YFY - Annual Report 2020 | FinancialReports.eu

Stock Code1907.TW

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This annual report can be downloaded from the following websites TWSE Website: http://mops.twse.com.tw Company Website: http://www.yfy.com Publishing Date: 2021.03.31

1. Spokesperson and Contacts�

Vice President Yin, K. T. | TEL[:] (02) 2396-8020 | E-mail : [email protected]

2. Headquarters, branch offices and plants�

YFY Inc. No. 14, Jiutang Road, Jiutang Village, Dashu Township, Kaohsiung County | TEL[:] (07)651- 2611

YFY Taipei branch 15F, No. 51, Sec. 2, Chongqing S. Rd., Taipei | TEL[: ] (02)2396- 8020

3. Stock Administration�

SinoPac Securities – Share Registration Services Department

3F, No. 17, Boai Road, Zhongzheng District, Taipei, Taiwan[| ] TEL[:] (02)2381- 6288

http : / / www.sinotrade.com.tw

4. Auditor:

CPA : Hui-Min Huang and Ya-Ling Wong Deloitte and Touche

20F, No. 100, Songren Rd., Xinyi Dist., Taipei, 11073, Taiwan[| ] TEL[:] (02)2725 - 9988

http : / / www.deloitte.com

5. Overseas Securities Exchange� None

6. Company Website�� http : / / www.yfy.com

Chapter 1. Message to Shareholders

Chapter	2.	Company Profile	Company Profile
	I.		Date of establishment
	II.		Company History
Chapter	3.	Corporate Governance Report
	I.		Organizational Chart11
	II.		Profiles of Directors, President, VP, VPs, and Managers12
	III.		Remuneration to Directors, Independent Directors, President, and VP in the Past Year19
	IV.		Corporate Governance Practice23
	V.		Information on Fees to CPA54
	VI.		Information on Change/Replacement of CPA54
	VII.		The Chairman, President and Financial or Accounting Managerial Officer of the Company who Has Worked for the CPA
			Firm or Its Affiliate in the Past Year55
	VIII.		Changes in Equity and Share Pledges by Directors, Independent Directors, Managers and Shareholders who Hold More
			than 10% of Equity in the Past Year56
	IX.		Information about Spouses, Kinship within Second Degree, and Relationships between Any of the Top Ten Shareholders57
	X.		Numbers of Shares Held in Invested Enterprises by the Company, the Company’s Directors, Independent Directors, and
			Managers, and Enterprises Directly or Indirectly Controlled by the Company and the Consolidated Shareholding Ratio58
Chapter	4.	Fundraising
	I.		The Company’s Capital and Shares, Corporate Bonds, Preferred Shares, Global Depositary Receipts, Employee Stock
			Options, Restricted Shares and Mergers (including Mergers, Acquisitions, and Demergers)60
	II.		Utilization of funds63
Chapter	5.	Business overview
	I.		Business Scope65
	II.		Market outlook65
	III.		Employee Information in the Last Two Years and Up to the Print Date of the Annual Report75
	IV.		Environmental protection expenditures76
	V.		Employer-employee relationship81
	VI.		Material contracts86
Chapter	6.	Financial Overview
	I.		Condensed Balance Sheet and Statements of Comprehensive Income for the Last Five Years88
	II.		Financial analysis for the last five years92
	III.		Audit Committee’s Review Report95
	IV.		Consolidated Financial Statements96
	V.		Individual financial statements101
	VI.		Any Financial Difficulty and the Impact on the Company’s Finance in Last Year and Up to the Print Date for the Annual
			Report106
Chapter	7.	Financial Position, Financial Performance and Risk Analysis
	I.		Financial comparison analysis108
	II.		Financial Performance Review and Analysis109
	III.		Cash flow analysis110
	IV.		Impact of Significant Capital Expenditures on Financial Operations in the Past Year110
	V.		Investment policy in the past year, profit/loss analysis, improvement plan, and investment plan for the coming year111
	VI.		Risk Analysis and Assessment in Last Year and Up to the Print Date of this Annual Report112
	VII.		Other important matters123
Chapter	8.	Special disclosures
	I.		Information of Affiliates125
	II.		Progress of Private Placement of Securities During the Last Year and Up to the Print Date of the Annual Report146
	III.		Holding or Disposal of the Company’s Shares by Subsidiaries in the Past year and Up to the Print Date of the Annual Report
			146
	IV.		Other supplemental information146
	V.		Any Incidents with Material Impact on Shareholder Equity or Security Price as Described Under Subparagraph 2, Paragraph
			3, Article 36 of the Securities and Exchange Act in the Last Year and Up to the Print Date for the Annual Report147
	VI.		Appendix 1: Notes to consolidated financial statements
	VII.		Appendix 2: Notes to individual financial statements

Note: This is a translation of YFY's annual report. This translation is intended for reference only and nothing else, the company here by disclaims any and all liabilities whatsoever for the translation. The Chinese text of the annual report shall govern any and matters related to the interpretation of the subject matter stated herein.

Letter to Shareholders

Dear Shareholders,

2020 was a year of massive disruptions. COVID pandemic drastically altered what we consider “ordinary” in everyday life and business. Border-closings, lock-downs, and the resulting disruptions in supply chains tested every company’s ability to adapt and change. Working hand-in-hand, our teams overcame difficulties and seized opportunities, netting a fruitful 2020. Consolidated income was 73.235 billion NTD, while net profit attributable to shareholders was 5.209 billion NTD, 3.14 NTD per share, up 127.9% compared to 2019.

Looking forward, 2021 remains a year of risks and opportunities. Resurgence of the pandemic continues to impact economic recovery; trade and technology dispute between United States and China persists after Joe Biden’s inauguration; all the while, inflationary pressure builds. At the same time, pent-up demandbuilt-up since early 2020 has driven significant business growth across the globe starting 4Q20, while the launch of COVID vaccines sheds glimmers of hope for global normalcy. Compared to a frigid 2020, institutions predict a strong rebound in 2021: The IMF projects 5.5% global economic growth, with China’s economy returning to an expected growth of 8.1%. Taiwan’s DGBAS projects 3.83% economic growth for Taiwan.

Upholding YFY’s heritage of innovation and blazing trails, we made significant changes in strategy and improved operations at our portfolio companies over the last 6 years. In an incredibly challenging 2020, YFY’s portfolio demonstrated our resilience and reaffirms the soundness of our investment philosophy. Some highlights from our 2020 operations:

Multidisciplinary Investment

YFY restructured to become an investment management and holding company in 2012. Likewise, our business model transformed into investment and incubation. We take time to nurture each business, and as they mature, recoup our investment from capital markets to invest and incubate new businesses. Since 2012, our portfolio investments TaiGen Biotechnology (4157TW) and Shin Foong Specialty and Applied Materials (6582TW) were listed on the Taiwan Stock Exchange. Our Consumer Product Business, YFYCPG (6790) obtained Emerging Stock Market registration in October, 2020, and is expected to file formal listing application in 2021.

Circular Economy

YFY Packaging and CHP redoubled efforts in circular economy. Xinwu mill finished construction of Taiwan’s first 100% SRF (Solid Recovered Fuel) industrial boiler. This zero coal, groundbreaking undertaking turns byproducts from paper recycling into renewable energy and resources, significantly reducing carbon emissions. Slated to start up in early 2021, its designed capacity will also allow YFY to help process SRF from other sources. Yangzhou mill and CHP Hualien mill committed additional investments to improve process efficiency and reduce energy use. Shin Foong Specialty and Applied Materials is expanding in Pingtung with plans to build a new green-building plant with accompanying green-building certified living quarters for employees, which reuses factory effluents after treatment and sanitization.

Innovation

CHP, collaborating with YFY portfolio company Sustainable Carbohydrate Innovation, makes steady advance in developing bio-based products and food packaging paper to replace single-use plastics. Taking a large step towards its transformation into a specialty materials company, CHP reorganized existing pulp and paper businesses into Cellulosic Materials Division and inaugurated new Specialty Materials Division, which will incorporate recently acquired material development and production base in Guanyin Township, Taoyuan in 2021 to further CHP’s vision to replace single-use plastics with cellulose based, compostable, recyclable products. Answering global consumers’ call for sustainable products with minimal plastic packaging, YFY Consumer Products launched “Orange House 5-in-1 Laundry Detergent Pod” - the world’s first zero-water laundry capsule. Nicked named “golden balls”, this new product incorporates zero liquid and utilizes paper packaging to minimize transportation space, weight, carbon footprint, reducing plastics by 95% when compared to liquid detergent products.

“Professionalism, Innovation, Circularity, and Sustainability” has long been part of YFY’s mission, championed by former Chairman and current Senior Board Director S. C. Ho, who is serving his 50th year on the YFY Board of Directors. With his foresight, YFY has focused on long-term value creation and ESG in our operations and investment portfolio since his tenure as President of the company. Keeping with this vision and mission, management team set forth the company’s strategy:

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Incubation and Portfolio Management

YFY Packaging Inc. (YFYPack), which includes all parts of our Containerboard and Packaging Business Group outside of mainland China, is planning to list in Taiwan. Throughout 2020, YFYPack has been busy preparing for listing application. YFYPack plans to expand internationally, primarily in South East Asia, and extend its operations through digital technology and automation. YFY will continue to cultivate portfolio companies and be on the lookout for new investment and incubation opportunities.

“Zero Waste” “Net Zero Emissions”

YFY’s Circular Economy heritage began more than 70 years ago, when we used sugarcane bagasse to produce insulation boards and typewriter paper. Our home base of Taiwan, an island with little natural resources, mandated YFY to find ways to turn waste into energy and resources through innovation long before Circular Economy became global consensus. YFY will diligently cultivate portfolio companies to continuously find ways to reduce waste and turn by-products into energy and products, with hope that YFY’s successful experience in Taiwan will set new benchmarks for circular practices around the globe.

Digital Platform

In 2020, YFY portfolio companies Fidelis IT Solutions, CHP, and YFYPack came together to build a blockchain-based supply chain finance platform, integrating data exchanges among CHP, YFYPack, and their suppliers, distributors, and financial institutions. Blockchain technology ensures security for all data exchanges from material purchasing, order, shipping, to account receivables management on a verifiable collaborative platform. This platform will reduce document and credit review time for accounts receivable financing and supplier loan, bringing business value to all participants.

Enhance Asset Utilization

Approved by YFY board of directors, our wholly owned subsidiaries “YFY Capital Co., Ltd.” and “YFY Venture Capital Investment Co., Ltd.” consolidated to form “YFY Development Corp.” YFY Development will house YFY’s real estate development team, serving as the forefront to create more value from YFY’s real estate and land portfolio. Starting with more mature and smaller projects, YFY Development Corp. will assess related resources and set forth action plans to generate long-term value and sustainable cashflow for YFY Inc.

As always, YFY will continue our relentless efforts to optimize asset allocation, invest and incubate, create portfolio synergies and build alliances when appropriate, cultivate next generation of management talents, and seek to define the future through innovation. “Do the right thing and do it better,” we stand on unwavering foundation built by our forebearers to support the next generation of exceptional colleagues who will carry the torch through the challenges of rapidly changing times. Standing 97-years strong, YFY marches boldly toward our centennial. We will continue to foster our employees, bring positive impact to our society, minimize our footprint on the environment, create long-term value and generate reasonable return for our shareholders.

Wishing you all great health and prosperity,

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Felix Ho Chairman of Board YFY Inc.

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2020 ��

Consolidated Revenue NTD$73.235Billion ��

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Net profit after tax attributed to the parent
company reached NTD$ 5.209 Billion growth 127.9 � Record High
Net worth Record High Earnings Record High Cash dividend Dividend Multiplied
per share per share per share
NTD$ 27.09 NTD$3.14 NTD$1.5
27.09
3.14
23.64
21.36
1.38
20.01
19.38 1.50
0.97 0.87
0.08
0.06 0.60 0.60 0.70
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Most
�� Comprehensive
Largest Scale
��
Best-Performing Profit
��
��
- Boosting
��
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- �� - ��

��

Xinwu Plant ,YFY Packaging Inc. uses the project of Circular Economy Industry Transformation to obtain BS8001, the International Circular Economy Certificate, as well as to become the honor of the “The most optimized business model innovation level 4 Optimizing!” This plan represents the creation of commercial-level value that has reached its most mature stage. With the consistence in the principle of circular economy, it helps to sustain continuously in the development of industry and environment. Among the three major programs which are the "Energy Resource Optimization of Recycled Paper Process", "Biogas Renewal Energy Generation”, and "Zero-Coal Steam and Electricity Coexistence System", introduce the circular economy throughout the whole process from the source to the end. That has became the most comprehensive, largest scale, and best-performing model of the circular economy in the industry.

We will focus on the development of special application materials, which can be applied in medical treatment, electronics, paper productions, green building materials, food, and other diversified industries in the future and continually innovating on a solid basis.

ESG Corporate Development

Social

In a symbiotic society, individuals should mutually support each other. Along the way, YFY Inc. has uphold the belief of co-existence and common prosperity with the locality in the goal of moving forward into the centenary and creating a better future with the new generation.

SOCIAL

Governance

The professional management team fulfills excellent management responsibilities and compliance with policies and regulations, which continuously creating stable long-term profits and efficient investment benefits for shareholders.

Environmental

Developing a steady renewable energy and committing to zero carbon emission and waste for a circulated economy year, meanwhile creating a better future together with the new generation.

GOVERNANCE

ENVIRONMENTAL

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Chung Hwa Pulp Corp.

Develop series of “CircuWell” product Plastic-free and fully recyclable paper products

Yuen Foong Yu Consumer Products Co., Ltd.

As one of the member of country’s six core strategic industries, we work together with the government to stabilize people’s livelihood.

In regards of the environmental protection in reducing plastic uses and the food safety issues, Chung Hwa Pulp Corp. has made the plastic-free and fully recyclable paper products in the “CircuWell” product line, such as paper cups without PE coating, lids, straws, sealing coat and inner linings that are all made from paper pulp, can be reused after recycling. Fulfilling a full paper recycling cycle. In the future, we will accelerate the adjustment of our product portfolios and create recycling resources with the core of development in circular economy in order to create an innovated creation and development in the paper industry.

During the outbreak of the pandemic, Yuen Foong Yu Consumer Products Co., Ltd. undertakes the important mission and responsibility as a member of Livelihood Materials National Team. Starting from the Lunar New Year, we have cooperated in producing the household paper and antibacterial cleaning products. As one of the member of country’s six core strategic industries, we work together with the government to stabilize people’s livelihood with responsibilities and obligations as corporate citizen. Moreover, CPG also plans to file for its IPO in 2021 in order to provide the best solutions for consumers with leading technology and continuous innovation. The company is striving to become an outstanding company in the competitive global consumer products industries.

RENEWABLE GREEN ENERGY POWER

Clean Energy

Zero Carbon Emissions During Power Generation

Biogas power generation

80%+ Methane purity increases

1+2 phases

Xinwu mill takes only 2 days to process sludge instead of 30 days in average. Achieved No.1

Taiwan No.1 Capacity 5,200 ��

40%+ Power Generation improves Biogas volume to be increased 3 30,000m /day

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DRYER Paper mill
DRYER
Biological
Desulfurization
System Biogas bag Drying machine
power generator power generator
1200kW 1406kW
Sulfur
Precipitator
Bioreactor Washing Tower Anaerobic Tower reclamationwater Burningtower heat recovery boiler Reduction in coal
usage per year
24,045
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24,045 ton

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��
Pool heat provides Sulfur Precipitator
for heating
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2021 NextStep Lignin Power Generation

Taiwan No. 1

Reduction in coal Capacity 20 MW usage per year 300,000 ton Carbon fixation Forestation per year 384,000 ton

300,000 ton

Pulp and paper production chain

Biomass power generation capacity

16,000kW 4,000kW 2021 Increased

Cellulose

It is expected to complete the transformation in Q4 2021 and become the largest generation Biomass energy in Taiwan by 2022

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Imported wood chips
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Electricity Coexistence System

Biomass power generation Recovery boiler

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Lignin
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Wood chip
processing plant
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Digester

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Lignin solution
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SRF Deducting Carbon Emissions

Taiwan No. 1

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Zero-Coal Cogeneration
Capacity
9,500��
Reduction in coal usage
Approximately
tons
87,800 per year
Estimated processing capacity
5,500 tons/month
The processing capacity will be
adjusted according to different
calorific value.
Estimated to process SRF in the
plant for 3000 to 4000 tons/month
Using SRF to replace coal
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Zero-Coal Cogeneration

Reconsidering the nature and characteristics of materials and combing different fields of technology and design for development. The composition of green mud (an inorganic by-product) in the pulp production is similar to the combustion burning ashes uses at the power plant‘s, which includes silicon, aluminum, iron, calcium, natural cement, and other raw materials.

Zero Waste

Waste Is A Misplaced Resources

Chung Hwa Pulp Corp. develop a low carbon and low energy manufacture technologies, and will rebuild those materials into an emerging materials which is similar to the concrete.

Huge Improvement in Zero Waste

Paper reject has begun the trial process in Q4 2020. After Q2 2021,

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Pavement materials
Bottom ash Paper rejects/Pulp sludge
Inorganic sludge
Paper mill
remainders
Construction materials Pulp
remainders
Concrete
Decoration materials
City circulation substitute
Construction materials
circulation
Pavement materials
Recycling demolition
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paper rejects will be 100% processed in-house instead of processing by the third party.

Marching Towards the New Targets of Advanced Biomass Energy

Converting sludge to resources green energy, reduced 70% sludge in the plant.

2.We are able to assist externals in processing organic sludge and converting biogas power �� breakthrough technique, it is able to solve waste problems while producing clean energy with zero carbon emissions.

Innovates Green Building Materials to Reduce Carbon Emissions

After years of development, Chung Hwa Pulp Corp. has developed green building materials that helps to reduce carbon emissions. In Q3 2021, we will apply for re-utilization while gradually deducting the production of green muds in order to become a new indicator in the era of circular economy.

Chapter 2. Company Profile

I. Date of Establishment : February 20, 1950

II. Company History :

1.Date of Establishment :1950/2/20 2.Company History

Ho Jei Lai Trading Company

Mr. Ho Chuan, and his brothers, Mr. Ho Yung and Mr. Ho Yi, established Ho Jei Lai Trading Company., a company in their father’s name. The company mainly dealt in fertilizers, sugar, and grain.

Yuen Foong Corporation was established and the business went corporatization.

Established Yuen Foong Yu Paper Manufacturing Co., Ltd.

The pioneer of privately owned paper manufacturing plant, located in Jioutang Village, Dashu District in Kaohsiung, which produced Kraft paper and one-side coated paper.

Developed the First Domestic Coated Paper

Developed the most advanced paper-coating technology and successfully produced domestic coated paper to replaced the imported products resulted to YFY's leading position in cultural paper market.

Merged with Yuen Foong Paper Co., Ltd.

The company located at No. 21 Gushan 3rd Rd., Kaohsiung City.

Chung Hwa Pulp Co., Ltd.

In response to the government's investment policy in the east of Taiwan, YFY invested CHP in Hualien city. In the same year, the company established Taitung plant to manufacture coated white paper board.

Merged with Guo Guang Paper Co., Ltd.

Manufactured the first embossed tissue paper in Taiwan.

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Stepped into Technology Business

YFY listed on the Taiwan Stock Exchange

Invested in E-Ink as the pioneer company in Taiwan LCD panel industry. Design and manufactured CHP's No. 2 paper dryer machine and commenced production.

Established Taiwan's First Paper Manufacturer R&D Center Established Taiwan's first and the only paper manufacturer R&D center, focus on the paper manufacturing technology innovation and development. Launched "10 Billion Grand Vision Investment Plan"

Extended Footprint in China.

Built plants started from Guanzhou, Kunshan to Xiamen to developed southern China market, and built household paper plant in Kunshan. Invested Guangdong Dingfeng Pulp and Paper Co., Ltd. for China pulp market.

Established the company's paper industry foundation.

Incubate talents for the company. Launch conglomerate diversification strategy.

Step into Organic Food Industry

Step into Paper Packaging Manufacturing Business Taoyuan packaging plant commenced production.

Set up Yuen Foong Yu Biotech Co., Ltd. to develop organic food in Taiwan and China. Through the various channel such as retail shops, door to door delivery, organic restaurant to promote organic diet to consumers.

Yangmei plant commenced production to elevate competitiveness in the household paper product market.

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Issued the First Exchangeable Bond in Taiwan with the shares of YFY subsidiary Chung Hwa Pulp Co., Ltd. as underlying stock. Issued the First Convertible Preferred Stock in Taiwan.

Invested in TaiGen Biotechnology Co., Ltd.

Merged Yuen Foong Yuan Paper Manufacturing Co., Ltd.

Invested in incubation pharmaceutical R & D company, TaiGen Biotechnology, as the leading company in Taiwan Biopharmaceutical industry.

Issued the First Foreign Convertible Corporate Bond

Expand Investment Portfolio into Biomedical Business

Xinwu plant commenced production as YFY's first fully-automated plant equipped with a computerized integrated manufacturing (CIM) system.

Management Company and form a consulting incubate team for the investment evaluation and business operation of biopharmaceutical industry.

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The subsidiary Laiya Co. signed a purchase agreement with P & G Taiwan to acquire Qinshui plant.

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Set up YFY Paper(Vietnam) Co., Ltd.

Step into the Vietnamese market. E-ink listed in Taiwan OTC board. Set up subsidiary YFY Paper Manufacturing(Yangzhou) Co., Ltd. Officially enter China's containerboard market.

Acquired Arizon RFID Technology (Yangzhou) Co., Ltd.

Established Yuen Foong Yu Blue Economy Natural Resources (Yangzhou) Co., Ltd. to utilize agricultural straw in the biopulping progress.

Increased investment in Southern Vietnam and consolidated Vietnam packaging operation. Packaging factories located in Northern Vietnam commenced production.

YFY INC.

The First E-reader Device Using E-paper Technology Launched in the Market and E-ink Supplied the Key Component -- E-paper. Containerboard and Packaging Business spun off and renamed YFY Packaging Inc.

Paper mill commenced production in Yangzhou plant.

Consumer Product Division spun off into Yuen Foong Yu Consumer Products Co., Ltd.

Signed strategic alliance memorandum of cooperation with Japan's Nippon Paper Group, Inc.(NPG).

Further Expand Technology Business

YEON Technologies Co., Ltd. established Asia Pacific RFID Certification Center, which is the only RD center that qualified by EPC Global in Asia.

Acquired the First FSC Certification for Forest Management in Domestic Paper Manufacturing Industry.

Acquired a Leading Technology of Electronic Paper Display (EPD) and E-paper R & D and Mass Production Company, E Ink Corporation (EIC) USA, to Further Expand the Development and Sales Footprint of E-paper .

YFY Packaging Inc. established an Packaging Examination Center and it was certified by a international organization from Taiwan Accreditation Foundation(TAF) to be the only ISO/ IEC 17025 containerboard packaging lab in Taiwan.

Acquired Jupiter Group, the USA packaging and brand design company, to be the global leading graphic design and packaging services company.

Xinwu factory commenced the largest scale of biogas power generation system. YFY demonstrates the model of Circular Economy.

Yuen Foong Yu Paper Manufacturing Co., Ltd. renamed to YFY INC., the investment holding structure established. Transferred Paper and Paperboard Division to Chung Hwa Pulp Co., Ltd., which streamlined pulp and paper operation.

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After 12 years cultivation and development, the new eco technology of nPulp commenced production in Yangzhou plant.

Xinwu Plant was awarded for BS8001 certificate as the very first global circular economy of paper industry.

Arizon RFID Technology (Yangzhou) Co., Ltd. Commenced New Plant

Yuen Foong Yu Consumer Products Co., Ltd. completed the listing as an emerging stock company and became the biggest consumer goods corporation in Taiwan. (Stock code 6790)

Equip with the most advanced manufacturing line and the finest manufacturing procedures, the new plant set a new standard to RFID industry.

The technology of nPulp was awarded Edison Award from the USA. Established YFY Shop to develop a platform for e-commerce and monetary service.

Chung Hwa Pulp Corp. completed acquisition of Guanyin plant to build a base of plastic-free materials

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Arizon RFID Technology Co., Ltd. has a new plant in Tucheng to be a backup production site to stand foots in the global RFID industry.

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Shin Foong Specialty & Applied Materials listed in OTC market.

New factory of Eco-friendly cleaning product, Orange House, commenced production in Taoyuan. Shin Foong Specialty & Applied Materials listed in TWSE board.

Chapter 3. Corporate Governance Report

I. Organizational Chart
II. Profiles of Directors, President, VP, VPs, and Managers
III. Remuneration to Directors, Independent Directors, President, and VP in the Past Year
IV. Corporate Governance Practice
V. Information on Fees to CPA
VI. Information on Change/Replacement of CPA
VII. The Chairman, President and Financial or Accounting Managerial Officer of the Company who Has Worked for the CPA Firm or Its Affiliate in the Past Year
VIII. Changes in Equity and Share Pledges by Directors, Independent Directors, Managers and Shareholders who Hold More than 10% of Equity in the Past Year
IX. Information about Spouses, Kinship within Second Degree, and Relationships between Any of the Top Ten Shareholders
X. Numbers of Shares Held in Invested Enterprises by the Company, the Company’s Directors, Independent Directors, and Managers, and Enterprises Directly or Indirectly Controlled by the Company and the Consolidated Shareholding Ratio

1. Organization

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Shareholders
Meeting
Audit Committee
Board of Directors
Board's Secretary
Chairman
Remuneration
Committee
Auditing Office
Corporate Affairs
President
CSR
Center of Finance
R & D Center
Human Resources
Pulp and Fine Paper Containerboard and Consumer Product Other Businesses Corporate Resources
Packaging Business Group Business Group
Legal
Operations Operations Operations Operations
Accounting
Manufacturing, sales and Manufacturing, processing and Manufacturing, sales and Manufacturing, sales
distribution of pulp, paper sales of container board and distribution of household paper and distribution of
and paperboard. corrugated carton. and cleaning products. electronics, chemical IT
related products.
Procurement
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II. Profiles of Directors, Independent Directors, President, VP, VPs, and Managers (I) Profiles of Directors and Independent Directors

	(I)P	rofiles of	Dir	ectors a	ectors a	ndInde	pendentDire	pendentDire	ctors	ctors
																	December 31,2020
			Gender	Date elected	Term(Year)	First elected											Spouse or relatives within			Notes
											Current shares
													Shares held in				second degree of kinship who
							Shares held when				held by spouse
									Shares currently held				names of third				also act as directors,
							elected				and underage
													parties				supervisors, or other
											children
	Nationality														Education and	Positions concurrently held at	department heads

Title	or place of	Name					Number of shares	Shareholding percentage	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage	work	the Company or other	Title	Name	Relation
	registration														experience	companies

Chairman	Republic of China	Shin-Yi Enterprise Co., Ltd. Representative: Felix Ho	Male	2018/06/21	3	2003/05/05	77,794,610	4.69	77,794,610	4.69	0	0	0	0	MBA, MIT Sloan School of Management	Note 1	Director	S. C. Ho	Father and son
							*35,529,953	2.14	*35,529,953	2.14
Director	Republic of China	Shin-Yi Enterprise Co., Ltd. Representative: S. C. Ho	Male	2018/06/21	3	1972/02/10	77,794,610	4.69	77,794,610	4.69	0	0	0	0	M.Sc. in Mechanical Engineering, Univ. of Wisconsin	Note 2	Director	Felix Ho	Father and son
							*168,615,028	10.16	*170,615,028	10.28
Director	Republic of China	Shin-Yi Enterprise Co., Ltd. Representative: Richard Ho	Male	2018/06/21	3	1994/03/23	77,794,610	4.69	77,794,610	4.69	88,024	0.01	0	0	B.Econ., University of Washington	AVP, YFY Inc.. Director, Shin-Yi Enterprise Co., Ltd. Director, Taitung Enterprise Corp. Director, Yuenfoong Industry Co., Ltd.	N/A	N/A	N/A
							*1,000,000	0.06	*1,000,000	0.06
Director	Republic of China	Yuen Foong Paper Co., Ltd. Representative: Kirk Hwang	Male	2018/06/21	3	2016/03/16	18,268,073	1.10	18,268,073	1.10	0	0	0	0	Ph.D. in Materials Chemistry, University of Wisconsin	Note 3	N/A	N/A	N/A
							*51,909	0.00	*51,909	0.00
Director	Republic of China	Yuen Foong Paper Co., Ltd. Representative: Chin-San Wang	Male	2018/06/21	3	2018/06/21	18,268,073	1.10	18,268,073	1.10	0	0	0	0	EMBA, Accounting and Management Strategy, National Taiwan University	Note 4	N/A	N/A	N/A
							0	0.00	0	0.00

			Gender	Date elected	Term(Year)	First elected											Spouse or relatives within	Spouse or relatives within	Spouse or relatives within
											Current shares held		Shares held				second degree of kinship who
							Shares held when
									Shares currently held		by spouse and		in names of				also act as directors,
							elected
											underage children		third parties				supervisors or other
	Nationality														Education and	Positions concurrently held at	, department heads
Title	or place of	Name													work	the Company or other
							Number of shares	Shareholding percentage	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage			Title	Name	Relation
	registration														experience	companies

Director	Republic of China	Yuen Foong Paper Co., Ltd. Representative Willie Tsai,	Male	2018/06/21	3	2019/02/19	18,268,073	1.10	18,268,073	1.10	0	0	0	0	Master of Finance, University of Iowa	Note 5	N/A	N/A	N/A
							0	0.00	0	0.00
Independ ent Director	Republic of China	Wen-Cheng Huang	Male	2018/6/21	3	2012/6/27	0	0.00	0	0.00	0	0	0	0	MBA, National Chengchi University	Note 6	N/A	N/A	N/A
Independ ent Director	Republic of China	Hsi-Peng Lu	Male	2018/6/21	3	2015/6/30	0	0.00	0	0.00	0	0	0	0	Ph.D. in Industrial Engineering, University of Wisconsin - Madison	Distinguished Professor, Department of Information Management, National Taiwan University of Science and Technology Independent Director, SHUI-MU International Co., Ltd. Independent Director, Taiwan Mobile Co., Ltd. Independent Director, 91APP Inc.	N/A	N/A	N/A
Independ ent Director	Republic of China	Thomas Chen	Male	2018/6/21	3	2012/6/27	0	0.00	0	0.00	0	0	0	0	MBA, Indiana University	N/A	N/A	N/A	N/A

*personal holdings

Note 1.

Director, Jupiter Prestige Group Holding Limited; Chairman, Willpower Industries Limited; Director, Yuen Foong Yu Paper Enterprise (Vietnam) Company Limited; Chairman, YFY Jupiter(BVI)Inc.; Director, YFY Biopulp Technology Ltd.; Director, YFY RFID Co., Ltd.; Director, Chung Hwa Pulp Corp.;, Director, YFY Packaging Inc.; Chairman, YFY Consumer Products Co., Ltd.; Chairman, Ever Growing Agriculture Bio-tech Co., Ltd.; Chairman, Yuen Foong Shop Co., Ltd.; Director, Livebricks Inc.; Director, E Ink Holdings Inc.; Director, Aidatek Electronics, Inc.; Director, eCrowd Media Inc; Chairman, Chairman, Arizon RFID Technology Co., Ltd.; Director, Arizon Japan Co., Ltd.; Director, YFY Packaging (Yangzhou) Investment Co., Ltd.; Director, Yuen Foong Yu Paper MFG (Yangzhou) Co., Ltd.; Chairman, Yuen Foong Yu Investment Co., Ltd.; Director, YFY Mauritius Corp.; Director, Yuen Foong Yu Consumer Products Investment Ltd.; Director, YFY Japan Co., Ltd.; Director, Yuen Foong International (Samoa) Ltd.; Director, Artone Investment (H.K.) Ltd.; Director, Shin-Yi Enterprise Co., Ltd.; Director, Yuen Foong Paper Co., Ltd.; Chairman, Yuen Foong Co., Ltd.; Director, Fu Hwa Enterprise Co., Ltd.; Director, Cheng Yu Co., Ltd.; Independent Director, Universal Cement Corporation; Supervisor, The Eisenhower Fellows Association in the Republic of China; Chairman, Epoch Foundation; Chairman, Taiwan Paper Industry Association; Director, Monte Jade Taiwan Science & Tech Association; Chairman, Association of Corporate Patent Executives.

Note 2.

Director, E Ink Corporation; Director, YFY Jupiter (BVI), Inc.; Director, Chung Hwa Pulp Corp.; Director, E Ink Holdings Inc.; Director, TaiGen Biotechnology Co., Ltd.; Director, TaiGen Biopharmaceuticals Holdings Limited; San Ying Enterprise Co., Ltd.; Director, China Color Printing Co., Ltd.; Director, Cupid InfoTech Co., Ltd.; Director, Effion Enertech Co., Ltd.; Director, Yuen Foong Yu Biotech Co., Ltd.; Director, Shen's Art Printing Co., Ltd.; Director, Sustainable Carbonhydrate Innovation Co., Ltd.; Director, YFY Biotech Management Company; Managing Director, China Investment and Development Co., Ltd.; Director, Yuen Foong Yu Paper MFG (Yangzhou) Co., Ltd.; Director, Yuen Foong Yu Consumer Products Co., Ltd.; Director, Yuen Foong International (Samoa) Ltd.; Director, YFY Japan Co., Ltd.; Director, Artone Investment (H.K.) Ltd.; Director, Artone Specialties Company Limited; Director, Hsinex International Corp.; Director, Taitung Enterprise Corp.; Director, Shin-Yi Enterprise Co., Ltd.; Chairman, Shin-Yi Investment Co., Ltd.; Director, Shin-Yi Recreation Co., Ltd.; Director, Ru Yi Enterprise Co., Ltd.; Director, Xing Yuan Investment Co., Ltd.; Director, Yuen Foong Co., Ltd., Chairman, Yuen Foong Paper Co., Ltd.; Chairman, Yuen Shin Yi Enterprise Co., Ltd.; Director, Yong-An Leasing Co., Ltd.; Director, Y F Chemical Corp.; Director, SinoCell Technologies Co., Ltd; Chairman, Fu Hwa Enterprise Co., Ltd.; Director, HuaDong Industrial Co., Ltd.; Director, Synmax Biochemical Co., Ltd; Director, Ho Jei Lai Kosan Unlimited Company; Director, Hsin Yi Holding Company; Director, Hsin Yi Foundation; Chairman, Foundation of Fire Fighting Development; Director, Shang Shan Human Culture Foundation; Director, Liver Disease Prevention & Treatment Research Foundation; Director, The Eisenhower Fellows Association in the Republic of China; Director, Yuan T. Lee Foundation Science Education for All; Director, Foundation for the Advancement of Outstanding Scholarship.

