Shihlin Paper — AGM Information 2021

Jul 30, 2021

Stock Code: 1903

(This translated document is prepared in accordance with the Chinese version and is for reference only. In the event of any inconsistency between the English version and the Chinese version, the Chinese version shall prevail.)

Shihlin Paper Co.,Ltd. 2021 Annual General Meeting of Shareholders

Meeting Agenda

Date: June 7, 2021

Location: No. 16, Section 4, Zhongshan North Road, Taipei City (Jixian Hall, 1st Floor, Ching Kuo Memorial Hall, Chientan Youth Activity Center-)

Table of Contents

Table of Contents	Table of Contents
One. Meeting Procedure		02
Two. Meeting Agenda		03
I. Matters to	be Reported	04
II. Matters to	be Ratified	05
III. Questions and Motions		05
Three. Attachments
Attachment 1.	Business Report	06
Attachment 2.	Audit Committees' Review Report	14
Attachment 3.	Independent Auditor’s Report for 2020	15
Attachment 4.	2020 Deficit Compensation Statement	33
Four. Appendices
Appendix 1.	Articles of Incorporation	34
Appendix 2.	Rules of Procedure for Shareholder Meetings	40
Appendix 3.	Shareholdings of Directors	48
Appendix 4.	Shareholder Proposals	49

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Shihlin Paper Co.,Ltd.

Procedure for the 2021 Annual General Meeting of Shareholders

I. Call the Meeting to Order

II. Opening Speech by the Chairperson

III.Matters to be Reported

IV.Proposals

V. Questions and Motions

VI.Adjournment

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Shihlin Paper Co.,Ltd.

2021 Annual General Shareholders’ Meeting Agenda

Time: 9:00 a.m. on Monday, June 7, 2021

Location: No. 16, Section 4, Zhongshan North Road, Taipei City (Jixian Hall, 1st

Floor, Ching Kuo Memorial Hall, Chientan Youth Activity Center -)

• I. Call the Meeting to Order

• II. Opening Speech by the Chairperson

• III. Management Presentation (Company Reports)

• 2020 Business Report.

• Report on Endorsement/Guarantee and Financing Provided to Others As of the End of 2020

• Audit Committee’s Review Report on the 2020 Financial Statements

• IV. Proposals

• Ratification of 2020 Financial Statements and Business Report.

• Ratification of 2020 Deficit Compensation Statement.

• V. Questions and Motions

VI. Adjournment

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Management Presentation (Company Reports)

Proposed by the Board of Directors

Proposal: Please proceed to review the 2020 Business Report.

Description: For the 2020 Business Report, please refer to Attachment 1 on pages 6 to

Proposed by the Board of Directors

• Proposal: Report on Endorsement/Guarantee and Financing Provided to Others As of the End of 2020.

• Description:[I. The amount of endorsement/guarantee provided to subsidiary Sunshine ] Shihlin Development Co., Ltd.: NT$800 million, with the actual amount of NT$450 million drawn.

• II. The amount of financing provided to subsidiary Sunshine Shihlin

  • Development Co., Ltd.: NT$200 million, with the actual amount of NT$0 drawn.

Proposed by the Board of Directors

Proposal: Please proceed to review the Audit Committee’s Review Report on the 2020 Financial Statements.

• Description:[For the Audit Committee’s Review Report of the 2020 Financial ] Statements, please refer to Attachment 2

• (page 12).

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Proposals

Proposed by the Board of Directors

Proposal: Please proceed to ratify the 2020 Financial Statements and Business Report.

• Description: I. The Company’s parent company only and consolidated financial statements for 2020, which have been audited by Yu-Ling Hung and Wen-Ting Hsiang, CPAs at Earnest & Co., together with the business report, were submitted to the Audit Committee for review in accordance with regulations, by which a written review report has been issued.

• II. For the business report and statements, please refer to Attachments 1 (pages 6 to 11) and 3 (pages 13 to 30).

• III. Please proceed to ratify them.

Resolution:

Proposed by the Board of Directors

Proposal: Please proceed to ratify the 2020 Deficit Compensation Statement.

• Description: I. The Company's Deficit Compensation Statement for compensation of losses for 2020 prepared in accordance with the provisions of the Company Act and the Company's Articles of Incorporation were approved by the board of directors, please refer to Attachment 4 (page 31).

II. Please proceed to ratify them.

Resolution:

Questions and Motions

Adjournment

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Appendix 1

Three. Attachments

Shihlin Paper Co.,Ltd. 2020 Business Report

• I. 2020 Business Report

• (i) Focus on the consumer goods market

1. Baby Lion

• (1) The Company is currently dedicated to the consumer market. In response to the gradual increase in the utilization rate of wet wipes in the overall market , the Company has spared no effort to develop the Lion Baby products since 2020. In addition to the existing Lion Baby wet wipes, it has launched an anti-mosquito collection and a baby washes to expanded its market share. It has also expanded its distribution channels to department stores enhance the brand image. The high quality of all its products has been recognized by consumers.

• (2) The Company's organization is adjusted and performance is growing continuously and steadily while personnel training will be strengthened to increase the overall market share. The professional R&D team will also continue to develop more innovative extension products with high production value to meet market needs.

2. Forest Beauty

• (1) The Company is currently dedicated to the consumer market. In response to the high usage rate of the facial masks, the Company has spared no effort to develop the Forest Beauty facial mask products in 2020. In addition to the Forest Nut series, there are micro-gold superconducting series, the biological fiber series, non-bleached pure cotton series, etc., and the Company will continue to increase the product lines of the brand step by step. The skin care products, including the Forest Beauty 14-day Renew series and the high-end new skin care products of Micro-gold Superconducting royal jelly peptide series are sold in major department stores and shopping malls across the country. As for the expansion to the international market, in 2020, due to the pandemic, the Company participated in the online beauty exhibition organized by the Taiwan External Trade Development Council of the Republic of China. The agency business of brands and the OEM business have continued to grow with increasing business opportunities. With the concept of the safe, effective, and harmless natural plant extracts, the brand of Forest Beauty has gradually expanded its market share. The high quality of the products has also been recognized by consumers.

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• (2) The Company's organization is adjusted and performance is growing continuously and steadily while personnel training will be strengthened to enhance their professional image. Their communication with distributors or customers is excellent professional. The R&D team will also continue to develop more innovative and extension products (skin care products) with high production value to meet market demand and to continue to expand market share and increase brand awareness.

• (ii) Consolidated financial revenue and expenditure and profitability in 2020 Unit: NTD thousand

nit: NTD thousand
Consolidated Statement of Comprehensive Income	2020	2019	Percentage of change %
Net operating income	159,473	169,454	(5.89)
Gross income from operations	53,508	52,232	2.44
Net operatingloss	(152,414)	(184,403)	(17.35)
Net loss after tax	(135,685)	(179,534)	(24.42)

II. Overview of Business Plan for 2021

• (i) Baby Lion

• The Company's operating policy this year will focus on replacement of the production-oriented approach with marketing-oriented one to continue to develop products that meet market demand, expand market share, and improve operating performance.

• In response to the strict requirements for products and the growth of the adult market in the era of declining birthrates, the Company will extend product categories and increase the product mix in line with the market demand, actively expand distribution channels, and expand the scale for sales.

• In addition to maintaining existing customers, the Company will use marketing resources, such as promotions and media advertisements, to integrate virtual and physical channels for products and launch products in major physical entities and online shopping platforms to expand its market share and increase profits.

• (ii) Forest Beauty

• The Company's operating policy for this year will focus on expansion of the market with an operating- and marketing-orientated approach to continue to develop distribution channels suited for facial masks

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and skin care products market, and the Company will also work to promote brand awareness and product visibility through marketing to increase the operating performance.

1. Products that emphasized the cost-effectiveness in line with consumers’ habits in the early days had resulted in astonishingly high sales performance. However, the affordable products without high quality would cause skin discomfort, which has led to a change in demand and the consumption structure. Based on the cost/value concept, Forest Beauty’s high quality and affordable features will lead to a revolution in the facial mask market. It allows consumers to pay more attention to safe, effective, and harmless products suited for their personal skin in addition to the price.

2. In addition to maintaining existing customers, the Company will use marketing resources, such as promotions and media advertisements, to integrate virtual and physical channels for products and launch products in major physical entities and online shopping platforms to expand its market share and increase profits. The Company will continue to develop the distribution channels in department stores this year to develop the high-end customer base.

III. Future development strategy

• (i) Long- and short-term business development plans

1. Sales strategy

• (1) Develop new channels based on product positioning, and formulate marketing strategies based on product and channel differentiation.

• (2) Revitalize the brand's image, keep abreast of consumer needs, and innovate and copy successful models to launch new products.

• (3) Actively develop overseas markets and new businesses, and ensure sustainable operation by diversifying operations and revitalizing assets.

2. Marketing and R&D strategy

• (1) Keep abreast of the market trends and develop differentiated and customized products to facilitate new product development and successful launch.

