompanying consolidated financial statements of MAX’S GROUP, INC. Doing
business under the names and styles of Pancake House; Maple; Dencio’s; and Singkit (the Company) and
Subsidiaries as at December 31, 2019 and 2018 and for the years ended December 31, 2019, 2018 and
2017, on which we have rendered our report dated March 11, 2020.
In compliance with the Revised Securities Regulations Code Rule 68, we are stating that the Company
has 82 stockholders owning one hundred (100) or more shares each.
Partner
\\\ Valid until January 1, 2023
PTR No. 8116478
March 11, 2020

Fax : +632 8 982 9111
REPORT OF INDEPENDENT AUDITORS

ON SUPPLEMENTARY SCHEDULES

MAX’S GROUP, INC.
Chino Roces Avenue Extension (formerly, Pasong Tamo Extension)
We have audited in accordance with Philippine Standards on Auditing, the consolidated financial statements
of MAX’S GROUP, INC. Doing business under the names and styles of Pancake House; Maple; Dencio’s; and
Singkit and Subsidiaries (the Group) as at December 31, 2019 and 2018 and for the three years ended
December 31, 2019, 2018 and 2017 included in this Form 17-A and have issued our report thereon dated
March 11, 2020. Our audits were made for the purpose of forming an opinion on the consolidated financial
statements taken as a whole. The accompanying supplementary schedules as at December 31, 2019 are the
responsibility of the Group’s management. These supplementary schedules include the following:
• Financial Soundness Indicators

• Reconciliation of Retained Earnings Available for Dividend Declaration
• Schedules required by Part II of the Revised SRC Rule 68
These schedules are presented for purposes of complying with the Revised Securities Regulation Code
Rule 68 Part II, and are not part of the consolidated financial statements. This information have been
subjected to the auditing procedures applied in the audit of the consolidated financial statements, including
comparing such information directly to the underlying accounting and other records used to prepare the
consolidated financial statements or to the consolidated financial statements themselves. In our opinion, the
information is fairly stated in all material respect in relation to the consolidated financial statements taken as
a whole.
Partner
Valid until January 1, 2023
PTR No. 8116478
March 11, 2020

MAX’S GROUP, INC.
AND SUBSIDIARIES
FINANCIAL SOUNDNESS INDICATORS
Below is a schedule showing financial soundness indicators in the years 2019, 2018 and 2017.
( Amounts in Thousands)
Ratio Formula 2019 2018 2017
Current Ratio Current assets P

=3,218,156 P
=2,648,276 P
=2,677,444
Divide by: Current liabilities 3,852,656 4,975,347 4,560,111
Current Ratio 0.84:1 0.53:1 0.59:1
Solvency Ratio Net income before depreciation 2,108,637 1,137,994 1,037,130

and amortization
Divide by: Total liabilities 10,879,437 7,393,455 7,376,026
Solvency Ratio 0.19:1 0.15:1 0.14:1
Debt-to-equity Ratio Total liabilities 10,879,437 7,393,455 7,376,026

Divide by: Total equity 5,899,226 5,487,231 5,380,963
Debt-to-equity Ratio 1.84:1 1.35:1 1.37:1
Asset-to-equity Ratio Total assets 16,778,663 12,880,686 12,756,989

Asset-to-equity Ratio 2.84:1 2.35:1 2.37:1
Interest rate Pretax income before interest 1,316,588 1,076,088 829,463

coverage Ratio Divide by: Interest expense 320,364 160,495 116,355
Interest rate coverage Ratio 4.11:1 6.70:1 7.13:1
Profitability Ratio Net income 724,226 631,144 626,690