Note 3

Chief Technology Officer, YFY Inc..; Chairman, Chung Hwa Pulp Corp.; Director, Guangdong Dingfung Pulp & Paper Co., Ltd.; Director, Zhaoqing Dingfung Forestry Co., Ltd.; Director, Shin Foong Specialty and Applied Materials Co., Ltd.; Director, CHP International (BVI) Corporation; Director, N.T.U. Innovation Incubation Co., Ltd.; Director, Taiwan Corporate Governance Association; Chairman, Industry Committee, Taiwan Institute of Chemical Engineers; Executive Director, Taiwan Paper Industry Association; Director, Taiwan Carbon Capture Storage and Utilization Association

Note 4

Independent Director, Taiwan Cement; Independent Director, Taiwan Navigation Co. Ltd.; Independent Director, DACIN Construction Co., Ltd.; Independent Director, Fulin Plastic Industry (Cayman) Holding Co., Ltd.; Director, Yageo Corporation; Director, Chilisin Electronics Corp.; Supervisor, DIVA Laboratories. Ltd.; Supervisor, Papivax Biotech Inc.; Director, T N Soong Foundation

Note 5

President, YFY Inc..; Chairman, YFY Corporate Advisory & Services Co., Ltd., Chairman, YFY Packaging Inc.; Director, YFY Consumer Products Co., Ltd.; Director, YFY International Ltd.; Director, YFY Global Investment Ltd.; Director, YFY Mauritius Corp.; Director, YFY Cayman Co., Ltd.; Chairman, YFY Paradigm Investment Co., Ltd.; Chairman, YFY Development Corp.

Note 6

Chairman, Hung Ching International Investment Co., Ltd.; Chairman, Guo Fu Management Consulting Co.; Independent Director, Chenbro Micom; Director, Aces Electronic Co., Ltd.; Independent Director, Entire Technology Co., Ltd.; Independent Director, E-CMOS Corporation; Supervisor, ez Travel; Supervisor, EZ Travel Travel Agency; Director, eLand Information Co. Ltd., Director, Guo Fu Investment Co.; Chairman, Phoenix Innovation Investment Co., Ltd., Director, Conserve & Associates, Inc.

December 31, 2020

	At least five years of work experience	At least five years of work experience	At least five years of work experience	Fulfillment of independence criteria (Note)	Fulfillment of independence criteria (Note)	Fulfillment of independence criteria (Note)	Fulfillment of independence criteria (Note)	Fulfillment of independence criteria (Note)	Fulfillment of independence criteria (Note)	Fulfillment of independence criteria (Note)	Fulfillment of independence criteria (Note)	Fulfillment of independence criteria (Note)	Fulfillment of independence criteria (Note)	Fulfillment of independence criteria (Note)	Fulfillment of independence criteria (Note)
Requirement
	and the following professional qualifications

	Lecturer or a	Specialized	Work	1	2	3	4	5	6	7	8	9	10	11	12
	higher post at a	professional or	experience													Number of
	public/private	technician certified	required for
	university/colle	as a judge,	operations in													concurrent
	ge in the field	prosecutor, lawyer,	commerce,													posts at other
																listed
	of commerce,	accountant, or	law, finance,
																comanies as
	law, finance,	another designation	accounting,													p independent
	accounting, or	relevant to the	or another
	another subject	Company’s	field													director
	relevant to the	operations and	relevant to
Name	Company’s	subject to national	the
	operations	examinations	Company’s
			operations

Felix Ho			`�`						`�`					`�`		1
S. C. Ho			`�`	`�`					`�`					`�`
Richard Ho			`�`		`�`	`�`			`�`	`�`		`�`	`�`	`�`
Kirk Hwang			`�`			`�`		`�`	`�`	`�`	`�`	`�`	`�`	`�`
Chin-San Wang		`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`		4
Willie Tsai			`�`			`�`		`�`	`�`		`�`	`�`	`�`	`�`
Wen-Cheng Huang			`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	2
Hsi-Peng Lu	`�`			`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	3
Thomas Chen			`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`

Note: Please mark “ � ” in the space below the corresponding requirement code if a director or supervisor meets any of the requirements two years prior to his/her term and during his/her term.
(1) Not an employee of YFY or one of its affiliates.
(2) Not a Director or Supervisor of the Company of any of its affiliates (excluding Independent Directors set up by the Company, its parent company, subsidiaries, or subsidiaries of the same parent company in accordance with the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies or local regulations).
(3) Not a shareholding natural person who holds at least 1% of the Company’s total outstanding shares in combination with his/her spouse, underage children, and in the name of third parties or is one of the ten top shareholders.
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the managerial officers listed in subparagraph (1) or persons listed in subparagraphs (2) and (3).
(5) Not a Director, Supervisor or employee of a corporate shareholder who directly holds more than 5% of the total number of issued shares of the Company or is ranked top five in terms of the number of shares held or is designated as a Director or Supervisor of the Company pursuant to Paragraph 1 or 2, Article 27 of the Company Act (excluding Independent Directors in the Company, its parent company, subsidiaries, or subsidiaries of the same parent company who have been appointed in accordance with the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies or local regulations).
(6) Not a Director, Supervisor, or employee of a company with a majority of the company's director seats or voting shares and those of any other company are controlled by the same person (this restriction does not apply to independent directors in the Company, its parent company, subsidiaries, or subsidiaries of the same parent company which have been appointed in accordance with local laws or laws of the registered country).
(7) Not a Director (member of the governing board), Supervisor (member of the supervising board), or employee of a company or institution with the same chairperson of the board, president, or equivalent position, or a spouse thereof (excluding Independent Directors set up by the Company, its parent company, subsidiaries, or subsidiaries of the same parent company which have been appointed in accordance with the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies or local regulations).
(8) Not a Director (member of the governing board), Supervisor (member of the supervising board), managerial officer, or shareholder holding more than 5% of the shares of a specific company or institution that has a financial or business relationship with the Company (excluding specific companies or institutions if they hold more than 20% but less than 50% of the outstanding shares of the Company or Independent Directors in the Company, its parent company, subsidiaries, or subsidiaries of the same parent company which have been appointed in accordance with the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies or local regulations).
(9) Not a professional individual or owner, partner, director (member of the governing board), supervisor (member of the supervising board), or managerial officer of a sole proprietorship, partnership, company, or institution that provides commercial, legal, financial, accounting, or consultation services to the company or to any affiliate enterprise for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or spouse thereof. Provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Securities and Exchange Act or to the Business Mergers and Acquisitions Act or related laws or regulations.
(10) Not a spouse or family member within second degree of kinship of another director.
(11) No record of any of the incidents described in Article 30 of the Company Act.
(12) Not elected as a government, legal entity, or its representative according to Article 27 of the Company Act.

1. Major Direct and Indirect Institutional Shareholders (1). Major Direct Institutional Shareholders

December 31, 2020

Name of Institutional
	Major Direct Institutional Shareholders
Shareholder

Shin-Yi Enterprise Co., Ltd.	S. C. Ho (27.84%), Jucheng Investment & Management Co., Ltd. (12.50%), BRILLIANT PRIDE LIMITED (12.50%), Gao Da Global Ltd. (12.50%), Mei-Yu Ho (12.50%), Guan Yu Investment Co., Ltd. (5.91%), Hui-Shin Ho Tsai (2.48%), Richard Ho (2.18%), Jin Jie Investment Ltd.(1.52%), Hoss Educational Foundation (1.48%), Hoss Cultural Foundation (1.48%)
Yuen Foong Paper Co., Ltd.	Shin-Yi Enterprise Co., Ltd. (27.39%), S. C. Ho (16.65%), Hsinex International Corp. (9.92%), Yu Hai Investment Corp. (9.69%), Hoss Venture Inc. (5.81%), Mei-Yu Ho (3.59%), Jucheng Investment & Management Co., Ltd. (3.59%), BRILLIANT PRIDE LIMITED (3.59%), Gao Da Global Ltd. (3.59%), Hui-Shin Ho Tsai (3.18%)

(2). Major Indirect Institutional Shareholders

December 31, 2020

Name of Institutional Shareholders	Major Indirect Institutional Shareholders

Jucheng Investment & Management Co., Ltd.	RAINBOW TIME LIMITED (Samoa) (100.0%)


BRILLIANT PRIDE LIMITED	LEE SWEE HIONG 100.0%

Gao Da Global Ltd.	Jin-Xing Lin (100.0%)

	Hui-Shin Ho Tsai (57.49%), Jie-Ru Ho (7.5%), Wen-Hua Ho (7.5%), Yi-Jin Huang (6.25%),
Guan Yu Investment Co., Ltd.	Yi-Xuan Huang (6.25%), Jie-Xi Liu (3.75%), Jie-Ya Liu (3.75%), Jie-Xiu Ka (3.75%),
	Jie-Ke Ka (3.75%), Richard Ho (0.01%)


Jin Jie Investment Ltd.	Guan Yu Investment Co., Ltd. 100.0%


Hoss Educational Foundation	Founded in 2001 with Hui-Mei Chen as the main donor at the time of founding (100%)


Hoss Cultural Foundation	Founded in 2004 with Chen-Kuan Sun (95%) and Hui-Mei Chen (5%) as the main donor at
	the time of founding

Yu Hai Investment Corp.	Yu Hai Enterprise Co., Ltd. (34.78%), Shan Tao Investment Ltd. (25.00%), Jie Lai Investment Ltd. (20.00%), Ka Feng Investment Ltd. (20.00%), Hui-Shin Ho Tsai (0.18%), Miao-Zhen Lin (0.04%)
Hsinex International Corp.	S. C. Ho (53.13%), Yi-Jia Ho (24.48%), Felix Ho (22.28%), Cheng Yu Co., Ltd. (0.11%)
Hoss Venture Inc.	Hoss Cultural Foundation (49.07%), Hoss Educational Foundation (40.03%), Yu-Hui Ho (6.81%), Ho Shi Investment Corp. (3.04%), Ho Shi International Corp. (0.37%), Hui-Mei Chen (0.26%), Shiou-Chuan Ho (0.19%), De Yong Chen (0.15%), Yo Tian Chuang (0.04%), Hui-Zhu Chen(0.04%)

December 31, 2020

(II). Profiles of President, VP, AVPs, and Management

	Nationality or place of registration
							Shares held by						Manager who is a spouse or
									Shares held in names
					Shares held		spouse and underage						relative within second degree
									of third parties
							children						of kinship

											Education and work	Concurrent position(s)
Title		Name	Gender	Date elected	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage			Title	Name	Relation	Notes
											experience	at YFY


President	Republic of China	Willie Tsai	Male	2019/02/19	0	0	0	0	0	0	Master of Finance, University of Iowa	Note 1	N/A
CSO	Republic of China	Hsianmin Chen	Male	2016/09/01	0	0	0	0	0	0	J.D., Syracuse University	Chairman, Fidelis IT Solutions Co., Ltd. Director, YFY Paper Mfg. (Jiangyin) Co., Ltd.; Director, Willpower Industries Limited; Director, Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd.	N/A
CTO	Republic of China	Kirk Hwang	Male	2016/01/01	51,909	0.00	0	0	0	0	Ph.D. in Materials Chemistry, University of Wisconsin	Note 2	N/A
VP, Finance Center	Republic of China	K. T. Yin	Male	2007/05/01	0	0	0	0	0	0	MBA, National Cheng Kung University	Note 3	N/A
AVP	Republic of China	Richard Ho	Male	1992/10/01	1,000,000	0.06	88,024	0.01	0	0	B.Econ., University of Washington	Director, Shin-Yi Enterprise Co., Ltd. Director, Taitung Enterprise Corp. Director, Yuenfoong Industry Co. Ltd.	N/A
AVP, Procurement Department	Republic of China	Claudia Kung	Female	2019/06/17	0	0	0	0	0	0	Management Science, National Chiao Tung University	Director, YFY Corporate Advisory & Services Co., Ltd.	N/A
AVP, Accounting Department	Republic of China	C. F. Wu	Male	2011/07/01	0	0	2,859	0.00	0	0	B.Acc., Feng Chia University	Note 4	N/A
AVP, Information Technology Department	Republic of China	Ray Chien	Male	2013/06/03	0	0	0	0	0	0	M.S. in Industrial Management, National Taiwan University of Science and Technology	Director and President, Fidelis IT Solutions Co., Ltd.	N/A
AVP, Legal Department and Corporate Governance	Republic of China	Vincent Chan	Male	2015/07/01	5,470	0.00	2,109	0.00	0	0	LL.B., National Chung Hsing University	Note 5	N/A

	Nationality or place of registration
							Shares held by						Manager who is a spouse or
									Shares held in names
					Shares held		spouse and underage						relative within second degree
									of third parties
							children						of kinship

											Education and work	Concurrent position(s)
Title		Name	Gender	Date elected	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage			Title	Name	Relation	Notes
											experience	at YFY


Officer
AVP, Human Resources Department	Republic of China	Aubrey Tsai	Male	2017/10/16	50,000	0.00	8,000	0.00	0	0	M.S. in Industrial Technology Education, National Taiwan Normal University and EMBA, National Chengchi University	Director, Hwa Fong Paper (Hong Kong) Co., Ltd. Remuneration Committee member, Apex Medical Corp. Remuneration Committee Member, Shen's Art PrintingCo.,Ltd.	N/A
AVP, President's Office	Republic of China	Miles Chang	Male	2019/09/16	0	0	36,826	0.00	0	0	Master for Eminent Public Administrators, Social Economics Section, National Chengchi University	N/A	N/A
Manager, Auditing Department	Republic of China	Irene Cheng	Female	2012/11/01	0	0	0	0	0	0	M.Sc. in Accounting and Information Technology National Chung Cheng University	N/A	N/A

Note 1

Chairman, YFY Corporate Advisory & Services Co., Ltd., Chairman, YFY Packaging Inc.; Director, YFY Consumer Products Co., Ltd.; Director, YFY International Ltd.; Director, YFY Global Investment Ltd.; Director, YFY Mauritius Corp.; Director, YFY Cayman Co., Ltd.; Chairman, YFY Paradigm Investment Co., Ltd.; Chairman, YFY Development Corp.

Note 2

Chairman, Chung Hwa Pulp Corp.; Director, Guangdong Dingfung Pulp & Paper Co., Ltd.; Director, Zhaoqing Dingfung Forestry Co., Ltd.; Director, Shin Foong Specialty and Applied Materials Co., Ltd.; Director, CHP International (BVI) Corporation; Director, N.T.U. Innovation Incubation Co., Ltd.; Director, Taiwan Corporate Governance Association; Chairman, Industry Committee, Taiwan Institute of Chemical Engineers; Executive Director, Taiwan Paper Industry Association; Director, Taiwan Carbon Capture Storage and Utilization Association

Note 3

Director, YFY Packaging Inc.; Director, YFY Paradigm Investment Co., Ltd.; Director, San Ying Enterprise Co., Ltd.; Director, Effion Enertech Co., Ltd.; Director, Huafeng Investment Co., Ltd.; Supervisor, YFY Packaging (Yangzhou) Investment Co., Ltd.; Supervisor, Yuen Foong Yu Paper MFG. (Yangzhou) Co., Ltd.; Director, YFY Investment Co., Ltd.; Supervisor, YFY Paper Mfg. (Jiangyin) Co., Ltd.; Supervisor, Arizon RFID Technology Co., Ltd.; Director, YFY (Shanghai) Commercial Factoring Co., Ltd.; Director, Guangdong Dingfung Pulp & Paper Co., Ltd.; Supervisor, Zhaoqing Dingfung Forestry Co., Ltd.

Note 4

Supervisor, YFY Packaging Inc.; Supervisor, Union Paper Corp.; Supervisor, China Color Printing Co., Ltd.; Supervisor, Supervisor, YFY Development Co, Ltd.; Supervisor, YFY Paradigm Investment Co., Ltd.; Supervisor, San Ying Enterprise Co., Ltd.; Supervisor, Fidelis IT Solutions Co., Ltd.; Supervisor, EFFION Enertech Co., Ltd.; Supervisor, YFY Corporate Advisory & Services Co., Ltd.; Supervisor, China Investment and Development Co., Ltd.; Supervisor, Sustainable Carbohydrate Innovation Co., Ltd.

Note 5

Director, China Color Printing Co., Ltd.; Director, YFY Corporate Advisory & Services Co., Ltd.; Supervisor, Yuen Foong Yu Paper Enterpriser (Guangzhou) Co., Ltd.; Director, YFY Paper Mfg. (Jiangyin) Co., Ltd.; Director, Hwa Fong Paper (Hong Kong) Co., Ltd.; Supervisor, Shenzhen Jinglun Paper Co., Ltd.; Supervisor, Yuen Foong Yu Blue Economy Natural Resource (Yangzhou) Co., Ltd.; Supervisor, YFY (Shanghai) Commercial Factoring Co., Ltd.; Supervisor, Shin-Yi Enterprise Co., Ltd.; Supervisor, Fu Hwa Enterprise Co., Ltd.

III. Remuneration to Directors, Independent Directors, President, and VP in the Past Year (I) Director remuneration

I) Director remuneration	I) Director remuneration
				Director remuneration S Dit'				Pf		Ratio of total compensation		Concurrent employee remuneration Salaries, S								Ratio of total compensation (A+B+C+D+E+		Compensation from invested enterprises that are not subsidiaries
		Remuneration (A)		everance pay and pension (B)		recors remuneration (C)		erormance compensation (D)		(A+B+C+D) to after-tax income (%)		incentives and allowances (E) (Note)		everance pay and pension (F)		Employee's remuneration (G)				F+G) to after-tax income (%)

		YFY	All companies in the financial statements	YFY	All companies in the financial statements	YFY	All companies in the financial statements	YFY	All companies in the financial statements	YFY	All companies in the financial statements	YFY	All companies in the financial statements	YFY	All companies in the financial statements			All companies		YFY	All companies in the financial statements
Title	Name															Y	FY	in the financial
																		state	ments
																Amount in cash	Amount in stocks	Amount in cash	Amount in stocks
Chairman	Shin-Yi Enterprise Co., Ltd. Representative: Felix Ho	0	0	0	0	16,000	16,000	480	1,540	0.316%	0.337%	35,189	56,019	214	214	45	0	45	0	0.997%	1.417%	N/A
Director	Shin-Yi Enterprise Co., Ltd. Representative: S. C. Ho
Director	Shin-Yi Enterprise Co., Ltd. Representative: Richard Ho
Director	Yuen Foong Paper Co., Ltd. Representative: Kirk Hwang
Director	Yuen Foong Paper Co., Ltd. Representative: Chin-San Wang
Director	Yuen Foong Paper Co., Ltd. Representative: Jung-TsungChien
Director	Yuen Foong Paper Co., Ltd. Representative: Willie Tsai
Shin-Yi Enterprise Co.,Ltd.
Yuen FoongPaper Co.,Ltd.
Independent Director	Wen-Cheng Huang	0	0	0	0	6,000	6,000	216	216	0.119%	0.119%	0	0	0	0	0	0	0	0	0.119%	0.119%	N/A
Independent Director	Thomas Chen
Independent Director	Hsi-Peng Lu

	Name	Name	Name	Name
	Total amount for the 4precedingremunerations (A+B+C+D)		Total amount for the 7precedingremunerations (A+B+C+D+E+F+G)
Range of remuneration to all directors
		All companies in the financial		All companies in the financial
	YFY		YFY
		statements		statements

Less than NT$1,000,000	S. C. Ho Felix Ho Richard Ho Kirk Hwang Chin-San Wang Willie Tsai	S. C. Ho Felix Ho Richard Ho Kirk Hwang Chin-San Wang Willie Tsai	S. C. Ho Chin-San Wang Kirk Hwang	S. C. Ho Chin-San Wang
NT$1,000,000 (incl.) ~ NT$2,000,000			Wen-Cheng Huang Thomas Chen Hsi-PengLu	Wen-Cheng Huang Thomas Chen Hsi-PengLu
NT$2,000,000 (incl.) ~ NT$3,500,000	Wen-Cheng Huang Thomas Chen Hsi-PengLu	Wen-Cheng Huang Thomas Chen Hsi-PengLu	Richard Ho Yuen Foong Paper Co., Ltd.	Richard Ho Yuen Foong Paper Co., Ltd.
NT$3,500,000(incl.)~ NT$5,000,000			Shin-Yi Enterprise Co.,Ltd.	Shin-Yi Enterprise Co.,Ltd.
NT$5,000,000(incl.)~ NT$10,000,000	Yuen FoongPaper Co.,Ltd.	Yuen FoongPaper Co.,Ltd.
NT$10,000,000(incl.)~ NT$15,000,000	Shin-Yi Enterprise Co.,Ltd.	Shin-Yi Enterprise Co.,Ltd.	Felix Ho	Kirk Hwang
NT$15,000,000 (incl.) ~ NT$30,000,000			Willie Tsai	Felix Ho Willie Tsai
NT$30,000,000(incl.)~ NT$50,000,000
NT$50,000,000(incl.)~ NT$100,000,000
More than NT$100,000,000
Total	11	11	11	11

(II). Remuneration to supervisors

Starting in 2015, supervisors were replaced by the newly established Audit Committee.

(III). Remuneration to the President and VP

Unit: NT$ thousand

Title	Name	Salary (A)	Salary (A)	Severance pay and pension (B)	Severance pay and pension (B)	Bonuses and allowances (C) (Note)	Bonuses and allowances (C) (Note)	Employee's remuneration (D)	Employee's remuneration (D)	Employee's remuneration (D)	Employee's remuneration (D)	Ratio of total compensation (A+B+C+D) to after-tax income (%)	Ratio of total compensation (A+B+C+D) to after-tax income (%)	Compensation from invested enterprises that are not subsidiaries
		YFY	All companies in the financial statements	YFY	All companies in the financial statements	YFY	All companies in the financial statements	YFY		All companies in the financial statements		YFY	All companies in the financial statements
								Amount in cash	Amount in stocks	Amount in cash	Amount in stocks
President	Willie Tsai	17,906	17,906	324	324	19,042	22,042	45	0	45	0	0.72%	0.77%	N/A
VP	K. T. Yin
CSO	Hsianmin Chen

Note1: Including car rental expenses of NT$894.6thousand

Note2: The Board of Directors approved the proposed distribution of employee compensation of NT$5,361 thousand (all in cash) for FY2020, but the list of employee compensation distribution has not been decided as of the printing date.


	Name of president and VP
Range of remuneration to president and VP
	YFY	All companies in the financial statements

Less than NT$1,000,000
NT$1,000,000(incl.)~ NT$2,000,000
NT$2,000,000(incl.)~ NT$3,500,000
NT$3,500,000(incl.)~ NT$5,000,000
NT$5,000,000(incl.)~ NT$10,000,000	K. T. Yin	K. T. Yin
NT$10,000,000(incl.)~ NT$15,000,000	Hsianmin Chen	Hsianmin Chen
NT$15,000,000(incl.)~ NT$30,000,000	Willie Tsai	Willie Tsai
NT$30,000,000(incl.)~ NT$50,000,000
NT$50,000,000(incl.)~ NT$100,000,000
More than NT$100,000,000
Total	3	3

(IV). Names of managements who distribute employee salaries and distribution status:

						Amonts in
			Shares	Cash
	Titles	Name			Total(Note)	proposion of
			Amount	Amount
						netprofits(%)

Managements	President	Willie Tsai	0	150	150	0.003%
	CSO	Hsianmin Chen
	CTO	Kirk Hwang
	VP, Finance Center	K. T. Yin
	AVP	Richard Ho
	AVP, Procurement Department	Claudia Kung
	AVP, AccountingDepartment	C. F. Wu
	AVP, Information Technology Department	Ray Chien
	AVP, Legal Department and Corporate Governance Officer	Vincent Chan
	AVP, Human Resources Department	Aubrey Tsai
	AVP, President's Office	Miles Chang
	Manager, Auditing Department	Irene Cheng

Note: The Board of Directors approved the proposed distribution of employee compensation of NT$5,361 thousand (all in cash) for the year 2020, and since the list of employee compensation distribution has not yet been decided, this table is an estimate of the proposed amount.

(V). Detailed ratios of total remuneration of YFY’s directors, president, and executive vice presidents to after-tax profit with respect to the individual and consolidated financial statements in the past two years, and description of the remuneration policy, standards and combinations, determination of remuneration, and connection to business performance and future risks

	Ratio of total remuneration to after-taxprofit	Ratio of total remuneration to after-taxprofit	Ratio of total remuneration to after-taxprofit	Ratio of total remuneration to after-taxprofit	Ratio of total remuneration to after-taxprofit	Ratio of total remuneration to after-taxprofit
	2020		2019		Difference
		All companies		All		All
Recipient				companies		companies
	YFY	in the	YFY	in the	YFY	in the
		financial statements		financial		financial
				statements		statements
Director	0.997%	1.417%	1.92%	2.41%	(0.92%)	(0.99%)
Independent Director	0.119%	0.119%	0.21%	0.21%	(0.09%)	(0.09%)
President and VPs	0.72%	0.77%	1.93%	2.15%	(1.21%)	(1.38%)

Director remuneration is determined by the Board of Directors and reported to the shareholders' meeting according to regulations.
The remuneration of the president and vice presidents is paid on a monthly basis, including a monthly salary, allowances (e.g., additional duty payments and meal expenses), and other regular compensation. The annual bonuses and benefits are paid separately. The salary standards are determined at the beginning of employment, while additional duty payments are determined by the position; performance bonus and other bonuses are based on business performance and personal performance.

IV. Corporate Governance Practice

(I) Board of Directors operating status

A total of 8 meetings of the 27th Board of Directors were held in 2020. Directors' attendance information is described below:

Title	Name	Attendance in person	Attendance by proxy Time(s)	Attendance in person rate (%)	Notes
Chairman	Shin-Yi Enterprise Co., Ltd. Representative: Felix Ho	8	0	100%	27th
Director	Shin-Yi Enterprise Co., Ltd. Representative: S. C. Ho	8	0	100%	27th
Director	Shin-Yi Enterprise Co., Ltd. Representative: Richard Ho	7	0	88%	27th
Director	Yuen Foong Paper Co., Ltd. Representative: Kirk Hwang	7	1	88%	27th
Director	Yuen Foong Paper Co., Ltd. Representative: Chin-San Wang	6	2	75%	27th
Director	Yuen Foong Paper Co., Ltd. Representative: Willie Tsai	8	0	100%	27th
Independent Director	Wen-Cheng Huang	8	0	100%	27th
Independent Director	Thomas Chen	8	0	100%	27th
Independent Director	Hsi-Peng Lu	8	0	100%	27th

Other statutory information:

I. If any of the following circumstances have occurred amid operations of the Board of Directors, the date, period, agenda content, the opinions of all independent directors, and the handling of the opinions of the independent directors by the Company shall be specified:
(I) Matters prescribed under Article 14-3 of the Securities and Exchange Act: The Company has set up an Audit Committee. Matters prescribed under Article 14-5 of the Securities and Exchange Act include matters prescribed under Article 14-3 of the Securities and Exchange Act. Please refer to the “Operating status of the Audit Committee” for details.
(II) Aside from the above matters, other resolutions adopted by the Board of Directors with regard to which an independent director had a dissenting or qualified opinion that is on record or stated in a written statement.

Operations of the Board of Directors which did not receive dissenting or qualified opinions from independent directors that are on record or stated in a written statement.

II. Any directors who had to recuse from a proposal to prevent conflicts of interest:
(I) In the Board meeting held on March 23, 2020, the Board discussed the remuneration for directors and the distribution method. A conflict of interest existed for independent directors Felix Ho, S. C. Ho, Richard Ho, Kirk Hwang, Chin-San Wang, and Willie Tsai on this matter; therefore, they recused themselves from discussing and voting on this proposal.
(II) In the Board meeting held on March 23, 2020, the Board discussed the remuneration for independent directors and the distribution method. A conflict of interest existed for independent directors Wen-Cheng Huang, Thomas Chen, and Hsi-Peng Lu on this matter; therefore, they recused themselves from discussing and voting on this proposal.
III. Board of Directors evaluation status: The Company has discussed and established the Company's "Board of Directors Performance Evaluation Guidelines" in the meeting of the Board of Directors on November 13, 2019, and amended certain articles of the "Board of Directors Performance Evaluation Guidelines" in the meeting of the Board of Directors on November 12, 2020.

			Evaluation cycle	Evaluation period	Evaluation scope			Evaluation method		Evaluation contents	Evaluation results
		The Company		From	The scope of			The		The criteria for evaluating the	The meeting organization
		completed the		January 1	the evaluation			performance		performance of the Company's Board	of the Board of Directors
		performance		to	covers the			evaluation		of Directors shall cover the following	delivered the
		evaluation of		December	performance			methods include		five aspects: 1. Understanding and	self-evaluation
		the board and		31, 2020	evaluation of			self-evaluation		recommendations for the operation of	questionnaire for the
		functional			the board as a			of the Board of		the company; 2. Improvement of the	performance evaluation
		committees in			whole,			Directors,		quality of the Board of Directors'	to each Director and
		2020 through			individual			self-evaluation		decision making; 3. Composition and	member of the Audit
		internal			directors, the			of the directors,		structure of the Board of Directors; 4.	Committee and
		self-evaluatio			Audit			and		Election and continuing education of	Remuneration Committee
		n			Committee,			self-evaluation		the directors; 5. Internal control.	before December 31,
					and			of the Audit		The criteria for evaluating the	2020 and recovered the
					Remuneration			Committee and		performance of the Company's	questionnaires before
					Committee			Remuneration		directors shall cover the following six	January 31, 2021.
								Committee		aspects: 1. Familiarity with the goals	According to the
										and missions of the Company; 2.	evaluation results, the
										Awareness of the duties of a director;	results of the
										3. Understanding and	self-evaluation of the
										recommendations for the operation of	board, board members,
										the company; 4. Management of	Audit Committee, and
										internal relationship and	Remuneration Committee
										communication; 5. The director's	were "excellent".
										professionalism and continuing
										education; 6. Internal control.
										The criteria for evaluating the
										performance of the Company's Audit
										Committee and Remuneration
										Committee shall cover the following
										five aspects: 1. Understanding and
										recommendations for the operation of
										the company; 2. Awareness of the
										duties of the functional committee; 3.
										Improvement of the quality of the
										functional committee's decision
										making; 4. Functional committee
										composition and election of members;
										5. Internal control.
	The aforementioned performance evaluation results were reported in								the meetings of the Audit Committee and Remuneration Committee convened on
	February 24, 2021 and reported to the meeting of					the Board of Directors convened on February 26, 2021 as reference for review and improvement.
IV.	Evaluation of targets and performance of the Board’s						functions for current year and past year:
	(I)		Three independent directors form the Company’s Audit Committee in substitution of supervisors. Matters prescribed under Article 14-5 of the
			Securities and Exchange Act are submitted					to the Audit Committee for discussion and resolution. The			convener of the Audit Committee is
			responsible	for reporting the resolutions passed by the Audit Committee to the Board of Directors.
	(II)		The Company discloses information regarding attendance to							board/shareholders' meetings, director continuing education, and		important
			resolutions passed during board meetings and shareholders' meetings.
	(III) In order to increase information transparency, the Company posts all important resolutions passed during Board/shareholders’ meetings on the
			Company website immediately following such meetings.
	(IV) In consideration of legal risks faced by directors and supervisors, the Company and its subsidiaries have purchased director and supervisor
			liability insurance for all directors and supervisors.
	(V) The Secretary General of				the Company's	Board of Directors regularly provides information on corporate governance courses organized by
			external training institutions to Directors to					encourage them to continue to acquire new knowledge and select corporate governance courses
			based on their personal needs. The Secretary				General also helps Directors who wish to participate in training organize registration procedures for
			the Company to provide subsidies for the expenses of Directors' participation in continuing education courses.

(II). Operating status of the Audit Committee

The Company’s Audit Committee is composed of three independent directors. The Committee’s purpose is to verify the fair presentation of the Company’s financial statements; hiring or dismissal of CPAs, their independence and performance; effectiveness regarding implementation of the Company's internal control system; compliance with relevant regulations and rules; and the Company’s control of existing or latent risks.

9 meetings of the 2nd Audit Committee were held in 2020. Key focuses for the year are described below:

Review financial reports

The Board of Directors prepared and submitted the 2019 business report, financial statements, and earnings distribution proposal. The financial statements were audited by Deloitte & Touche, and an audit report was submitted. The Company’s Audit Committee reviewed the said business report, financial statements, and the earnings distribution proposal and did not find any instances of noncompliance.

Assess internal control system effectiveness

The Company’s Audit Committee assessed the effectiveness of policies and procedures of the Company’s internal control system (including finance, operations, risk management, information security, legal compliance, and other control measures) and audited the Company’s Auditing Department and CPA, as well as regular reports by managers, including risk management and compliance.

Evaluate the independence and competence of CPAs

The Company’s Audit Committee evaluated and found that the CPAs Hui-Ming Huang, Benjamin Shih, and Ya-Ling Wong of Deloitte and Touche Taiwan have not served as the Company's CPA for more than seven years; did not have direct or indirect interest in the Company that would compromise their independence; established a suitable method to communicate with the Company and its Audit Committee; and fulfill the independence and competence requirements of the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies.

Release of shares implemented for related operations for the stock listing of the subsidiary YFY Consumer Products Co., Ltd.

In response to related operations for the stock listing of the subsidiary YFY Consumer Products Co., Ltd., the Company plans to dispose up to 72,000 thousand ordinary shares of YFY Consumer Products Co., Ltd. at a price of NT$34 per share to the Company's existing shareholders, employees, strategic investors, and financial investors. The proposal was reviewed and passed by the Company's Audit Committee.

Adjustment of the overseas investment structure in response to the stock listing of the subsidiary YFY Packaging Inc.

The Company's Audit Committee has reviewed and approved the adjustment of the

overseas investment structure in response to the operation requirements of overseas subsidiaries and the stock listing of the subsidiary YFY Packaging Inc.