• (2) Work closely with academic and research and development units, actually participate in the government’s relevant unit’s new product research and development projects, and actively apply for patents to ensure the Company's rights and interests, while expanding the scale of new product development.

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3. OEM strategy

  - (1) Strictly monitor and inspect the operating procedures to strengthen and improve product quality.

  - (2) Require manufacturers to cooperate with equipment maintenance and improvement and to upgrade process technology to achieve the differentiated value of new products.

• (ii) Mid- and long-term business development plans

• Master the win-win core technologies and continuously improve product quality to enhance competitive advantage.

• Use diversified marketing strategies to promote a diversified product mix to increase market share.

• Actively expand domestic and foreign sales markets, establish an international brand image, and become the most favored and reliable enterprise and a well-known brand.

Baby Lion:

Extended the product lines to anti-mosquito series and baby washes products, building on the wet wipes collection, to provide safer and more reliable products for infants and young children, so that consumers can have better choices.

Forest Beauty:

Develop a series of facial care products based on facial masks to provide female consumers to meet their demand for naturality, safety, beauty, and health in all aspects, and to share the pie in the female skin care market.

IV. External competition environment

(i) Baby Lion

1. The sales region of the Company's main products is mainly in the domestic market, divided into three areas: Northern (Taoyuan, Hsinchu, Miaoli), central, and southern Taiwan, and the Company plans to step into the Asian market.

2. Future supply and demand status and growth: According to the statistics from professional market survey and research institutions, the wet wipes market continues to grow, with the affordable and pure water products as the mainstream. The Company will plan various functional products according to different consumer groups, and develop natural products and the ones with patented formula to achieve diversification and market segmentation to improve performance.

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1. Future supply-demand response: Seek more domestic and foreign professional OEM to respond to future market demand.

2. Favorable and unfavorable factors of development prospects:

3. (1) Favorable factors: Domestic and foreign professional OEM have better product technology capabilities and positive competitive advantages in innovative manufacturing processes, which make the product collections developed more complete than the competitors in the same industry so as to keeps pace with major domestic businesses.

4. (2) Unfavorable factors: Due to the limited demand in the domestic consumer goods market with many brands and sufficient resources, the Company can only adopt marketing strategies to attract consumers and expand market share.

1. The sales region of the Forest Beauty is mainly in the domestic market, divided into three areas: Northern, central, and southern Taiwan, and the Company plans to step into the global market while based in Taiwan.

2. Future supply and demand status and growth: According to the statistics from professional market survey and research institutions and actual sales of distribution channels, the mask market continues to grow, and the concept of natural plant extracts also makes consumers feel assured and recognize the concept. The Company will plan various functional products according to different consumer groups, and continue to develop natural products, facial masks, and skin care products with unique patented formula and diversified functions to increase market share and performance.

3. Future supply-demand response: Seek more domestic and foreign professional OEM to respond to future market demand.

4. Favorable and unfavorable factors of development prospects:

5. (1) Favorable factors: Domestic and foreign professional OEM have better product technology capabilities and positive competitive advantages in innovative manufacturing processes, which make the product collections developed more complete than the competitors in the same industry so as to keeps pace with major domestic businesses.

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  - (2) Unfavorable factors: Due to the limited demand in the domestic consumer goods market, the competition among brands is fierce. After acquiring a certain degree of market popularity and market share, the Company will step up the pace of entering overseas markets to become an international brand in the future.

• V. The impact of legal and the overall business environments

• (i) All products are tested and qualified in compliance with relevant laws and regulations to provide consumers with the highest quality.

• (ii) In recent years, the Company has continued to develop innovative products with high production value, while strengthening R&D and marketing capabilities, and cultivating talents is also a key development strategy for the Company in the future.

• (iii) In the future, the Company will continue to uphold a pragmatic spirit, strive to take on challenges at all stages, and work hard to operate the consumer product market so as to achieve goals as planned while fulfilling social responsibilities to create greater profits and best benefits for shareholders and all employees.

2020 Business Report of Investee Sunshine Shihlin Development Co., Ltd.

I. 2020 Business Report

• (i) Change of the category of the old Shihlin Paper Mill land

The land development project of the old Shilin Paper Mill has been approved conditionally by the Taipei Urban Planning Commission in the fourth quarter of 2020. It will continue to work with the Taipei City Government to complete the to-do items related to the project, and continue to evaluate the development of the situation for the maximum benefit of all shareholders of the Company, so as to meet the expectations of all parties and complete the development work successfully.

• (ii) The Warehouse No. 5 hotel urban renewal development project was approved by the city government on October 30, 2019 for implementation with the work at the current stage completed. The company obtained a construction license on April 9, 2020.

• (iii) For the joint construction project at the corner of the Fude Road (Yinxiu Community), there was only one housing unit of 70 pings on the seventh floor remaining, which was still for sale.

• (iv) The original dormitory building (Paper Sun Apartment), which was previously outsourced to an agency to operate it as a rental condo. It has completed the registration as a hotel in March, 2017 and changed its name to "Paper Sun Hotel." Due to the impact of the global pandemic in 2020, it was converted into a quarantine hotel in December 2020.

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• (v) The company has completed the signing of an joint construction contract for the land at No. 669-3 and 669-15, Guanghua Subsection 2, with a parcel of neighboring land, which has been included in the land reconstruction program (the reconstruction program for dangerous old buildings) on December 25, 2020.

• (vi) The company planned to build a commercial building with 10 floors above ground and 3 floors underground on the self-owned land at No. 18, Fude Road, which has been included in the land reconstruction program (the reconstruction program for dangerous old buildings) on July 24, 2020.

• II. Overview of Development Plan for 2021

• (i) The land development project of the old Shilin Paper Mill has been approved conditionally by the Taipei Urban Planning Commission in the fourth quarter of 2020. It will continue to work with the Taipei City Government to complete the to-do items related to the project in 2021, and continue to evaluate the development of the situation for the maximum benefit of all shareholders of the Company, and conduct planning by stage and zone through this project and complete the development work successfully.

• (ii) The construction work of the Warehouse No. 5 hotel urban renewal development project is scheduled to be officially launched in the third quarter of 2021 (a hotel building with 12 floors above ground and 3 floors underground).

• (iii) For the joint construction project at the corner of the Fude Road (Yinxiu Community), the last housing unit has been sold with the contract completed, and it is scheduled to complete the sales in the first quarter of 2021.

• (iv) Paper Sun Hotel has been converted into a quarantine hotel. With the ongoing pandemic, the company will continue into integrate various resources this year to increase revenue and accommodation rates.

• (v) In the company’s joint construction contract for the land at No. 669-3 and 669-15, Guanghua Subsection 2, together with a parcel of neighboring land, residential buildings with 10 floors above ground and 3 floors underground will be built. The construction license is scheduled to be obtained in the second quarter of 2021, and construction will be officially launched in the fourth quarter.

• (vi) The company planned to build a commercial building and a hotel building with 10 floors above ground and 3 floors underground on the self-owned land at No. 18, Fude Road. It is scheduled to obtain a construction license in the second quarter of 2021, and the construction will be officially launched in the fourth quarter.

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III. Future development strategy

Sunshine Shihlin Development Co., Ltd. is a sustainable company, conducting the best management of its own land assets and re-planning and decorating existing properties according to the conditions of its self-owned land to improve the per ping efficiency and occupancy rate. The company will continue to integrate land in other areas that are conducive to carry out development, urban renewal, or reconstruction work of dangerous old buildings, to create a niche for the company while cooperating with government policies to jointly create the best interests of the urban development of Taipei City’s north district and nearby residents.

IV. External competition environment

Affected by the pandemic, in response to the increase in the number of people who need to be quarantined independently, the Paper Sun Hotel has been converted into a quarantine hotel. In 2021, it will continue to cautiously respond to changes in the external economy, adjust and increase catering services in a timely manner, and explore the take-out meal market to diversify income sources.

V. The impact of legal and the overall business environments

The Urban Renewal Act was amended and passed for implementation on January 30, 2019. The company has actively reviewed the conditions of existing land assets and conducted various asset revitalization assessments. In addition, the Taipei City’s regulations for acceleration of the reconstruction of dangerous and old buildings were implemented in October 2019. The company has reviewed eligible land assets in accordance with the regulations and completed the inclusion in the land reconstruction program in 2020 (the reconstruction program for dangerous old buildings) for the project at No. 18, Fude Road and the joint construction project at No. 669-3 and 669-15, Guanghua Subsection 2 with the neighboring land. In 2021, the construction work will be continued as scheduled in line with the planned schedule.

Looking ahead to 2021, with the gradual recovery of Taiwan’s economic growth, the company still needs to pay attention to changes in the global economy due to the pandemic, China-US trade friction, and other factors, and make appropriate adjustments. Therefore, the company will continue to be cautious and to cooperate with the government policies actively to meet relevant review requirements, so as to implement the company’s development business smoothly while safeguarding the rights and interests of the company’s shareholders and meeting the expectations of all parties in the society.