Profitability Ratio 0.12:1 0.12:1 0.12:1
MAX’S GROUP, INC.
AND SUBSIDIARIES
SEC SUPPLEMENTARY SCHEDULES AS REQUIRED BY PAR. 6 PART II
OF THE REVISED SRC RULE 68
DECEMBER 31, 2019
Table of Contents
Schedule Description Page
A Financial Assets N/A
B Amounts Receivable from Directors, Officers, Employees, Related Parties,

and Principal Stockholders (Other than Related Parties) 1
C Amounts Receivable from Related Parties which are Eliminated during the
Consolidation of Financial Statements 2
D Intangible Assets - Other Assets 3
E Long-Term Debt 4
F Indebtedness to Related Parties N/A
G Guarantees of Securities of Other Issuers N/A
H Capital Stock 6
A - The Group does not have financial assets measured at fair value through other comprehensive income
and financial assets measured at fair value through profit or loss.
F - Total indebtedness to related parties does not exceed five percent (5%) of the total assets.
G - No guarantees of securities of other issuer.
MAX’S GROUP, INC.
AND SUBSIDIARIES
SCHEDULE B - AMOUNTS RECEIVABLE FROM DIRECTORS, OFFICERS, EMPLOYEES, RELATED PARTIES and PRINCIPAL STOCKHOLDERS
(OTHER THAN RELATED PARTIES)
DECEMBER 31, 2019
(Amount in Thousands)
Deductions
Balance at beginning Additions Amounts Ending Balance Balance at end
Name and Designation of Debtor of year (Collections) Collection Write off Current Noncurrent of year
Various stockholders P
=82,337 P
=− P
=− P
=− P
=82,337 P
=− P
=82,337
MAX’S GROUP, INC.
AND SUBSIDIARIES
SCHEDULE C - AMOUNTS RECEIVABLE FROM RELATED PARTIES WHICH ARE ELIMINATED DURING THE CONSOLIDATION
OF FINANCIAL STATEMENTS
DECEMBER 31, 2019
Balance at Beginning Deductions Ending Balance Balance at end

of period Additions Collections Write off Current Noncurrent of period
Max’s Group, Inc. ₽340,031 ₽490,882 (₽527,188) ₽– ₽303,725 ₽– ₽303,725
Max’s Kitchen, Inc. 150,146 144,077 (180,936) – 113,287 – 113,287
No Bia, Inc. 103,283 742,062 (737,043) – 108,302 – 108,302
Global Max’s Services Pte. Ltd. 123,697 676,278 (699,391) – 100,584 – 100,584
Teriyaki Boy Group, Inc. 65,795 70,640 (70,724) – 65,711 – 65,711
Max’s Bakeshop, Inc. 52,083 339,468 (335,674) – 55,877 – 55,877
The Real American Doughnut Co. Inc. 29,334 27,280 (30,708) – 25,906 – 25,906
Others 65,357 61,633 (19,438) (96) 107,456 – 107,456
₽929,726 ₽2,552,320 (₽2,601,102) (₽96) ₽880,848 ₽– ₽880,848
MAX’S GROUP, INC.
AND SUBSIDIARIES
SCHEDULE D: INTANGIBLE ASSETS – OTHER ASSETS
DECEMBER 31, 2019
Other changes
Charged to other additions
Description Beginning balance Additions at cost Amortization accounts (deductions) Ending balance
Trademarks P
=2,738,913 P
=– (P
=14,714) P
=– P
=– P
=2,724,199
Goodwill 1,964,379 – – – – 1,964,379
Franchise fees 174,973 – (22,944) – – 152,029
Software 72,984 18,593 (10,805) – – 80,772
Brand development cost 2,627 – (2,627) – – –
P
=4,953,876 P
=18,593 (51,090) P
=– P
=– P
=4,921,379
MAX’S GROUP, INC.
AND SUBSIDIARIES
SCHEDULE E - LONG-TERM BORROWINGS
DECEMBER 31, 2019
Amount shown under “Current portion of Amount shown under “Long-term

long-term borrowings” account in the borrowings” account in the consolidated
Title of issue and type of obligation consolidated statement of financial position statement of financial position
Long-term debt P
=– P
=3,104,503
Details are discussed in Note 15 to the consolidated financial statements.