Independent directors’ attendance to the Audit Committee meetings in 2020 is described below:

Title	Name	Attendance in person	Attendance by proxy	Attendance in person rate (%)	Notes
Independent Director	Wen-Cheng Huang	9	0	100%	2nd term
Independent Director	Thomas Chen	8	1	75%	2nd term
Independent Director	Hsi-Peng Lu	9	0	100%	2nd term

Other statutory information:

The date of the meeting, the term, contents of the proposals, resolutions of the Audit Committee, and the Company’s handling of the resolutions of the Audit Committee shall be specified under any of the following circumstances in the operations of the Audit Committee:

(1) Matters prescribed under Article 14-5 of the Securities and Exchange Act.

Board meeting date	Sessions	Agenda item	Resolution s adopted by the Audit Committee	Actions taken by the Company in response to the opinion of the Audit Committee
2020.3.23	10th meeting of the 27th Board of Directors	The Company’s 2019 consolidated financial statements, CPA’s audit report and 2019 business report.	Passed as proposed.	Approved in the Board meeting on March 23, 2020 and ratified in the 2020 shareholders’ meeting
2020.3.23	10th meeting of the 27th Board of Directors	The Company’s 2019 earnings distribution proposal	Passed as proposed.	Approved in the Board meeting on March 23, 2020 and ratified in the 2020 shareholders’ meeting
2020.3.23	10th meeting of the 27th Board of Directors	Proposal to issue the Company’s 2019 Statement of Internal Control System	Passed as proposed.	Approved in the Board meeting on March 23, 2020
2020.3.23	10th meeting of the 27th Board of Directors	Replacement of YFY's former CPAs with CPAs Hui-Ming Huang and Benjamin Shih	Passed as proposed.	Approved in the Board meeting on March 23, 2020
2020.5.12	11th meeting of the 27th Board of Directors	Conversion of the shares of BoardTek Electronics Corp. held by the Company to shares of Zhen Ding Technology Co.,Ltd.	Passed as proposed.	Approved in the Board meeting on May 12, 2020
2020.5.12	11th meeting of the 27th Board of Directors	In coordination with the plan for the subsidiary YFYCPG’s application for stock listing and the future stock listing of YFY Packaging Inc., the Company passed the proposal for the release of the shares of the companies in separate installments and waives the right to participate in the companies' cash capital increaseplans	Passed as proposed.	Approved in the Board meeting on May 12, 2020 and discussed and passed in the 2020 shareholders’ meeting
2020.6.4	12th (interim) meeting of the 27th Board of Directors	Related commitment documents of the Company and related subsidiaries for the stock listing of the subsidiary Arizon RFID Technology Co., Ltd. on the Shanghai Stock Exchange in China	Passed as proposed.	Approved in the Board meeting on June 4, 2020 and reported in the 2020 shareholders’ meeting
2020.6.22	13th (interim) meeting of the 27th Board of Directors	Proposal for YFY Consumer Products Co., Ltd. to serve as the contract performance guarantor in its subsidiary YFY Investment Co., Ltd.'s sales of 100% of the shares of Yuen Foong Yu Family Paper (Beijing) Co., Ltd. to non-relatedparties	Passed as proposed.	Approved in the Board meeting on June 22, 2020
2020.7.23	14th (interim) meeting of the 27th Board of Directors	In response to related operations for the stock listing of the subsidiary YFY Consumer Products Co., Ltd., the Company proposes to dispose up to 72,000 thousand ordinary shares of YFY Consumer Products Co., Ltd. at a price of NT$34per share	Passed as proposed.	Approved in the Board meeting on July 23, 2020
2020.7.23	14th (interim) meeting of the 27th Board of Directors	Adjustment of the overseas investment structure in response to the stock listing of the subsidiary YFY PackagingInc.	Passed as proposed.	Approved in the Board meeting on July 23, 2020
2020.8.13	15th meeting of the 27th Board of Directors	Passed the proposal for the Company to purchase real estate in Tucheng District, New Taipei City in accordance with methods prescribed in Article 34-1 of the Land Act.	Passed as proposed.	Approved in the Board meeting on August 13, 2020. However, a co-owner of the land exercised the right of first refusal and the Companyrescinded the contract
2020.8.13	15th meeting of the 27th Board of Directors	Merger of the subsidiaries YFY Paradigm Investment Co., Ltd. and Lotus Ecoscings & Engineering Co., Ltd.	Passed as proposed.	Approved in the Board meeting on August 13, 2020
2020.8.13	15th meeting of the 27th Board of Directors	Merger of the subsidiaries YFY Capital Co., Ltd. and YFY Venture Capital Investment Co., Ltd.	Passed as proposed.	Approved in the Board meeting on August 13, 2020
2020.8.13	15th meeting of the 27th Board of Directors	In coordination with the stock listing of the subsidiary YFYCPG, the Company passed a proposal to reduce its shareholding ratio in the company to 80.85% without affectingthe shareholder equityof the Company	Passed as proposed.	Approved in the Board meeting on August 13, 2020
2020.11.12	16th meeting of the 27th Board of Directors	YFY’s 2021 audit plan	Passed as proposed.	Approved in the Board meeting on November 12, 2020
2020.11.12	16th meeting of the 27th Board of Directors	In coordination with the stock listing of the subsidiary YFYCPG, the Company passed a proposal to reduce its shareholding ratio in the company to 64.52% without affectingthe shareholder equityof the Company	Passed as proposed.	Approved in the Board meeting on November 12, 2020
2020.12.29	17th meeting of the 27th Board of Directors	Proposal for the organizational restructuring of the containerboard and packaging subsidiary in China	Passed as proposed.	Approved in the Board meeting on December 29, 2020

(2) In addition to matters above, other resolutions which did not receive the approval of the Audit Committee but were approved by more than two thirds of the entire Board of Directors. Audit Committee operations which did not receive the approval of the Audit Committee but were approved by more than two thirds of the entire Board of Directors.

Any independent directors who had to recuse themselves to avoid conflicts of interest: No independent directors had to recuse themselves to avoid conflicts of interest.
Communication between independent directors and internal auditing officer and accountants: (1) On a regular basis
- Each month, completed audit reports are sent via emails to each independent director. If there are questions or instructions, independent directors can contact the auditing officer via emails or the telephone.
- Each quarter, the Audit Committee submits an Audit Progress Report ; it contains audit procedures, findings, and abnormalities which might require improvement for the Company as well as its subsidiaries.
- The CPA attends meetings of the Audit Committee to discuss and communicate on the audit methodology, CPA report type, key audit items, and financial report analysis for semi-annual and annual financial reports.
(2) On a non-regular basis
- Through telephone calls, emails, and meetings, discussions are held concerning how to increase the Company’s audit value and enhance operational efficiency and effectiveness. If any serious violations are discovered, independent directors must be notified according to regulations. There are many open channels of communication for the Company’s internal auditing officers to communicate with the independent directors.
- In the event of a material or special incident or special requirements in related regulations, the CPA attends meetings of the Audit Committee on a non-regular basis to provide explanation and communicate.

3. Recent communication between independent directors, internal audit managers, and

accountants:


	Communication		Communication summary and
Date		Key Points of Communication
	Method		results


		1. Chief Auditor reported the Audit Progress Report for
		2019 Q4.	1. Approved and acknowledged.
		2. The Chief Auditor explained the 2019 Statement on	2. Passed as proposed after review.
		the Internal Control System.
		1. The CPA explained related audits in the 2019
2020/03/20	Audit Committee	financial statements, and discussed and
		communicated on the financial conditions and	1. Passed as proposed after reviewing
		business results.	related conditions and discussions.
		2. Review of the newly appointed CPA.	2. Passed as proposed after review.
		3. The CPA explains changes in important regulations
		and communicated.
		Chief Auditor reported the Audit Progress Report for
		2020Q1.
2020/05/11	Audit Committee		Approved and acknowledged.

		Reported the 2020 Q1 financial statements.


		Chief Auditor reported the Audit Progress Report for
			Approved and acknowledged.
		2020 Q2.

2020/08/11	Audit Committee
		The CPA explained related review status of the 2020 Q2
			Passed as proposed after inquiring and
		financial statements, and discussed and communicated on
			reviewing related conditions.
		the financial conditions and business results.

		1. Chief Auditor reported the Audit Progress Report for
		2020 Q3.
			1. Approved and acknowledged.
		2. Chief Auditor explained the 2021 annual audit plan
			2. Passed as proposed after review.
		formulated in accordance with results of risk

2020/11/10	Audit Committee	assessments.
		1. Reported the 2020 Q3 financial statements.
		2. Review of the independence and competence of	1. Approved and acknowledged.
		CPAs.	2.3. Passed as proposed after review.
		3. Review of the newlyappointed CPA.

		Chief Auditor reported the Audit Progress Report for
2020/12/29	Audit Committee		Approved and acknowledged.
		October to November 2020.


		1. Chief Auditor reported the Audit Progress Report for
		December 2020.	1. Approved and acknowledged.
		2. The Chief Auditor explained the 2020 Statement on	2 Passed as proposed after review.
		the Internal Control System.
		1. The CPA explained related audits in the 2020
2021/02/24	Audit Committee
		financial statements, and discussed and

		communicated on the financial conditions and	1. Passed as proposed after reviewing
		business results.	related conditions and discussions.
		2. The CPA explains changes in important regulations
		and communicated.

(III). Corporate governance practice and compliance with the Corporate Governance Best Practice Principles for TWSE/TPEx Listed

Companies

			Practice	Compliance with
				Best Practice
Evaluation item				Principles and
	Yes	No	Summary
				reasons for any

				discrepancies
I. Does the Company abide by the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies in establishing and disclosing its corporate governance best practiceprinciples?	V		The Company has established the_Corporate Governance Best Practice Principles_, which were approved in the 3rd meeting of the 27th Board of Directors on November 13, 2018 and disclosed on the Company website.	� Compliant
II. The Company’s shareholding structure and shareholders’ rights and interests (I) Does the Company have in place an internal operating procedure for handling shareholders’ suggestions, questions, disputes, or litigation and abide by it? (II) Does the Company possess a list of major shareholders and a list of ultimate owners of those major shareholders? (III) Does the Company have in place a risk management mechanism and firewall against its affiliates or implement it? (IV) Does the Company have internal regulations in place to prevent its people from trading securities based on information yet to be public on the market?	V V V V		A service department is already in place to handle related matters. Information can be obtained through shareholder service agents at any time. The companies stay financially independent from each other, and business performance is evaluated on a regular basis. (IV) The Company has established the "Ethical Corporate Management Operating Procedures and Code of Conduct" to prevent the Company's insiders from using information yet to be made public on the market to purchase and sell marketable securities.	� Compliant � Compliant � Compliant � Compliant
III. Composition and responsibilities of the Board of Directors (I) Does the Board of Directors establish and implement a diversification policy for its composition?	V		The adoption of the Company’s_Corporate Governance Best Practice Principles_was approved at the Board meeting on November 13, 2018. The Principles stipulate the diversification policy for the composition of the board in Article 19 under Chapter 13 titled "Composition and Responsibilities of the Board of Directors." The nomination and election of Board members are pursuant to the regulations prescribed in the Company’s Articles of Incorporation. A candidate nomination system is adopted in accordance with the_Regulations Governing the Election of Directors_ and_Corporate Governance Best Practice Principles_to ensure the diversity and independence of board members. The professional backgrounds of the Company’s Board members include expertise in industry, business management, and accounting. According to the list of members of the 27th Board of Directors, those with the ability of leadership management administration,and crisis management,as well as industryknowledge,and an international marketperspective include directors	� Compliant � � � � �

			Practice	Practice	Practice	Practice	Compliance with
							Best Practice
Evaluation item							Principles and
	Yes	No	Summary
							reasons for any

							discrepancies
(II) Besides the Remuneration Committee and the Audit Committee established according to law, has the Company actively established other types of functional committees? (III) Has the Company established and implemented methods for assessing the performance of the Board of Directors and conducted performance evaluation annually? Does the Company submit results of assessments to the Board of directors and use results as the basis for the salary, remuneration, nomination and reappointment of individual Directors?	V V		Felix Ho, S. C. Ho, Kirk Hwang, and Willie Tsai; Chin-San Wang is an accountant. The Company’s independent directors include Wen-Cheng Huang who is a former president of a public listed company, Hsi-Peng Lu who is a university professor, and Thomas Chen who is also an independent director and supervisor of other public listed companies. The Company’s Board of Directors comprises four directors who are employees of the Company as well as three independent directors. Two independent directors have served a term of 6 years and one served three years. Age distribution of directors: Two directors are 70 years of age and above; four are 60–70 years old; two are 50–60 years of age and above; and one is 40–50 years of age and above. The Remuneration Committee and Audit Committee have been established and are both composed of independent directors. The Company's Board of Directors established the "Board of Directors Performance Evaluation Guidelines" in the board meeting on November 13, 2019. The Company has completed the 2020 performance evaluation of the board as a whole, individual directors, and functional committees before the end of the first quarter of 2021 and reported the performance evaluation results to the meeting of the Board of Directors on February 26, 2021.				� Compliant � Compliant
(IV) Does the Company periodically evaluate independence of the CPA?	V		Each year, the Audit Committee evaluates CPAs’ independence and competence based on the following indicators, and respective results are reported to the Board of Directors. Evaluation indicator 1: Independence Item No. Evaluation item Evaluatio n results Fulfillment of independence criteria 1 Has the CPA submitted an independence declaration? Yes V 2 Does the CPA firm have a system for rotatingCPAs? Yes V 3 Has YFY replaced CPAs so that no CPA has certified the Company's financial reports for more than 7 consecutiveyears? Yes V 4 Has YFY ensured that there are no direct or indirect material financial interests between the CPA and the Company? Yes V 5 Has YFY ensured that there are no financing or endorsements between the CPA and the Companyor directors? Yes V 6 Has YFY ensured that the CPA is not a relative of the Company's directors, Yes V				� Compliant
			Evaluation indicator 1: Independence
			Item No.	Evaluation item	Evaluatio n results	Fulfillment of independence criteria
			1	Has the CPA submitted an independence declaration?	Yes	V
			2	Does the CPA firm have a system for rotatingCPAs?	Yes	V
			3	Has YFY replaced CPAs so that no CPA has certified the Company's financial reports for more than 7 consecutiveyears?	Yes	V
			4	Has YFY ensured that there are no direct or indirect material financial interests between the CPA and the Company?	Yes	V
			5	Has YFY ensured that there are no financing or endorsements between the CPA and the Companyor directors?	Yes	V
			6	Has YFY ensured that the CPA is not a relative of the Company's directors,	Yes	V

				Practice	Practice			Compliance with
								Best Practice
Evaluation item								Principles and
	Yes	No		Summary
								reasons for any

								discrepancies
				managerial officers, or other individuals in positions that may have significant impact on the audit? (Evaluate at least the relations such as the spouse, underage children,and close relatives)
			7	Has YFY ensured that the CPA and the Company do not have close business relations? (e.g., joint investments in businesses, strategic alliances for profit, orproduct co-marketingorpromotion)		Yes	V
			8	Has YFY ensured that no members of the audit service team currently serve or had served as the Company's director, supervisor, managerial officer, or positions that may have significant impact on the audit in the most recent two years?		Yes	V
			9	Has YFY ensured that the CPA has not accepted valuable (with value beyond regular social norms) gifts or presents from the Company, directors, or managerial officers?		Yes	V
			10	Has YFY ensured that the CPA is not appointed by the Company to perform routine tasks,receive fixed salary,or serve as a director?		Yes	V
			11	Has YFY ensured that the CPA is not involved in the decision-making process of the Company?		Yes	V
			12	Has YFY ensured that the CPA does not provide the Company with appraisal services with material impact on the financial statements or highly subjective appraisals?		Yes	V

			Evaluation indicator 2: Competence
			Item No.		Evaluation item	Evaluatio n results	Fulfillment of competence criteria
			1		Has the CPA been disciplined or received any other disciplinary action in the past 2years that would impair his/herprofessionalism or independence?	Yes	V
			2		Has the CPA actively provided YFY with the latest information on taxation, and securities supervisory regulations, and updates of IFRS accounting standards.?	Yes	V
			3		Has the CPA assisted YFY in coordinating communication and coordination with competent authorities?	Yes	V
			4		Have all financial statements been completed within the deadline?	Yes	V
			5		Has the CPA maintained adequate communication channels with YFY's management,Audit Committee,and Directors?	Yes	V

			Practice	Compliance with
				Best Practice
Evaluation item				Principles and
	Yes	No	Summary
				reasons for any

				discrepancies
IV. Has the TWSE or TPEx listed company set up a full-time (part-time) unit or appointed designated personnel to handle governance related affairs (including but not limited to supplying information requested by the directors and supervisors, processing company registration and change of registration and preparing minutes of the board meetings and shareholders' meetings)?	V		The Board of Directors resolved in the meeting on May 14, 2019 to appoint Vincent Chan, the AVP of the Legal Department, as the Corporate Governance Officer to protect shareholder interests and strengthen the functions of the Board of Directors. Vincent Chan, the AVP of the Legal Department, has more than three years of work experience in legal affairs in public companies. The Corporate Governance Officer is responsible for related corporate governance affairs including: Handling matters relating to Board meetings and shareholders’ meetings according to law; Producing minutes of Board meetings and shareholders’ meetings; Assisting in work and continuing education of directors; Furnishing information required for business execution by directors and independent directors; and Assisting the Company in complying with laws and regulations governing such meetings. The implementation of corporate governance affairs in 2020 is as follows: 1. Convened one annual general meeting of shareholders in 2020 and produced meeting minutes of the shareholders' meeting. 2. Convened 8 meetings and special meetings of the Board of Directors in 2020 and produced meeting minutes of the Board meetings. 3. Convened 9 meetings of the Audit Committee in 2020 and produced meeting minutes of the Audit Committee meetings. 4. Issued letters to the directors of YFY in January and July 2020 to verify the information on their concurrent positions to ensure the integrity of information on the directors' positions concurrently held at the Company or other companies. 5. Responded to letters from Taiwan Stock Exchange and issued notices to directors and other insiders of YFY to remind them of matters to be reported when they transfer shares of insiders. 6. Regularly provided information on material information reporting procedures and regulations to all departments of YFY. 7. Cooperated with the Human Resources Department in inviting external lecturers for the continuing education for directors and supervisors of YFY and subsidiaries. 8. Provided YFY's Directors with information on continuing education courses for Directors and supervisors organized by external training institutions and assisted Directors in registration and payment procedures. The Company's Corporate Governance Officer has attended 15 hours of courses in 2020 to further improve competency and knowledge. These courses included "Practical Operations of Corporate Governance Personnel", "Corporate Governance and Ethical Corporate Management Seminar for Directors and Supervisors", "Insider Trading Prevention and Insider Equity Trading Seminar", "Revolutions of the 5G Era and Impact on Industries", and "Digital Supply Chain Management in Wave of Transformation".	� Compliant
V. Does the Company have in place a communication channel with stakeholders (including but not limited to shareholders, employees, customers, and suppliers) and set up a stakeholders section on its website to properlyaddress stakeholders’ concerns regarding	V		The Company has set up a dedicated section for stakeholders on its website, where contact information for employees, customers, suppliers/contractors, shareholders/investors, consumers, press members, and other stakeholders are listed for responding to questions concerning corporate social responsibility.	� Compliant

	Practice	Practice	Practice	Compliance with
				Best Practice
Evaluation item				Principles and
	Yes	No	Summary
				reasons for any

				discrepancies
important corporate social responsibilities?
VI. Does the Company hire professional stock agencies to take care of affairs related to shareholders’ meetings?	V		We have commissioned SinoPac Securities - Register & Transfer Agency Division to provide assistance.	� Compliant
VII. Information disclosure (I) Has the Company established a corporate website to disclose information regarding the Company’s financial, business and corporate governance status? (II) Has the Company adopted other means of information disclosure (such as establishing a website in English, appointing dedicated personnel to collect and disclose corporate information, implementing a spokesperson system, and disclosing the process of investor conferences on the Company website)? (III) Does the Company publish and report its annual financial report within two months after the end of a fiscal year, and publish and report its financial reports for the first, second and third quarters as well as its operating status for each month ahead of schedule before the specified deadline?	V V	V	Regularly disclose information on the corporate website regarding the Company's financial, business, and corporate governance status. We have created an official Company website in both Chinese and English, and appoint the Corporate Affairs Department to compile and organize information for publication. Each unit has set up a dedicated contact channel, and information is disclosed through investor or press conferences. The Company uploads information in accordance with the deadline specified in regulations and has not published information ahead of schedule.	� Compliant � Compliant � Changes are made gradually
VIII. Does the Company have other information that is helpful for understanding its status of corporate governance (including but not limited to employee rights and interests, employee well-being, investor relations, supplier relations, rights of stakeholders, further education sought by directors and supervisors, implementation of risk management policies and risk evaluation standards, implementation of customer policies, the purchase of liability insurance for directors and supervisors, etc.)?	V		We have already notified each director of the related regulations. Directors are notified immediately when there are regulation changes. Regulations relevant to insider trading among listed companies are also explained to directors at Board meetings. When a material issue that may impact the Company’s stock prices is encountered during a Board meeting, the Legal Department will remind all directors and managers present that insider trading is strictly forbidden according to Article 157-1 of the Securities and Exchange Act. When the Company organized ethical corporate management training, the employees of the Legal Department inform employees of the regulations prohibiting insider trading.	� Compliant
IX. Please mention any prioritymatters and measures that require improvement and improvements that have been made accordingto the Corporate Governance Evaluation results released byTWSE’s Governance Center.

	Practice	Practice	Practice	Compliance with
				Best Practice
Evaluation item				Principles and
	Yes	No	Summary
				reasons for any

				discrepancies
The Company is committed to strengthening information disclosure in order to enhance corporate governance, and plans to disclose indices that failed to receive points during the Corporate Governance Evaluation. The following section will explain some of the items: Index 2.2: Has the Company established a board diversification policy and disclosed the implementation status of this policy on its annual report and Company website? The Company has complied with the requirements of the Corporate Governance Evaluation in 2018 and established the_Corporate Governance Best Practice Principles_, which stipulate the Board diversification policy. We also disclosed the implementation status of the diversity policy in the annual report and the Company's website. Index 2.22: Have the Regulations Governing the Evaluation of the Performance of the Board of Directors established by the company been approved by the Board of Directors? Has the Company performed self-evaluations once every year and disclosed the evaluation results on the Company's website and annual reports? The Company's Board of Directors established the "Board of Directors Performance Evaluation Guidelines" in the board meeting on November 13, 2019. The Company has completed the 2020 performance evaluation of the board as a whole, individual directors, and functional committees before the end of the first quarter of 2021 and reported the performance evaluation results to the meeting of the Board of Directors on February 26, 2021. We also disclosed the evaluation results in the annual report and the Company's website.

Director/Supervisor continuing education in 2020:

		Duration	Duration
Title	Name			Organizer	Course	Hours

		Start date	End date


Representative of Institutional Director	Felix Ho	2020/09/30	2020/09/30	Taiwan Corporate Governance Association	Corporate Governance and Security Regulations	3
		2020/11/17	2020/11/17	Taiwan Corporate Governance Association	5G shapes the Enterprise. Digital Transformation and New Landscape of Competition	3
		2020/11/17	2020/11/17	Taiwan Corporate Governance Association	Digital Supply Chain Management under the Transformation Wave	3
Representative of Institutional Director	S. C. Ho	2020/11/17	2020/11/17	Taiwan Corporate Governance Association	5G shapes the Enterprise. Digital Transformation and New Landscape of Competition	3
		2020/11/17	2020/11/17	Taiwan Corporate Governance Association	Digital Supply Chain Management under the Transformation Wave	3
Representative of Institutional Director	Kirk Hwang	2020/01/16	2020/01/16	Institude for Information Industry	Improve the Corporate Governance Structure with the Management of Intellectual Property	2.5
		2020/02/05	2020/02/05	Taiwan Institue for Sustainable Energy	19th Council with CEO Lecture	2
		2020/05/13	2020/05/13	Taiwan Institue for Sustainable Energy	20th Council with CEO Lecture	2
		2020/07/20	2020/07/20	Taiwan Institue for Sustainable Energy	21st Council with CEO Lecture	2
		2020/08/07	2020/08/07	Taiwan Corporate Governance Association	Evaluation of Director Function and Performance	3
		2020/09/22	2020/09/22	Taipei Exchange, TPEx	Corporate Governance 3.0-Sustainable Development Blueprint Summit Agenda	3
		2020/12/18	2020/12/18	Taiwan Corporate Governance Association	Trends in Enterprise Tax Management in the Post-Epidemic Era	3
Representative of Institutional Director	Chin-San Wang	2020/08/11	2020/08/11	Taiwan Corporate Governance Association	Ten Essential Lessons in Corporate Governance	3
		2020/08/11	2020/08/11	Taiwan Corporate Governance Association	How to Effectively Perform the Functions of Directors and Implement Corporate Governance	3
Representative of Institutional Director	Willie Tsai	2020/09/30	2020/09/30	Taiwan Corporate Governance Association	Corporate Governance and Security Regulations	3
		2020/11/17	2020/11/17	Taiwan Corporate Governance Association	Digital Supply Chain Management under the Transformation Wave	3
Independent Director	Wen-Cheng Huang	2020/01/10	2020/01/10	Taiwan Corporate Governance Association	Practical Operation of Audit Committee Analysis and Discussion of the Return of Foreign Funds	3
		2020/06/29	2020/06/29	Security and Future Institude	Legal Matters for Directors and Supervisors of Public Companies	3
Independent Director	Hsi-Peng Lu	2020/02/14	2020/02/14	Taiwan Corporate Governance Association	Key Technologies and Market Applications of 5G and IoT	3
		2020/11/17	2020/11/17	Taiwan Corporate Governance Association	5G shapes the Enterprise. Digital Transformation and New Landscape of Competition	3
Independent Director	Thomas Chen	2020/10/23	2020/10/23	Taiwan Corporate Governance Association	Information Security Challenges and Countermeasures	3
		2020/10/27	2020/10/27	Taiwan Corporate Governance Association	ESG Development Trends and Socially Responsible Investment (SRI)	3

(IV) Companies that have established a Remuneration Committee shall disclose the names and responsibilities of its members and committee operations

(1) Information on members of the Compensation Committee

															Number of other public companies in which the committee member also serves as a remuneration committee member	Notes
		At least five years of work experience
		and the following professional qualifications			Fulfillment of independence criteria (Note)


	Requirement	Lecturer or a higher post at a public/private university/college in the field of commerce, law, finance, accounting, or another subject relevant to the Company’s operations	Specialized professional or technician certified as a judge, prosecutor, lawyer, accountant, or another designation relevant to the Company’s operations and subject to national examinations	Work experience required for operations in commerce, law, finance, accounting, or another field relevant to the Company’s operations	1	2	3	4	5	6	7	8	9	10







Position







	Name






Independent Director	Wen-Cheng Huang			`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	2	N/A
Independent Director	Thomas Chen			`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	0	N/A
Independent Director	Hsi-Peng Lu	`�`			`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	`�`	3	N/A

Note: If the committee member meets any of the following criteria in the two years before being appointed or during the term of office, please check “ � ” in the corresponding boxes.
(1) Not an employee of YFY or one of its affiliates.
(2) Not a director or supervisor of the Company or any of its affiliates. The same does not apply if the person is an independent director of the Company or its parent company, or any subsidiary established by following this or local regulations.
(3) Not a shareholding natural person who holds at least 1% of the Company’s total outstanding shares in combination with his/her spouse, underage children, and third parties or is one of the ten largest shareholders.
(4) Not a spouse, relative within the second degree of kinship, or lineal relative within the third degree of kinship, of any of the managerial officers listed in subparagraph (1) or persons listed in subparagraphs (2) and (3).
(5) Not a Director, Supervisor or employee of a corporate shareholder who directly holds more than 5% of the total number of issued shares of the Company or is ranked top five in terms of the number of shares held or is designated as a Director or Supervisor of the Company pursuant to Paragraph 1 or 2, Article 27 of the Company Act (excluding Independent Directors in the Company, its parent company, subsidiaries, or subsidiaries of the same parent company who have been appointed in accordance with the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies or local regulations).
(6) Not a Director, Supervisor, or employee of a company with a majority of the company's director seats or voting shares and those of any other company are controlled by the same person (this restriction does not apply to independent directors in the Company, its parent company, subsidiaries, or subsidiaries of the same parent company which have been appointed in accordance with local laws or laws of the registered country).
(7) Not a Director (member of the governing board), Supervisor (member of the supervising board), or employee of a company or institution with the same chairperson of the board, president, or equivalent position, or a spouse thereof (excluding Independent Directors set up by the Company, its parent company, subsidiaries, or subsidiaries of the same parent company which have been appointed in accordance with the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies or local regulations).
(8) Not a Director (member of the governing board), Supervisor (member of the supervising board), managerial officer, or shareholder holding more than 5% of the shares of a specific company or institution that has a financial or business relationship with the Company (excluding specific companies or institutions if they hold more than 20% but less than 50% of the outstanding shares of the Company or Independent Directors in the Company, its parent company, subsidiaries, or subsidiaries of the same parent company which have been appointed in accordance with the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies or local regulations).
(9) Not a professional individual or owner, partner, director (member of the governing board), supervisor (member of the supervising board), or managerial officer of a sole proprietorship, partnership, company, or institution that provides commercial, legal, financial, accounting, or consultation services to the company or to any affiliate enterprise for which the provider in the past 2 years has received cumulative compensation exceeding NT$500,000, or spouse thereof. Provided, this restriction does not apply to a member of the remuneration committee, public tender offer review committee, or special committee for merger/consolidation and acquisition, who exercises powers pursuant to the Securities and Exchange Act or to the Business Mergers and Acquisitions Act or related laws or regulations.
(10) No record of any of the incidents described in Article 30 of the Company Act.

(2) Operation of Compensation Committee

a. The Company’s Remuneration Committee is composed of three persons.

b. Current term for the members: From June 2018 to June 2021. The Remuneration Committee held two meetings during

the past year, and the qualifications and attendance information of each member are listed below:

Title	Title	Name		Attendance in person	Attendance by proxy	Attendance by proxy	Attendance in person rate (%)	Notes
Convener		Wen-Cheng Huang		2	0		100%	Convener
Committee member		Thomas Chen		2	0		100%	Committee member
Committee member		Hsi-PengLu		2	0		100%	Committee member

Remuneration Committee	Agenda item and follow-up		Results of resolution			Actions taken by the Company in response to theopinionof the RemunerationCommittee
4th Committee 3rd Meeting 2020/01/16	Reviewed the Company’s 2019 year-end bonus proposal for executive managers		Approved by all committee members as proposed.			The Chairman of the Board was authorized to approve the 2019 year-end bonus proposal for executive managers within the amount approved by the Remuneration Committee according to individual performance evaluation results and compensation structure for 2019.
4th Committee 4th Meeting 2020/03/20	1. Reviewed the Company’s 2019 employee remuneration proposal. 2. Reviewed the Company’s 2019 director remuneration proposal.		Approved by all committee members as proposed, and recommendation were proposed to the Board of Directors.			The Board of Directors approved YFY’s 2019 employee and director remuneration proposals and submitted them to the shareholders’ meeting.
Other statutory information: a. If the Board of Directors did not adopt or revise the recommendations of the Compensation Committee, the date of the Board meeting, term of the Board, agenda item, resolutions adopted by the Board, and actions taken by the Company in response to the opinion of the Compensation Committee shall be specified: N/A. b. If a member has an opposing or qualified opinion regarding a resolution the Remuneration Committee has adopted with a written record or statement, the date and session of the meeting, the resolution, opinions of all the members, and the handling of their opinions shall be specified: N/A.

Other statutory information:

a. If the Board of Directors did not adopt or revise the recommendations of the Compensation Committee, the date of the Board meeting, term of the Board, agenda item, resolutions adopted by the Board, and actions taken by the Company in response to the opinion of the Compensation Committee shall be specified: N/A.

b. If a member has an opposing or qualified opinion regarding a resolution the Remuneration Committee has adopted with a written record or statement, the date and session of the meeting, the resolution, opinions of all the members, and the handling of their opinions shall be specified: N/A.