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Attachment 2

Audit Committees' Review Report The board of directors submitted the Company’s 2020 business report, financial statements, and a loss compensation proposal to us. After review, we found no inconsistency. Of them, the financial statements were also reviewed by Earnest & Co. Therefore, we have issued a report for your review in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

To

2021 General Shareholders’ Meeting of Shihlin Paper Co., Ltd.

Convener of the Audit

Committee : Hsiao-Chueh Hsieh

==> picture [106 x 45] intentionally omitted <==

March 19, 2021

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Attachment 3

Independent Auditors’ Report

To the Board of Directors of Shihlin Paper Co., Ltd.,

Opinion

We have audited the accompanying financial statements of Shihlin Paper Co., Ltd. (the Company), which comprise the balance sheets as of December 31, 2020 and 2019, and the statements of comprehensive income, changes in equity, and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis of Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements of section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2020. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion, we do not provide a separate opinion on these matters. The key audit matter identified in the audit of the Company’s financial statements as of and for the year ended December 31, 2020 is as follows:

Revenue recognition

For the accounting policy of revenue, please refer to Note (4) 16 for revenue recognition of the financial statements.

As part of the Company's sales income is from sales to distributors, and the Company shall pay incentives, slotting fees, and advertising sponsorship fees to distributors upon contract signing, and part of the inventory is stored in the distributors’ warehouses. Thus, contract conditions may affect revenue recognition, so revenue recognition is a key audit item. Corresponding audit procedure

Our main audit procedure is as follows:

• Assess the reasonableness of the accounting treatment of revenue recognition (including sales discounts and returns).

• Test the effectiveness of the internal control system design and implementation with regard to income.

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• •Analyze the new sales customers who are related parties with a significant transaction amount or rank among the top ten sales customers to confirm that the revenue recognition is in line with the realization principle.

• •Test the sales samples for a period before and after the end of the year according to the delivery conditions to evaluate the correctness during the revenue recognition period.

Tangible asset impairment assessment

For the accounting policy for tangible asset impairment, please refer to Note (4) 12 of the standalone financial statements; for the uncertainty of accounting estimates and assumptions in assessing tangible asset impairment, please refer to Note (5) of the standalone financial statements.

We assess whether there are any signs that tangible assets may have been impaired at each balance sheet date. If there are any signs of impairment, it is necessary to estimate the asset's recoverable amount. If it is impossible to estimate the recoverable amount in an individual asset, estimate the recoverable amount in the cash-generating unit to which the asset belongs. Since the recoverable amount estimation involves many assumptions and estimates, the assessment of tangible asset impairment is a key audit item.

Corresponding audit procedure

Our main audit procedures for the key audit items above include:

• Understand the Company’s asset impairment assessment methods and implementation status;

• Obtain the impairment evaluation form from the management and evaluate its reasonableness;

• Assess the reasonableness of the cash-generating unit and recoverable amount in the assets identified by the management.

Responsibilities of the Management and the Governance Bodies for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and maintenance of necessary internal control related to the preparation of said statements to ensure that said statements to be free from any material misstatement, either due to fraud or errors.

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

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

Auditors’ Responsibilities for the Audit of the Financial Statements

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

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

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throughout the audit. We also:

1. Identify and assess the risks of material misstatement of the standalone 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 of our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control related to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relevant disclosures made by management.

4. Conclude on the appropriateness of the 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 Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in financial statements in our auditors’ report to the relevant disclosures in the standalone 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 Company to cease to continue as a going concern.

5. Evaluate the overall presentation, structure, and content of the standalone financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the standalone financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Yu-Ling Hung and Wen-Ting Hsiang.

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Earnest & Co.,CPAs. Taipei, Taiwan (Republic of China) March 19, 2021

Notice to Readers

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

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

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Shihlin Paper Co., Ltd. Balance Sheets

December 31, 2020 and 2019

					Shihlin Paper Co., Ltd. Balance Sheets December 31, 2020 and 2019	Shihlin Paper Co., Ltd. Balance Sheets December 31, 2020 and 2019	Shihlin Paper Co., Ltd. Balance Sheets December 31, 2020 and 2019	Shihlin Paper Co., Ltd. Balance Sheets December 31, 2020 and 2019
	Asset AccountingItems Current assets Cash and cash equivalents FVTOCI financial assets Note receivable Net accounts receivable Other receivables Inventories Prepayments Other current assets Total current assets Non-current assets FVTOCI financial assets Investment under equity method Property, Plant and Equipment Investment Property Intangible asset Net defined benefit assets Other non-current assets Total non-current assets Total assets	Note: (IV) and (VI) (IV) and (VI) (IV) and (VI) (IV), (VI), and (VII) (IV) and (VII) (IV) and (VI) (VII) (IV) and (VI) (IV) and (VI) (IV), (VI), and (VIII) (IV), (VI), and (VIII) (IV) and (VI) (IV) and (VI)	Dec. 31,2020 Amount % $ 9,449 0.21 1,605,525 35.31 529 0.01 44,616 0.98 407 0.01 12,490 0.27 3,043 0.07 78 0.00 1,676,137 36.86 5,160 0.11 2,697,034 59.32 34,379 0.76 124,986 2.75 8,398 0.18 263 0.01 405 0.01 2,870,625 63.14 $ 4546762 10000		(Expressed in Thousands of New Taiwan Dollars) Dec. 31,2019 Liabilities and Equity Amount % Code AccountingItems Current liabilities $ 20,797 0.57 2100 Short-term loans 576,697 15.78 2110 Short-term notes and bills payable 2130 Contract liability 593 0.02 2170 Accounts payable 42,495 1.16 2200 Other payables 98 0.00 2300 Other current liabilities 9,239 0.25 21XX Total current liabilities 4,516 0.12 54 0.00 654,489 17.90 Non-current liabilities 2570 Deferred income tax liabilities 2645 Guarantee deposit received 25XX Total non-current liabilities 2XXX Total liabilities 5,441 0.15 Equity attributable to owners of the parent company 2,820,333 77.15 3100 Share capital 35,356 0.97 3110 Common stock 130,663 3.57 Retained earnings 8,656 0.24 3320 Special reserve 305 0.01 3350 Accumulated deficit 359 0.01 3300 Total retained earnings 3,001,113 82.10 3400 Other equity interest 3XXX Total equity $ 3,655,602 100.00 Total liabilities and equity				Note:		Dec. 31,2020	% 15.39 8.29 0.00 0.15 0.21 0.01 24.05 0.65 0.24 0.89 24.94 57.19 33.75 (39.13) (5.38) 23.25 75.06 100.00	Dec. 31,2019 Amount % $ 584,000 15.98 492,783 13.48 189 0.01 7,921 0.21 10,723 0.29 258 0.01 1,095,874 29.98 29,405 0.80 10,416 0.29 39,821 1.09 1,135,695 31.07 2,600,391 71.13 1,534,420 41.97 (1,643,634) (44.96) (109,214) (2.99) 28,730 0.79 2,519,907 68.93 $ 3,655,602 100.00
Code 1100 1120 1150 1170 1200 1310 1410 1470 11XX 1517 1551 1600 1760 1780 1975 1900 15XX			Amount $ 9,449 1,605,525 529 44,616 407 12,490 3,043 78 1,676,137 5,160 2,697,034 34,379 124,986 8,398 263 405 2,870,625 $ 4546762		Amount $ 20,797 576,697 593 42,495 98 9,239 4,516 54 654,489 5,441 2,820,333 35,356 130,663 8,656 305 359 3,001,113 $ 3655602		Code 2100 2110 2130 2170 2200 2300 21XX 2570 2645 25XX 2XXX 3100 3110 3320 3350 3300 3400 3XXX	AccountingItems			Amount $ 700,000 376,752 49 6,718 9,806 364 1,093,689 29,405 10,983 40,388 1,134,077 2,600,391 1,534,420 (1,779,403) (244,983) 1,057,277 3,412,685 $ 4,546,762		Amount $ 584,000 492,783 189 7,921 10,723 258 1,095,874 29,405 10,416 39,821 1,135,695 2,600,391 1,534,420 (1,643,634) (109,214) 28,730 2,519,907 $ 3,655,602
								Current liabilities Short-term loans Short-term notes and bills payable Contract liability Accounts payable Other payables Other current liabilities Total current liabilities Non-current liabilities Deferred income tax liabilities Guarantee deposit received Total non-current liabilities Total liabilities Equity attributable to owners of the parent company Share capital Common stock Retained earnings Special reserve Accumulated deficit Total retained earnings Other equity interest Total equity Total liabilities and equity	(VI) (VI) (IV) (VII) (VII) (VI) (VI)
			,,	.	,,	.