MAX’S GROUP, INC.
AND SUBSIDIARIES
SCHEDULE H – CAPITAL STOCK
DECEMBER 31, 2019
Number of shares issued Number of shares

and outstanding as shown reserved for options, Directors,
Number of shares under the statement of warrants, conversion officers and
Title of Issue authorized financial position caption & other rights Related parties employees Public
Common shares 1,400,000,000 780,139,778 – 313,419,116 200,601,052 266,119,610
MAX’S GROUP, INC.
AND SUBSIDIARIES
RECONCILIATION OF RETAINED EARNINGS AVAILABLE FOR DIVIDEND DECLARATION
DECEMBER 31, 2019
(Amounts are based on the Separate Financial Statements of the Parent Company)
Amounts in
thousands
Retained earnings, as adjusted to amount available for
dividend declaration, at beginning of year P
=882,723
Add: Net income for the year 58,423
Impairment loss on third party receivables 2,500
Retirement expense 9,527
Movement in deferred tax assets 41,222
Less: Cash dividends (157,781)
Retained earnings available for dividend declaration, at end of year P
=836,614
RECONCILIATION:
Retained earnings at end of year as shown in the financial
statements P
=694,637
Add: Allowance for doubtful accounts 207,614
Retirement liability, net of actuarial gains and transfers 99,287
Allowance for impairment losses on third party receivables 2,500
Less: Deferred tax assets as at end of year, recognized through
profit or loss (167,424)
Retained earnings available for dividend declaration, at end of year P
=836,614
MAX’S GROUP, INC.
AND SUBSIDIARIES
MAP SHOWING THE RELATIONSHIP BETWEEN AND AMONG THE GROUP
DECEMBER 31, 2019

Maxs Sec 17-A 2019 - Final

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A 2 0 0 0 0 3 0 0 8

S.E.C. Registration Number

(Company's Full Name)

Rebecca R. Arago (632) 784-9000

Secondary License Type, If Applicable

Total Amount of Borrowings

Total No. of Stockholders Domestic Foreign

To be accomplished by SEC Personnel Concerned

File Number LCU

Document I.D. Cashier

MAX’S GROUP, INC.

11/F Ecoplaza Building

December 31, 2019

Form 17-A Annual Report

December 31, 2019

1. For the year ended December 31, 2019

2. SEC Identification Number A2000-03008

3. BIR Tax Identification No. 205-357-210-000

4. Exact name of registrant as specified in its charter Max’s Group, Inc.

6. (SEC Use Only)

Address of principal office

Number of Shares of Common Stock

Max’s Group, Inc. 1,037,292,224 Shares

Philippine Stock Exchange Common shares

Number of Shares Owned by Non-Affiliates (Public) 265,248,410

APPLICABLE ONLY TO ISSUERS INVOLVED IN

DOCUMENTS INCORPORATED BY REFERENCE

(a) Any annual report to security holders;

(c) Any prospectus filed pursuant to SRC Rule 8.1-1.

PART I - BUSINESS AND GENERAL INFORMATION

Item 1. Business 1-25

PART II - OPERATIONAL AND FINANCIAL INFORMATION

PART III - CONTROL AND COMPENSATION INFORMATION

Item 9 Directors and Executive Officers of the Issuer 44-47

PART IV - EXHIBITS AND SCHEDULES

Item 13 Corporate Governance 52-53

A. STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR

Max’s Restaurant started as a popular family-oriented destination that witnessed several

Stores 2017 2018 2019

Name of Joint Venture Date Established/Start of

PCK Estancia Capitol Inc.

Stores 2017 2018 2019

Yellow Cab Pizza

Yellow Cab Pizza operates one joint venture entity:

Name of Joint Venture % Date Established/

Yellow Cab Food Corp. 55% Incorporated on 11/12

Stores 2017 2018 2019

TBGI has an existing Joint Venture entity:

Name of Joint Venture % Date Established/

Stores 2017 2018 2019

Dencio’s operates one joint venture format:

Name of Joint Venture % Date Established/

Pancake House, Inc. 60% Incorporated on 1/05

Stores 2017 2018 2019

Stores 2017 2018 2019

Stores 2017 2018 2019

Stores 2017 2018 2019

Stores 2017 2018 2019

Max’s Corner Bakery

(in Php thousands) 2017 2018 2019

Supply Chain, Production and Distribution Methods

Sources and Availability of Raw Materials

Customer Base and Related Parties

59 Max's Inasal USA 4950259 May 3, 2016 29 Registered