(V) Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons

(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons
			Practice	Deviation from
	Yes	No		Corporate Social
				Responsibility
				Best Practice
Evaluation Items				Principles for
			Summary
				TWSE/TPEx

				listed companies
				and reasons for
				deviation
I. Does the Company perform assessments of risks in environmental, social, and corporate governance issues relevant to its business activities and devise risk management policies and strategies based on the principle of materiality? II. Does the Company have a dedicated (concurrent) unit responsible for CSR promotion? Is the CSR unit run by senior managerial officers, which are authorized by and report their progress to the Board of Directors?	V V		The Company's Corporate Social Responsibility Office and professional employees of business groups assess the environmental, social, and corporate governance risks related to the Company's operations and include materiality issues into risk management. We review related climate risks and opportunities faced by different plants. We also planned response measure for climate events, changes in energy resources, water resource management, and compliance. We refurbished and strengthened related equipment to create more resilient plants. YFY has established a dedicated unit to promote corporate social responsibility. The "Sustainability and Social Responsibility Office" was established in the Corporate Affairs Department on April 1, 2013. We increased the implementation of corporate social responsibility on August 1, 2020 by creating an independent CSR Office to take charge of related strategies and management systems. The Office is implements plans for employees, communities, and the environment, and focuses on environmental, social, and governance (ESG) plans. The CSR Office has two dedicated staff members. Seven targets are established based on projects. Details are provided below: 1. Target control: Manage YFY’s corporate social responsibility in terms of the environment, society, and employees. 2. Sustainable actions: Participate in the planning of short-, mid-, and long-term energy saving and emission reduction goals for all plants. Propose response measures with respect to climate change and obtain various environmental protection certifications. 3. Employee training: Increase employee’s awareness towards environmental protection and ecological issues; share the goals and vision of the Company with employees; and encourage them to propose ideas on social responsibility and sustainability. 4. Social engagement: Strengthen YFY’s eco-friendly image and continue to improve relations with communities to strengthen connections between plants and local communities. Encourage employees to participate in local eco-friendly, cultural, and volunteering events. 5. Corporate social responsibility exchanges: Continue to hold discussions with stakeholders; and increase the transparency for enforcing corporate management and promoting social responsibility. 6. Supply chain management: Monitor and control all personnel involved in the production line in order to provide a healthy and safe work environment for employees and contractors. Establish management standards for all suppliers of YFY, including thresholds for health and safety, social responsibility, green and sustainable development, etc. 7. Technological innovation: Integrate R&D, production, and market to maximize efficiency and profit. Ensure that all production processes meet international environmental standards; Combine internal and external R&D results to obtain international certifications and support from non-governmental organizations. The President is the officer responsible for the CSR Office which reports to the Chairman’s Office on a quarterly basis, and presents annual plans and implementation status to the Board of Directors regularly.	Compliant Compliant
III. Environmental issues (I) Has the Company established a proper environmental management system based on the characteristics of the industry? (II) Is the Company committed to improving the efficiency of various resources and using recycled materials which have a low impact on the environment? (III) Does the Company evaluate the potential risks and opportunities in climate change with regard to the present and future of its business, and take appropriate action to counter climate change issues?	V V V		All plants in China and Taiwan have obtained ISO 14001 Environmental Management certification, and dedicated personnel have been assigned to maintain each plant's environmental management systems and ensure their proper operation. YFY is committed to improving the efficiency of the use of all resources. Sustainable development and the circular economy are important corporate values and we have fully implemented five major cycles including the renewable energy cycle, water cycle, paper recycling cycle, agricultural cycle, and carbon cycle. The Xinwu mill also obtained the international BS 8001 Circular Economy certification and was the first in the global paper industry to receive the circular economy certification. YFY continues to evaluate potential risks and opportunities in climate change and focuses on the optimal use of raw materials, energy resources, and water resources in the production process. The plants continue to create benchmarks in the industry in terms of water recycling and the development of renewable energy. For instance, the lignin fuel power generation at Hualien Plant uses 100% biomass fuel. The biogas powergeneration at Xinwu mill uses high-tech bacteria cultivation technologies to create the largest industrial biogaspowergeneration	Compliant Compliant Compliant

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(V) Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons

(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons
			Practice	Deviation from
	Yes	No		Corporate Social
				Responsibility
				Best Practice
Evaluation Items				Principles for
			Summary
				TWSE/TPEx

				listed companies
				and reasons for
				deviation
(IV) Does the Company take inventory of its greenhouse gas emissions, water consumption, and the total weight of waste in the last two years, and draw up policies on energy efficiency and carbon reduction, greenhouse gas reduction, water reduction, or waste management?	V		system. The renewable energy created in these processes helps YFY significantly reduce the use of fossil fuels and they are important response measures for combating climate change, conserving energy, reducing carbon emissions, and reducing greenhouse gas emissions. The CSR Office and employees responsible for technologies, energy, and environmental protection at the plants perform regular inspections to ensure the accuracy of the inventory of greenhouse gas emissions, water consumption, and the total waste, and evaluate the performance of energy conservation and carbon emissions reduction. The plants are responsible for active supervision. The plants have obtained the ISO50001 certification for energy management systems and fully implemented GHG energy conservation and carbon emissions reduction measures. They included the following: (1) Conversion of waste into renewable energy at Xinwu mill to reduce the pressure on external disposal of waste. Xinwu mill effectively recycled and converted non-paper residue waste in recycled paper into fuel and converted them into solid recovered fuel (SRF) which reduces waste and increases the energy self-sufficiency rate. (2) Greenhouse gas (GHG) inventory: The Company continues to pay attention to requirements for the disclosure of carbon emissions as well as developments of domestic regulations and requirements. We request all units to complete GHG inventories voluntarily and publish their results on the national greenhouse gas tracking platform. (3) Energy conservation and carbon reduction: The Company promotes the integration of energy resources and recycling in plants and continues the promotion of energy saving projects among plants/offices, which include shifting to LED lights and high-efficiency motors and introducing energy saving technologies to improve each plant's energy efficiency. In 2015, we also established a five-year annual energy reduction goal of reducing energy consumption by 1% eachyear. We replaced coal with renewable fuel and increased theplants'powergeneration in 2020.	Compliant
IV. Social issues (I) Does the Company comply with relevant laws and regulations and internationally recognized covenants on human rights, and have related management policies and procedures in place? (II) Has the Company established and implemented reasonable employee benefits (including remuneration, leave, and other benefits), and ensured business performance or results are reflected adequately in employee remuneration?	V V		A set of rules has been implemented in accordance with the applicable regulations to protect employee rights as specified by law. The Company provides a comprehensive remuneration system, welfare measures, and performance management system while meeting requirements in the external business environment and building a fair and reasonable internal system. We provide a leave system that is more favorable than regulatory requirements and uphold the ideal of sharing profits with employees by attracting, retaining, developing, and encouraging talents. � Competitive salary (1) The Company participates in compensation surveys in the industry or on the market and determine the salaries of employees based on their academic records, work experience, skills, and position. (2) Salary is not determined by gender or age. � Bonus and compensation (1) Year-end bonus and other incentives: The Company has established regulations on the year-end bonus to include at least 30 days of salary. The Company also established related standards for the issuance of additional bonuses based on the Company's operations and the employees' rank and performance. The bonuses are competitive and used as incentives to encourage employees to make more contributions andgrow with the Company.	Compliant Compliant

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(V) Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons

(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons
	Practice			Deviation from
	Yes	No		Corporate Social
				Responsibility
				Best Practice
Evaluation Items				Principles for
			Summary
				TWSE/TPEx

				listed companies
				and reasons for
				deviation
(III) Does the Company provide a safe and healthy work environment, and provide employees with regular safety and health training?	V		(2) Employee's remuneration: The Company's Articles of Incorporation specifies that if the Company sustains profit every year, 0.1% or more of the income shall be set aside as remunerations to employees, and 2% or less shall be distributed as director remuneration. However, an amount shall be set aside first to compensate cumulative losses, if any. � Salary adjustment (1) The Company implemented three rounds of salary adjustments for all employees in the past three years (2018 to 2020) and the average salary increase was at least 2.5-3%% in each round. (2) When employees are promoted, their salaries are adjusted immediately to prepare, incentivize, and retain outstanding talents. Units from all levels have dedicated safety and health management personnel responsible for the development of occupational safety and health management plans to promote in work environment and identify operational hazards, as well as to assess and control various safety and health management matters. All of our employees must undertake at least three hours of safety and health training every three years. At each plant, we implement automatic pre-inspection of all machinery and operations, as well as work environment monitoring. We continue to make improvements on safety and health facilities, and actively create a safe, healthy, comfortable, and friendly work environment to achieve our goal of “zero accidents”. YFY has met health and safetystandards and all ourplants have obtained OHSAS 18001 certification.	Compliant
(IV) Does the Company offer its employees effective occupational empowerment training programs?	V		organize professional training based on different positions and levels;	Compliant
(V) Does the Company comply with relevant laws and international standards in relation to customer health and safety, customer privacy, marketing, and labeling of products and services, and does it establish relevant consumer protection policies and grievance procedures? (VI) Does the Company establish supplier management policies, which require suppliers to observe relevant regulations on environmental protection, occupational safety and hygiene, or labor and human rights? If so, describe the implementation results. V. Does the Company prepare corporate social responsibility reports and other reports that disclose non-financial information by following international reporting standards or guidelines? Has the company received assurance or certification of the aforesaid reports from a third-party accreditation institution?	V V V		All specifications on the labels of YFY products meet national regulations and standards so that customers fully understand product information and can choose safe and high-quality products. In addition, the consumer service line also provides instantaneous consultation service and complaint channels. The operating procedures are in line with personal data protection regulations to ensure that consumer interests are protected and continue to provide customers with better products and experience. Since 2013, the Company has requested all new suppliers and contractors to sign an_Honesty and Integrity Declaration_. It comprises the commitments and concrete actions with regard each supplier’s corporate social responsibility, including compliance with the principles of honesty, trustworthiness and integrity, environmental and labor laws, as well as liabilities in case of a breach of contract. All suppliers have signed the_Honesty and Integrity Declaration_in 2020. The Company has compiled the Corporate Social Responsibility Report in accordance with GRI Standards since 2015. We have also invited third-party certification institutions for certification since 2017. We received the SGS AA1000 Type 2 moderate-level assurance for the Corporate Social Responsibility Reports from 2016 to 2019.	Compliant Compliant Compliant
VI. If the Company has established corporate social responsibility guidelines by following the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies, please describe the practice and any discrepancies with regard to the Best Practice Principles: The Company’s Board of Directors has approved and implemented the YFY Inc.. Sustainabilityand Social ResponsibilityGuidelines in 2018.
VII. Other keyinformation useful for explainingstatus of corporate social responsibility practices:

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(V) Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons

(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons	(V)Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons
	Practice			Deviation from
	Yes	No		Corporate Social
				Responsibility
				Best Practice
Evaluation Items				Principles for
			Summary
				TWSE/TPEx

				listed companies
				and reasons for
				deviation
(1) Full cycle of renewable energy, increasing energy self-sufficiency and reducing dependence on fossil fuels In response to the impact of climate change, YFY has invested in a number of environmental protection and energy conversion technologies to improve the efficiency and value of resource utilization. The heat, steam and electricity required for the manufacturing process mainly come from internal The reuse of internal waste resources improves energy utilization, significantly reduces dependence on fossil fuels such as coal, heavy oil, and LPG, and reduces greenhouse gas emissions and impacts. Alternative fuels and renewable energy Alternative fuels and renewable energy sources include the Hualien plant's wood quality power generation, the Xinwu mill's biogas power generation, and SRF solid recovered fuels, all of which increase the energy self-sufficiency rate. (2) Plastic reduction system solutions with plastic-free all-paper materials The plastic-free food safety paper products of CircuWell series break through the traditional process of paper containers and are completely plastic-free, do not need to go through the lamination process, and are waterproof and oil-resistant. After use, they can be directly fed into the general paper recycling system.This material breakthrough, which has taken three years to develop, will solve the problem of a large amount of disposable container waste in urban life and embody the company's social responsibility to solve environmental problems on a large scale.This breakthrough in material development over the past three years will solve the problem of large amounts of disposable container waste in urban life and realize the social responsibility of enterprises to solve environmental problems on a large scale. (3) Recognition of various certifications and awards "The 16th Vision Magazine CSR Corporate Social Responsibility Award in 2020", the "BS 8001 Circular Economy Level 4 certification", the "Taichung City Government's Corporate Green Energy Sustainability Award", and the "Taichung City Government's Environmental Protection Award. Award", "Taichung City Government Environmental Protection Bureau 2020 Green Life and Green Consumption - Green Procurement Outstanding Enterprise", "Outstanding Performance of Green Procurement by Private Enterprises and Organizations", "The 2nd National Enterprise Environmental Protection Award Bronze The 2nd National Enterprise Environmental Protection Award Bronze Level Award in the Manufacturing Industry Category", "109th Energy Saving Benchmark Award of the Ministry of Economic Affairs", "Sports Enterprise Certification Mark of the Department of Sports, Ministry of Education", "Corporate Health (Corporate Health Responsibility) Pledge", the Ministry of Labor's "Excellent Demonstration Enterprise for Strengthening Workplace Health Management and Promotion", the "Ministry of Health and Welfare's Healthy Workplace Certification Health Promotion The Ministry of Health and Welfare's Healthy Workplace Certification Health Promotion Badge, the Taiwan Vaccine Promotion Association's Silver Award for Epidemic Prevention, the Outstanding Civilian Green Procurement Enterprise, the Air Quality Purification Zone Recognition. (4) Social welfare and community involvement YFY Consumer Products sponsored and volunteered for a series of public welfare activities of the "Taoyuan City Huangyi Xinji Care Association", which was established by parents of brain marijuana, to promote zero-waste and recycling. We help the underprivileged employment groups to find their expertise. The "YFY Taitung Primary School" entered its sixth year and cooperated with the Taitung Family Support Guanshan Service Office to put in volunteers to participate in video reading and companionship. Each factory continues to carry out local community support and care programs, such as sending warmth in winter to resource recyclers and elderly people living alone, giving thanks at the Mid-Autumn and Spring Festivals, scholarships for elementary and middle schools, and community Donations to the community, etc. For the fifth year, we co-hosted the Paper Manufacturers Association's "Carton Battle", a large-scale industry-academic cooperation event for the paper industry in Asia, which allowed the public to participate in a large-scale installation display that combines environmentalprotection,art,and entertainment.

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(VI) Deviations of the implementation of ethical corporate management from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and reasons for deviation

			Practice	Deviation from Ethical
				Corporate Management Best
				Practice Principles for
Evaluation item
	Yes	No	Summary	TWSE/TPEx Listed

				Companies and reasons for
				deviation
I. Establishment of ethical corporate management policy and approaches (I) Has the company established the ethical corporate management policies approved by the Board of Directors and specified in its rules and external documents the ethical corporate management policies and practices as well as the commitment of its Board of Directors and senior management to implementing the management policies? (II) Does the Company have mechanisms in place to assess the risk of unethical conduct and perform regular analysis and assessment of business activities with a higher risk of unethical conduct within the scope of business? Does the Company implement programs to prevent unethical conduct based on the above and ensure the programs cover at least the matters described in Paragraph 2, Article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies? (III) Does the Company have any measures against dishonest conduct? Are these measures supported by proper procedures, conduct guidelines, disciplinary actions and complaint systems? Does the Companyreview thepolicies on a regular basis?	V V V		The Company's "Code of Operation Integrity" was passed by the Board of Directors and the Company established the "Ethical Corporate Management Operating Procedures and Code of Conduct" to actively prevent dishonest behavior and conflicts of interest, establish whistleblowing channels, and regulate the conduct of relevant personnel. The Company performs regular analysis and assessment of business activities with a higher risk of unethical conduct within the scope of business and implement programs to prevent unethical conduct. The programs are provided below: 1. Prevention of dishonest behavior and the prohibition of bribery acceptance: Detailed information about disciplinary actions and the reporting system are listed in Chapter Four: “Service Regulations” of the Work Rules. 2. Protection of Intellectual Property Rights: Achieved by requiring employees to sign the Integrity and Confidentiality of Intellectual Property Agreement_as well as the employment contract. 3. Code of Conduct for Employees: The Code of Conduct for Employees was established to implement the Company’s core values, maintain high ethical standards, provide employees with standard compliance requirements when performing their daily duties and tasks, protect the Company’s reputation, and earn the respect and trust of our clients, vendors, and other individuals. 4. _Ethical Corporate Management Operating Procedures and Code of Conduct: Contain 15 operational regulations and stipulate whistleblowing systems and handling procedures. The Company established the_Ethical Corporate Management Operating Procedures and Code of_ _Conduct_in accordance with the_Code of Operation Integrity_to specify disciplinary actions and complaint systems and the Company reviews the policies on a regular basis.	Compliant Compliant Compliant
II. Full Implementation of ethical management principles (I) Does the Company evaluate the integrity of all counterparties it has business relationships with? Are there any integrity clauses in the agreements it signs with business partners? (II) Does the Company have a unit responsible for business integrity on a full-time basis under the Board of Directors, which will report the business integrity policy and programs against unethical conduct regularly (at least once a year) to the Board of Directors while overseeing such operations? (III) Does the Company have policies that help prevent conflicts of interests, provide appropriate channels for filing related complaints, and precisely enforce them? (IV) Does the Company have effective accounting and internal control systems inplace to implement business integrity? Does	V V V V		In the credit evaluation process of business partners, the Company carefully assesses the integrity of their records. Likewise, we clearly specify in the procurement contract as well as the_Honesty_ and Integrity Declaration Form_that absolutely no bribery or dishonest behavior are allowed. The Company’s Human Resources Department is responsible for handling the drafting, revision, interpretation, consulting services, notification, and record of the Company’s_Ethical Corporate Management Operating Procedures and Code of Conduct. The Department supervises the executing unit and reports the implementation status of the ethical corporate management policies and programs for preventing unethical conduct to the Board of Directors once a year. Directors who may have a conflict of interest with respect to a proposal discussed during a Board meeting must recuse themselves from the meeting. An effective accounting system and internal control system are already in place; internal auditors conduct inspections accordingto the auditplan approved bythe Board of Directors. In 2018,the	Compliant Compliant Compliant Compliant

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	Practice	Practice	Practice	Deviation from Ethical
				Corporate Management Best
				Practice Principles for
Evaluation item
	Yes	No	Summary	TWSE/TPEx Listed

				Companies and reasons for
				deviation
the internal audit unit follow the results of unethical conduct risk assessments and devise audit plans to audit the systems accordingly to prevent unethical conduct, or engage CPAs to perform the audits? (V) Does the Company periodically provide internal and external training on ethical corporate management?	V		Company hired a CPA to conduct a special audit within the specific scope of the internal control system as required by TWSE. The Company organizes regular training on ethical corporate management related topics to promote relevant moral and ethical standards. The Company organized ethical management seminars, corporate governance courses for Directors and Supervisors, and corporate governance courses for legal affairs/audit managerial officers in 2020. The courses received 269 enrollments from YFY and YFY HoldingManagement and delivered 365 hours of training.	Compliant
III. Implementation of the Company’s whistleblowing system (I) Does the Company have in place a substantial whistleblowing and reward system as well as a convenient reporting channel and appropriate designated personnel with regard to the party being reported on? (II) Has the Company established standard operating procedures for investigating reported issues, follow-up measures to be adopted after the investigation, as well as relevant confidential mechanisms? (III) Does the Company adopt measures to prevent whistleblowers from improper treatment for filing the report?	V V V		The Company's_Ethical Corporate Management Operating Procedures and Code of Conduct_ established a whistleblowing and reward system as well as open and diversified reporting channels with the Human Resources Department as the responsible department. The Company has prescribed the standard operating procedures for investigating report, follow-up measures to be taken after the completion of investigations, and related confidentiality mechanisms in its_Ethical Corporate Management Operating Procedures and Code of Conduct_. The Company’s_Ethical Corporate Management Operating Procedures and Code of Conduct_ expressly pledges the Company's protection of whistleblowers from damages imposed on the legal or contractual rights of whistleblowers as a result of whistleblowing. Should he or she be subject to improper treatment after filing the report, the whistleblower may file grievance report with the Company's Human Resources Department.	Compliant Compliant Compliant
IV. Reinforcing information disclosure (I) Has the Company disclosed its corporate ethical management principles and progress onto its website and the Market Observation Post System?	V		Important internal policies and the operation of audit units are disclosed on the Company website.	Compliant
V. If the Company has implemented its own ethical corporate management principles by following the Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies, please describe the practice and any discrepancies with regard to the Best Practice Principles: The Company has established the_Ethical Corporate Management Guidelines_and relevant operational procedures, and incorporated the principles of ethical corporate management into applicable regulations pursuant to the Ethical Corporate Management Best Practice Principlesfor TWSE/TPEx Listed Companies.
VI. Other important information to facilitate better understanding of the Company’s implementation of ethical corporate management: (e.g., review/revision of the Company’s ethical corporate management principles, etc.): The Company requires all suppliers and third parties to sign the_Honesty and Integrity Declaration Form_to guarantee their commitment to fulfill their obligations of conducting honest business operations. All contracts between the Company and its suppliers require both parties to comply with the ethical corporate management policy. If the supplier is involved in any dishonest activity, the Company may terminate or void the contract at anytime.

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(VII) The Company shall disclose the ways to make inquiries if it has implemented a set of corporate governance principles or related rules: N/A
(VIII) Other material information that can facilitate the understanding of the Company's corporate governance practice may be disclosed:
Please refer to (3) Corporate governance practice and compliance with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies.
Continuing education and training for key managers who participate in corporate governance:

Corporate governance training for key managers in 2020

5G shapes the Enterprise. Digital Transformation and New Landscape of Competition	Human Resources Department	2020.11.17	3	Hsianmin Chen, Miles Chang, Vincent Chan, Aubrey Tsai, Chia-Ling Wu, Ya-Hui Chang, Claudia Kung, Ray Chien, Ya-Hui Huang, Yi-Xue Cai, Chung-Yi Chang, Wei-Yen Liu, Shu-Chin Hsu, Bing-Yi Lin, Guo-Feng Gao, Wen-Fu Chen, Pei-Ling Dai
Digital Supply Chain Management under the Transformation Wave	Human Resources Department	2020.11.17	3	Hsianmin Chen, Vincent Chan, Claudia Kung, Chia-Ling Wu, Ya-Hui Huang, Ray Chien, Yi-Xue Cai, Wei-Yen Liu, Shu-Chin Hsu, Bing-Yi Lin, Wen-Fu Chen, Pei-Ling Dai

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(IX). Status of implementation of internal control system:

1. Statement on the Internal Control System

YFY Inc.

Statement on the Internal Control System

Date: February 26, 2021

In 2020, the Company conducted a self-assessment on its internal control system, and based on its outcomes, hereby declares as follows:

(1) The Company is clearly aware that the establishment, implementation and maintenance of the internal control system are the responsibility of the Board of Directors and the executives. YFY has established this system accordingly. The purpose is to provide reasonable assurance to the effectiveness and efficiency of business operations (including profitability, performance and security of assets), reliability, timeliness, and information transparency of reports and compliance with relevant regulatory requirements.
(2) There are inherent limitations to even the most well-designed internal control system. As such, an effective internal control system can only reasonably ensure the achievement of the aforementioned goals. In addition, due to changes in market environment and conditions, the effectiveness of the internal control system may change along with them. Nonetheless, YFY’s internal control system has a built-in self-supervision mechanism and once a flaw is detected, the Company is able to make immediate corrections.
(3) In compliance with the Regulations Governing Establishment of Internal Control Systems by Public Companies (the “Regulations”), YFY has adopted a checklist of items for the internal control system in judging the effectiveness of system design and implementation. The checklist items covered in the Regulations are based upon five elements according to the management control process: 1. Control environment, 2. Risk assessment, 3. Control operation, 4. Information and communication, and 5. Monitoring. Each element comprises several items as detailed in the Regulations.
(4) The Company has evaluated the design and operating effectiveness of its internal control system according to the aforesaid criteria.
(5) Based on the aforementioned evaluation results, the Company holds that it has reasonably assured the achievement of the aforementioned with the internal control system as of December 31, 2020 (including the monitoring over the subsidiaries), including understanding the effectiveness and efficiency in operation, reliability and transparency in timely reporting, and compliance with relevant regulatory requirements, and that the design and enforcement of internal control are effective.
(6) This Statement shall become a main part of the annual report and prospectus and be disclosed to the public. If there are any deceptive or concealed statements herein, the Company shall be liable for violations of Articles 20, 32, 171 and 174 of the Securities and Exchange Act.
(7) This Statement was approved by the Board of Directors on Friday, February 26, 2021; all 9 directors present concurred unanimously.

YFY Inc.

Chairman: Signature

President: Signature

CPA’s internal control special audit report: N/A

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(X). Penalty on the Company and its personnel or punishment imposed by the Company on personnel in violation of internal control system regulations, major deficiencies, and improvement in the past year and up to the print date for this annual report:

This event did not occur at the Company.

(XI). Important resolutions adopted in shareholders’ meetings, Board of Directors' meetings, and the Audit Committee meetings in the past year and up to the print date of this annual report:

1. Important resolutions of the 2020 annual shareholders’ meeting (June 22, 2020) (abstract)

(1) Approved the acknowledgment of YFY’s 2019 financial statements.
(2) Approved the acknowledgment of YFY’s 2019 earnings distribution proposal.
(3) Passed the proposal for the amendment for YFY’s "Rules of Procedure for Shareholders’ Meeting"
(4) In coordination with the plan for the subsidiary YFYCPG’s application for stock listing and the future stock listing of YFY Packaging Inc., the shareholders' meeting passed the proposal for the release of the shares of the companies in separate installments and waives the right to participate in the companies' cash capital increase plans.

Implementation of resolutions of the 2020 shareholders’ meeting:

(1) The Board of Directors followed Article 230 of the Company Act and prepared and submitted the financial statements to the shareholders’ meeting for acknowledgment. Once acknowledged by the shareholders’ meeting, the Board of Directors distributed the financial statements and earnings distribution proposals to the shareholders through announcements.
(2) In 2019, the Company’s cash dividends of ordinary stock were NT$0.7 per share; the ex-dividend date was July 21, 2020, and the distribution date for dividends was August 14, 2020.
(3) The Company's shareholders' meeting approved the amendment of YFY’s "Rules of Procedure for Shareholders’ Meeting" and subsequently convened and organized shareholders' meetings in accordance with the "Rules of Procedure for Shareholders’ Meeting".
(4) The Company's shareholders' meeting resolved to support the plan for the subsidiary YFYCPG’s application for stock listing and the future stock listing of YFY Packaging Inc., the Company may release the shares of the companies in separate installments and waives the right to participate in the companies' cash capital increase plans. The Company has planned to dispose up to 72,000 thousand ordinary shares of YFY Consumer Products Co., Ltd. at a price of NT$34 per share to the Company's existing shareholders, employees, strategic investors, and financial investors. The Company's shareholding ratio in the company was reduced to 64.52%, which does not affect the Company's shareholder equity.

YFY have completed the implementation of all tasks in accordance with the resolutions of the shareholders’ meeting.

2. Important resolutions of the 10th meeting of the 27th Board of Directors (March 23, 2020) (summary) (1) Approved YFY’s 2019 financial statements and submitted them to the shareholders' meeting for acknowledgment.

(2) Approved YFY’s 2019 earnings distribution proposal and submitted it to the shareholders’ meeting for approval.
- YFY's 2019 net profit after tax was NT$2,285,768,948; surplus from the previous year in terms of accumulated undistributed earnings was NT$5,657,212,092, confirmed welfare plan re-measurement

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was NT$81,765,600, profits from disposal of FVOCI financial assets (including investment companies) was NT$288,212,817, and special reserve reversal was NT$950 before subtracting a recognized change of NT$21,633,567 in the net value of shares held in the investment portfolio to arrive at a total of NT$8,291,326,840 in unappropriated retained earnings. Excluding a statutory legal reserve of NT$263,411,475, the distribution of a NT$0.7 cash dividend of per share, amounting to

NT$1,162,260,047 in total, was conducted. The remaining balance of NT$6,865,655,318 is reserved to be appropriated in the coming year.

(3) Approved YFY’s 2019 employee and director remuneration proposals and submitted them to the shareholders’ meeting. In 2019, the Company set aside NT$2,282,255 as remuneration for employees and NT$12,500,000 as remuneration for directors.
(4) Approved the Company’s 2019 Statement of Internal Control System.
(5) Approved the amendment of certain articles of YFY's "Board of Directors Meeting Procedures" for reporting to the shareholders' meeting.
(6) Approved additional amendments of certain articles of the YFY "Audit Committee Charter".
(7) Approved the amendment of YFY’s "Rules of Procedure for Shareholders’ Meeting" for reporting to the shareholders' meeting.
(8) Approved the time, location, agenda, and other relevant matters regarding the 2020 shareholders’ meeting.
(9) Approved the replacement of YFY’s former CPAs to Hui-Ming Huang and Benjamin Shih.
(10) Approved YFY’s interbank lending credit line application.
(11) Approved YFY to serve as the joint promissory note maker and the joint and severable guarantor in the interbank lending credit line applications by YFY’s subsidiaries, and to issue letters of support for the interbank lending credit line applications by the subsidiaries.
(12) Approved YFY’s subsidiaries to serve as the joint promissory note maker and the joint and severable guarantor in the interbank lending credit line applications by their subsidiaries.
(13) Approved the acknowledgment of the total amount of liabilities in endorsements and guarantees as of 2019 and calculated these at the end of Q4 to be approx. NT$15,541,544 thousand.

3. Important resolutions of the 11th meeting of the 27th Board of Directors (May 12, 2020) (summary)

(1) Passed the conversion of the shares of BoardTek Electronics Corp. held by the Company to shares of Zhen Ding Technology Co., Ltd.
(2) In coordination with the plan for the subsidiary YFYCPG’s application for stock listing and the future stock listing of YFY Packaging Inc., the Company passed the proposal for the release of the shares of the companies in separate installments and waives the right to participate in the companies' cash capital increase plans
(3) To facilitate the aforementioned share release for the public listing of the subsidiary, the Board of Directors passed the proposal for the 2020 annual general meeting of shareholders.
(4) Approved YFY’s interbank lending credit line application.
(5) Approved YFY to serve as the joint promissory note maker and the joint and severable guarantor in the interbank lending credit line applications by YFY’s subsidiaries, and to issue letters of support and comfort for the interbank lending credit line applications by the subsidiaries.
(6) Approved YFY’s subsidiaries to serve as the joint promissory note maker and the joint and severable guarantor in the interbank lending credit line applications by their subsidiaries.
(7) Approved the acknowledgment of the total amount of liabilities in endorsements and guarantees as of 2020 and calculated these at the end of Q1 to be NT$15,648,292 thousand.

4. Important resolutions of the 12th (interim) meeting of the 27th Board of Directors (June 4, 2020)

(abstract)

(1) Passed related commitment documents of the Company and related subsidiaries for the stock listing of the subsidiary Arizon RFID Technology Co., Ltd. on the Shanghai Stock Exchange in China.

5. Important resolutions of the 13th (interim) meeting of the 27th Board of Directors (June 22, 2020) (abstract)

(1) Passed the proposal for YFY Consumer Products Co., Ltd. to serve as the contract performance guarantor in its subsidiary YFY Investment Co., Ltd.'s sales of 100% of the shares of Yuen Foong Yu Family Paper (Beijing) Co., Ltd. to non-related parties at the price of RMB 180,000,000.

6. Important resolutions of the 14th (interim) meeting of the 27th Board of Directors (July 23, 2020)

(abstract)

(1) In response to related operations for the stock listing of the subsidiary YFY Consumer Products Co., Ltd., the Company assed the proposal to dispose up to 72,000 thousand ordinary shares of YFY Consumer Products Co., Ltd. at a price of NT$34 per share to the Company's existing shareholders, employees, strategic investors, and financial investors.
(2) Passed the adjustment of the overseas investment structure in response to the operation requirements of overseas subsidiaries and the stock listing of the subsidiary YFY Packaging Inc.

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(3) Passed the proposal for YFY to purchase 51.2% of the shares of YFY Mauritius Corp. from YFY Packaging (BVI) Corp., and purchased 48.8% of the shares of YFY Mauritius Corp. from YFY Cayman Co., Ltd. through its subsidiary YFY International Limited.
(4) Passed the proposal for YFY to purchase 100% of the shares of YFY Packaging Inc. from YFY International Labuan Co., Ltd.

7. Important resolutions of the 15th meeting of the 27th Board of Directors (August 13, 2020) (summary)

(1) Passed the proposal for the Company to purchase real estate in Plot 287 and 288, Tucheng District, New Taipei City in accordance with methods prescribed in Article 34-1 of the Land Act.
(2) Passed the proposal for the merger of YFY's subsidiaries YFY Paradigm Investment Co., Ltd. and Lotus Ecoscings & Engineering Co., Ltd.
(3) Passed the proposal for the merger of YFY's subsidiaries YFY Capital Co., Ltd. and YFY Venture Capital Investment Co., Ltd.
(4) In coordination with the stock listing of the subsidiary YFYCPG, the Company passed a proposal to reduce its shareholding ratio in the company to 80.85% without affecting the shareholder equity of the Company.
(5) Approved YFY’s interbank lending credit line application.
(6) Approved YFY to serve as the joint promissory note maker in the interbank lending credit line applications by YFY's subsidiaries, and to issue letters of support/comfort for the interbank lending credit line applications by YFY's subsidiaries.
(7) Approved YFY’s subsidiaries to serve as the joint promissory note maker and the joint and severable guarantor in the interbank lending credit line applications by their subsidiaries, and to issue letters of support for the interbank lending credit line applications by their subsidiaries.
(8) Approved the acknowledgment of the total amount of liabilities in endorsements and guarantees as of 2020 and calculated these at the end of Q2 to be approx. NT$15,162,477 thousand.

8. Important resolutions of the 16th meeting of the 27th Board of Directors (November 12, 2020)

(summary)

(1) Approved YFY’s 2021 annual audit plan.
(2) In coordination with the stock listing of the subsidiary YFYCPG, the Board of Directors passed a proposal to reduce its shareholding ratio in the company to 64.52% without affecting the shareholder equity of the Company.
(3) Approved the amendment of YFY's "Regulations for Evaluating the Performance of the Board of Directors".
(4) Passed the proposal for the replacement of YFY's former CPAs with CPAs Hui-Ming Huang and Ya-Ling Wong.
(5) Approved a resolution to finance YFY's existing short-term loans from banks and replenish the medium-term operational budget as well as improve YFY's capital structure via a five-year syndicated loan with Bank of Taiwan, Mega International Commercial Bank, Hua Nan Bank, First Bank and Taipei Fubon Bank as lead banks.
(6) Approved YFY’s interbank lending credit line application.
(7) Approval of YFY to be the joint promissory note maker of subsidiaries' loan credit line with correspondent bank, and the approval of YFY to issue a letter of commitment for subsidiaries.
(8) Approved YFY’s subsidiaries to serve as the joint promissory note maker and the joint guarantor in the interbank lending credit line applications by their subsidiaries, and to issue letters of support for the interbank lending credit line applications by their subsidiaries.
(9) Approved the acknowledgment of the total amount of liabilities in endorsements and guarantees as of 2020 and calculated these at the end of Q3 to be approx. NT$14,306,824 thousand.

9. Important resolutions of the 17th meeting of the 27th Board of Directors (December 29, 2020) (summary)

(1) Approved YFY's 2021 annual operational budget.
(2) Approved YFY's organizational restructuring of the containerboard and packaging subsidiary in China whereby the Company invests in the YFY Packaging (Yangzhou) Investment Co., Ltd. with the investment capital of 13 subsidiaries including Yuen Foong Yu Paper MFG (Yangzhou) Co., Ltd. held by YFY Mauritius Corporation as the consideration.

10. Important resolutions of the18th meeting of the 27th Board of Directors (January 13, 2021)

(summary)

(1) Approved the subsidiary, YFY Packaging Inc., to spin-off the Asset Management Division of Central District to YFY Development Corp..
(2) Approved the subsidiary, YFY Packaging Inc., to process capital reduction due to the spin-off project in exchange for the new shares issuance by the conterparty, YFY Development Corp.

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11. Important resolutions of the 10th meeting of the 27th Board of Directors (March 23, 2020) (summary) (1) Approved YFY’s 2020 financial statements and submitted them to the shareholders' meeting for acknowledgment.