The accompanying notes are an integral part of the standalone financial statements

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Shihlin Paper Co., Ltd. Statements of Comprehensive Income For the Years Ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Common Share)

Code 4000 5000 5900 6100 6200 6300 6000 6900 7010 7020 7050 7070 7000 7900 8200 8311 8316	Item Operating revenue Operating costs Gross profit Operating expenses Selling expenses Administrative expenses R&D expenses Total operating expenses Operating loss Non-operating revenue and expense Other income Other gains and losses Finance costs Share of profit or loss of subsidiaries accounted for using the equity method Total non-operating revenue and expenses Net loss before tax Net loss Other comprehensive income - net Items that may not be reclassified subsequently to profit and loss Gains (losses) on remeasurements of defined benefit plans Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income	Note: (IV), (VI), and (VII) (VI) and (VII) (VII) (VII) (VII) (VI) (VI) (VI) (IV) (IV) and (VI) (IV)	2020	% 100.00 (60.25 ) 39.75 41.19 30.04 5.65 76.88 (37.13) 36.57 (0.05 ) (10.46 ) (110.06) (84.00) (121.13) (121.13) (0.07 ) 918.18 918.11 796.98	2019
			Amount $ 112,020 (67,487 ) 44,533 46,141 33,649 6,331 86,121 (41,588) 40,963 (54 ) (11,720 ) (123,286) (94,097) (135,685) (135,685) (84 ) 1,028,547
8300 8500 9750	Other comprehensive income (net of tax) Total comprehensive income (loss) Earnings per Share Basic earnings per share	(VI)	1,028,463 $ 892,778 $ (0.52)

The accompanying notes are an integral part of the standalone financial statements

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Shihlin Paper Co., Ltd. Statements of Changes in Equity For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

Item Balance at January 1, 2019 Net loss for 2019 Other comprehensive income for 2019 Total comprehensive income for 2019 Balance at December 31, 2019 Net loss for 2020 Other comprehensive income for 2020 Total comprehensive income for 2020 Balance at December 31, 2020	Share capital Shares (thousands) Common stock 260,039 $ 2,600,391 - - - - - - 260,039 2,600,391 - - - - - - 260,039 $ 2,600,391		Retained earnings	Total retained earnings $ 70,331 (179,534) (11) (179,545) (109,214) (135,685) (84) (135,769) $ (244,983)	Other items of equity Unrealized gain (loss) on FVTOCI financial assets $ (50,135) - 78,865 78,865 28,730 - 1,028,547 1,028,547 $ 1,057,277	Total Equity $ 2,620,587 (179,534 ) 78,854 (100,680) 2,519,907 (135,685 ) 1,028,463 892,778 $ 3,412,685
	Shares (thousands) 260,039 - - - 260,039 - - - 260,039	Special reserve $ 1,534,420 - - - 1,534,420 - - - $ 1,534,420	Accumulated deficit $ (1,464,089) (179,534) (11) (179,545) (1,643,634) (135,685) (84) (135,769) $ (1,779,403)

The accompanying notes are an integral part of the standalone financial statements

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Shihlin Paper Co., Ltd. Statements of Cash Flow For the Years Ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities: Net loss before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expenses Interest expenses Interest income Dividend income Share of profit or loss of subsidiaries accounted for using the equity method Changes in operating assets and liabilities: Decrease (increase) in notes receivable Decrease (increase) in trade receivable Increase in other receivables Decrease (increase) in inventories Decrease (increase) in prepayments Decrease (increase) in other current assets Increase in net defined benefit assets Increase (decrease) in contract liability Increase (decrease) in accounts payable Decrease in other payables Increase (decrease) in other current liability Cash inflow (outflow) from operating activities Interest received Dividend received Net cash inflow from operating activities Cash flows from investing activities: Acquisition of FVTOCI financial assets Increase in investment under the equity method Acquisition of property, plant and equipment Acquisition of investment property Acquisition of intangible assets Decrease (increase) in other non-current assets Net cash used in investing activities (Continued on the next page)

2020 2019 $ (135,685) $ (179,534) 8,371 8,946 1,316 1,216 11,720 11,502 (8) (15) (25,285) (19,416) 123,286 163,535 64 (40) (2,121) 19,191 (309) (81) (3,251) 15,345 1,473 (880) (24) 37 (42) (11) (140) 189 (1,203) 2,171 (860) (682) 106 (295) (22,592) 21,178 8 15 25,298 19,416 2,714 40,609 - (198) - (100,000) (438 ) - (1,279 ) (429) (1,058 ) - (46 ) 124 (2,821 ) (100,503)

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Shihlin Paper Co., Ltd. Statements of Cash Flow For the Years Ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars) (Continued from the previous page) 2020 Cash flows from financing activities: Increase in short-term loans $ 116,000 Decrease in short-term notes and bills payable (116,000) Increase (decrease) in guarantee deposit received 567 Interest paid (11,808) Net cash inflow (outflow) from financing activities (11,241) Decrease in cash and cash equivalents (11,348) Cash and cash equivalents, beginning of period 20,797 Cash and cash equivalents, end of period $ 9,449

2019 $ 263,000 (197,000) (310) (10,641) 55,049 (4,845) 25,642 $ 20,797

The accompanying notes are an integral part of the standalone financial statements

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Independent Auditors’ Report

To the Board of Directors of Shihlin Paper Co., Ltd.,

Opinion

We have audited the accompanying financial statements of Shihlin Paper Co., Ltd. (the Company) and its subsidiaries (collectively referred to as “the Group”), which comprise the consolidated balance sheets as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity, cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2020 and 2019 and for the years then ended. Its consolidated financial performance and its consolidated cash flows for the years then ended in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC) of the Republic of China.

Basis of Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2020. 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.

Revenue recognition

For the accounting policy of revenue, please refer to Note (4) 15 for revenue recognition of the consolidated financial statements.

As part of the sales income of the Group is from sales to distributors, and the Group shall pay incentives, slotting fees, and advertising sponsorship fees to distributors upon contract signing, and part of the inventory is stored in the distributors’ warehouses. Thus, contract conditions may affect revenue recognition, so revenue recognition is a key audit item. Corresponding audit procedure

Our main audit procedure is as follows:

• Assess the reasonableness of the accounting treatment of revenue recognition (including sales discounts and returns).

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• Test the effectiveness of the internal control system design and implementation with regard to income.

• •Analyze the new sales customers who are related parties with a significant transaction amount or rank among the top ten sales customers to confirm that the revenue recognition is in line with the realization principle.

• •Test the sales samples for a period before and after the end of the year according to the delivery conditions to evaluate the correctness during the revenue recognition period.

• Tangible asset impairment assessment

For the accounting policy for tangible asset impairment, please refer to Note (4) 11 of the consolidated financial statements; for the uncertainty of accounting estimates and assumptions in assessing tangible asset impairment, please refer to Note (5) of the consolidated financial statements.

As of December 31, 2020, the Group’s property, plant, and equipment amounted to NT$1,311,043 thousand, and the investment property amounted to NT$4,403,082 thousand. We assess whether there are any signs that the Group’s tangible assets may have been impaired at each balance sheet date. If there are any signs of impairment, it is necessary to estimate the asset's recoverable amount. If it is impossible to estimate the recoverable amount in an individual asset, estimate the recoverable amount in the cash-generating unit to which the asset belongs. Since the total amount in the above-mentioned tangible assets is NT$5,714,125 thousand (accounting for 75.97% of the total consolidated assets), and the estimation of the recoverable amount involves many assumptions and estimates, the impairment assessment of tangible assets is a key audit item.

Corresponding audit procedure

Our main audit procedures for the key audit items above include:

• Understand the Company’s asset impairment assessment methods and implementation status;

• Obtain the impairment evaluation form from the management and evaluate its reasonableness;

• Assess the reasonableness of the cash-generating unit and recoverable amount in the assets identified by the management.

Other Matters

Shihlin Paper Co., Ltd. has prepared its parent company only financial statements as of and for the years ended December 31, 2020 and 2019, on which we have issued an unmodified opinion.

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

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

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters

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related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis of our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control related to the audit in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and relevant disclosures made by management.

4. Conclude on the appropriateness of the 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.

5. Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2020 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Yu-Ling Hung and Wen-Ting Hsiang.