(2) Approved YFY’s 2020 earnings distribution proposal and submitted it to the shareholders’ meeting for approval.
- YFY's 2020 net profit after tax was NT$5,209,079,592; surplus from the previous year in terms of accumulated undistributed earnings was NT$6,865,655,318confirmed welfare plan re-measurement was NT$583,663,200, profits from disposal of FVOCI financial assets (including investment companies) was NT$302,575,063, and special reserve reversal was NT$26,770,557 before subtracting a recognized change of NT$56,258,745in the net value of shares held in the investment portfolio to arrive at a total of NT$12,391,484,985 in unappropriated retained earnings. Excluding a statutory legal reserve of NT$606,582,967, the distribution of a NT$1.5 cash dividend of per share, amounting to NT$2,490,557,243 in total, was conducted. The remaining balance of NT$9,834,344,775 is reserved to be appropriated in the coming year.
(3) Approved YFY’s 2020 employee and director remuneration proposals and submitted them to the shareholders’ meeting. In 2020, the Company set aside NT$5,361,204 as remuneration for employees and NT$22,000,000 as remuneration for directors.
(4) Approved to propose the 28th term of the 9 seats board of directors( 5 directors and 4 independent directors) to be elected in the annual general meeting of 2021.
(5) Approved the proposal to the shareholders meeting to remove the non-competition restriction for YFY's new directors and the institutional entities they represented.
(6) Approved the time, location, agenda, and other relevant matters regarding the 2021 shareholders meeting.
(7) Approved the Company’s 2020 Statement of Internal Control System.
(8) Approved the amendment for YFY's Procedures for Lending Funds to Other Parties and the submission to the shareholders' meeting for resolution.
(9) Approved the amendment for YFY's Procedures for Making Endorsements and Guarantees and the submission to the shareholders' meeting for resolution.
(10) Approved the amendment of certain articles of YFY's "Procedures for Remuneration Committee".
(11) Approved YFY’s interbank lending credit line application.
(12) Approved YFY to serve as the joint promissory note maker and the joint and severable guarantor in the interbank lending credit line applications by YFY’s subsidiaries, and to issue letters of support for the interbank lending credit line applications by the subsidiaries.
(13) Approved YFY’s subsidiaries to serve as the joint promissory note maker and the joint and severable guarantor in the interbank lending credit line applications by their subsidiaries.
(14) Approved the acknowledgment of the total amount of liabilities in endorsements and guarantees as of 2020 and calculated these at the end of Q4 to be approx. NT$12,912,081 thousand.

12. Important resolutions of the 8th meeting of the 2nd Audit Committee (March 20, 2020) (summary)

(3) Approved YFY’s 2019 financial statements and submitted them to the Board of Directors for approval.
(4) Approved YFY’s 2019 earnings distribution proposal with NT$0.8 cash dividend of per share, and submitted it to the Board of Directors for approval.
(5) Approved YFY's 2019 Statement on the Internal Control System and submitted it to the board meeting for approval.
(6) Approved the replacement of YFY’s former CPAs to Hui-Ming Huang and Benjamin Shih, and submitted this to the Board of Directors for approval.
(7) Approved the acknowledgment of the total amount of liabilities in endorsements and guarantees as of 2019 and calculated these at the end of Q4 to be approx. NT$15,541,544 thousand, and submitted this to the Board of Directors for approval.

13. Important resolutions of the 9th (interim) meeting of the 2nd Audit Committee (March 23, 2020)

(summary)

(1) Due to the impact of the COVID-19 pandemic, the Company has adopted a more conservative outlook of the economy and intends to keep more cash in the Company. The Audit Committee passed the 2019 earnings distribution proposal and changed the cash dividend of per share to NT$0.7. It and submitted the proposal to the Board of Directors for approval.

14. Important resolutions of the 10th meeting of the 2nd Audit Committee (May 11, 2020) (summary)

(1) Passed the conversion of the shares of BoardTek Electronics Corp. held by the Company to shares of Zhen Ding Technology Co., Ltd. The proposal is filed to the Board of Directors for approval.
(2) In coordination with the plan for the subsidiary YFYCPG’s application for stock listing and the future stock listing of YFY Packaging Inc., the Audit Committee passed the proposal for the release of the shares of the companies in separate installments and waives the right to participate in the companies' cash capital increase plans. The proposal is filed to the Board of Directors for approval.

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(3) Approved the acknowledgment of the total amount of liabilities in endorsements and guarantees as of 2020 and calculated these at the end of Q1 to be approx. NT$15,648,292 thousand, and submitted this to the Board of Directors for approval.

15. Important resolutions of the 11th (interim) meeting of the 2nd Audit Committee (June 4, 2020)

(summary)

(1) With regard to the commitment documents of the Company and related subsidiaries for the stock listing of the subsidiary Arizon RFID Technology Co., Ltd. on the Shanghai Stock Exchange in China. The members in attendance considered that they do not have material impact on the finance, business, and shareholder equity of the shareholders of YFY Inc. and Arizon RFID Technology Co., Ltd. The proposal is filed to the Board of Directors for approval.

16. Important resolutions of the 12th (interim) meeting of the 2nd Audit Committee (June 22, 2020)

(summary)

(1) Passed the proposal for YFY Consumer Products Co., Ltd. to serve as the contract performance guarantor in its subsidiary YFY Investment Co., Ltd.'s sales of 100% of the shares of Yuen Foong Yu Family Paper (Beijing) Co., Ltd. to non-related parties at the price of RMB 180,000,000. The proposal is filed to the Board of Directors for approval.

17. Important resolutions of the 13th (interim) meeting of the 2nd Audit Committee (July 23, 2020)

(summary)

(1) In response to related operations for the stock listing of the subsidiary YFY Consumer Products Co., Ltd., the Company assed the proposal to dispose up to 72,000 thousand ordinary shares of YFY Consumer Products Co., Ltd. at a price of NT$34 per share to the Company's existing shareholders, employees, strategic investors, and financial investors. The proposal is filed to the Board of Directors for approval.
(2) Passed the adjustment of the overseas investment structure in response to the operation requirements of overseas subsidiaries and the stock listing of the subsidiary YFY Packaging Inc. The proposal is filed to the Board of Directors for approval.
(3) Passed the proposal for YFY to purchase 51.2% of the shares of YFY Mauritius Corp. from YFY Packaging (BVI) Corp., and purchased 48.8% of the shares of YFY Mauritius Corp. from YFY Cayman Co., Ltd. through its subsidiary YFY International Limited. The proposal is filed to the Board of Directors for approval.
(4) Passed the proposal for YFY to purchase 100% of the shares of YFY Packaging Inc. from YFY International Labuan Co., Ltd. The proposal is filed to the Board of Directors for approval.

18. Important resolutions of the 14th meeting of the 2nd Audit Committee (August 11, 2020) (summary)

(1) Passed the proposal for the Company to purchase real estate in Plot 287 and 288, Tucheng District, New Taipei City in accordance with methods prescribed in Article 34-1 of the Land Act. The proposal is filed to the Board of Directors for approval.
(2) Passed the proposal for the merger of YFY's subsidiaries YFY Paradigm Investment Co., Ltd. and Lotus Ecoscings & Engineering Co., Ltd. The proposal is filed to the Board of Directors for approval.
(3) Passed the proposal for the merger of YFY's subsidiaries YFY Capital Co., Ltd. and YFY Venture Capital Investment Co., Ltd. The proposal is filed to the Board of Directors for approval.
(4) In coordination with the stock listing of the subsidiary YFYCPG, the Company passed a proposal to reduce its shareholding ratio in the company to 80.85% without affecting the shareholder equity of the Company. The proposal is filed to the Board of Directors for approval.
(5) Approved the acknowledgment of the total amount of liabilities in endorsements and guarantees as of 2020 and calculated these at the end of Q2 to be approx. NT$15,162,477 thousand, and submitted this to the Board of Directors for approval.

19. Important resolutions of the 15th meeting of the 2nd Audit Committee (November 10, 2020)

(summary)

(1) Approved YFY’s 2021 annual audit plan and submitted it to the Board of Directors for approval.
(2) In coordination with the stock listing of the subsidiary YFYCPG, the Company passed a proposal to reduce its shareholding ratio in the company to 64.52% without affecting the shareholder equity of the Company. The proposal is filed to the Board of Directors for approval.
(3) Approved the amendment of YFY's "Regulations for Evaluating the Performance of the Board of Directors". The proposal is filed to the Board of Directors for approval.
(4) Approved the replacement of YFY’s former CPAs to Hui-Ming Huang and Ya-Ling Wong, and submitted this to the Board of Directors for approval.

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(5) Approved the compliance of the CPAs’ independence and accountability after evaluation as required by the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies, and reported this to the Board of Directors.
(6) Approved the acknowledgment of the total amount of liabilities in endorsements and guarantees as of 2020 and calculated these at the end of Q3 to be approx. NT$14,306,824 thousand, and submitted this to the Board of Directors for approval.

20. Important resolutions of the 16th meeting of the 2nd Audit Committee (December 29, 2020)

(summary)

(1) Approved YFY's organizational restructuring of the containerboard and packaging subsidiary in China whereby the Company invests in the YFY Packaging (Yangzhou) Investment Co., Ltd. with the investment capital of 13 subsidiaries including Yuen Foong Yu Paper MFG (Yangzhou) Co., Ltd. held by YFY Mauritius Corporation as the consideration. The proposal is filed to the Board of Directors for approval.

21. Important resolutions of the 17th meeting (interim) of Audit Committee (January 13, 2021) (summary) (1) Approved the subsidiary, YFY Packaging Inc., to spin-off the Asset Management Division of Central District to YFY Development Corp. The proposal is filed to the Board of Directors for approval.

(2) Approved the subsidiary, YFY Packaging Inc., to process capital reduction due to the spin-off project in exchange for the new shares issuance by the conterparty, YFY Development Corp. The proposal is filed to the Board of Directors for approval.

22. Important resolutions of the 18th meeting of the 2nd Audit Committee (Febuary 241, 2021) (summary)

(1) Approved YFY’s 2020 financial statements The proposal is filed to the Board of Directors for approval.
(2) Approved YFY’s 2020 earnings distribution proposal to distribute NT$1.5 cash dividend per share. The proposal is filed to the Board of Directors for approval.
(3) Approved YFY's 2020 Statement on the Internal Control System and filed to the Board of Directors for approval.
(4) Approved the amendment for YFY's Procedures for Lending Funds to Other Parties and filed to the Board of Directors for approval.
(5) Approved the amendment for YFY's Procedures for Making Endorsements and Guarantees and filed to the Board of Directors for approval.
(6) Approved the acknowledgment of the total amount of liabilities in endorsements and guarantees as of 2020 and calculated these at the end of Q4 to be approx. NT$12,912,081 thousand, and filed to the Board of Directors for approval.

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(XII) The content of any resolution of the Board of Directors which received any dissenting opinions from a director or supervisor that are supported by appropriate records or written statements: N/A.

(XIII) Resignation and dismissal of professional managerial officers, including Chairman, President, Chief Accounting Officer, Chief Financial Officer, Chief R&D Officer and Chief Internal Auditor, in the past year and up to the print date of this annual report: This event did not occur at the Company.

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V. Information on Fees to CPA

When non-audit fees paid to the CPAs, to the accounting firm of the CPAs, and to any affiliated enterprise of such accounting firm are equivalent to one quarter or more of the audit fees paid to them, the amounts of both audit and non-audit fees and the details of the non-audit services shall be disclosed.

Unit: NT$ thousand


				Non-audit fees
Name of		Audit
	Name of CPAs			Business				Audit period	Notes
accounting firm		fee	System		Human	Others
				registratio			Subtotal
			design		resources	(Note)
				n

Deloitte and Touche Taiwan	Hui-Ming Huang	4,250	-	-	25	1,140	1,165	2020.01.01 ~ 2020.07.31	Administrative litigation
	Benjamin Shih
Deloitte and Touche Taiwan	Hui-Ming Huang							2020.08.01 ~ 2020.12.31
	Ya-Ling Wong

Note: Non-audit fees shall be listed by service item. If the "Others" column under Non-Audit Fees reaches 25% of the total

non-audit fees, the service items associated with this column shall be listed in the Note column.

VI. Information on change/replacement of CPA:

1. Regarding previous CPA:

	From August 2020	From August 2020	From August 2020	From August 2020
Date of change

	Because of the firm’s internal rotation and arrangement, CPA Benjamin Shih was replaced by CPA Ya-Ling Wong.
Reasons for change and remark

	Parties Involved
			CPA	Client
Termination initiated by client	Scenario

or accountant declined to accept	Termination initiated by client		N/A	N/A
the appointment
	CPA declined to accept (continue) the appointment		N/A	N/A

Audit opinions other than		N/A
unqualified opinions issued in
thepast twoyears and reasons
	Yes		Accounting principles orpractice
			Disclosure of financial reports
Opinions different from those of			Scope or stages of auditing
			Others
issuer

	N/A	`�`
		Description
Other disclosures		N/A
(Disclosures specified in Item
1.4-1.7, Subparagraph 6, Article
10 of the Standards)

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(2) Regarding succeeding CPA:

	Deloitte and Touche Taiwan
Name of firm

Name of CPAs:	Ya-Ling Wong, CPA
Date of appointment	From August 2020
Consultation given on accounting treatment or accounting principle	N/A
adopted for any specific transactions and on possible opinion issued
on financial reportprior to appointment and results
Succeeding CPA’s written opinions that are different from those of	N/A
theprevious CPA

(3) The former CPA’s reply to Point 3, Item 1 and Item 2, Subparagraph 6, Article 10 of the Standards: N/A.

VII. The Chairman, President and Financial or Accounting Managerial Officer of the Company who has worked for CPAs’ firm or its affiliate in the past year: This event did not occur at the Company.

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VIII. Equity transfers and changes of equity interests by directors, supervisors, managers, and major shareholders holding more than 10% of the shares in last fiscal year and up to the print date for this annual report

(I). Changes in Shareholding of Directors, Supervisors, Managers and Major Shareholders

		2020	2020	Current fiscalyear upto March 31	Current fiscalyear upto March 31
		Increase	Increase	Increase	Increase
Title	Name
		(decrease) in	(decrease) in	(decrease) in	(decrease) in

		shares held	pledged shares	shares held	pledged shares
Chairman	Felix Ho	-	-	200,000	-
Director	S. C. Ho	2,000,000	-	-	-
Director and AVP	Richard Ho	-	-	-	-
Director and CTO	Kirk Hwang	-	-	-	-
Director	Chin-San Wang	-	-	-	-
Director and President	Willie Tsai	-	-	-	-
Independent Director	Wen-ChengHuang	-	-	-	-
Independent Director	Hsi-PengLu	-	-	-	-
Independent Director	Thomas Chen	-	-	-	-
Institutional Director	Shin-Yi Enterprise Co.,Ltd.	-	-	-	-
Institutional Director	Yuen FoongPaper Co.,Ltd.	-	-	-	-
CSO	Hsianmin Chen	-	-	-	-
VP,Finance Center	K. T. Yin	-	-	-	-
AVP,Procurement Department	Claudia Kung	-	-	-	-
AVP,AccountingDepartment	C. F. Wu	-	-	-	-
AVP, Information Technology Department	Ray Chien	-	-	-	-
AVP, Legal Department and Corporate Governance Officer	Vincent Chan	-	-	-	-
AVP, Human Resources Department	Aubrey Tsai	50,000	-	-	-
AVP,President's Office	Miles Chang	-	-	-	-
Manager, Auditing and Compliance Office	Irene Cheng	-	-	-	-

(II). Share transfer information: This event did not occur at the Company.

(III). Share pledge information: This event did not occur at the Company.

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IX. Information disclosing the spouse, kinship within second degree, and relationship between any of the top ten shareholders

Name	Shares held by the individual	Shares held by the individual	Shares held by spouse and underage children	Shares held by spouse and underage children	Total shares held in names of third parties	Total shares held in names of third parties	Titles, names and relationships between top 10 shareholders (related party, spouse, or kinship within the second degree)	Titles, names and relationships between top 10 shareholders (related party, spouse, or kinship within the second degree)	Notes
	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage	Number of shares	Shareholding percentage	Name	Relation
S. C. Ho	170,615,028	10.28%	0	0	0	0	1. Hsin-Yi Foundation 2. Shin-Yi Enterprise Co., Ltd. 3. Mei-Yu Ho 4. Felix Ho 5. Hsinex International Corp.	1. Director is the representative’s spouse 2. Director is the representative’s spouse 3. Siblings 4. Father and son 5. Director is the representative’s spouse	N/A
Hsin-Yi Foundation Representative: Sing-Ju Chang	94,004,485 0	5.66% 0	0 *170,615,028	0 10.28%	0	0	1. S. C. Ho 2. Mei-Yu Ho 3. Felix Ho	1. Director is the representative’s spouse 2. Related to the representative as relative-in-law within second degree of kinship 3. Mother and son with the representative	N/A
Shin-Yi Enterprise Co., Ltd. Representative: Sing-Ju Chang	77,794,610 0	4.69% 0	0 *170,615,028	0 10.28%	0	0	1. S. C. Ho 2. Mei-Yu Ho 3. Felix Ho	1. Director is the representative’s spouse 2. Director is the representative’s relative-in-law within second degree of kinship 3. Director and representative are mother and son	N/A
Hsinex International Corp. Representative: Sing-Ju Chang	47,705,895 0	2.87% 0	0 *170,615,028	0 10.28%	0	0	1. S. C. Ho 2. Mei-Yu Ho 3. Felix Ho	1. Director is the representative’s spouse 2. Related to the representative as relative-in-law within second degree of kinship 3. Mother and son with the representative	N/A
Cheng-TingHo	*46,544,959	2.80%	*1,878,837	0.11%	0	0	Min-TingHo	Siblings	N/A
Supervisory Committee of Workers' Pension Reserve Funds, YFY Inc.. Representative: K. T. Yin	46,396,624 0	2.79% 0	0 0	0 0	0	0	N/A	N/A	N/A
Mei-Yu Ho	*44,053,664	2.65%	*3,959,,112	0.24%	0	0	1. S. C. Ho 2. Shin-Yi Enterprise Co., Ltd. 3. Sing-Ju Chang, Representative of Hsin-Yi Foundation, Shin-Yi Enterprise Co., Ltd., and Hsinex International Corp.	1. Siblings 2. Director 3. Related to the representative as relative-in-law within second degree of kinship	N/A
Ru Yi Enterprise Co., Ltd. Representative:Bo-Yu Hsieh	43,629,000 0	2.63% 0.00%	0 *488	0 0.00%	0 0	0 0	S.C. Ho	Director	N/A
NEW TALENT LIMITED Representative: Modern VictoryLimited	37,744,132 0	2.27% 0	0 0	0 0	0	0	N/A	N/A	N/A
Felix Ho	*35,729,953	2.15%	0	0	0	0	1. S. C. Ho 2. Shin-Yi Enterprise Co., Ltd. 3. Sing-Ju Chang, Representative of Hsin-Yi Foundation, Shin-Yi Enterprise Co., Ltd., and Hsinex International Corp.	1. Father and son 2. Director 3. Mother and son	N/A

*personal holdings.

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X. Numbers of Shares Held in Invested Enterprises by the Company, the Company’s Directors,

Independent Directors, and Managers, and Enterprises Directly or Indirectly Controlled by the Company and the Consolidated Shareholding Ratio

			December 31,2020 Unit: thousand shares;%	December 31,2020 Unit: thousand shares;%	December 31,2020 Unit: thousand shares;%	December 31,2020 Unit: thousand shares;%
			Investments by directors,
	Investment by the		independent directors, the
					Consolidated investment
	Company		President and directly or
Equity method-accounted investments
			indirectlycontrolled entities

	Number of	Shareholding	Number of	Shareholding	Number of	Shareholding
	shares	ratio	shares	ratio	shares	ratio
YFY Packaging Inc.	410,150	100.0	0	0	410,150	100.0
YFY Consumer Products Co., Ltd.	158,005	64.5	21,122	8.6	179,127	73.1
Union Paper Corp.	19,584	18.9	6,675	6.4	26,259	25.3
Yuen Yan Paper Co., Ltd.	6,179	50.9	9	0.1	6,188	51.0
China Color Printing Co., Ltd.	32,896	49.7	887	1.3	33,783	51.0
YFY Development Corp.	112,821	100.0	0	0	112,821	100.0
E Ink Holdings	133,473	11.7	96,888	8.5	230,361	20.2
Fidelis IT Solutions Co., Ltd.	2,857	100.0	0	0	2,857	100.0
Taiwan Global Biofund	16,970	23.0	23,160	31.4	40,130	54.4
Taiwan Genome Sciences Inc.	561	19.4	96	3.3	657	22.7
Shin Foong Specialty and Applied Materials Co., Ltd.	51,871	48.9	0	0	51,871	48.9
YFY Paradigm Investment Co., Ltd.	146,726	100.0	0	0	146,726	100.0
San Ying Enterprise Co., Ltd.	2,500	100.0	0	0	2,500	100.0
YFY International Ltd.	79,000	100.0	0	0	79,000	100.0
YFY Global Investment Ltd.	363,690	100.0	0	0	363,690	100.0
YFY Japan Co., Ltd.	0.2	100.0	0	0	0.2	100.0
Effion Enertech Co., Ltd.	34,300	49.0	35,700	51.0	70,000	100.0
Chung Hwa Pulp Corp.	627,827	56.9	61,659	5.6	689,486	62.5
YFY Corporate Advisory & Services Co., Ltd.	3,000	100.0	0	0	3,000	100.0
Sustainable Carbonhydrate Innovation Co., Ltd.	3,000	100.0	0	0	3,000	100.0

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Chapter 4. Fundraising

I. The Company’s Capital and Shares, Corporate Bonds, Preferred Shares, Global Depositary Receipts, Employee Stock Options, Restricted Shares and Mergers (including Mergers, Acquisitions, and Demergers)
II. Implementation of Capital Allocation Plans

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Chapter 4. Fundraising

I. The Company’s Capital and Shares, Corporate Bonds, Preferred Shares, Global Depositary Receipts, Employee Stock Options, Restricted Shares and Mergers (including Mergers, Acquisitions, and Demergers)
(I). Source of share capital

Unit: NT$ thousand thousand shares

		Authorized capital	Authorized capital	Paid-in capital	Paid-in capital	Notes	Notes	Notes
Year/Mon	Issue						Shares
th	price	Number of	At	Number of	At	Share capital	acquired by non-cash assets	Others
		shares	moun	shares	moun	source


2011.08	10	2,200,000	22,000,000	1,660,372	16,603,715	Undistributed earnings	-	Jing-Shou-Shang No. 10001196670 dated August 26,2011

				Unit: thousand shares Notes Publicly traded shares
		Authorized capital
Shareholding type				Notes
	Outstandingshares	Unissued shares	Total

Ordinary shares	1,660,372	539,628	2,200,000	Publicly traded shares

(II) Shareholder structure

						March 19,2021
Shareholder
					Foreign
	Government	Financial	Other
structure				Individuals	institutions &	Total
	agencies	institutions	institutions
Quantity					natural persons


Head count	4	10	325	87,762	250	88,351
Number of shares	7,591,555	14,245,767	632,929,768	711,135,125	294,469,280	1,660,371,495
Shareholding ratio	0.46%	0.86%	38.12%	42.83%	17.73%	100.00%

(III) Shareholding distribution status

			March 19,2021
Shareholdingrange	Number of shareholders	Number of shares	Shareholdingratio
1 to 999	55,240	6,377,946	0.38%
1,000 to 5,000	24,719	51,330,998	3.09%
5,001 to 10,000	3,999	30,228,534	1.82%
10,001 to 15,000	1,341	16,322,961	0.98%
15,001 to 20,000	736	13,572,125	0.82%
20,001 to 30,000	696	17,464,663	1.05%
30,001 to 40,000	314	11,044,022	0.67%
40,001 to 50,000	245	11,394,721	0.69%
50,001 to 100,000	424	31,073,481	1.87%
100,001 to 200,000	264	36,508,540	2.20%
200,001 to 400,000	140	39,286,710	2.37%
400,001 to 600,000	70	34,534,238	2.08%
600,001 to 800,000	25	17,318,661	1.04%
800,001 to 1,000,000	16	15,047,203	0.91%
1,000,001 and above	122	1,328,866,692	80.03%
Total	88,351	1,660,371,495	100.00%

Note: The Company does not have any outstanding preferred shares.

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(IV) List of major shareholders

		March 19,2021 Shareholding ratio 10.28% 5.66% 4.69% 2.87% 2.80% 2.79% 2.66% 2.63% 2.27% 2.15%
Shares Name	Number of	Shareholding
	shares	ratio
S. C. Ho	170,615,028	10.28%
Shin-Yi Foundation	94,004,485	5.66%
Shin-Yi Enterprise Co., Ltd.	77,794,610	4.69%
Hsinex International Corp.	47,705,895	2.87%
Cheng-Ting Ho	46,544,959	2.80%
Supervisory Committee of Workers' Pension Reserve Funds of YFY Inc.	46,396,624	2.79%
Mei-Yu Ho	44,176,664	2.66%
Ru Yi Enterprise Co., Ltd.	43,629,000	2.63%
NEW TALENT LIMITED	37,744,132	2.27%
Felix Ho	35,729,953	2.15%

(V). Market price, net asset value, earnings, and dividends per share

					Current year up to the print date of this annual report
	Year
			2019	2020
Item


Market price per share	Highest		14.00	30.70	31.95
	Lowest		11.05	10.00	23.20
	Average		11.93	16.06	27.24
Net asset value per share	Before distribution		23.64	27.09	-
	After distribution		22.94	25.59	-
Earnings per share	Weighted average number of shares (thousand shares)		1,660,372	1,660,372	1,660,372
	Earnings per share		1.38	3.14	-
Dividend per share	Cash dividends		0.7	1.5	-
	Stock dividends	From Retained Earnings	-	-	-
		From Paid-in Capital	-	-	-
	Accumulated undistributed dividends		-	-	-
Return on investment analysis	PE ratio		8.64	5.11	-
	Price dividend ratio		17.04	10.71	-
	Cash dividend yield (%)		5.87	9.34	-

Note 1: PE ratio = Average market closing value per share over the year/earnings per share. Note 2: Price dividend ratio = Average market closing value per share over the year/Cash dividends per share. Note 3: Cash dividend yield = Cash dividends per share/Average market closing value per share over the year.

(VI) Dividend policy and implementation:

1. Dividend policy:

In making its dividend policy, the Company takes into account future capital expenditures and working capital requirements for the upcoming year. Based on this policy, an appropriate percentage of the remaining surplus is retained as needed to support the

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ongoing business operations, and dividends are distributed in a way that at least 20% is distributed as cash dividends and the remainder as share dividends. However, for the purpose of meeting other capital expenditure requirements, the Company may distribute the aforementioned remaining surplus in the form of share dividends only.

2. Dividend distribution to be proposed to the shareholders’ meeting:

With respect to the earnings distribution for 2020, the Company proposes to distribute NT$2,490,557,243 in cash dividends, the equivalent of NT$1.5 per share.

(VII) Impact of stock dividends proposed at this shareholders’ meeting on business performance and earnings per share:

N/A.

(VIII) Remuneration of employees, directors, and independent directors:

1. Percentages or ranges of remuneration of employees, directors, and independent directors under the Articles of Incorporation:

According to current policies, if the Company sustains profit every year, 0.1% or more of the income shall be set aside as employee remuneration, and 2% or less shall be distributed as director remuneration. However, an amount shall be set aside first to compensate cumulative losses, if any.

Directors’ remuneration may be distributed by way of cash dividends, and employees’ remuneration may be distributed by way of cash dividends or stock dividends. The Board of Director shall be authorized to define the qualification requirements of employees entitled to receive shares or cash, including the employees of subsidiaries of the Company that meet certain specific requirements. The distribution ratio of directors’ remunerations, and the method of distribution and ratio of employees’ remunerations shall be resolved by a majority vote at a Board meeting attended by more than two thirds of the directors, and shall be reported at the shareholders’ meeting.

Employee and director remunerations are calculated deducting the cumulative losses from the profit for the year (i.e., the profit before employee and director remunerations is deducted from profit before tax).

2. Basis for estimating the amount of remuneration of employees, directors, and independent directors; basis for calculating the number of shares to be distributed as employee remuneration; and the accounting treatment of the discrepancy, if any, between the actual distributed amount and the estimated amount, for the current period:

The estimated employee and director remunerations are recognized as expenses at the distributable amounts for the current year according to Articles of Incorporation. Any change in the amounts on the date of resolution by the Board of Directors shall be treated as accounting adjustments and recognized as adjustments for net profit and loss of the year approved by the Board of Directors. If it is decided by the Board of Directors to distribute employee remuneration in the form of shares, the number of shares shall be determined by dividing the approved remuneration by the fair price of the shares. The fair price of the shares will be calculated based on the closing price on the day before the date of the Board meeting.

3. Remuneration proposals approved by the Board of Directors:

(1) Distribution of NT$5,361,204 in cash as employee remuneration; no stock shares shall be distributed. Directors’ remuneration shall be NT$22,000,000. The amounts listed above are not different from the expense estimates for 2020.
(2) Amount in stock distributed as employee remuneration as a percentage with respect to the after-tax profit in current period’s individual financial statement and total employee remuneration: None.

4. Any difference between actual distribution (including number, amount, and price of shares) of employee remuneration and director and independent director

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remunerations from the previous year and recognized employee remuneration and director and supervisor remunerations, and the reasons as well as corresponding treatments:

In 2019, the actual remuneration distributed to employees was NT$2,282,255 in cash and no stock shares were distributed. Director remuneration was NT$12,500,000. The aforementioned amount did not differ from the amount approved by the Board of Directors.

(IX). Buyback of treasury stock: This event did not occur at the Company.
(X). Issuance of corporate bonds: The Company does not issue corporate bonds.
(XI). Issuance of preferred stocks: The Company does not issue preferred stocks.
(XII). Issuance of global depositary receipts (GDR): The Company does not issue global depositary receipts.
(XIII). Exercise of employee stock option plan (ESOP): The Company does not provide employee stock option plans.
(XIV). Restricted stock awards: The Company does not issue restricted stock awards.
(XV). Mergers, acquisitions or issuance of new shares for acquisition of shares of other companies: The Company did not engage in mergers and acquisitions, or issue new share for acquisition of shares of other companies.

II. Utilization of funds

(I). Plan content:

The Company has no special plans for utilization of funds.

(II). Implementation status: N/A.

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Chapter 5. Business overview

I. Business Scope
II. Market outlook
III. Employee Information in the Last Two Years and Up to the Print Date of the Annual Report
IV. Environmental protection expenditure information
V. Employer-employee relationship
VI. Material contracts

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Chapter 5. Business overview

I. Business Scope

(I) Business scope

Key areas of business:
Industry investment holding.
Key operations and products of invested companies: Pulp and paper subsidiary
Production, marketing, and distribution of pulp, paper, and paperboards.
Containerboard and packaging subsidiary
Paperboards for industrial use; production, processing, and marketing of cardboard boxes.
Consumer products subsidiary
Household paper products; production, marketing, and distribution of cleaning products.
Other businesses
Production, marketing, and distribution of electronic related products.
Production and marketing of chemical products.
Revenue breakdown:
Manufacturing and trading of paper products account for the largest portion of revenue at approximately 84%.
Other items accounted for approximately 16%.
New products in development:
Special purpose paper.

(II). Industry Overview Overall Economic Environment

2020 was the year when the epidemic took over the global market. The first wave of the virus caused the collapse of the financial market, lockdowns, and economic decline in the first quarter. Global industry chains and supply chains were cut and reorganized which affected the daily lives, scientific disease prevention, and commercial activities of the people. Fortunately, the global economy has achieved a V-shaped economic recovery after gaining control of the epidemic in the third quarter. Mainland China was first hit by the epidemic but it also led the recovery and quickly restored industrial production and exports to pre-pandemic levels. According to IMF reports, the global economic growth rate was approximately -3.5% in 2020. Mainland China benefited from the gradual economic recovery and booming exports and focused on the internal economic and retail demand to support the growth of industrial activities. Its annual economic growth rate reached 2.3%. Taiwan imposed a face mask policy supported by all citizens and managed to control the spread of the disease without imposing large-scale closure of campuses, offices, and malls. The changes in global demand have been favorable for the manufacturing sector which occupies a favorable position. According to the Directorate General of Budget, Accounting and Statistics, Taiwan achieved an economic growth rate of 2.98% which was a hard-won accomplishment.

In conclusion, the successful distribution and vaccination of the COVID-19 vaccines and the loose monetary policies adopted by the countries are set to help the global economy regain the momentum for growth in 2021. However, this wave of economic recovery is characterized by its variability. Different countries, different industries, and groups with different income will have different paths to recovery. We must pay close attention to the resolution or continuation of the trade war between the United States and China and the pressure on inflation created as a result of loose monetary policies.

In this environment, the professional management teams of YFY's subsidiary business units shall focus on the fundamental parts of their operations and risk management for the supply chain. We shall also respond to the government's response and adjustment measures to demonstrate maximum mobility as we continue our stable operations and business development.

Main Subsidiaries’ Current Market Condition and Development:

Pulp and paper subsidiary

Current trends and outlook of the industry:

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Pulp: We are a one-stop pulp production mill which produces short-fiber virgin pulp. The upstream of the industry is broad-leaf wood chips from various countries; the wood chips are imported according to customers' requirement of pulp type. The pulp is made by continuous cooking.

The production formula of the final pulp products is adjusted according to the needs of customers. This product is widely used in paper stationery products, household paper, packaging paper, carton and cardboard paper. Our main customers are domestic paper mills; there are also some exports to supply for overseas market demand. As the only pulp mill in Taiwan, the cost of pulp products is directly affected by fluctuations of international raw materials. In response to market demand, the production is decided to be self-made or outsourced based on the international imported raw pulp prices and the condition of production costs, as well as supplying downstream paper industry.

Paper stationery products and special paper products: According to the customer's demand for printing paper, packaging paper, carton and cardboard, etc., the pulp is made into various types of paper according to the formula to supply customers' needs. The upstream of the product is pulp, the middle is the paper industry, and the downstream are various types of dealers and cultural publishers, cardboard processing industry, and end customers.

Product competition and development trends:

The main competitors in pulp include international peers such as Asia Paper International (APP), Asia Pacific Semper (Shandong) Pulp and Paper Co., etc. Domestic producers of paper stationery products and special paper products such as Cheng Loong and Taiwan Pulp & Paper Corporation have withdrawn from the paper stationery market due to intense competition from imported products in recent years. Chung Hwa Pulp has managed to maintain a favorable position in the market due to its outstanding structure and continuous transformation.