Earnest & Co.,CPAs. Taipei, Taiwan (Republic of China)

March 19, 2021

Notice to Readers

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

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

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Shihlin Paper Co., Ltd. and Subsidiaries Consolidated Balance Sheets December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

	Asset AccountingItems Current assets Cash and cash equivalents FVTPL financial assets FVTOCI financial assets AC financial assets Note receivable Net accounts receivable Other receivables Inventories Prepayments Other current assets Total current assets Non-current assets FVTOCI financial assets Property, Plant and Equipment Investment Property Intangible asset Net defined benefit assets Other non-current assets Total non-current assets Total assets	Note:	Dec. 31,2020 Amount % $ 24,307 0.32 14,855 0.20 1,605,525 21.34 1,396 0.02 529 0.01 48,864 0.65 407 0.01 74,386 0.99 21,855 0.29 105 0.00 1,792,229 23.83 5,160 0.07 1,311,043 17.43 4,403,082 58.54 9,483 0.12 263 0.00 733 0.01 5,729,764 76.17 $ 7,521,993 100.00	Dec. 31,2019 Amount % $ 117,697 1.79 15,410 0.23 576,697 8.76 - - 593 0.01 49,050 0.74 46 0.00 72,798 1.11 23,897 0.36 78 0.00 856,266 13.00 5,441 0.08 1,067,932 16.21 4,646,933 70.55 9,853 0.15 305 0.00 533 0.01 5,730,997 87.00 $ 6,587,263 100.00		Liabilities and Equity	Note:		Dec. 31,2020 Amount % $ 2,087,500 27.75 376,752 5.01 2,516 0.03 7,164 0.10 21,570 0.29 812 0.01 2,496,314 33.19 1,596,040 21.22 16,954 0.22 1,612,994 21.44 4,109,308 54.63 2,600,391 34.57 1,534,420 20.40 (1,779,403) (23.66) (244,983) (3.26) 1,057,277 14.06 3,412,685 45.37 $ 7,521,993 100.00	Dec. 31,2019 Amount % $ 1,873,700 28.44 542,168 8.23 2,369 0.04 12,865 0.20 23,937 0.36 771 0.01 2,455,810 37.28 1,596,040 24.23 15,506 0.24 1,611,546 24.47 4,067,356 61.75 2,600,391 39.48 1,534,420 23.29 (1,643,634) (24.95) (109,214) (1.66) 28,730 0.43 2,519,907 38.25 $ 6,587,263 100.00
Code 1100 1110 1120 1136 1150 1170 1200 1310 1410 1470 11XX 1517 1600 1760 1780 1975 1900 15XX			Amount $ 24,307 14,855 1,605,525 1,396 529 48,864 407 74,386 21,855 105 1,792,229 5,160 1,311,043 4,403,082 9,483 263 733 5,729,764 $ 7,521,993	Amount $ 117,697 15,410 576,697 - 593 49,050 46 72,798 23,897 78 856,266 5,441 1,067,932 4,646,933 9,853 305 533 5,730,997 $ 6,587,263	Code 2100 2110 2130 2150 2170 2200 2300 21XX 2570 2645 25XX 2XXX 31XX 3100 3110 3320 3350 3300 3400 3XXX	AccountingItems			Amount $ 2,087,500 376,752 2,516 7,164 21,570 812 2,496,314 1,596,040 16,954 1,612,994 4,109,308 2,600,391 1,534,420 (1,779,403) (244,983) 1,057,277 3,412,685 $ 7,521,993	Amount $ 1,873,700 542,168 2,369 12,865 23,937 771 2,455,810 1,596,040 15,506 1,611,546 4,067,356 2,600,391 1,534,420 (1,643,634) (109,214) 28,730 2,519,907 $ 6,587,263
		(IV) and (VI) (IV) and (VI) (IV) and (VI) (IV) and (VI) (IV) and (VI) (IV), (VI), and (VII) (IV) (IV) and (VI) (VI) and (VII) (IV) and (VI) (IV), (VI), and (VIII) (IV), (VI), and (VIII) (IV) and (VI) (IV) and (VI)				Current liabilities Short-term loans Short-term notes and bills payable Contract liability Accounts payable Other payables Other current liabilities Total current liabilities Non-current liabilities Deferred income tax liabilities Guarantee deposit received Total non-current liabilities Total liabilities Equity attributable to owners of the parent company Share capital Common stock Retained earnings Special reserve Accumulated deficit Total retained earnings Other equity interest Total equity Total liabilities and equity	(VI) (VI) (VII) (VI) (VI)

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

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Shihlin Paper Co., Ltd. and Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Code 4000 5000 5900 6100 6200 6300 6000 6900 7010 7020 7050 7000 7900 7950 8200 8311 8316 8300 8500 8600	Item Operating revenue Operating costs Gross profit Operating expenses Selling expenses Administrative expenses R&D expenses Total operating expenses Operating loss Non-operating revenue and expenses Other income Other gains and losses Finance costs Total non-operating revenue and expenses Net loss before tax Income tax expense Net loss Other comprehensive income - net Items that may not be reclassified subsequently to profit and loss Gains (losses) on remeasurements of defined benefit plans Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income Other comprehensive income (net of tax) Total comprehensive income (loss) Net loss attributable to:	Note (IV), (VI), and (VII) (VI) and (VII) (VII) (VII) (VII) (VI) (VI) (VI) (IV) and (VI) (IV) and (VI) (IV)	2020	% 100.00 66.45 33.55 49.44 74.02 5.66 129.12 (95.57) 26.62 (0.09 ) (16.04) 10.49 (85.08 ) - (85.08) (0.05 ) 644.96 644.91 559.83 (85.08 ) - (85.08) 559.83 - 559.83	2019	% 100.00 69.18 30.82 52.56 81.69 5.39 139.64 (109.82) 18.29 0.01 (15.43) 2.87 (105.95 ) - (105.95) (0.01 ) 46.54 46.53 (59.42) (105.95 ) - (105.95) (59.42 ) - (59.42)
			Amount $ 159,473 105,965 53,508 78,852 118,036 9,034 205,922 (152,414) 42,451 (136 ) (25,586) 16,729 (135,685 ) - (135,685) (84 ) 1,028,547 1,028,463 $ 892,778		Amount $ 169,454 117,222 52,232 89,068 138,427 9,140 236,635 (184,403) 30,993 19 (26,143) 4,869 (179,534 ) - (179,534) (11 ) 78,865 78,854 $ (100,680) $ (179,534 ) - $ (179,534) $ (100,680 ) - $ (100,680) $ (0.69)
8610 8620 8700 8710 8720 9750	Owners of the parent company Non-controlling interests Comprehensive income attributable to: Owners of the parent company Non-controlling interests Earnings per Share Basic earnings per share	(VI)	$ (135,685 ) - $ (135,685) $ 892,778 - $ 892,778 $ (0.52)

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

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Shihlin Paper Co., Ltd. and Subsidiaries Consolidated Statements of Changes In Equity For the Years Ended December 31, 2020 and 2019 (Expressed in Thousands of New Taiwan Dollars)

Equity attributable to owners of the parent company

Item Balance at January 1, 2019 Net loss for 2019 Other comprehensive income for 2019 Total comprehensive income for 2019 Balance at December 31, 2019 Net loss for 2020 Other comprehensive income for 2020 Total comprehensive income for 2020 Balance at December 31, 2020	Share capital Shares (thousands) Common stock 260,039 $ 2,600,391 - - - - - - 260,039 2,600,391 - - - - - - 260,039$ 2,600,391		Retained earnings	Total retained earnings $ 70,331 (179,534) (11) (179,545) (109,214) (135,685) (84) (135,769) $ (244,983)	Other items of equity Unrealized Gains (losses) from financial assets measured at FVTOCI $ (50,135) - 78,865 78,865 28,730 - 1,028,547 1,028,547 $ 1,057,277	Total Equity $ 2,620,587 (179,534) 78,854 (100,680) 2,519,907 (135,685) 1,028,463 892,778 $ 3,412,685
	Shares (thousands) 260,039 - - - 260,039 - - - 260,039	Special reserves $ 1,534,420 - - - 1,534,420 - - - $ 1,534,420	Accumulated deficit $ (1,464,089 ) (179,534 ) (11) (179,545) (1,643,634) (135,685 ) (84) (135,769 ) $ (1,779,403 )

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

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Shihlin Paper Co., Ltd. and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2020 and 2019

Cash flows from operating activities: Net loss before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Expected credit impairment loss Net (gain) loss on financial assets at FVTPL Interest expense Interest income Dividend income Changes in operating assets and liabilities: Decrease (increase) in notes receivable Decrease (increase) in accounts receivable Increase in other receivables Decrease (increase) in inventories Decrease (increase) in prepayments Decrease (increase) in other current assets Increase in net defined benefit assets Increase in contract liability Decrease in notes payable Increase (decrease) in accounts payable Increase (decrease) in other payables Increase (decrease) in other current liabilities		2020 (135,685) 18,552 1,428 119 (55) 25,586 (24) (25,286) 64 67 (361) (1,588) 2,042 (27) (42) 147 - (5,701) (2,298) 41	2019 $ (179,534) 19,861 1,329 - (82) 26,143 (34) (19,416) (40) (13,594) (29) 16,100 (2,951) 22 (11) 1,105 (27) 4,759 1,750 (234)	2019 $ (179,534) 19,861 1,329 - (82) 26,143 (34) (19,416) (40) (13,594) (29) 16,100 (2,951) 22 (11) 1,105 (27) 4,759 1,750 (234)
	$
Cash outflow generated from operations Interest received Dividends received Net Cash provided by (used in) operating activities (Continued on the next page)		(123,021) 24 25,286 (97,711)		(144,883) 34 19,416 (125,433)

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Shihlin Paper Co., Ltd. and its Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2020 and 2019

(Expressed in Thousands of New Taiwan Dollars)

(Continued from the previous page) Cash flows from investing activities: Proceeds from disposal FVTPL financial assets Acquisition of financial assets at FVTOCI Increase in Amortized cost financial assets Acquisition of property, plant and equipment Acquisition of investment property Acquisition of intangible assets Decrease (increase) in other non-current assets Net cash used in investing activities Cash flows from financing activities: Increase in short-term loans Repayment of short-term loans Decrease in short-term notes and bills payable Increase (decrease) in guarantee deposits received Interest paid Net cash inflow from financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period	2020 $ 610 - (1,396) (3,807) (14,005) （1,058) (200) (19,856) 12,319,500 (12,105,700) (165,500) 1,448 (25,571) 24,177 (93,390) 117,697 $ 24,307	2019 $ 2,450 (198) - (2,921) 95 (574) 10,132,400 (9,589,700) (327,500) (148) (24,788) 190,264 64,257 53,440 $ 117,697

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

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Attachment 4 Shihlin Paper Co., Ltd.

2020 Deficit Compensation Statement

Cumulative loss at the beginning of the period Re-measurement of defined benefit plans for 2020 reclassified to retained earnings Net loss after tax for 2020 Cumulative loss at the end of the period	Unit: NTD thousand Amount
	(1,643,634) (84) (135,685)
	(1,779,403)

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Appendix 1

Articles of Incorporation of Shihlin Paper Co., Ltd.

• Article 1: The Name of the Company is “Shihlin Paper Co., Ltd”. in accordance with the provisions of the Company Act regarding company limited by shares.

• Article 2: The registered business of the Company is as follows:

• A101020 Growing of Crops.

A101030 Growing of Special Crops.

A101040 Growing of Edible Fungi.

A102020 Agricultural Products Preparations.

A102050 Crops Cultivation.

A102060 Food Dealers.

C601020 Paper Manufacturing.

C601030 Paper Containers Manufacturing.

C601040 Processed Paper Manufacturing.

F101130 Wholesale of Vegetables and Fruits.

F101990 Wholesale of Other Agricultural, Livestock and Aquatic Products.

F102050 Wholesale of Tea Leaves.

F102170 Wholesale of Foods and Groceries.

F106020 Wholesale of Daily Commodities. F108040 Wholesale of Cosmetics. F199990 Other Wholesale Trade. F201010 Retail Sale of Agricultural Products.

F201990 Retail Sale of Other Agricultural, Livestock and Aquaculture Products. F203010 Retail Sale of Food, Grocery and Beverage. F206020 Retail Sale of Daily Commodities. F208040 Retail Sale of Cosmetics. F399040 Retail Sale No Storefront.

F401010 International Trade. F501060 Restaurants. H701040 Specific Area Development.

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H701060 New Towns, New Community Development.

H703100 Real Estate Leasing.

ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.

• Article 3: The total amount of the Company's investment is not restricted by Article 13 of the Company Act.

• Article 3-1: The company may provide endorsement/guarantee to external parties.

• Article 4: The Company is located in Taipei City and may set up a production and marketing organization at an appropriate location.

• Article 5: Deleted.

• Article 6: The Company’s total registered capital is NT$2.8 billion, divided into 280 million shares, with a par value of NT$10 per share, which may be issued in tranches.

• Article 7: The Company’s shares are registered and are issued after being signed or stamped by the Chairman and at least three directors, alongside the Company’s seal and tax ID number, and certified in accordance with the law. The Company may be exempted from the printing hard copies of the stock certificates but has to register with the central depository of securities.

• Article 8: The transfer of share ownership shall be suspended within 60 days prior to a general shareholders’ meeting, 30 days before convening an extraordinary shareholders' meeting, or 5 days prior to the record date of the Company’s distribution of dividends, bonuses, or other benefits.

• Article 9: The Company’s shareholders’ meeting is divided into two types: general meetings and extraordinary meetings. The general meeting is held once a year, which is held within six months after the final accounts of each year are ready, and the extraordinary meeting is convened when necessary. The date, location, and reason for the convening of the general shareholders’ meeting shall be contained in a notice to shareholders within 30 days before the meeting and announced accordingly while the date, location, and reason for the convening of an extraordinary shareholders’ meeting shall be contained in a notice to shareholders within 15 days before the meeting and announced accordingly

The shareholders’ meeting mentioned in the preceding paragraph shall be convened by the board of directors, unless otherwise provided by the Company Act.

For shareholders who hold less than 1,000 shares of the registered stock, the notice of the convening of the meeting in the preceding paragraph may be announced by way of public announcement.

• Article 9-1: If shareholders are unable to attend the shareholders’ meeting for any reason, they may appoint a proxy to attend the meeting.

The regulations on attendance at shareholders' meetings by proxy are in

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accordance with the “Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies” promulgated by the Financial Supervisory Commission (FSC), unless otherwise provided by the Company Act.

• Article 10: The Chairman shall chair shareholders’ meetings. In case that the Chairman is on leave or cannot exercise his power and authority for any reasons, the Vice Chairman shall act on his behalf. In case that the Vice Chairman is also on leave or unable to exercise his power and authority for any reasons, the Chairman shall designate one director to act on his behalf. In the absence of such designation, the directors shall elect from among themselves an acting chair.

The shareholders' meeting mentioned in the preceding paragraph shall be handled in accordance with the Company’s Rules of Procedure for Shareholders’ Meetings.

• Article 10-1: Unless otherwise specified in the Company Act, resolutions in a shareholders’ meeting shall be adopted by a majority vote in the meeting which is attended by shareholders representing a majority of the total issued shares. Resolutions adopted at a shareholders' meeting shall be recorded in the minutes of the meeting, which shall be affixed with the signature or seal of the chair of the meeting and shall be distributed to all shareholders of the Company within twenty days after the close of the meeting.

The meeting minutes as mentioned in paragraph 1 may be distributed by means of public announcement.

The meeting minutes shall record the date and place of the meeting, the name of the chair, the method of adopting resolutions, a summary of the essential points of the proceedings, and the results. The minutes shall be kept persistently throughout the life of the Company.

The shareholders’ meeting sign-in book and the powers of attorney of the proxies shall be kept for a minimum period of at least one year. However, if a lawsuit has been instituted by any shareholder in accordance with the provisions of Article 189 of the Company Act, the meeting minutes involved shall be kept until the final ruling of the action.

Article 11: The shareholders present at a shareholders meeting of the Company is entitled to one vote for each share held, except when restricted under Subparagraph 3, Article 157 of the Company Act or without voting rights as listed under Paragraph 2, Article 179 of the Company Act.

Article 12: The Company shall establish 7 seats of directors and the nomination system shall be adopted; the shareholders shall elect the candidates on the list. The term of office is 3 years and can be renewed if reelected.

Of all the aforementioned number of seats of directors, at least 3 shall be reserved for independent directors and the seats of independent directors shall account for at least one-fifth of the total seats of directors and the nomination system shall be adopted. The shareholders shall elect the candidates on the list to act as independent directors. The professional

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qualification, shareholding, concurrent job position limitation, determination of independence, nomination, election methods, and implementation of responsibilities for independent directors, as well as other necessary compliance matters shall be handled in accordance with the Securities and Exchange Act as well as relevant laws and regulations.

The board of directors shall elect a chairman of the board from among the directors by a majority vote at a meeting attended by over two-thirds of the directors, and may also elect in the same manner a vice chairman of the board. All the affairs of the Company shall be carried out in accordance with the laws, Articles of Incorporation, and the resolutions adopted by the shareholders’ meeting and the board of directors. The shares held by all directors shall be handled in accordance with the “Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies” promulgated by the FSC.

• Article 13: The 24th board of directors of the Company established the Audit Committee, composed of all independent directors The committee shall be formed with at least three members. One of them shall be the convener and at least one member shall have expertise in accounting or finance. The implementation of responsibilities, the committee charter, and other compliance matters shall be subject to relevant laws and regulations or the Company’s Articles of Incorporation.

• Article 14: The Company’s operating policies and other important matters are determined by the board of directors. Except for the first meeting of the board of directors that shall be convened in accordance with Article 203 of the Company Act, the Chairman shall convene board meetings and serve as the chair of the meetings. Where the Chairman cannot perform his duties, the Vice Chairman shall act on his behalf, and where the Vice Chairman cannot perform his duties, the Chairman shall designate a director to act on his behalf. In the absence of such designation, attending directors shall elect from among themselves an acting chair. Where a director fails to attend a board meeting for any reason, he/she may appoint another director to act on his/her behalf.

• Article 14-1: The resolutions of the board of directors, unless otherwise stipulated by the Company Act, shall be approved by a majority vote at a meeting attended by a majority of the directors. The resolutions shall be recorded in the meeting minutes and signed or stamped by the chair.

• Article 15: The Company shall engage one President and may engage several Vice Presidents and Assistant Vice Presidents, and their appointment and dismissal shall be approved by a majority vote of all the directors.

• Article 16: The Company’s annual final accounts shall be prepared at the end of December each year. The board of directors shall prepare the following documents and submit them to the general shareholders’ meeting for ratification in accordance with the legal procedures.

  • (i) Business report.

  • (ii) Financial statements.

  • (iii) Proposal for earnings distribution and deficit compensation.

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• Article 17: Where the Company makes a profit at the end of the year, it shall allocate 1% of the balance for employee remuneration. However, where there are accumulated losses, an equivalent amount shall be appropriated to compensate for the losses.