In terms of market development, the global demand for paper stationery products keeps declining due to the changes in reading habits, digitalization and reduced birth rate. However, the demand for packaging paper stays stable due to the prosperous development in e-Commerce. The development of other special purpose paper is anticipated with the development of Industry 4.0 and the Internet of Things.

In the global pulp market in 2020, the severe global economic recession, trade disputes between China and the United States, and the appreciation of the NTD have made market sentiments more conservative and caused pulp and paper prices to remain low. The pulp market has seen a decline from the high levels of demand in 2018 Q3 which continued to 2020 Q3 in the longest period of low prices in history. As global pulp plants adjusted their inventory levels after 2020, the international pulp prices have rebounded in early 2021.

Facing the fluctuation of international pulp prices, the pulp and paper subsidiary supplies the demand for short-fiber pulp within the group, in order to reduce the impact of market price fluctuations on profit and loss; The paper stationery product market will implement flexible production and marketing policies and will continue to expand the trade model of sales, in order to maintain the company's reasonable profits and market share. As global demand for reducing the impact on the environment increases in the post-pandemic era, we actively develop fully-recyclable non-plastic food safety paper with laminating films that do not contain plastic. We leverage our advantages in pulp-making technologies to create products for the circular economy which is used to develop our core competencies and comprehensive upgrades and transformation to grasp green business opportunities.

2. Containerboard and packaging subsidiary Current trends and outlook of the industry:

Paperboards for industrial use and processed paper products are made of upstream, imported long-fiber pulp and recycled paper (or recycled paper pulp), which are then processed in pulp dispersion, selection, grinding, molding, and drying. Linerboards and corrugating mediums are processed into cardboard boxes of different specifications and strength based on the needs of paper container plants. They are provided to downstream industries (electronics, information, food, and textile fiber industries) for packaging. The products include linerboards, white cardboard, corrugating mediums, corrugating medium boxes, food containers, color boxes, and containers.

Product competition and development trends:

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In addition to YFY, domestic manufacturers also include Cheng Loong and Longchen P&P. The three major paper mill account for 60.5% of the total sales in Taiwan, supplying paperboards for industrial use to downstream paperboard and containerboard processing plants.

In response to the Taiwanese market demands of small quantity, greater variety and high quality, YFY will continue to replace old equipment and introduce automated production equipment. By developing differentiated products and continuously offering services of premium quality, we aim to win the trust of customers. The containerboard and packaging subsidiary will continue to improve production efficiency and pay equal attention to production operation and resources recycling. Starting from self-improvement on the emission standards and being environment-friendly, it will further examine the feasibility of reusing all types of energy, in order to fully realize the circular economy.

3. Consumer products subsidiary

Current trends and outlook of the industry:

The consumer products subsidiary mainly engages in household paper products, production, marketing, and distribution of cleaning products. Its current main products include toilet paper, hand wipes, paper towel, and other household cleaning products. The Company’s supply chain comprises upstream paper pulp manufacturers and downstream vendors, distributors, and end consumers. The upstream of the sanitary ware industry is special ingredient (such as tangerine oil, natural fragrance, etc.), while the downstream is various retailers, distributors, and end consumers.

Product competition and development trends:

Competition in the household paper product market in Taiwan is intense. YFY's brands such as “Mayflower”, “Delight”, and “Tender” have been ranked number one in market share in Taiwan for many years, and continue to meet the diversified needs of consumers with high-quality innovative products. Kimberly-Clark, Cheng Loong, and Golden Century Paper are main suppliers in Taiwan.

In terms of cleaning products, we continue to launch high-quality products that put consumers' minds at ease. "Orange House" has become a leading brand for natural cleaning products in Taiwan due to its natural ingredients and effectiveness. We promoted "Fresh Sense" with fashionable office workers as the target consumers. We adopted a broad marketing strategy for "Pride detergent" and succeeded in positioning the brand in the mid-range cleaning products market. The "National Brand Yushan Award" is the most prestigious and iconic enterprise evaluation in Taiwan and is often referred to as the Academy Awards for national brands. YFY and subsidiaries have won three best product awards with the "Mayflower thick toilet papers", "Orange House Laundry Detergent Series", and "Orange Oil Food Ware Cleaning Agent" which demonstrated the quality of our products.

In the future, we will continue to invest in new product development, master the market of disease prevention, Lohas, middle-aged people, and environmental protection, and meet different market requirements by developing a series of household, individual, and commercial commodities; strengthen the research and development of high value-added products, operate in the high-end market, deepen the existing channels, master the behavior of next-generation consumers, focus on consumer demand for environmental protection and taking care of the Earth in the post-pandemic era, instill sustainability ideals into innovative products, and maintain our leading position in consumer goods brands.

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Relationships with upstream, mid-stream, and downstream companies:

==> picture [462 x 228] intentionally omitted <==

----- Start of picture text -----

The publishing industry
Imported pulp Manufacturing, sales and distribution special material application
of pulp, paper and paperboard in various industries
Pulp and Fine Paper BG Pulp and Fine Paper BG Others BG
Wood
Imported pulp
chips Manufacturing, sales and distribution The paperboard and
of containerboard and corrugated corrugated paper
cartons industries
Pulp and Fine Pulp and Fine Paper BG
Paper BG
Containerboard and Packaging BG Containerboard and Packaging BG
Recycles paper
recycled pulp
Manufacturing, sales and distribution
Consumers, distributors
of household paper products
Containerboard and
Packaging BG
Conumer Products BG Others BG
Pulp and Fine Paper BG
Upstream industries Upstream paper industry Mid-stream paper industry Downstream paper industry
Fiber raw material plant Pulp plant+waste paper Paper production plant The packaging industry and end users
industry
----- End of picture text -----*

(III). Overview of Technology and R&D

R&D investments during the past year

Direct R&D expenditure was roughly NT$48,551 thousand in 2020. Expenditures on other development applications were not included herein.

Direct R&D expenditure up to the printing date of this annual report in 2021 was NT$10,835 thousand.

Launching and application of new technology products YFY invests in a broad scope of fields. Each of its subsidiaries has acquired the core technology of the industries in which it invests, including pulp/paper making, domestic detergents, special materials, biomedicine, Internet of Things, among others. YFY’s subsidiaries engage in different R&D projects for their respective fields of application to develop niches and innovative products. In 2020, subsidiaries were committed to the research and development of equipment, processes, formulas, applications, and energy consumption improvement and reuse of available resources for production units. They actively conducted research and development of bio-based special materials (e.g., starch and cellulose) and high-value applications. They also invested in effective designs for the reuse of pulp by-products and process wastes. In addition, the subsidiaries engaged in the development of non-plastic card paper for food safety applications to increase the recycling and reuse rate of pulp materials, effectively increase the economic benefits of the circular economy, and reduce the impact of petrochemical materials on the environment. The Company developed capsule coating platform technologies to improve the preservation of effective components and increase the applications for high-value products. By achieving coexistence of the biosphere and industrial cycles, we ensure that biological and industrial resources are constantly recycled to achieve circular economy.

(IV). Long- and short-term business plans:

Pulp and paper subsidiary
Short-term development plans
(1) Continue to improve the production processes and management to increase our capacity for transformation.
(2) Reinforce the R&D of niche products and develop alternative products to replace plastic applications to expand the market for environmentally-friendly products.
(3) Vertically integrate the supply chain and strengthen the cooperative development with the downstream processing plants to increase the overall industry competitiveness.
(4) Enhance information integration and make use of big data analyses to improve the efficiency in procurement, production, and marketing.
(5) Provide customers with innovative cash flow and logistics services and consolidate control over the market.
(6) Invest in circular and reuse equipment and implement the circular economy.

Long-term development plans

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(1) Research and develop environmentally sustainable and high value-added, botanical fiber-based material products and continue promoting innovative applications for pulp and paper.
(2) Dedicate to the sustainable development of the circular economy and use the R[3] (recycle, re-create and reinvent value) to enhance the usage of materials and promote the evolution of product diversity.
(3) Implement talent cultivation plans and establish a succession team to become a world-class materials producer.
Containerboard and packaging subsidiary Short-term development plans:
(1) Continue equipment update and process automation to improve the production efficiency and quality of equipment.
(2) Optimize the production processes and management procedures to enhance the market competitiveness of products.
(3) Improve the quality in the procurement of recycled paper and improve the reuse rate.
(4) Continue to optimize the profitability of chemical paper product portfolio and strengthen the business team to pursue create joint growth with customers
(5) Integrate the supply chain of paperboard and containerboard supply chain, and make full use of the advantages of vertical integration to expand the market share.
(6) Respond to shifts in the growth of the global supply chain and expand the production capacity of the containerboard businesses in Vietnam.
(7) Continue to expand new customers for containerboard and develop large-scale customers to increase sales.
(8) Maximize the efficiency of biogas power generation for renewable energy. Smooth operations of the cogeneration plant with zero coal use and create a circular economy for converting waste into energy.

Long-term development plans:

(1) Continue to promote reduction of consumption and control unit cost, and pursue gains for both shareholders and employees.
(2) Optimize and refurbish equipment to reduce unit energy cost, energy use, and carbon emissions.
(3) Continue promoting the reduction of excess material from production and conversion into resources.
(4) Respond to shifts in the global supply chain and continue to expand containerboard businesses in Vietnam for new customers.
(5) Develop automated production and process improvements.
(6) Recruit and train technical, operational, and business talents, invest in employee training, and cultivate the future management team.
Consumer products subsidiary

Short-term development plans

(1) Continue optimizing the product structure and increase automation productivity. Plan optimized production lines and accelerate collaboration with OEM customers to increase the utilization rate of production equipment.
(2) Expand high-end paper product markets, consolidate the Mayflower thick toilet papers sub-brand, and expand product categories.
(3) Make use of R&D technologies for cleaning products and continue to develop unique and innovative products. Actively expand the high-end and mid-range cleaning product markets. Develop existing channels for cleaning products and improve sales and turnover.
(4) Active develop special technologies for raw paper, expand niche products, and continue to improve production efficiency.

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(5) Enhance the development of commercial channels and develop high-volume customers. Enhance strategies for cooperation with strategic distributors and create mutual benefits.
(6) Expand and work with online/offline channels to increase sales and continuously elevate brand reputation.

Long-term development plans

(1) Continue to optimize organization work efficiency and management and cultivate next-generation talents based on plans.
(2) Enhance brand management, shape approaches based on the target audience and market segmentation, and increase various brand values and product virtues.
(3) Expand the export market, develop OEM/ODM customers for paper and cleaning products, and work with high-end partners to create synergy.
(4) Invest in the development of innovative products, including household products, commercial products, and a diversity of products to enhance high-end market management.
(5) Develop new strategic partners, expand high value-added products, and develop new types of services.
(6) Implement a circular economy, establish measures for processing production wastes, and cultivate green energy and low-carbon development to ensure simultaneous advancement of both development and environmental protection and achieve sustainability.

II. Marketoutlook

(I). Market analysis

Based on the statistics by the Taiwan Paper Industry Association, the total production of paper and paperboards in Taiwan in 2020 was 4.362 million tons. The paper market continues to decline while cardboard boxes and paperboard increased slightly. The overall production capacity was a 2.7% growth from 4.249 million tons in 2019. The import volume was 1.579 million tons, with an increase of 2%. Domestic sales were 4.374 million tons, growing by 1.9% compared to 2019; Exports increased by 4.2% to 1.567 million tons.

Analysis of each subsidiary’s product market is as follows:

Pulp and paper subsidiary

Market conditions:

According to statistics of the Taiwan Paper Industry Association in 2020, the annual output of paper and paperboard (paper usage in Taiwan other than household paper and white and gray paper boards), such as those produced by the pulp and paper subsidiary, was 1.05 million tons. As the demand for paper for printing and writing and paperboards has gradually declined, the annual output has fallen by 1.1%. The paper and paperboard sales volume in the domestic market was 1.723 million tons which was a marginal growth of 0.5% from the previous year. Exports of paper and paperboard were 350 thousand tons which was lower than the previous year. The annual domestic pulp production volume was 230 thousand tons which was the same as the previous year. As domestic production and consumption were unaffected by the epidemic compared to nearby countries, domestic sale volume was 968 thousand tons, growing by 4.1%.

Business overview:

The pulp and paper subsidiary produced 535 thousand tons of paper and paperboard in 2020, an increase of 6.0% compared to the same period in the previous year. The total domestic sales

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volume was 350 thousand tons, a 2.5% decrease compared to the previous year. Exports amounted to 291 thousand tons, growing by 2.1% compared to the previous year. In terms of pulp, the global pandemic resulted in large-scale lockdown and work from home in different countries. China delayed the resumption of work after Chinese New Year and the market demand fell in the first half of the year. The production volume of the subsidiary in 2020 was 320 thousand tons which was a 2.9% decline from the previous year.

Competitive niche and countermeasures:

The spread of the epidemic caused global economic decline and the trade disputes between China and the United States remained unresolved. These factors have caused pulp and paper prices to remain low. The international pulp prices have declined from the high levels of demand in 2018 Q3 which continued to 2020 Q3 in the longest period of low prices in history. As global pulp plants adjusted their inventory levels after 2020, the international pulp prices have shown signs of increase in 2021.

In response to the global restrictions on plastic and the growth in the demand for food safety paper products after the epidemic, Chung Hwa Pulp actively developed fully-recyclable non-plastic food safety paper with laminating films that do not contain plastic. The technology will help us directly recycle and reuse paper, thereby meeting the three goals of food containers including reducing plastic use, reducing carbon emissions, and reducing waste. In addition, we also constructed new plants at Hualien Plant to make use of the advantages in pulp-making technologies to create consumer products for the circular economy which is used to develop our core competencies and accelerate comprehensive upgrades and transformation. In addition, Guanyin Plant is set to start production and operations in the second half of the year and it will help improve the operations of Chung Hwa Pulp in 2021.

Containerboard and packaging subsidiary

Market conditions:

Based on statistics by the Taiwan Paper Industry Association, the total production of paper for industrial use in Taiwan in 2020 was 3.555 million tons, growing by 3.2% compared to 2019. Domestic sale volume was 2.759 million tons, growing by 3.2% compared to 2019. Exports increased by 4.4% to 1.337 million tons. According to statistics released by the Taiwan Paper Industry Association, the sales volume of processed paper increased by 9.37% in 2020, which showed that the domestic demand and exports in Taiwan were not affected by the epidemic.

Business overview:

As Taiwan's overall containerboard market had remained relatively stable compared to other regions in 2020, the domestic and foreign demands for contactless and stay-at-home economy as a result of the epidemic have created stable growth in the domestic market and spectacular export sales, and powered the sales of related industries in Taiwan. Similar changes in the containerboard market demand in China and Vietnam: The interruption of the supply chain and the global economic decline as a result of the epidemic affected production in the first half of the year. The epidemic gradually eased in the second half of the year and the traditional peak season and the lifting of lockdowns in Europe and Americas created demand for inventories which increased sales till the end of the year.

Although the production and sales volume of containerboard in China remained the same in 2020, we have successfully generated profits in the fourth quarter by continuing to improve equipment availability and adjust product portfolio. The profitability of the year was thus improved.

The subsidiary continued to grow in Vietnam and grasped opportunities for growth in Vietnam as the supply chain shifted. We also developed international brand customers and the total sales volume of processed paper products in Vietnam increased in 2020 from sales in 2019 with spectacular performance.

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Competitive niche and countermeasures:

Faced with multiple market uncertainties in 2021, the containerboard and packaging subsidiary will adopt rigorous cost control, continue to increase the performance of production equipment, adjust product structure and sales channels, and monitor the demand of downstream customers to maintain stable growth. In response to the rapid changes in policies and higher business risks for containerboard in China, we will uphold principles of stability and conservatism and rigorously manage inventories, loans, cash flow, and other business risks to safely navigate through the period in which weak companies in the industry are eliminated. We will maintain growth in Vietnam and grasp the opportunity to expand factories and develop the North Vietnamese market. We will accelerate the upgrades of production and efficiency for containerboard operations in Taiwan and improve the competitiveness of products. We will make further investments in renewable energies and the installation of eco-friendly equipment, thus contributing to making the paper industry an example of a “circular economy” in Taiwan.

3. Consumer products subsidiary

Market conditions:

Based on statistics by the Taiwan Paper Industry Association, the total production of household paper in Taiwan in 2020 was 307 thousand tons, increasing by 3.4% compared to 2019. The import was 128 thousand tons, which was a significant increase of 25.1%. In terms of sales volume, the domestic consumption was 404 thousand tons, increasing by 7.6% compared to 2019; Exports were 31 thousand tons, which was a 30.8% growth compared to the previous year despite the low volume.

Business overview:

In 2020, the household paper production of the consumer product subsidiary was 151 thousand tons, declining by 5.1% compared to 2019. In 2020, the household product domestic sales were 82 thousand tons which was an 10.5% increase from 2019. It was mainly caused by changes in consumer habits as a result of the epidemic in Taiwan, mass production of new products, and changes in the product portfolio which increased sales. Exports were 117 thousand tons, declining by 7.9% from the previous year. The main reason was the impact of the epidemic in foreign markets and the reduction in business scale due to the adjustment of sales channels. Competition in the household paper product market in Taiwan is intense. The management team has positioned the Company as a leading brand and used product differentiation to launch the high-end paper product "Mayflower thick toilet papers" to satisfy the diversified needs of consumers and successfully increase the Company's market share in the high-end market. In terms of cleaning products, anti-virus detergent and anti-virus sprays launched by "Orange House" created high user satisfaction rate and outstanding sales performance.

Competitive niche and countermeasures:

Facing the maturity of Taiwan's household paper market in 2021, the consumer products subsidiary will continue to improve the paper product businesses, accelerate expansion of cleaning products, and develop innovative products. We shall continue to leverage brand advantages to provide consumers with personalized experience and innovative products of value as we strive for self-improvement and stable growth. Optimize the product and production and sales structure, enhance the organization structure, and increase manufacturing automation. Increase the sales of non-paper products by utilizing comprehensive distribution and channel marketing and expand sales in domestic and foreign markets. Increase the proportion of niche products and elevate business performance to even greater heights to achieve record sales and profitability.

The subsidiary initiated plans for public listing in early 2020 and completed public offering and

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emerging stock registration in the same year. It is expected to accelerate and complete the public listing process and use the public listing to improve the Company's image and maintain the company brand's leading position in Taiwan, which will create a valuable brand image for countering intense competition on the market. The brand image will also help attract talents, retain key talents, and create core value and a high-quality corporate culture.

(II). Application and production of key products

Pulp and paper subsidiary

Pulp: Suitable tree species are used based on the paper plant’s requirements; different types of pulp are produced from lumber after evaporation, cleaning, bleaching, molding and drying.
Paper products: The main raw material is pulp; different types of paper are produced by going through a series of processing steps including pulp dispersion, blending, cleaning, shaping, dehydration, drying, and coiling. High-quality printing paper (e.g., coated paper and simile paper) is made by coating and calendering the surface, which is suitable for premium quality text and color printing; and special papers (e.g., glassine paper and masking paper) are suitable for various types of industrial use.

Containerboard and packaging subsidiary

Paper for industrial use: The main raw material used is recycled paper; raw material for different types of corrugated fiberboards and boxes are produced by going through a series of steps including pulp dispersion, debris removal, washing and selection, deinking, cleaning, grinding, mixing, molding, and drying.
Corrugated fiberboard boxes: Cardboard boxes are made by putting linerboards or corrugating mediums through corrugators (pressing, fitting, lining, and cutting) and printer/cutter machines (printing, grooving, and fitting). They are used as packaging for various products.
Consumer products subsidiary
Household paper products: The main raw material used is pure wood pulp; different types of daily-use consumer products are produced by going through a series of steps including pulp dispersion, blending, cleaning, molding, dehydration, drying, and coiling. These products include: toilet paper, tissue, hand wipes, paper towels, and other household paper products.

(III). Supply status of primary raw materials

		Product(Service)	Product(Service)	Keyraw material(s)	Keyraw material(s)	Keyraw material(s)
Departments		Primary	Distribution
	Name			Name	Main source(s)	Supply
		market(s)	method

Paper making	Paper	Taiwan and Asia	Distributors and direct marketing	Diverse types of paper making fibers	Imported from foreign countries	Stable supply

(IV). List of clients who accounted for at least 10% of total sales and procurement in any of the last two years and corresponding amounts and percentages

1. Major suppliers in last two years

No supplier has accounted more than 10% of the total procurement in the last two years.

2. Major sales clients in last two years:

No client has accounted for more than 10% of the total sales in the last two years.

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V. Output volume and value for the last two years

Unit: NT$ thousand tons

Production / Year	Production / Year
Volume		2019		2020
Value



		Volume	Value	Volume	Value
Main business units

Pulp and paper subsidiary	Paper	371,434	11,850,027	391,362	11,401,874
	Paperboards	133,072	2,533,224	143,416	2,641,644
	Pulp	329,746	6,150,298	320,202	4,564,051
Containerboard and packaging subsidiary	Paperboards	950,243	13,506,796	940,811	13,274,100
	Processed paper	961.633	21,623,302	945,161	21,021,214
Consumer products subsidiary	Paper	158,678	7,745,805	150,965	7,325,708

VI. Sales in last two years

Unit: NT$ thousand tons

	Sales / Year
Volume		2019				2020
Value

		Domestic sales		Export		Domestic sales		Export




Main business units		Volume	Value	Volume	Value	Volume	Value	Volume	Value


Pulp and paper subsidiary	Paper	197,721	5,734,415	218,289	7,537,728	191,349	5,144,124	232,076	7,191,893
	Paperboards	162,045	3,077,570	66,785	1,278,552	159,478	3,042,294	59,063	983,113
	Pulp	85,824	1,671,989	73,629	1,302,077	78,872	1,150,832	74,430	1,034,287
Containerboard and packaging subsidiary	Paperboards	216,999	3,248,902	732,349	10,072,875	214,249	3,088,131	701,533	9,687,624
	Processed paper	308,727	6,749,300	685,271	15,145,638	330,214	7,459,514	659,459	14,330,774
Consumer products subsidiary	Paper	73,722	4,426,940	126,931	4,810,148	81,490	4,907,977	116,917	3,985,769

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III. Employee information in the last two years and up to the print date of this annual report

(I) Employee information in the last two years and up to the print date of this annual report:

				Current year up to the
	Year	2019	2020	print date of this
				annual report
Number of employees	General personnel	5,372	5,368	5,318
	Technicians	6,074	6,089	6,070
	Total	11,446	11,457	11,388
	Average age	38.43	38.70	38.73
Average years of service		9.06	8.94	9.22
Academic qualifications	Master's degree or higher	5.09%	5.09%	5.12%
	University/College	40.16%	40.16%	40.42%
	Senior high school and below	54.75%	54.75%	54.46%

(II) Authority-designated certification by employees whose jobs are related to transparency and disclosure of financial information:

Certifications	Finance and accounting	Auditing
CPA of ROC	11	0
CPA of USA	7	0
Certified internal auditor (CIA) organized by Institute of Internal Auditors	0	8

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IV. Environmental protection expenditures

(I). Losses arising as a result of environmental pollution in the recent year up until the publishing date of this annual report; quantify the estimated losses and state any response actions, or state any reasons why losses cannot be reasonably estimated.

Contents of violation	Contents of penalties	Penalty date	Penalty number	Response measures
Article: Article 7, Paragraph 1 of the Water Pollution Control Act Content: Those enterprises, sewage systems or building sewage treatment facilities that discharge wastewater or sewage into surface water bodies shall comply with effluent standards.	The total fine was NT$ 702 thousand	Aug 25, 2020	30-109-080005	Improvements were made and we have obtained the competent authority's approval of the improvement completion report for reference.
		Oct 26, 2020	30-109-100002	Improvements were made and we have set up an alert system for anomalies in monitoring data and enhanced the emergency response training for onsite personnel.
Article: Article 10, Paragraph 1, Subparagraph 1 of the Methods and Facilities Standards for the Storage, Clearance and Disposal of Industrial Waste, Article 36, Paragraph 1 of the Waste Disposal Act Content: Storage, clearing, or disposal methods and facilities shall be established for industrial waste according to the regulations of the central competent authority. Storage facilities shall be established for general industrial waste according to the characteristics of its major components. Apart from those items officially announced by the central competent authority, general industrial waste storage facilities must have equipment or measures to prevent the inflow or infiltration of surface water, rainwater, or groundwater.	The total fine was NT$ 6 thousand	Dec 26, 2020	40-109-120074	We completed improvements on December 8, 2020. The EPA personnel conducted onsite review on December 11, 2020 and verified that the environmental protection requirements were met.
Article: Article 2 of the Stationary Pollution Source Air Pollutant Emissions Standards, Article 20, Paragraph 1 of the Air Pollution Control Act Content: Public and private premises with stationary pollution sources that emit air pollutants shall comply with emission standards.	The total fine was NT$ 3,910 thousand.	Jan 13, 2020	20-109-010001	Improvements were made and we have set up an alert system for anomalies in monitoring data and enhanced the emergency response trainingfor onsite operators.
		Jan 14, 2020	20-109-010036	After adjusting the method for adding the odor control agent, the inspections showed that all standards were met. In addition, the pollution source was decommissioned at the end of 2020 and there will be no more pollutant emissions.
		Apr 25, 2020	20-109-040039	We improved and adjusted the flow regulator. We regularly recorded the operations of the boiler.
		Aug 13, 2020	20-109-080002	Improvements were completed and we have obtained the competent authority's approval of the improvement completion report for reference.
		Sep 14, 2020	20-109-090006	The Company is evaluating whether to appeal the case due to questionable inspection methods.
		Mar 5, 2021	20-110-030002	Improvements were made and we have obtained the competent authority's approval of the improvement completion report for reference.

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Article: Article 20, Paragraph 1 of the Air Pollution Control Act, Article 24, Paragraph 2 of the Air Pollution Control Act Content: Public and private premises with stationary pollution sources that emit air pollutants shall comply with emission standards. After the installation or modification of the stationary pollution sources in the preceding paragraph, public and private premises shall submit verification documents that demonstrate compliance with the regulations of the Act to the special municipality, county or city competent authority or other government agency commissioned by the central competent authority in order to apply for the issuance of operating permits, and shall perform operations pursuant to the permit contents.	The total fine was NT$ 400 thousand	Oct 27, 2020	20-109-100033	1. We obtained approval for changing electricity consumption volume on August 12, 2020 and we now implement all operations based on the contents of the approval. 2. We have purchased odor sampling equipment for audits by the Environmental Protection Bureau and we also took samples in the plant to clarify the impact of odors from external sources. The case remains in appeal at the Environmental Protection Administration.
Article: Article 24, Paragraph 2 of the Air Pollution Control Act Content: After the installation or modification of the stationary pollution sources in the preceding paragraph, public and private premises shall submit verification documents that demonstrate compliance with the regulations of the Act to the special municipality, county or city competent authority or other government agency commissioned by the central competent authority in order to apply for the issuance of operating permits, and shall perform operations pursuant to thepermit contents.	The total fine was NT$ 300 thousand	Mar 10, 2020	20-109-030009	We obtained the stationary pollution operation permit on October 28, 2020 andperform operations in accordance with regulations.
		Apr 1, 2020	20-109-040001	We have submitted application documents for the change and we are waitingfor the review and approval of the competent authority.
		Jul 27, 2020	20-109-070045	We have changed the existing pollution prevention equipment to ensure that subsequent operations are within the permissible scope.
Article: Article 31, Paragraph 1, Subparagraph 1 of the Waste Disposal Act, Article 31, Paragraph 1, Subparagraph 1 of the Waste Disposal Act Enforcement Rules Content: Enterprises of a certain scale that are designated and officially announced by the central competent authority shall submit an industrial waste disposal plan to the special municipality, county or city competent authority, or the organization commissioned by the central competent authority for review and approval before beginning operations. This regulation shall also apply to the modification of matters related to the production and disposal of industrial waste.	The total fine was NT$ 18 thousand	Feb 7, 2020	40-109-020001	Improvements were completed and we have submitted related application documents and the improvement plan, and obtained the competent authority's approval of the documents and report for reference.
		May 26, 2020	40-109-050001	We have submitted application documents for the change and we are waiting for the review and approval of the competent authority.
Article: Article 3, Paragraph 1, Subparagraph 2 of the Ministry of Economic Affairs Management Regulations on the Recycling of Industrial Waste, Article 39, Paragraph 1 of the Waste Disposal Act Content: Reuse of industrial waste shall be processed in accordance with the categories and management methods specified in the table. Reuse of industrial waste shall be processed in accordance with the regulations stipulated by the central industry competent authorities or the central competent authority.	The total fine was NT$ 6 thousand.	Feb 13, 2020	40-109 -020039	Improvements were made and we have controlled the ratios of mixed fuel based on the daily coal incineration control volume.

As of the publication date, the Company only has 2 environmental protection appeals and evaluation cases remaining (penalty number: 20-109-090006 and 20-109-100033). The cases for other appeals have been closed.
In addition, YFY has made improvements regarding the faults pointed out by the competent authority to minimize its impact on the environment. In response to the production line expansion projects, as well as to improve the operating stability of existing equipment and optimize emission quality, the Company plans to invest NT$180 million in environmental protection in 2021.

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(II). Environmental sustainability

1. Greenhouse gas emissions in the past two years

According to the inventory, the Company's production sites in Taiwan and China emitted 2,736,012 tons-CO2e in 2020. Emission data for the year are provided below:

	2018	2018	2018	2019	2019	2019	2020	2020	2020
Subsidiary
	Scope 1	Scope 2	Total emissions	Scope 1	Scope 2	Total emissions	Scope 1	Scope 2	Total emissions

Pulp and Fine Paper Business Unit	866,286	214,663	1,080,949	798,737	157,385	956,122	846,557	186,513	1,033,070
Containerboard and Packaging Business Unit	1,317,837	67,418	1,385,255	1,701,018	61,397	1,762,414	1,552,210	45,657	1,597,867
Consumer products Business Unit	82,661	67,437	150,098	72,557	61,537	134,094	57,486	47,588	105,074
Total	2,266,784	349,518	2,616,302	2,572,312	280,319	2,852,630	2,456,254	279,758	2,736,012

Scope 1 (direct emissions): Emissions from operations that are owned or controlled by the reporting company, such as gas pipes, processes, ventilation facilities, and vehicles owned or controlled by the company are calculated based on the fuel consumption volume and the "Greenhouse Gas Emission Factor Management Table Version 6.0.4" of the Environmental Protection Administration.

Scope 2 (indirect emissions): Emissions from outsourced electricity, heat, steam, or other fossil fuel-derived energy. The Company did not conduct inventory on plants in China and Vietnam because of differing local laws and regulations. Scope 2 emission figures only represent those of plants in Taiwan and Yangzhou Plant and Dingfeng Plant in China.

Energy conservation and carbon reduction, reduction of greenhouse gas emissions, reduction of water consumption or other solid waste policies In 2020, the subsidiaries in Taiwan jointly formulated multiple measures for energy conservation and carbon reduction, out of which key measures

are listed below:

Use of renewable fuel to replace coal in boilers.

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Replacement of old and energy-consuming machinery in the production process with energy-efficient and energy-saving air compressors and

pumps.

Recycling residual heat
Participate in the demand response load management measures of Taiwan Power Company to actively reduce electricity consumption.
Continue to introduce and promote the ISO 50001 Energy Management System

The effectiveness of each energy measure is as below:

Energy conservation item	2019	2020
Energy conservation effectiveness (thousand kWh/year)	12,279	12,751
GHG reduction effectiveness (t-CO2e)	6,545	7,248

GHG emission reduction associated with reduction in energy consumption was estimated at 7,247 ton-CO2e.

The carbon emissions in Taiwan were calculated based on the electricity carbon emission coefficient provided by the Bureau of Energy, Ministry of Economic Affairs for 2019: 0.509kg CO2e/kWh.

Acquisition of environmental management certification by the Company

The Company’s main production units are equipped with ISO14001-certified environmental management systems. The systems are regularly verified

by external verification units such as DNV, SGS, BSMI, and the Bureau of Standards, Metrology, & Inspection, Ministry of Economic Affairs.

Internal and external auditing are conducted regularly to maintain system validity and continue to improve the effectiveness of environmental

protection. Valid system certificates are kept in each production unit.

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In addition to ISO14001 environmental management systems, product and material environmental protection certifications are also obtained in an

effort to work with our upstream suppliers and downstream consumers to protect the environment. These certifications include the Forest

Stewardship Council- Chain of Custody (FSC-CoC), Programme for the Endorsement of Forest Certification’s (previously known as “Pan European

Forest Certification”) Chain of Custody Certification (PEFC-CoC), ISO50001, and product carbon footprint. In addition, we also obtained the

international BS 8001 Circular Economy certification for material and resource cycles in the paper-making process and we were the first in the global paper industry to receive the certification.

(PEFC website: http://www.pefc.org/)

(FSC website: https://ic.fsc.org/)

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V. Employer-employee relationship

(I) Present status of employer-employee relationship

Employee benefits measures
�� Chinese New Year bonus, Worker’s Day, and birthday gifts
�� Subsidies for weddings, funerals, child birth, hospitalization, disability, and self-improvement activities
�� Scholarships for employees’ children
�� Preschool educational books for employees and free subscription to monthly publications and magazines
�� Retirement pension
�� Business trip allowance
�� Employee of the year and senior awards
�� Group insurance for employees and their dependents
�� Medical rooms in plants to ensure the occupational safety and health of employees
�� Regular medical check-ups that exceed requirements of the Labor Health Protection Regulations

Leisure activities for employees

�� Employee club activities
�� Employee birthday celebrations, sports competition, and travel activities
�� Recreational facilities and audio-visual entertainment equipment in plants

2. Retirement plan

YFY enacted the "Labor Retirement Regulations" and established the Supervisory Committee of Workers' Pension Reserve Funds to take care of employees' life after retirement. We allocate reserve funds for the old pension system to a special account in the Bank of Taiwan based on actuary calculation results each year to protect labor rights.

The Company also adopted the Labor Pension Act (new labor pension system) on July 1, 2005 and allocate an amount equivalent to 6% of the respective workers' wage range to the employees' individual pension accounts. For those that voluntarily pays additional pension, YFY deducts amounts based on the voluntary appropriation rate from the salary to the dedicated personal pension account at the Bureau of Labor Insurance.

The contents of the YFY's "Labor Retirement Regulations" are as follows:

�� Criteria for voluntary retirement:
(1) Employees who are over 55 years old and have served in the Company for more than 15 years, including services in the Company's affiliated enterprises.
(2) Employees who have served in the Company for more than 25 years, including services in the Company's affiliated enterprises.
(3) Employees who are over 60 years old and have served in the Company for more than 10 years, including services in the Company's affiliated enterprises.
�� Criteria for compulsory retirement:

The Company may subject an employee to compulsory retirement except for one of the following conditions:

(1) Where the employee over 65 years old.
(2) Where the employee is mentally incapable or physically disabled and cannot continue to work.

The mental incapacity or physical disability specified in the preceding paragraph shall be determined by the

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level 1 to level 6 disabilities of Labor Insurance. An additional 20% on top of the amount calculated according to

Article 55, Paragraph 1, Subparagraph 2 of the Labor Standards Act shall be given to workers forced to retire due to

disability incurred from the execution of their duties.

Calculation of the years of service and pension:

(1) Employees' years of service shall be calculated starting from the date of employment and the years of service before and after the implementation of the Labor Standards Act and the years of service after the implementation of the Labor Pension Act shall be combined for calculation. The duration shall be based on the years of actual continuous service in this Company.

(2) The years of service of employees assigned to affiliated enterprises to provide services or transferred from affiliated enterprises to the Company to provide services shall be combined for calculation.

(3) Where an employee is employed by the Company and an affiliated enterprise and applies for retirement in accordance with regulations, the total pension payment amount shall be calculated based on the ratio of the number of months served in each company and paid by the companies.

Status of YFY's appropriation of labor pension reserve in 2020

(1) Year-round appropriation: NT$61,184 thousand.
(2) Balance of assets at the end of the year: NT$439,825 thousand.
Labor-management communications

YFY regularly convenes employer-employee meetings to communicate and coordinate with employees, and subsequently adjusts measures according to the consensus of both parties.

Contents of violation	Contents of penalties	Penalty date	Penalty number	Response measures
Article: Article 56, Paragraph 2 of the Labor Standards Law Content: The employer shall, before the end of each year, estimate the balance of the Labor Retirement Reserve Fund. If the balance is not sufficient to pay the amount of retirement benefits calculated in accordance with Article 53 or Article 54(1)(1) for workers who are expected to meet the retirement requirements in the following year, the employer shall make a lump sum withdrawal of the difference before the end of March of the following year and send it to the Labor Retirement Reserve Fund Supervisory Committee of the business unit for consideration.	The total fine was NT$ 150 thousand	Dec 24, 2020	1090254902	The difference has been made up in accordance with the regulations.
Article: Labor Standards Law, Article 24, Items 1~2, Article 32, Item 2, Article 34, Item 2, Article 39 Content: Failure to pay wages for extended working hours, failure to pay wages for extended working hours on rest days in accordance with the law, extending the working hours of workers beyond 12 hours in a day or 46 hours in a month, having at least 11 consecutive hours of rest time when changing shifts, and failure to double the pay for work on holidays.	The total fine was NT$220 thousand	Aug 20, 2020	1090158366A ~1090158366E	We will coordinate with employees to rotate out of work in order to comply with laws and regulations, and adjust the shift change method to prevent employees from having insufficient rest time due to shift change.
Article: Article 32, Paragraph 2 of the Labor Standards Law Content: Extending the working hours of workers beyond 12 hours in a dayor 46 hours in a month.	The total fine was NT$ 50 thousand.	May 13, 2020	1090087920	For special conditions, we will coordinate with colleagues to rotate out of work to comply with regulations.

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Article: Article 22, item 2, Article 24, items 1 and 2, Article 32, item 2, Article 34, item 2, and Article 39 of the Labor Standards Law Content: Wages are not paid to workers in full, wages for extended working hours are not increased, wages for extended working hours on rest days are not increased in accordance with the law, extended working hours exceed 12 hours in a day or 46 hours in a month, shift intervals are not in accordance with the law, and wages for holidays are not increased in accordance with the law.	The total fine was NT$ 120 thousand	Apr 20, 2020	1090062919A ~1090062919F	The calculation of late payment deduction has been revised, and the shortage of overtime payment has been compensated in accordance with the regulations and the calculation method has been revised. The company will coordinate with employees to rotate out of work in order to comply with the regulations under special circumstances, and will adjust the shift transfer method to prevent employees from having insufficient rest time due to shift transfer.
Article: Article 32, Paragraph 4 of the Labor Standards Law; Article 34, Paragraph 2 of the Labor Standards Law; Article 36 of the Labor Standards Law Content: If the employer has the need to make the workers work beyond normal working hours due to natural disasters, events or emergencies, the employer may extend the working hours but shall notify the labor union within twenty-four hours of the start of the extension; if there is no labor union organization, the employer shall report the extended working hours to the local competent authority for record, and the employer shall provide the workers with appropriate rest afterwards; if the day and night shift system does not provide rest in accordance with the regulations; if the workers are not given rest every Failure to provide workers with two rest days out of every seven days, of which one shall be a regular holiday and one shall be a rest day.	The total fine was NT$ 150 thousand	Jan 17, 2020	Gao City Labor Article No. 10930397200	We have planned to adjust the scheduling method in response to the situation and will implement it only after obtaining the consent of the union..
Article: Article 32, Paragraph 4 of the Labor Standards Law Content: Due to natural disasters, events or emergencies, if it is necessary to extend the working hours of the workers, they do not notify the labor union or report to the local competent authorities within 24 hours after the extension.	The total fine was NT$ 50thousan d	Aug 21, 2020	1090174123	In the event of a natural disaster, event, or emergency that may cause employees to work overtime in the future, the union must be notified within 24 hours of the payment of the penalty.
Article: Labor Standards Law, Article 34, Paragraph 2 Content: Shift change does not provide workers with at least 11 consecutive hours of rest time.	The total fine was NT$ 50 thousand.	Nov 04, 2020	1090276383	The company has issued a letter to all units on site to promote the relevant provisions of the Labor Standards Law to avoid violation of the law and to take a break of at least 11 consecutive hours to change shifts.

(II) Losses due to labor disputes in last year and up to the print date for this annual report The Company did not sustain losses due to labor disputes in 2020 and up to the print date for this annual report.

(III) Continuing education and training for employees

YFY holds talent strategic development consensus meetings with executives, amends training development rules, and conducts assessments of employee competency at all levels to sustain the development of the Company and overcome any market and industry challenges. Systematic and continuous talent cultivation programs are provided to encourage employees to maximize their potential and improve their performance. Meanwhile, diversified learning resources are made available to employees (e.g., orientation training, management training, professional training, and general training) to encourage self-enhancement among employees.

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(1) Orientation training: Aims to assist new employees to know their way around the workplace and understand the Company's vision, organizational structure, rules, and the operating status of each functional and business units.
(2) Management training: Aims to strengthen the organization’s management performance, and foster and improve supervisors’ leadership and strategic thinking capabilities.
(3) Professional training: Aims to enhance work-related skills of departmental professionals.
(4) General training: Aims to foster employees’ knowledge and skills required for independent operations, workplace communication, and job management to support the Company’s future business development requirements and achieve long-term business goals.

The focus of education and training outcomes in 2020 is as below:

Course type	No. of classes	Total number of people	Total hours	Total costs (thousand NT$)
Professional competency	2,710	30,948	90,224	5,223,235
Management and general knowledge	931	25,014	86,104	6,479,078
Cultural cultivation for new recruits	345	3,801	22,987	141,549
On-the-job continuing education	453	6	1,634	595,070

(IV) Employee code of conduct or ethics

The Company’s Work Rules provide a service guideline and clear work principles for employee compliance. To more effectively protect the Company’s trade secrets, operating profits, and competitive edge in response to the amendment made to the Trade Secrets Act in 2013, the Company has prescribed Integrity and Confidentiality of Intellectual Property Agreement as a mandatory document for registration of new recruits.

YFY subsequently promulgated the YFY Employee Code of Conduct in May 2016. Employees’ behavior must comply this Code of Conduct when performing daily tasks and operations: Employees must take the initiative to avoid improper benefits, perform their duties properly, and effectively utilize Company resources and public properties during work. The Employee Code of Conduct prescribes reporting channels and investigation procedures. Regular education and training programs are provided to raise employees’ awareness towards ethical conduct.

The Ethical Corporate Management Operating Procedures and Code of Conduct were promulgated in December 2018 in accordance with the Company’s Ethical Corporate Management Guidelines and TWSE’s Ethical Corporate Management Best Practice Principles for TWSE/GTSM-Listed Companies . The Company performs business activities based on the principles of fairness, integrity, accountability, and transparency. The Ethical Corporate Management Operating Procedures and Code of Conduct were established to implement the ethical corporate management policy, actively prevent unethical conduct and conflicts of interest, establish whistleblowing channels, and regulate the conduct of relevant

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personnel.

(V) Employee safety and health

The Company is responsible for and obligated to protect the health and safety of its employees. In addition to the OHSAS 18001 certification for occupational safety and health, YFY plants have declared their determination to promote employee safety and the vision to create a corporate safety culture.

The following active measures were adopted to ensure employee health and safety:

Responsibilities of different levels of responsible units: The first level is the Occupational Safety and Health Taskforce. A professional in occupational safety and health and healthcare personnel are responsible for cross-unit coordination. The second level is occupational safety and health supervisor appointed by each subsidiary who is responsible for developing safety and health work rules for YFY plants, and acts as the counselor, supervisor, and auditor of safety and health measures. The third level comprises the occupational safety teams of plants of all levels. The team is directly responsible for the promotion, execution, and on-site management of occupational safety related works.
Safe operations promotion: Through safety education and labor safety systems, the safety management functions of managers of all levels are reinforced to gradually establish a coherent set of safety values and standards, and build a consensus to promote safe operations.
Operation standardization: Standard operating procedures and work safety analysis are implemented for various operations.
Employee health management: Regular employee physical checkups are held and exceed requirements of the Labor Health Protection Regulations. Health promotion programs for employees are developed according to health checkup results.
Employee safety training: Employees and contractors must receive safety training upon entering the Company and during reassignments. Departments hold ad hoc work safety training and education seminars to increase collective safety awareness.
Accident reporting and investigation: Any work accident at any of the plants must be reported to the person in charge of the occupational safety and health of a subsidiary within 24 hours, and an investigation for cause and improvement must take place within one week. Meanwhile, all employees are informed of the incident to prevent it from repeating.
Work safety reviews and disaster drills: In addition to regular disaster drills and monthly occupational safety and health management meetings of plants, equipment safety inspections are reinforced to actively improve the workplace and safety measures.

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VI. Material contracts

				Restricti
		Commencement
Contract type	Parties Involved		Content	ve
		date/expiration date
				clauses

1. YFY
Long term loan contract	Made jointly by 4 banks including Mega International Commercial Bank, Taiwan Cooperative Bank, Hua Nan Bank and Taipei Fubon Bank and 6 participating banks.	2017/12/25-2022/12/25	5-year syndicated loan repaid at maturity	N/A
Long term loan contract	Made jointly by 3 banks including Bank of Taiwan, First Bank, and Hua Nan Bank with 8participatingbanks	2018/12/24-2023/12/24	5-year syndicated loan repaid at maturity	N/A
Long term loan contract	Made jointly by 7 banks including Bank of Taiwan, First Bank, and Chang Hwa Bank with 5participatingbanks	2020/02/10-2025/02/10	5-year syndicated loan repaid at maturity	N/A
Long term loan contract	Made jointly by 5 banks including Bank of Taiwan, Mega International Commercial Bank, Hua Nan Bank, First Bank, and Taipei Fubon Bank and 7 participating banks.	2020/12/30-2025/12/30	5-year syndicated loan repaid at maturity	N/A
2. ChungHwa PulpCorp.
Long term loan contract	Made jointly by 7 banks including Bank of Taiwan, Chang Hwa Bank, and Land Bank of Taiwan with 5participatingbanks	2020/3/31-2025/3/31	5-year syndicated loan repaid at maturity	N/A
3. YFY PackagingInc.
Long term loan contract	Made jointly by 3 banks including Bank of Taiwan, First Bank, and Hua Nan Bank with 8participatingbanks	2019/01/18-2024/01/18	5-year syndicated loan repaid at maturity	N/A
Long term loan contract	Made jointly by 5 banks including First Bank, Taipei Fubon Bank, Bank of Taiwan, Mega International Commercial Bank, and Hua Nan Bank with 7 participatingbanks	2020/12/30-2025/12/30	5-year syndicated loan repaid at maturity	N/A
4. YFY Consumer Products
Long term loan contract	Made jointly by 7 banks including Chang Hwa Bank, Bank of Taiwan, and Land Bank of Taiwan with 5participatingbanks	2019/12/25-2024/12/25	5-year syndicated loan repaid at maturity	N/A

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Chapter 6. Financial Overview

I. Condensed Balance Sheet and Statements of Comprehensive Income for the Last Five Years
II. Financial analysis for the last five years
III. Audit Committee’s Review Report
IV. Financial Statements
V. Individual financial statements
VI. Any Financial Difficulty and the Impact on the Company’s Finance in Last Year and Up to the Print Date for the Annual Report

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Chapter 6. Financial Overview

I. Condensed Balance Sheet and Statements of Comprehensive Income for the Last Five Years

1. Condensed balance sheet and statement of comprehensive income - Consolidated

1. Condensed consolidated balance sheet

Unit: NT$ thousand

	Year
		Financial data of the past five years
Item


		2016	2017	2018	2019	2020

Current assets		37,655,208	41,062,377	44,317,379	45,753,516	47,120,856
Property, plant and	equipment	46,766,595	47,994,654	48,947,012	47,806,173	48,354,857
Intangible assets		498,022	458,555	521,979	509,530	484,123
Other assets		25,783,096	23,070,187	24,422,004	27,019,794	27,811,374
Total assets		110,702,921	112,585,773	118,208,374	121,089,013	123,771,210
Current liabilities	Before distribution	28,735,154	32,336,585	32,704,919	35,712,886	34,230,405
	After distribution	28,735,154	33,332,808	33,701,142	36,875,146	36,720,962
Non-current liabilities		40,325,638	36,722,868	38,570,422	34,592,593	31,252,806
Total liabilities	Before distribution	69,060,792	69,059,453	71,275,341	70,305,479	65,483,211
	After distribution	69,060,792	70,055,676	72,271,564	71,467,739	67,973,768
Share capital		16,603,715	16,603,715	16,603,715	16,603,715	16,603,715
Capital surplus		823,793	1,046,800	989,929	1,000,169	2,504,194
Retained earnings	Before distribution	12,221,994	13,894,534	14,241,392	15,879,283	20,756,081
	After distribution	12,221,994	12,898,311	13,245,169	14,717,023	18,265,524
Other equity		2,532,357	1,686,125	3,627,473	5,767,066	5,121,275
Equity attributable t	o owners of parent	32,181,859	33,231,174	35,462,509	39,250,233	44,985,265
Non-controlling interest		9,460,270	10,295,146	11,470,524	11,533,301	13,302,734
Total equity	Before distribution	41,642,129	43,526,320	46,933,033	50,783,534	58,287,999
	After distribution	41,642,129	42,530,097	45,936,810	49,621,274	55,797,442

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(2) Condensed consolidated statement of comprehensive income

Unit: NT$ thousand

Year
	Financial data of the past five years



Item	2016	2017	2018	2019	2020

Operating revenue	63,354,152	66,769,908	76,439,683	74,760,487	73,234,546

Gross profit	10,514,876	12,006,570	11,684,994	12,561,839	14,981,409

Operating profit	1,114,818	2,960,426	2,359,830	2,990,809	5,602,904

Non-operating income and expenditure	(151,117)	(121,377)	566,264	565,383	2,773,629
Pre-tax profit	963,701	2,839,049	2,926,094	3,556,192	8,376,533
Net profit for the current period	555,107	2,132,123	1,959,764	2,659,623	6,603,903
Other comprehensive income for the current period(after-taxprofit)	(3,402,286)	(773,867)	151,472	2,536,880	(25,566)
Total comprehensive income for the current period	(2,847,179)	1,358,256	2,111,236	5,196,503	6,578,337
Net income attributable to owners of the parent	126,117	1,606,510	1,440,003	2,285,769	5,209,079
Net income attributable to non-controlling interest	428,990	525,613	519,761	373,854	1,394,824
Total comprehensive income attributable to owner of theparent	(3,028,403)	900,796	1,597,278	4,773,707	5,360,674
Total comprehensive income attributable to non-controllinginterest	181,224	457,460	513,958	422,796	1,217,663
Earnings per share	0.08	0.97	0.87	1.38	3.14

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2. Condensed balance sheet and statement of comprehensive income-Individual

1. Condensed individual balance sheet

Unit: NT$ thousand


		Financial data of the past five years
Year

Item
		2016	2017	2018	2019	2020


Current assets		92,183	249,394	88,444	186,239	32,489

Property, plant and equipment		621,529	618,461	620,320	619,312	615,945

Other assets		55,715,666	56,823,944	59,558,358	63,368,304	66,249,139

Total assets		56,429,378	57,691,799	60,267,122	64,173,855	66,897,573

Current liabilities	Before distribution	1,904,594	3,334,222	3,358,265	3,192,501	1,947,405

	After distribution	1,904,594	4,330,445	4,354,488	4,354,761	4,437,962

Non-current liabilities		22,342,925	21,126,403	21,446,348	21,731,121	19,964,903

Total liabilities	Before distribution	24,247,519	24,460,625	24,804,613	24,923,622	21,912,308

	After distribution	24,247,519	25,456,848	25,800,836	26,085,882	24,402,865

Share capital		16,603,715	16,603,715	16,603,715	16,603,715	16,603,715

Capital surplus		823,793	1,046,800	989,929	1,000,169	2,504,194

Retained earnings	Before distribution	12,221,994	13,894,534	14,241,392	15,879,283	20,756,081

	After distribution	12,221,994	12,898,311	13,245,169	14,717,023	18,265,524

Other equity		2,532,357	1,686,125	3,627,473	5,767,066	5,121,275
Total equity	Before distribution	32,181,859	33,231,174	35,462,509	39,250,233	44,985,265

	After distribution	32,181,859	32,234,951	34,466,286	38,087,973	42,494,708

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(2). Condensed individual statement of comprehensive income

Unit: NT$ thousand

Year
	Financial data of the past five years



Item	2016	2017	2018	2019	2020

Operating revenue	441,038	2,046,694	1,773,764	2,414,115
					5,481,543

Gross profit	441,038	2,046,694	1,773,764	2,414,115
					5,481,543

Operating profit	107,448	1,672,764	1,439,400	2,065,030
					5,119,864

Non-operating income and expenditure	(17,331)	(62,254)	15,603	135,439
					210,215

Pre-tax profit	90,117	1,610,510	1,455,003	2,200,469
					5,330,079

Net profit for the current period	126,117	1,606,510	1,440,003	2,285,769
					5,209,079

Other comprehensive income for the currentperiod(after-taxprofit)	(3,154,520)	(705,714)	157,275	2,487,938
					151,595

Total comprehensive income for the currentperiod	(3,028,403)	900,796	1,597,278	4,773,707
					5,360,674

Earnings per share	0.08	0.97	0.87	1.38
					3.14

(V). Names of auditing CPAs of the past five years and their audit opinions:

1. Name of CPAs:

2016 - 2017: Chih-Ming Shao and Cheng-Hong Kuo from Deloitte and Touche Taiwan. 2018: Hui-Ming Huang and Cheng Hong Kuo from Deloitte and Touche Taiwan.

2019: Hui-Ming Huang and Benjamin Shih from Deloitte and Touche Taiwan.

2020: Hui-Ming Huang and Ya-Ling Wong from Deloitte and Touche Taiwan.

2. CPAs’ opinions:

2016 - 2020: Unqualified opinion and a segment on other matters.

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II. Financial analysis for the last five years

1. Financial analysis - Consolidated

	Year	Financial analysis for the last five years	Financial analysis for the last five years	Financial analysis for the last five years	Financial analysis for the last five years	Financial analysis for the last five years



Item		2016	2017	2018	2019	2020

Financial structure (%)	Debt-to-asset ratio	62.38	61.34	60.30	58.06
						52.91

	Long-term capital to property, plant and equipment	175.27	167.20	174.69	178.59
						185.17

Solvency (%)	Current ratio	131.04	126.98	135.51	128.11
						137.66

	Quick ratio	82.45	80.74	84.77	86.07
						93.95

	Times interest earned ratio	202.97	405.52	387.01	482.30
						1,302.44

Operating ability	Receivables turnover (times)	4.57	4.79	5.06	4.98
						4.90

	Average days receivable	79.86	76.20	72.13	73.29
						74.48

	Inventory turnover (times)	5.85	6.27	6.36	5.98
						6.24

	Payables turnover (times)	6.60	7.14	8.01	7.00
						5.99

	Average inventory turnover (days)	62.39	58.21	57.39	61.03
						58.49

	Property, plant and equipment turnover (times)	1.35	1.41	1.58	1.55
						1.52

	Total assets turnover (times)	0.57	0.60	0.66	0.62
						0.60

Profitability	Return on assets (%)	1.19	2.60	2.41	2.84
						5.85

	Return on equity (%)	1.28	5.01	4.33	5.44
						12.11

	Pre-tax profit to paid-in capital ratio (%)	5.80	17.10	17.62	21.42
						50.45

	Net margin (%)	0.88	3.19	2.56	3.56
						9.02

	Earnings per share (NT$)	0.08	0.97	0.87	1.38
						3.14

Cash flows	Operating cash flow ratio (%)	18.08	12.14	15.11	29.51
						23.57

	Cash flow adequacy ratio (%)	50.52	52.56	71.44	101.00
						116.75

	Cash flow reinvestment ratio (%)	3.88	2.93	2.77	6.63
						4.60

Leverage	Operating leverage	4.12	2.21	2.68	2.41
						1.77

	Financial leverage	6.23	1.46	1.76	1.45
						1.14

Note: Explanation of changes 1. Changes in interest protection multiples resulted from an increase in net income before tax. 2. Changes in profitability resulted from an increase in profit and loss after tax. 3. Changes in operating cash flow ratio and cash reinvestment ratio resulted from a decrease in net cash flow from operating activities. 4. Changes in operating leverage resulted from an increase in net operating income.

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(2) Financial analysis - Individual

	Year
		Financial analysis for the last five years


Item		2016	2017	2018	2019	2020
Financial structure (%)	Debt-to-asset ratio	42.97	42.40	41.16	38.84
						32.76

	Long-term capital to property, plant and equipment	8,772.69	8,789.17	9,174.11	9,846.63
						10,544.80

Solvency (%)	Current ratio	4.84	7.48	2.63	5.83
						1.67

	Quick ratio	1.11	0.71	0.83	2.04
						1.07

	Times interest earned ratio	124.95	550.34	509.64	754.62
						1,966.11

Operating ability	Receivables turnover (times)	-	-	-	-
						-

	Average days receivable	-	-	-	-
						-

	Inventory turnover (times)	-	-	-	-
						-

	Payables turnover (times)	-	-	-	-
						-

	Average inventory turnover (days)	-	-	-	-
						-

	Property, plant and equipment turnover (times)	-	-	-	-
						-

	Total assets turnover (times)	-	-	-	-
						-

Profitability	Return on assets (%)	0.73	3.34	2.92	4.11
						8.30

	Return on equity (%)	0.37	4.91	4.19	6.12
						12.37

	Pre-tax profit to paid-in capital ratio (%)	0.54	9.70	8.76	13.25
						32.10

	Net margin (%)	-	-	-	-
						-

	Earnings per share (NT$)	0.08	0.97	0.87	1.38
						3.14

Cash flows	Operating cash flow ratio (%)	26.87	11.70	11.90	14.75
						99.72

	Cash flow adequacy ratio (%)	9.05	12.98	30.41	45.15
						81.01

	Cash flow reinvestment ratio (%)	0.02	0.71	-	-
						1.19

Leverage	Operating leverage	1.10	1.01	1.01	1.01
						1.00

	Financial leverage	-	1.27	1.33	1.19
						1.06

Note: Explanation of changes 1. Changes in current ratio and quick ratio are caused mainly by a decrease in current liabilities. 2. Changes in interest protection multiples resulted from changes in net income before tax. 3. Changes in profitability resulted from an increase in profit and loss after tax. 4. Changes in operating cash flow resulted from an increase in net cash flow from operating activities.

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Financial structure
(1) Debt-to-asset ratio = Total liabilities / total assets.
(2) Long-term capital to property, plant and equipment = (total equity + non-current liabilities) / net amount of property, plant and equipment.
Solvency
(1) Current ratio = current assets / current liabilities
(2) Quick ratio = (current assets - inventory - prepaid expense) / current liabilities.
(3) Times interest earned ratio = net income before income tax and interest expense / interest expense for the current period.
Operating ability
(1) Receivables turnover (including accounts receivable and notes receivable from operations) = Net sales / Average balance of receivables (including accounts receivable and notes receivable from operations).
(2) Average days receivable = 365 / receivables turnover.
(3) Inventory turnover = Cost of goods sold / average amount of inventory.
(4) Payables turnover (including accounts payable and notes payable from operations) = Cost of goods sold / Average balance of payables (including accounts payable and notes payable from operations).
(5) Average inventory turnover (days) = 365 / inventory turnover.
(6) Property, plant and equipment turnover = Net sales / average net amount of property, plant and equipment.
(7) Total assets turnover = net sales / average total assets.
Profitability
(1) Return on assets � [Net income + interest expense x (1 - tax rate)] / average total assets.
(2) Return on equity = after-tax income / total average equity.
(3) Net margin = After-tax income / net sales.
(4) Earnings per share = (Income attributable to owner of parent - stock dividends of preferred stocks) / weighted average number of issued shares.
Cash flows
(1) Operating cash flow ratio = Net cash flow from operating activities / current liabilities.
(2) Net cash flow adequacy ratio = Net cash flow from operating activities for the past five years / (capital expenditures + inventory increase + cash dividends) for the past five years.
(3) Cash reinvestment ratio = (Net cash flow from operating activities - cash dividends) / (gross margin of property, plant and equipment + long-term investment + other non-current assets + working capital).
Leverage:
(1) Operating leverage = (Net operating revenue - current operating cost and expense) / operating profit.
(2) Financial leverage = Operating profit / (operating profit - interest expense).

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III. Audit Committee’s Review Report

YFY Inc.

Audit Committee’s Review Report

The Company’s 2020 business report, financial statements, earnings distribution proposal, and auditors’ reports relating to the financial statements were compiled by the Board of Directors, and have been examined and determined to be correct and accurate by the Audit Committee in accordance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act.

We hereby submit the report.

2021 Annual General Shareholders’ Meeting

Audit Committee Convener: Wen-Cheng Huang

March 19, 2021

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IV. Consolidated financial statements INDEPENDENT AUDITORS’ REPORT The Board of Directors and Shareholders YFY Inc.

Opinion

We have audited the accompanying consolidated financial statements of YFY Inc. 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 and 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, based on our audits and the reports of other auditors (refer to Other Matter section), 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 its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

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

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Key audit matters of the Group’s consolidated financial statements for the year ended December 31, 2020 are stated as follows:

Estimation of Expected Credit Loss Recognized on Accounts Receivable

The accounts receivable of the Group’s significant components are material in amount. In consideration of transactions with various counterparties, the recoverability of accounts receivable is subject to not only each customer’s financial condition but also management’s estimation and judgment. Therefore, we identified the estimation of expected credit loss recognized on accounts receivable as a key audit matter.

For related policies and relevant information on the estimation of expected credit loss of accounts receivable, refer to Notes 4, 5 and 11 to the accompanying consolidated financial statements.

The key audit procedures that we performed in respect of the expected credit loss on accounts receivable included the following:

We obtained and assessed the reasonableness of the method and the information used by management for the estimation of expected credit loss recognized on accounts receivable.
We tested sample items in the aging report on the balance sheet date and verified the correctness of the calculation of the expected credit loss.
We analyzed overdue receivables and performed sampling on the collection of overdue receivables after the balance sheet date. We assessed the reasonableness of the expected credit loss recognized on accounts receivable based on customers’ historical payment records, credit line control and overdue receivables tracking.

Other Matter

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In addition, as of and for the years ended December 31, 2020 and 2019, the financial statements of Taiwan Genome Sciences, Inc. and Perpetual Prosperity Printing Technology Co., Ltd., an investment accounted for using the equity method, were audited by other auditors. Thus, our opinion, insofar as it relates to the calculation of the Group’s share in these investees’ profit or loss and other comprehensive income, is based solely on the report of other auditors. As of December 31, 2020 and 2019, the carrying amounts of these investees were NT$13,397 thousand and NT$112,618 thousand, respectively. These investees’ net profit or loss were included in the Group’s total comprehensive income and loss for the years ended December 31, 2020 and 2019 which were a loss of NT$1,029 thousand and a loss of NT$36,103 thousand, respectively.

We have also audited the financial statements of YFY Inc. as of and for the years ended December 31, 2020 and 2019 on which we have issued an unmodified opinion, including an Other Matter paragraph, respectively.

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

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

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

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise

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from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 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 Hui-Min Huang and Ya-Ling Wong.

Deloitte & Touche 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 accepted and applied in the Republic of China.

For the convenience of readers, the 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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V. Individual financial statements INDEPENDENT AUDITORS’ REPORT The Board of Directors and Shareholders YFY Inc.

Opinion

We have audited the accompanying financial statements of YFY Inc. (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, based on our audits and the reports of other auditors (refer to Other Matter section), 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 for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements 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 based on our audits and the report of other auditors.

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 thereon, and we do not provide a separate opinion on these matters.

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Key audit matters of the Company’s financial statements for the year ended December 31, 2020 are stated as follows:

The Valuation of Investments Accounted for Using the Equity Method

Under the investments accounted for using the equity method, the financial position and performance of some significant components of the Company will significantly affect the Company. The accounts receivable of significant components of the Company are material in amount. In consideration of transactions with various counterparties, the recoverability of accounts receivable is subject to not only each customer’s financial condition but also management’s estimation and judgment. Therefore, the estimation of expected credit loss recognized on accounts receivable has been identified as a key audit matter.

For related policies and relevant information about investments accounted for using the equity method, refer to Notes 4 and 9 to the accompanying financial statements.

The key audit procedures that we performed in respect of the valuation of investments accounted for using the equity method included the following:

We obtained and assessed the reasonableness of the method and the information used by management for the estimation of expected credit loss recognized on accounts receivable.
We tested sample items in the aging report on the balance sheet date and verified the correctness of the calculation of the expected credit loss.
We analyzed overdue receivables and performed sampling on the collection of overdue receivables after the balance sheet date. We assessed the reasonableness of the expected credit loss recognized on accounts receivable based on customers’ historical payment records, credit line control and overdue receivables tracking.

Other Matter

We did not audit the financial statements as of and for the years ended December 31, 2020 and 2019 of Fidelis IT Solutions Co., Ltd., Sustainable Carbohydrate Innovation Co., Ltd., Taiwan Genome Science, Inc., YFY Biotech Management Company and Livebricks Inc., which are accounted for using the equity method by YFY Paradigm Investment Co., Ltd., Jupiter Prestige Group Holdings Limited and its subsidiaries, which are accounted for using the equity method by YFY Global Investment Corp., and the financial statements as of and for the year ended December 31, 2019 of Lotus Ecoscings & Engineering Co., Ltd., Syntax Communication (H.K.) Ltd., which is accounted for using the equity method by Chung Hwa Pulp Corp., Ever Growing Agriculture Biotech Co., Ltd., which is accounted for using the equity method by Yuen Foong Yu Consumer Products Co., Ltd., Perpetual Prosperity Printing Technology Co., Ltd., the

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subsidiaries of Willpower Industries Ltd. and the subsidiaries of Wingsong Packaging Investment Company Ltd., which are accounted for using the equity method by YFY International Corp., but such financial statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the investments accounted for using the equity method and the net profit of investments, is based solely on the reports of other auditors. As of December 31, 2020 and 2019, the long-term equity investments of these investee companies were NT$487,116 thousand and NT$2,498,563 thousand, respectively, representing 0.7% and 3.9%, respectively, of the Company’s total assets. As of and for the years ended December 31, 2020 and 2019, the net investment income of these investee companies were NT$4,730 thousand and NT$417,930 thousand, respectively, representing 0.1% and 8.8%, respectively, of the Company’s total comprehensive income and loss.

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Responsibilities of Management and Those Charged with Governance 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 for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance, including the audit committee, 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 the economic decisions of users taken on the basis of these financial statements.

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

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Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the 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 the 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.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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

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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 Hui-Min Huang and Ya-Ling Wong.

Deloitte & Touche 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 accepted and applied in the Republic of China.

For the convenience of readers, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. 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.

VI. Any financial difficulty and the impact on the Company’s finance in last year and up to the print date of this annual report: This event did not occur at the Company.

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Chapter 7. Financial Position, Financial Performance and Risk Analysis

I. Financial comparison analysis
II. Financial Performance Review and Analysis
III. Cash flow analysis
IV. Impact of Significant Capital Expenditures on Financial Operations in the Past Year
V. Investment policy in the past year, profit/loss analysis, improvement plan, and investment plan for the coming year
VI. Risk Analysis and Assessment in Last Year and Up to the Print Date of this Annual Report
VII. Other important matters

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Chapter 7. Financial Position, Financial Performance and Risk Analysis

I. Financial comparison analysis

Unit: NT$ thousand

Year			Difference	Difference
	2020	201
Item		9	Amount	%

Current assets	$47,120,856	$45,753,516	$1,367,340	3
Property, plant and equipment	48,354,857	47,806,173	548,684	1
Intangible assets	484,123	509,530	(25,407)	(5)
Other assets	27,811,374	27,019,794	791,580	3
Total assets	123,771,210	121,089,013	2,682,197	2
Current liabilities	34,230,405	35,712,886	(1,482,481)	(4)
Non-current liabilities	31,252,806	34,592,593	(3,339,787)	(10)
Total liabilities	65,483,211	70,305,479	(4,822,268)	(7)
Share capital	16,603,715	16,603,715	-	-
Capital surplus	2,504,194	1,000,169	1,504,025	150
Retained earnings	20,756,081	15,879,283	4,876,798	31
Other equity	5,121,275	5,767,066	(645,791)	(11)
Non-controlling interest	13,302,734	11,533,301	1,769,433	15
Total equity	58,287,999	50,783,534	7,504,465	15
Notes on changes in increase or decrease percentage: 1. The increase in capital surplus resulted from an increase in the sales of equity interests in subsidiaries. 2. The increase in retained earnings resulted from the increase in netprofit in thisperiod.