Employees entitled to receive the employee remuneration, distributed in the form of stock or cash, in the preceding paragraph include the employees of subordinate companies who meet certain criteria.

• Article 17-1: Where there is a surplus in the Company’s annual final accounts, the Company shall first pay taxes and compensate the accumulated losses; then, appropriate 10% of the balance for legal reserve and another 10% for the payment for dividends. If there is still a surplus, the shareholders’ meeting shall decide on the distribution of shareholders’ dividends.

The Company's industrial environment is ever-changing and it is at a stage od development. The Company shall consider the overall industrial environment and take into account the long-term financial planning and future capital needs to achieve stable development and sustainable operation.

The Company's dividend policy is based on the current year's profitability and the consideration for the Company’s future growth, capital budgeting, and measurement of capital needs. After the Company retains earnings or reserves the fund needed for stock dividends, the remaining surplus will be distributed for cash dividends.

• Article 18: The Company’s Articles of Incorporation are separately formulated by the board of directors.

• Article 19: Matters not specified in the Articles of Incorporation shall be handled in accordance with the provisions of the Company Act and relevant laws and regulations.

• Article 20: The Articles of Incorporation were formulated on June 29, 1958. The first amendment was made on December 5, 1959. The second amendment was made on March 26, 1962. The third amendment was made on December 20, 1962. The fourth amendment was made on April 15, 1963. The fifth amendment was made on March 23, 1966. The sixth amendment was made on March 18, 1967. The seventh amendment was made on June 28, 1968. The eighth amendment was made on May 10, 1969. The ninth amendment was made on March 2, 1970. The 10th amendment was made on March 10, 1971. The 11th amendment was made on March 25, 1972. The 12fth amendment was made on March 10, 1973. The 13th amendment was made on March 16, 1974. The 14th amendment was made on February 28, 1976. The 15th amendment was made on March 15,1977. The 16th amendment was made on August 15, 1977. The 17th amendment was made on March 1, 1978. The 18th amendment was made on March 3, 1979. The 19th amendment was made on March 5, 1980. The 20th amendment was made on March 3, 1981. The 21st amendment was made on March 20, 1982. The 22nd amendment was made on March 17, 1983. The 23rd amendment was made on March 16, 1984. The 24th amendment was made on March 16, 1985. The 25th amendment was made on March 25, 1986. The 26th amendment was made on March 27, 1987. The 27th amendment was made

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on March 15, 1988. The 28th amendment was made on March 31, 1989. The 29th amendment was made on May 14, 1990. The 30th amendment was made on April 29, 1991. The 31st amendment was made on May 30, 1994. The 32nd amendment was made on May 8, 1995. The 33rd amendment was made on April 23, 1996. The 34th amendment was made on May 23, 2000. The 35th amendment was made on May 28, 2001. The 36th amendment was made on June 25, 2002. The 37th amendment was made on June 30, 2003. The 38th amendment was made on June 23, 2004. The 39th amendment was made on June 13, 2007. The 40th amendment was made on June 15, 2010. The 41st amendment was made on June 21, 2012. The 42nd amendment was made on June 4, 2013. The 43rd amendment was made on June 27, 2014. The 44th amendment was made on June 8, 2015. The 45th amendment was made on June 8, 2016. The 46th amendment was made on June 24, 2019.

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Appendix 2

I.

Shihlin Paper Co., Ltd. Rules of Procedure for Shareholder Meetings

The Rules of Procedure for Shareholder Meetings of the Company, except as otherwise provided by law, regulation or the Articles of Incorporation, shall be as provided in the Rules.

II.

Unless otherwise provided by law or regulation, the Company’s shareholders meetings shall be convened by the board of directors.

The Company shall prepare electronic versions of the shareholders’ meeting notice and proxy forms, and the origins of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors, and upload them to the Market Observation Post System (MOPS) thirty days before the date of an ordinary shareholders’ meeting or fifteen days before the date of an extraordinary shareholders’ meeting. The Company shall prepare electronic versions of the shareholders meeting agenda and supplemental meeting materials and upload them to the MOPS before 21 days before the date of the ordinary shareholders’ meeting or before 15 days before the date of the extraordinary shareholders’ meeting. The shareholders’ meeting shall prepare the Meeting Agenda Handbook and supplementary data of the meeting available to all shareholders and display them at the Company and the shareholder services agent fifteen days prior to the shareholders’ meeting and shall have the same handed out on-the-spot the shareholders’ meeting.The shareholders’ meeting shall prepare the Meeting Agenda Handbook and supplementary data of the meeting available to all shareholders and display them at the Company and the shareholder services agent fifteen days prior to the shareholders’ meeting and shall have the same handed out on-the-spot the shareholders’ meeting.

A meeting notice or meeting announcement shall contain information including the cause of meeting. With the approval of the counterparty, such notices or announcements shall be made electronically.

The issues regarding election or dismissal of the directors, amendment to the Articles of Incorporation, dissolution of the Company, merger, demerger, or issues set forth under Paragraph 1 of Article 185 of the Company Act, and Article 26-1 and Article 43-6 of Securities and Exchange Act shall be expressly enumerated under the cause for convening the meeting and shall not be put forth through extempore motions.

A shareholder who holds more than 1% of the aggregate total of the outstanding shares may pose a proposal to the regular shareholders meeting but each proposal may contain only one issue. The issue beyond one shall not be

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accredited as an issue. Besides, where a proposal posed by a shareholder proves to have fallen upon any single one among those enumerated under Paragraph 4, Article 172-1 of the Company Act, the board of directors may not accredit it as an issue under the agenda.

The Company shall promulgate before convening of the regular shareholders meeting to entertain proposals posed by shareholders before the Company suspends transfer of stocks. The location and timeframe to entertain proposals shall not be shorter than the minimum of 10 days.

An issue proposed by a shareholder shall not exceed the maximum of 300 Chinese characters; an issue that exceeds 300 Chinese characters shall not be entered into the agenda. A shareholder who submits a proposal shall participate in the shareholders’ meeting either in person or by proxy and shall participate in the discussion process of the issue so proposed.

The Company shall keep the proposing shareholders informed of the results in handling their proposals before the notice of the shareholders’ meeting is served and shall have the proposals meeting the requirements set forth under this Article included in the agenda. With regard to the proposals submitted by shareholders but not included in the agenda of the meeting, the cause of exclusion of such proposals and explanation shall be made by the board of directors at the shareholders’ meeting to be convened.

III.

For each shareholders’ meeting, a shareholder may appoint a proxy to attend the meeting by providing a power of attorney issued by the Company and stating the scope of the proxy’s authorization.

A shareholder may issue only one proxy form and appoint only one proxy for any given shareholders meeting, and shall deliver the proxy form to the Company before five days before the date of the shareholders meeting. When duplicate proxy forms are delivered, the one received earliest shall prevail; unless the preceding proxy is declared withdrawn.

After the service of the power of attorney of a proxy to the company, in case the shareholder issuing the said proxy intends to attend the shareholders’ meeting in person or to exercise his/her/its voting power in writing or by way of electronic transmission , a proxy rescission notice shall be filed with the company two days prior to the date of the shareholders’ meeting as scheduled in the shareholders’ meeting notice so as to rescind the proxy at issue, otherwise, the voting power exercised by the authorized proxy at the meeting shall prevail.

IV. The Company shall furnish the attending shareholders or proxies entrusted by shareholders (collectively, “shareholders”) with an attendance book to sign, or attending shareholders may hand in a sign-in card in lieu of signing in.

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The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker’s slips, voting slips, and other meeting materials. Where there is an election of directors or supervisors, pre-printed ballots shall also be furnished.

Shareholders shall hand in their attendance cards, sign-in cards, or other attendance certificates to attend the shareholders’ meeting; power of attorney solicitors shall carry their identity documents with them for verification.

When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders meeting. When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting.

V.

The presence and voting in a shareholders’ meeting shall be duly calculated based on the number of shares.

The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in plus the number of shares whose voting rights are exercised by correspondence or electronically.

The shares held by shareholders having no voting right shall not be counted in the total number of issued shares while adopting a resolution at a meeting of shareholders.

On an issue under discussion in a shareholders’ meeting, a shareholder who is an interested party in such issue that is likely to impair the interests of the Company shall not join the voting process, nor shall he or she exercise voting rights as a proxy for another shareholder.

The number of shares mentioned in the preceding paragraph that could not be exercised for voting rights shall not be counted as the voting rights of the shareholders who are already present in the meeting.

Except for trust enterprises or stock agencies approved by the competent authority, when a person who acts as the proxy for two or more shareholders, the number of voting power represented by him/her shall not exceed 3% of the total number of voting shares of the company, otherwise, the portion of excessive voting power shall not be counted.

On the day of a shareholders meeting, the Company shall compile a statistical statement of the number of shares obtained by solicitors through solicitation and the number of shares represented by proxies, and shall make an express disclosure of said statement at the place of the shareholders’ meeting.

VI.

The venue for a shareholders meeting shall be the premises of the Company’s headquarters, or a place easily accessible to shareholders and suitable for a shareholders meeting. The meeting may begin no earlier than 9 a.m. and no

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later than 3 p.m.

• VII. Where the board of directors convene a shareholders’ meeting, the Chairman of the Company shall preside over the meeting. In the absence of the Chairman or if the Chairman cannot perform their duties, the Vice Chairman shall act on behalf of and in the name of the Chairman to preside over the meeting. Where there is no seat of a Vice Chairman, in the absence of the Vice Chairman or where the Vice Chairman cannot perform their duties, the Chairman shall designate one director to preside over the meeting. In the absence of such designation, the directors shall elect from among themselves an acting chair. Where a shareholders’ meeting is convened by another convener beyond the board of directors, such meeting shall be chaired by that convener. In the event that there are 2 or more conveners, one shall be elected from among themselves to chair the meeting.

• VIII. The Company may appoint its attorneys, certified public accountants, or relevant persons retained by it to attend a shareholders’ meeting in a non-voting capacity.

• IX. Shareholder’s meetings of the Company must be recorded in video or audio, and kept for at least one (1) year. However, if a lawsuit has been instituted by any shareholder in accordance with the provisions of Article 189 of the Company Act, the meeting minutes involved shall be kept until the legal proceedings of the foregoing lawsuit have been concluded.

• X. The chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than one hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the chair shall declare the meeting adjourned.

• If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution approved with a majority vote of attending shareholders may be adopted pursuant to Paragraph 1 of Article 175 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders meeting shall be convened within one month.

When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the chair may resubmit the tentative resolution for a vote by the shareholders’ meeting pursuant to Article

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174 of the Company Act.

• XI. If a shareholders’ meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors. The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders’ meeting.

The provisions of the preceding paragraph apply mutatis mutandis to a shareholders meeting convened by a party with the power to convene that is not the board of directors.

• The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extempore motions), except by a resolution of the shareholders’ meeting. If the chair declares the meeting adjourned in violation of the rules of procedure, the other members of the board of directors shall promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

• XII. Before speaking, an attending shareholder must specify on a speaker’s slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the chair. A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. In case the content of the speech delivered on the floor is inconsistent with the content in the speech slip, the former shall prevail. When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the chair and the shareholder that has the floor; the chairperson shall stop any violation.

• Except with the consent of the chair, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the chair may terminate the speech.

• When a juridical person shareholder appoints two or more representatives to attend a shareholders’ meeting, only one of the representatives so appointed may speak on the same proposal.

• After an attending shareholder has spoken, the chair may respond in person or direct relevant personnel to respond.

• XIII. The chair shall grant adequate opportunities for clarification and discussion on an amendment or extempore motions posed by a shareholder. Upon the time believed to be up for resolution, the chair may announce discontinuation from a discussion and put the issue for resolution.

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• XIV. A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under Paragraph 2 of Article 179 of the Company Act.

• Where a shareholders’ meeting is convened by the Company, voting rights may be exercised in writing or electronic means. When the voting rights are to be exercised in writing, such means of exercise shall be expressly provided in the notice to the shareholders’ meeting. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting; it is therefore advisable that the Company avoid the submission of extraordinary motions and amendments to original proposals.

• A shareholder intending to exercise voting rights by correspondence or electronic means under the preceding paragraph shall deliver a written declaration of intent to the Company before two days before the date of the shareholders meeting. When duplicate declarations of intent are delivered, the one received earliest shall prevail; except when a declaration is made to cancel the earlier declaration of intent.

• After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the shareholders meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made known to the Company, by the same means by which the voting rights were exercised, before two business days before the date of the shareholders meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights both by correspondence or electronic means and by appointing a proxy to attend a shareholders meeting, the voting rights exercised by the proxy in the meeting shall prevail.

• Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of the Company. The counting of the votes at the shareholders’ meeting shall be conducted publicly at the shareholders’ meeting, and the results of the vote shall be announced on the spot and recorded in the meeting minutes.

• XV. Where directors are elected in a shareholders’ meeting, the election shall be duly conducted in accordance with relevant election guidelines defined by the Company. The outcome of the election shall be announced on the spot.

• The ballots for the election referred to in the preceding paragraph shall be

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sealed with the signatures of the monitoring personnel and kept in proper custody for at least one year. However, if a lawsuit has been instituted by any shareholder in accordance with the provisions of Article 189 of the Company Act, the meeting minutes involved shall be kept until the legal proceedings of the foregoing lawsuit have been concluded. XVI. When a meeting is in progress, the chair may announce a break based on time considerations. If a force majeure event occurs, the chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

If the meeting venue is no longer available for continued use and not all of the items (including extempore motions) on the meeting agenda have been addressed, the shareholders meeting may adopt a resolution to resume the meeting at another venue.

A resolution may be adopted at a shareholders meeting to defer or resume the meeting within five days in accordance with Article 182 of the Company Act.

XVII. Except as otherwise provided in the Company Act and in the Company's Articles of Incorporation, the passage of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders.

The chair is to consult the motion ready for balloting with the attendees at the meeting and it is deemed as having been passed if there are no objections raised.

XVIII. When there is an amendment or an alternative to a proposal, the chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

XIX. The chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an identification badge or armband bearing the word "Proctor."

At the place of a shareholders meeting, if a shareholder attempts to speak through any device other than the public address equipment set up by the Company, the chair may prevent the shareholder from so doing. When a shareholder violates the rules of procedure and defies the chair's correction, obstructing the proceedings and refusing to heed calls to stop, the chair may direct the proctors or security personnel to escort the shareholder from the meeting.

• XX. Resolutions adopted at a shareholders' meeting shall be recorded in the minutes

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of the meeting, which shall be affixed with the signature or seal of the chair of the meeting and shall be distributed to all shareholders of the Company within twenty days after the close of the meeting. The meeting minutes may be produced and distributed in electronic form.

The Company may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the Market Observation Post System (MOPS).

Contents of the minutes shall include the time, the place, and the chair of the meeting as they are, as well as the method and the process of deliberation, and 38 the results of deliberation.

The minutes shall be retained for the duration of the existence of the Company. If matters put to a resolution at a shareholders’ meeting constitute material information under applicable laws or regulations or under Taiwan Stock Exchange Corporation regulations, the Company shall upload the content of such resolution to the MOPS within the prescribed time period.

• XXI. The Rules, and any amendments hereto, shall be implemented after adoption by shareholders’ meetings.

• XXII. The Rules were formulated on March 15, 1988. The 1st amendment was made on May 12, 1999.

• The 2nd amendment was made on June 25, 2002.

• The 3rd amendment was made on June 4, 2013.

• The 4th amendment was made on June 8, 2015. The 5th amendment was made on June 24, 2019.

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Appendix 3

Shihlin Paper Co., Ltd. Shareholdings of Directors

Book closure date of the shareholders’

meeting: April 9, 2021

Title	Name	Date of (elected to) office	Term	Shares Held When Elected	Shares Held When Elected	Shares Held at Present	Shares Held at Present
				Shares	Percentage of Shareholding	Shares	Percentage of Shareholding
Chairman	Tai Shih Trading Co., Ltd.	2019,06.24	3 years	907,667	0.35	904,667	0.35
Director	Yee Tzao Enterprise Co., Ltd.	2019,06.24	3 years	825,905	0.32	825,905	0.32
Director	Taiwan Evervaliant Corp.	2019,06.24	3 years	12,674,381	4.87	12,674,381	4.87
Director	Yi Xiang Co., Ltd.	2019,06.24	3 years	800,000	0.31	800,000	0.31
Independent Director	Ming-Chu Chen	2019,06.24	3 years	0	0	0	0
Independent Director	Ming-Chien Tang	2019,06.24	3 years	0	0	0	0
Independent Director	Hsiao-Chueh Hsieh	2019,06.24	3 years	0	0	0	0
Total directors' shareholdings				15,207,953	5.85	15,204,953	5.85

1. The Company's paid-in capital is NT$2,600,391,210, and has issued 260,039,121 outstanding shares.

2. As stipulated in Article 26 of the Securities and Exchange Act, all directors shall hold a minimum of 12,000,000 shares.

3. As the Company has established an Audit Committee, the minimum percentage of all supervisors' shareholdings is not applicable.

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Appendix 4

Shihlin Paper Co.,Ltd.

Shareholder Proposals

Description of processing of shareholder proposals for this general shareholders’ meeting

• (i) Shareholder proposals are handled in accordance with Article 172-1 of the Company Act.

• (ii) On the book closure date of the shareholders’ meeting, shareholders holding more than 1% of the Company’s total outstanding shares may submit proposals to the Company.

• (iii) Each proposing shareholder shall submit only one proposal, and the content of the proposal is limited to 300 characters (including text and punctuation). Otherwise, it will not be included in the agenda of the shareholders' meeting. The proposing shareholders shall attend the shareholders' meeting in person or by proxy to discuss their own proposals.

• (iv) Acceptance period: April 1, 2021 to April 12, 2021.

• (v) The Company did not receive any shareholder proposal.

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