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II. Financial Performance Review and Analysis

Unit: NT$ thousand

Year
	2020	2019	Increase/decrease	Change (%)
Item

Net sales revenue		$74,760,487	$(1,525,941)	(2)
	$73,234,546

Cost of goods sold		62,192,559	(3,939,089)	(6)
	58,253,470

Gains from changes in fair value minus the cost to sell a biological asset		(6,089)	6,422	105
	333

Gross profit		12,561,839	2,419,570	19
	14,981,409

Operating expenses		9,571,030	(192,525)	(2)
	9,378,505

Net operating profit		2,990,809	2,612,095	87
	5,602,904

Non-operating income and expenditure		565,383	2,208,246	391
	2,773,629

Pre-tax profit		3,556,192	4,820,341	136
	8,376,533

Income tax expense		(896,569)	(876,061)	(98)
	(1,772,630)

Net income for the current year		2,659,623	3,944,280	148
	6,603,903

Notes/Analysis on changes in increase or decrease percentage: 1. The increase in operating net profit, net profit before tax, and net profit of the fiscal year resulted from the decrease in the cost of goods sold. 2. The increase in non-operating income and expenditures resulted from an increase in other income. 3. The increase in income tax expenses and net income for the current year resulted from an increase in net profit before tax.

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III. Cash flow analysis

Cash Net cash flow from Inflow (outflow) of	Liquidity contingency plan
, Beginning of Year operating activities net cash from other activities Cash balance
	Investmentplan Financialplan
$6,062,871 $8,068,377 ($7,848,127) $6,283,121	- -

Analysis on the cash flow changes of the current year:
(1) Cash flow from operating activities: Operating activities generated cash flow mainly from operational profit.
(2) Cash flow from other activities: Investment activities mainly consisted of plant expansion in Vietnam and the annual expenditure on the upgrading and maintenance of relevant equipment. Financing activities mainly consisted of repayment of loans from financial institutions and distribution of cash dividends.
Liquidity contingency plan and liquidity analysis: N/A
Cash flow analysis for the coming year:
(1) Cash flow from operating activities: The industry development is anticipated to be stable and YFY can maintain a steady operating cash inflow.
(2) Cash flow from investing activities: Mainly consisted of the annual capital expenditure on the upgrading and maintenance of relevant equipment.
(3) Cash flow from financing activities: Bank loans and repayments are arranged based on the cash flows from overall operating and investing activities.

IV. Major capital expenditures and impact on financial operations in last year:

Pulp and paper subsidiary:

Refurbishment of the paper machine in Jiutang Plant: The refurbishment of the equipment reduces the cost of production and will increase product competitiveness in business operations.
Equipment update at Hualien Plant and Dingfeng Plant: We updated the equipment and improved production efficiency to reduce waste from production and meet related laws and regulations.

Containerboard and packaging subsidiary:

The phase 1 and phase 2 investments in the biogas power generation facilities in Xinwu containerboard plant converts process wastes into renewable energy and increases proceeds from green energy.
Xinwu containerboard plant invested in the first industrial solid recovered fuel (SRF) boiler in Taiwan. The boiler has begun operations in 2020 to recycle and process

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excess material from production.

Xinwu containerboard plant continued to replace and upgrade cogeneration equipment (TG1 replacement is expected to be completed in early 2022; the coal conservation device is expected to be constructed in early 2021; the refurbishment of the second gas boiler is expected to be completed in early 2021) to maintain energy efficiency, upgrade production equipment, and improve product competitiveness.
We added printers for containerboard processes in Taiwan and implemented multiple product development plans. We also plan to replace and upgrade the corrugator in the northern area to increase product line profitability and reduce process cost.
The second containerboard plant in northern Vietnam was inaugurated in 2019 and it facilitated growth in overall revenue. The second corrugator in the Dong Nai Plant in southern Vietnam was completed in 2020. It expanded production capacity and increased competitiveness. Long An Plant expanded and replaced its corrugator in 2020 to expand sales and solidify the plant's leading position in the local containerboard industry.

Consumer products subsidiary:

We installed denitrification equipment in Qingshui Plant and Yangmei Plant to meet requirements of environmental protection policies and strengthen pollution prevention.

The improved business competitiveness helped YFY’s subsidiaries generate increased revenue from products. Working capitals for capital expenditures are sourced from YFY’s funds and bank loans. This year and last year's interest expenditures were the same and therefore did not generate a material impact on the Company's finance.

V. Investment policy, reasons for profit or loss, improvement plans, and investment plans for coming year:

(I) Reinvestment policy, reasons for profit or loss, improvement plans, and investment plans for next year

Major reinvestment projects of the Company and its subsidiaries are mainly part of the Company’s long-term development strategy, with the main focus on printing paper, advanced energy conservation technologies, medical biotechnology, financial businesses, and new creations. In recent years, the Company also continued to streamline its non-core investments. By focusing resources on strategic investment, which is consistent with the Company’s long-term development ideal, to deepen vertical integration benefits and pursue maximum return on investment.

Investment assessment aspects include: Sales growth, R&D capacity enhancement, production efficiency increase, product quality improvement, and the potential for earning a profit in the future. Taking into account the financial investment benefits and the corresponding risks, investment methods and amounts are then decided. In terms of

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post-investment management, the Company regularly reviews the performance of each reinvestment project. If there is a significant drop in performance or deviation from the standards of similar industries, we require the company to develop improvement plans in order to achieve our original investment objectives.

Pulp and paper subsidiary: International pulp prices have remained low in 2019 while the prices of raw materials such as lumber have remained high. The subsidiary suffered losses throughout the year. To reduce losses and improve profitability, the subsidiary shall enhance the sources of low-price raw materials and increase the production efficiency of various paper machines. It shall also continue to develop paper-based vessels and produce green products made from recycled environmentally-friendly materials such as paper straws, food containers, and food safety paper products for packaging. It shall continue to expand related markets for high-value medical products and personal protection products.
Containerboard and packaging subsidiary: To realize a circular economy and overcome China's waste paper import restrictions, the Yangzhou Plant focuses on making internal improvements such as increasing production efficiency and saving costs. In addition, the plant also endeavors to develop high-value products and increase the supply of its own paper container plants to vertically integrate synergistic effects, increase its market response capability, and mitigate the effect of market changes on the company's business operation.
Consumer products subsidiary: We continue to focus on the paper product business and accelerate the expansion of the market for cleaning products. Focus on consumer demands and deepen the brand positioning. Invest in the development of innovative products, including household products, commercial products, and a diversity of products for personal use to provide high-quality products. The subsidiary shall continue to enhance automated production capacity, optimize process layout, and strengthen cost control to improve operational competitiveness.
(II) Reinvestment Plans for the Coming Year
(1) The main objective of developing subsidiary investments is to enhance vertical integration and develop other businesses, and the key consideration is to facilitate the development of the Company’s subsidiaries so that they can complement each other and achieve synergy.
(2) Resource integration and complementarity will be enforced among the invested companies and their core competitiveness strengthened in order to enhance their business performance.
VI. Risk analysis and assessment in the last year and up to the print date of this annual report:
(I). Impact of changes in interest rates, exchange rates, and inflation on the Company’s profitability and response measures
(1) Interest rate

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The COVID-19 epidemic devastated economic activities in the United States and the global economy has suffered a significant decline. The U.S. Federal Reserve quickly reduced interest rates to zero in March 2020 and announced unlimited quantitative easing policies which significantly reduced the market interest rate of the USD. Europe and Japan continued their negative interest rate policies and accelerated monetary easing to stimulate the economy, leading to an abundance of market funds in the global financial market. Taiwan benefited from adequate disease prevention policies in 2020 and continues to enjoy transferred purchase orders. Tech companies have continued to perform well and Taiwan has become one of the few economies that maintained growth. Therefore, the Central Bank only reduced interest rate by 0.25% in March and has maintained the same interest rate for three consecutive quarters. The market interest rate of the NTD has also remained stable.

Response measures: The uncertainties of the COVID epidemic continue to affect the prospects of global economic recovery. Federal Reserve officials have thus refrained from announcing a reduction in quantitative easing or start to raise interest rates. We expect the global economy to remain an environment with relatively loose monetary policies in 2021. The Central Bank of Taiwan will also maintain adequate and loose monetary policies to facilitate the economic growth in Taiwan and reduce the pressure of large-scale influx of hot money in the market. The Company will evaluate the liability positions and financing policies regularly and flexibly to effectively reduce the Company’s interest expenses.

(2) Exchange rate:

The COVID-19 epidemic devastated economic activities in the United States in 2020 and forced the Federal Reserve to reactivate zero interest rate and large-scale quantitative easing, causing the international USD exchange rate to fall. The economic and trade performance in China quickly rebounded in the second half of the year as China shrugged off the impact of the epidemic. The fundamental differences between the economic and monetary policies of the United States and China caused RMB to end its fall and rose to approximately 6.5 in the second half of the year. The appreciation of the TWD in 2020 was caused by the weakening USD, economic and trade performance in Taiwan, and higher yield in the Taiwan stock market which have attracted an influx of foreign capital. Major exchange rate risks faced by the Company are FCY loans from China. In 2020, the Company continued to dynamically adjust RMB hedging ratio and implement response measures for hedging and cost control in order to reduce the fluctuations in currency exchange gain or loss.

Response measures: Looking forward to 2021, the uncertainties in the COVID-19 pandemic will continue to cloud the global economic outlook. The fluctuations of foreign

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exchange rates remain affected by numerous variables. The Company will take into account exchange rate risks and hedging costs, and make appropriate financial and hedging strategies to reduce the negative impact of exchange rate fluctuations on the Company’s overall operations.

(3) Inflation:

The global COVID-19 pandemic caused international oil prices to plunge below US$20 in 2020. The appreciation of NTD against USD reduced the overall pressure of inflation in Taiwan in 2020 and the Consumer Price Index had been negative for many months. However, the rapid growth in domestic demand has accelerated economic development and there has been no actual deflation in Taiwan as overall prices remained stable. Although the overall CPI was -0.23% in 2020 which meant that growth was negative and marked the lowest point in the past five years, the core CPI (excluding the CPI of energy and fruits and vegetables) was 0.36%, suggesting stable commodity price.

In 2021, the Central Bank preliminary estimated that CPI and core CPI in 2021 will increase annually by 0.92% and 0.71%, with a benign inflation outlook. Up to the printing date of this annual report, inflation does not exert a material impact on the Company. However, China is continuing to increase the extent of its environmental supervision, while the U.S.-China trade war and relocation of supply chains have exposed raw material prices to risks of fluctuation. The economic impact of the COVID-19 pandemic after the introduction of vaccines has not been fully assessed. The Company will still pay close attention to changes in raw material prices as well as the risks derived from the trade war between China and the U.S. and the COVID-19 pandemic.

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(II). Policies on high risk or high leverage investments, lending to others, making endorsements or guarantees, and trading derivatives, reasons for profit or loss, and response measures

The Company has not invested in high risk and high leverage instruments. For example, the utilization of short-term idle funds focuses on trading of notes or bonds under repurchase agreements and subscriptions of money market funds.

The Company adheres to its Procedure for Lending Funds to Other Parties and Procedures of Making of Endorsement and Guarantees when lending funds to others and providing endorsements and guarantees. Principally, funds or endorsement/guarantees are extended between affiliated parent companies and subsidiaries for financial and business purposes.

The Company engages in derivative transactions in accordance with its Procedure for Processing Derivative Transactions so as to clearly define the purposes of each transaction, which must be primarily hedging. The derivatives operated in 2020 are primarily aimed at avoiding RMB exchange rate risks. The hedging ratio is adjusted with due consideration given to the hedge cost and exchange rate risk of derivatives to mitigate the effects of RMB exchange rate fluctuations.

(III). Future R&D Plans and Expected R&D Investment:

The Company’s major R&D investment plans in 2021 include:

� Paper product R&D NT$ 24,811 thousand. � Special material development NT$ 16,766 thousand. � Material analysis NT$ 21,206 thousand.

R&D expenses listed above do not include investments in product development, new technology development, and equipment modifications.

(IV) Impact of important policy and legislative changes in Taiwan and overseas on financial operations and response measures:

For the purpose of managing legal risks as a whole, the Company has established the Legal Department to be responsible for preventing legal risks due to regulation changes. When important policy and legislative changes in Taiwan and overseas have a potential impact on the Company’s financial or sales performance, the responsible departments will cooperate with the Legal Department to devise the Company’s response measures. In case of any noncompliance with newly promulgated laws in the Company’s internal guidelines and operating procedures, the responsible departments will make the necessary changes and corrections to effectively manage and reduce the Company’s legal risks.

In response to the promulgation of the amendments of the Labor Standards Act, the Company has also modified related internal regulations and the Work Rules, as well as convened

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labor-management meetings to discuss various response measures. Work hours and work schedule for each company (plant) were adjusted accordingly, and employee annual leaves and holiday pay for unused annual leaves were given to employees according to regulations.

IFRS 16 stipulates accounting treatments for the identification of lease agreements and lessors and lessees. It will replace IAS 17 "Leases", IFRIC 4 "Determining Whether an Arrangement Contains a Lease", and related interpretations. The Company shall elect to determine whether contracts signed (or changed) after January 1, 2019 are (or include) leases in accordance with IFRS 16. The lease contracts previously identified in accordance with IAS 17 and IFRIC 4 shall not be reassessed and shall be processed in accordance with transitional regulations in IFRS 16.

(V). Impact of recent technological and market changes on the Company’s finance and business, and response measures:

Industries invested in by the Company strive for new achievements in innovation and R&D. In the development of various industries, we use various technologies to enhance product quality, production capacity, and production volume, as well as strengthen existing competitive advantages in order to pursue sustainable management.

(VI). Impact of corporate image change on risk management and response measures

YFY focused on the circular economy and ESG for communicating its corporate image in internal and external communication in 2020. We have gradually consolidated corporate capital and steadily enhanced our corporate image from the inside out as we transform a century-old company into a company dedicated to material science.

E(environment) - In terms of the environment, YFY had started its paper-making industry with bagasse from sugar plants to produce paper. After more than 70 years, the concept of the circular economy has become part of the DNA of all YFY employees. As we sought to increase production, we also identified new energy to replace fossil fuel for power generation in the process water, production residue, and pulp-making process to support the United Nations Sustainable Development Goals (SDGs) and the Sustainable Development Policy of the Executive Yuan, and fulfill corporate social responsibility. For example, YFY's biogas power generation and SRF zero-coal boiler are paradigms for the circular economy in Taiwan. The biogas power generation system had won the Model Award in the Global Views Corporate Social Responsibility Award in the "Excellent Solution: Environmentally Friendly Category" in early 2020. It also obtained the first international BS 8001 Circular Economy certification in the global paper industry at the end of 2020. Chung Hwa Pulp Corp. received the "Asia Responsible Entrepreneurship Awards - Circular Economy Award", and YFY Consumer Products' Qingshui Plant received the Outstanding Green Procurement Enterprise Award from the Environmental

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Protection Bureau of Taichung City Government. These awards serve as testaments to YFY's circular economy business model which will reduce resource consumption and environmental impact, effectively respond to risks, and maintain economic resilience.

S(social) - In terms of social engagement, we focus on three main themes. The first is caring for the disadvantaged communities around our plants. YFY's production materials include recycled paper, which is collected by diligent recyclers. Since 2019, YFY has actively

communicated with the Department of Environmental Protection of Taoyuan City Government to take part in the "winter donations for recyclers" organized by the Environmental Maintenance and Inspection Division of the Department of Environmental Protection each year. We have provided care to more than 400 recyclers for 3 consecutive years. Xinwu mill has supported this activity for 3 years and provided care to recyclers in areas near the plant who face financial difficulties. Second, we focus on the "circular economy" by supporting the Xuan Yi New Knowledge Care Association established by mothers of patients with cerebral palsy. We support the circular economy ideals for zero waste adopted by the Association. We have provided long-term sponsorship with Mayflower toilet paper and Orange House detergent and we also assisted with hardware upgrade for the Association including industrial washing machines, sewing machines, and overlock sewing machines. We also invited the celebrity endorser Chris Wu to jointly promote the "wash before donate" initiative to help mothers of children suffering from cerebral palsy design their products with peace of mind. Third, we focused on "paper" as the vessel and we have organized YFY volunteers to read with students through video conferencing and help children of the Taitung Family Support Kuanshan Service Center with their studies for 5 consecutive years. 53 volunteers have provided more than 3,200 hours of services in the past 5 years.

G(governance) - In terms of corporate governance, YFY protects shareholder equity and regularly discloses the Company's information to ensure transparency in operations. YFY established the Corporate Governance Best Practice Principles , which were approved by the Board of Directors on November 13, 2018. We also appointed dedicated corporate governance personnel to take charge of corporate governance affairs. The Company has set up a dedicated section for stakeholders on its website, where contact information for employees, customers, suppliers/contractors, shareholders/investors, consumers, press members, and other stakeholders are listed for responding to questions concerning corporate social responsibility. We also created the "YFY Blockchain Supply Chain Finance Platform" in 2020 to form teams with multiple banks. We aim to resolve financing issues for suppliers and customers with whom we have established long-term partnerships and satisfy their needs for flexible use of funds in order to create a finance platform of mutual trust that benefits YFY, the bank, and the supplier/customer. In addition, we also organize regular investor conferences and press releases to provide diverse and transparent channels for stakeholders to obtain more company information.

From YFY’s perspective, corporate image and crisis management are closely linked to each other. We can only enhance the trust of consumers, investors, and other stakeholders and

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effectively reduce tangible and intangible damages if all employees can support the ESG circular economy and create a healthy company.

(VII). The expected benefits and possible risks of mergers and acquisitions as well as the responding measures: N/A.

(VIII). Expected benefits of plant expansion, potential risks, and response measures:

In October 2020, the Forest Pulp & Paper Group purchased the Guanyin plant in Taoyuan as a research and development, production and processing base as well as a storage and transfer center for non-plastic end products, and will continue to develop related non-plastic products and optimize its product portfolio to provide one-stop services to customers by integrating upstream, midstream and downstream. The Guanyin plant is expected to join operation in

With the development of global non-plastic policy, it will help to enhance the operation of the Forest Pulp & Paper business group.

(IX). Risks in concentrated procurement or sales and response measures:

The Company’s sources of procurement and sales channels remain stable; there are no concentration risks.

(X). Impact of mass transfer of equity by or change of directors, supervisors, or shareholders holding more than 10% equity of the Company, associated risks and

response measures:

The composition of directors, supervisors, or shareholders holding more than 10% of the Company’s shares and the shareholding ratio are stable. As of the print date of this annual report, there are not large transfers. Equity transfer or conversion is considered a normal financial transaction for shareholders, which does not have a significant impact on the Company. The Company’s directors and major shareholders always maintain open channels of communication.

(XI). Impact of control transfer and risks: The Company is not exposed to risks of control transfer.

(XII). Litigation or non-litigation events:

1. YFY INC.:

(1) On June 20, 2011, YFY Global, a subsidiary of the Company, purchased the shares of Giant Crystal (a subsidiary of Sanbao Group) at US$8.5 million exchangeble bond and used the equity of the company Star City as exchangable target. On August 11, 2017, YFY Global received US$12.39 million in payment for the redemption of exchangable bonds, including principal and interest, equivalent to roughly 45% in return on investment. However, the Taipei

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District Prosecutor’s Office believed that the Company’s directors S. C. Ho, Melody Chiu, and four other employees committed a special breach of trust in accordance with Subparagraph 3, Paragraph 1, Article 171 of the Securities and Exchange Act. The involved parties were prosecuted in August 2017. Although the Company did not sustain any loss or damages to shareholder equity, the Taipei District Court still sentenced 4 of 6 individuals of the Company on November 20, 2020, including the Director S. C. Ho and former Director Melody Chiu, to fixed-term imprisonment for special breach of trust of 8 years and 6 months, 4 years and 8 months, 4 years and 6 months, and 4 years. The other 2 individuals were found not guilty. The prosecutor has not filed an appeal for the 2 individuals who were found not guilty, and they were thus acquitted. The remaining 4 individuals objected to the guilty verdict in the original court and have filed appeals, which are now processed in Taiwan High Court.

(2) The Securities and Futures Investors Protection Center took legal actions against Shin Foong Specialty and Applied Materials and directors S. C. Ho and Melody Chiu in accordance with Subparagraph 2, Paragraph 1, Article 10-1 of the Securities Investor and Futures Trader Protection Act, and proposed to dismiss them. The court cost arising from this matter totaled NT$1.65 million. Former Director Melody Chiu no longer serves as the Director of the Company and the case is still on trial at Taipei District Court.

2. YFY Packaging Inc.

(1) YFY's subsidiary, YFY Packaging Inc., signed the "Pulp Disperser Paper Reject Gasification Processing Contract" with Taiwan Clean Energy Technology Co., Ltd. on June 1, 2011 to process the light paper reject at the Xinwu mill. After the parties signed the contract, Xinwu Plant questioned whether the gasification boiler installed by Taiwan Clean Energy Technology Co., Ltd. could satisfy the mass production requirements of Xinwu mill and questioned the stability and safety risks of the gasification boiler. Xinwu mill thus notified the other party to suspend the project. Taiwan Clean Energy Technology Co., Ltd. believed that it suffered damages as a result of the suspension and filed a suit in court requesting compensation of NT$120 million from YFY Packaging Inc. Taipei District Court rejected the appeal but Taiwan Clean Energy Technology Co., Ltd. was dissatisfied and filed an appeal for compensation for NT$40 million. Taiwan High Court rejected the appeal in a ruling on October 27, 2020. Taiwan Clean Energy Technology Co., Ltd. remained dissatisfied and filed another appeal. The case is now on trial at the Supreme Court.

(XIII). Other significant risks and response measures:

Other major risks:

In addition to implementing management guidelines for internal management in accordance with the law, the Company also devises rules to be followed by different

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departments. Business risks are diversified and managed by each subsidiary according to their respective functions, and the management of each functional unit is coordinated by the management headquarters.

Organizational structure of response measures and risk management:

The Company’s business risks are decentralized and managed by each business department according to the respective functions, and the management of each functional unit is coordinated by the management headquarters.

Department responsibilities are as follows:

Unit	Business (Responsibilities)	Corresponding risks
Pulp and Paper BG	Operations in paper stationery products, special paper, paperboard, pulp and chemical products	Risks related to operation and market change
Containerboard and packaging BG	Operations in industrial paper, cardboard boxes, color boxes, and food containers	Risks related to operation and market change
Consumer products BG	Operations in household paper and cleaning products	Risks related to operation and market change
Auditing Office	The Office performs ad hoc reviews to inspect the degree of guideline compliance, and the Board of Directors determines the overall business direction for the Company. The Office is also responsible for internal audit andprocess management.	Guidelines and process
Human Resources Department	Human resources management and organization development	Risks related to management and regulation change
Corporate Affairs	Corporate internal and external communication, image maintenance	Corporate image
CSR	Corporate social responsibility related internal and external communication, and continued implementation	Corporate image
Corporate resources	Administrative general affairs	Risks related to management and regulation change
Legal Department	Legal affairs, contracts, patents, and other intellectual property rights related affairs	Laws and policies, litigious and nonlitigious matters
Research & Development Center	New product and paper development and technology enhancement	R&D projects and investments
Center of Corporate Finance	Investment analysis, financial management, and fund utilization management	Interest rate, exchange rate, inflation, investment, acquisition,laws,share
Accounting Department	Accounting administration	Laws and policies
Procurement Department	Procurement, logistics, imports and exports, and property management	Plant expansion, purchases
IT Department	Information management planning, system development and maintenance	Information security

3. Information Security Risk

In an era of rigorous technological development and prevalent Internet use, everyone, including business entities and individuals, must confront the growing risk of information security and the challenges thereof. From our perspective, information management requires both software and hardware comprising equipment, technologies (hardware), and safety awareness (software),

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which are all key to ensuring information security. With a dedicated information security management platform and team, all companies within the Group are able to adopt optimal approaches to utilize resources, centralize management in an appropriate and timely manner, and upgrade existing information security network equipment and mechanisms, so that the information of YGY companies is kept secure in line with current trends. We will continuously work toward increasing employees’ awareness towards the risks of information security to reinforce our lines of defense for information security. Details are as follows:

Information Security Risk Management Framework

The Company manages information security risk by using a professional IT management and technical service platform, which ensures that professional skills are properly allocated across the Company and the Group, accurate technical support is provided, and control mechanisms are clearly defined. Meanwhile, we conduct periodic auditing and report applicable results to the Board of Directors. Details are provided below:

Professional IT management and technical service team: Since 2000, YFY has expanded its original information department and recruited specialists to establish Fidelis IT Solutions Co., Ltd.

(hereafter referred to as “Fidelis”), which is an independent, professional IT subsidiary fully owned by YFY. All employees of Fidelis, including the President, are all IT professionals responsible for managing IT-related affairs and providing professional services to the Company and the Group's companies. With respect to the organization of executives, decision-makers directly overseen by the Company are in charge of supervising and executing information security management policies for the Company and the Group’s companies.

Responsibilities of IT management platform and YFY companies: The duties of each company are distributed as follows in order to facilitate optimal allocation and utilization of IT resources among YFY companies and at the same time implement IT policies and management of executive responsibilities.

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		Responsible and Managing Unit	Responsible and Managing Unit	Responsible and Managing Unit
Types of		IT Unit of the Group -	IT Unit of Affiliated	IT Unit of Plants (in Taiwan,
Information	Key Management Focus	Fidelis	Subsidiaries	China, and Vietnam)
Management		Taipei Headquarters		Containerboard packaging
		(including YFY and YFY	Subsidiaries	, , Chunghwa Pulp
		Holding Management)

IT Infrastructure	Group’s core dedicated network	V	`�`Partial management
	Network equipment management	V	V	V
	Network use application	V	V	V
	Group central server room management	V
	Plant information server room management		V	V
	Computer repair handling	V	V	V
	Mail system usage management	V
	Information security and anti-virus system	V	V
	Software/Hardware asset management	V	V
	Major system host management	V	V
	Groupcopyright management	V
	Access control and surveillance system		V	V
	Telecommunication and voice system		V	V
Functional system	Groupe-signature system	V
	Administration system	V
	Corporate homepage	V
	File server	V
	Legal documents	V
	Enterprise resource management	V
	Production and manufacturing systems	`�`Partial management	V	`�`Partial management
	Production machinery automated system	`�`Partial management		V
	Budget analysis	V
	Business management and reporting	V
	Capital expenditures	V
	Business intelligence	V
	Accountingsystem	V
	Fund management	V

Information security policies and specific management plans

The Company’s information security policy is focused on the use of technology and information governance. By using a human-machine interface, software, and hardware configurations and systems of inspection and balance, we construct a network of information security management and subsequently implement various aspects of the policy through firewall setup, information server room management, user information management, and plant information security management. The Company conducts yearly discussions with IT technicians from each plant to talk about information security problems, trends, and reinforcement measures. Education and training programs are organized to

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increase employees’ awareness towards the environmental maintenance of information security and risks.

The professional IT management and service platform is responsible for the governance, planning, supervision, and policy implementation relating to the information security of the Company and YFY companies. The platform simultaneously evaluates and selects potential risks and proposes corresponding plans as needed. An external consultant is hired when necessary in hopes of keeping in pace with current trends and facilitating immediate response to various IT demands. Reporting of information security risk management is conducted periodically, and information security policies and plans of action are inspected every six months. In addition, information security protection mechanism review and counseling are occasionally conducted at production sites to develop a total information security protection capability and educate employees on the importance of information security. Auditing departments of the Company and its subsidiaries regularly conduct auditing of information security tasks to ensure the completeness of information security systems and the effective implementation of relevant policies. Relevant audit results are periodically reported to the Board of Directors as required by law.

In the current era of Internet of Things, no one, including business entities, is safe from information security risks hidden in every corner of a network. YFY not only endeavors to comply with government policies and in-house regulations regarding information security. The Company also fulfills responsibilities to complete routine tasks related to information security management so as to minimize the IT-related operational risks of all YFY companies.

The U.S.-China trade war has created trade barriers and caused companies to change and readjust their supply chains. The Company must develop more flexible response capabilities with regard to raw materials or products: Our containerboard business in China must quickly adjust to the types of clients and industries it serves and focus on industries with domestic demand which have suffered minimum impact. We must continue to expand containerboard businesses in Vietnam and develop ideas and strategies for integration of production and marketing in the global supply chain to identify new opportunities. Subsidiaries must continue to develop new market products such as special papers and high-quality paper and cleaning products to stimulate market segmentation and actively develop other new markets. Moreover, YFY will continue to pay attention to industries that merit long-term investments, attract foreign investments, and disperse market risks in order to increase return on equity.

VII. Other material disclosures:

N/A.

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Chapter 8. Special disclosures

I. Information of Affiliates
II. Progress of Private Placement of Securities During the Last Year and Up to the Print Date of the Annual Report
III. Holding or Disposal of the Company’s Shares by Subsidiaries in the Past year and Up to the Print Date of the Annual Report
IV. Other supplemental information
V. Any Incidents with Material Impact on Shareholder Equity or Security Price as Described Under Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act in the Last Year and Up to the Print Date for the Annual Report
VI. Appendix 1: Notes to consolidated financial statements
VII. Appendix 2: Notes to individual financial statements

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I. Information of Affiliates

Organization chart of affiliates December 31, 2020 TABLE 1 YFY INC. AND SUBSIDIARIES DIAGRAM OF INVESTMENT STRUCTURE DECEMBER 31, 2020

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YFY Inc .
64 .5% 18.9% 50.9% 49% 57.8% 48 .9% 49.7%
Development Corp.YFY 2.1% Yuen Fo ong Yu Products C o ., C onsum er Ltd. Union Paper Corp. 4.1% Investm ent C o., YF Y Paradig m Ltd . 0.07% Yuen Yan Paper C o ntainer C o., Ltd . Packaging YFY Inc. International LimitedYFY Enertech Co., Effion Ltd. 49 % C hung H w a C o rpo rationPulp Solutio ns C o., Fidelis IT Ltd YF Y C orporate Services C o., Adviso ry & Ltd . Enterprise C o., San Ying Ltd . A pplied Materials Specialty and Shin Foong Co ., Ltd Printing C o., C hina C olor Ltd . YF Y Glob al Investm ent Lim ited YFY Japan C o ., Ltd. Innovation C o., C arbo hy drate Sustainable Ltd.
0.02% 66 .4%
0.1% 6.4% Investm ent Hwa Fong Co., Ltd. Development YFY 1% 1% Investment Hwa Fong Actview C arb o n Techno log y C o., K unshan Ltd . TradingShin Foo ng Bhd.Sdn . Co. LimitedYFY RFID Technologies YFY RFID Co., Ltd.
0.7% 0.03% Corp. Co., Ltd. CHP
International 86.5%
C hung H w a C o rpo rationPulp Livebricks Inc. M anagem ent YFY Biotech C o., Ltd . Pek Crown Paper Co., Ltd. 66.8% YFY Capital Holdings Corp. Renew ab les Inc.Geno vella 60% Corporation(BV I) 20.2% 81.1% Arizon RF ID Techno log y C o., Ltd . Techno lo gies C o., Ltd .Yeon
Bio tech C o., Ltd .Ever Gro w ing Agriculture 85 % Yu en Foong Yu Investm ent C onsu m er Produ cts L im ited Sho p C o., Ltd .Yuen F oo ng YFY Cayman Co., Ltd. (BVI) Corp.Packaging YFY YF Y (Shang hai) Services C o., F inancial Ltd . Jinglun Paper Xinchuan Green Technolog y C o., Shenzhen Co ., Ltd.Zhao qing 40%Ding fung Pulp & Paper C o ., Guang do ng Ltd. 66.3% 13.5% Fo restry C o., Zhao qing Dingfung Ltd . C o m m unicatio n (H .K .) Lim itedSy ntax YFY Jupiter (BV I) Inc. (H ong K ong) Arizo n RF ID Technolo g ies C o., Ltd . Technolo gies (Yang zhou) C o., Ltd.Yeon Arizo n JAPAN C o., Ltd .
Ltd .
94 % 60% 57% 99% 1%
Investment Co., Ltd.YFY Trade C o ., Ltd . Shang hai YFY Internatio nal Yuen Fo ong Shop (H K ) Lim ited (Hong K ong) Hwa Fong Co., LtdPaper YFY Paper (Jiangyin ) Co ., Ltd.M fg. M auritius Corp.YFY Natural Resou rce (Yangzhou ) C o., Yu en Foong Yu B lue Econom y Ltd. YFY Biopulp Technology Limited G roup H o ldingsJupiter Prestig e Lim ited YFY Jupiter Lim ited YFY Jupiter US, Inc. YFY Jupiter Sdn. Bhd .M alaysia 1% M obius105 Ltd. 99% Indonesia, PT YFY Jupiter PM A
1% 99%
82.5%
YFY Fam ily (K unshan) Co., Ltd.Care (YangzhouYuen Foong Yu C onsu m er Prod ucts L td. ) Co., W illpower Industries 55.2%Ltd. Com p any Lim itedInvestm ent Packaging W insong 70% Capital Corp .Packaging YFY International Labuan Co ., YFY Ltd. Jupiter Prestig e Gro up N o rth Am erica Inc .60% Group Australia Jupiter Prestig e P ty Ltd Jupiter Prestig e Group Europe Lim ited Opal BPM Limited Brands, LLCSpectiv M exico,S.de YFY Jupiter R.L. YFY Jupiter (Shenzhen ) Ltd. Jupiter V ietnamC o m pany Lim ited
Paper Enterprise Yuen Fo ong Yu (V ietnam) C o., Ltd . Paper Enterprise Duong C o., Ltd .Yuen F oo ng Yu (V ietnam) Binh Packaging (Ha Nam ) Co.,Ltd.YFY Packaging Thai Binh Co.,Ltd.YFY Contrast LLC Jupiter Prestig e Group Asia Lim ited Opal BPMLimitedPrivateIndia ConsultingOpal BPMLimited Packaging Ltd .K unshan YF Y Jupiter Green Su pp ly C hain Managem ent YFY Jup iter (ShenzhenServices Lim ited )
90% 93.8 % 64.6%
Yuen Fo ong Yu Yuen Fo ong Yu YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Pack aging
Paper Enterprise Paper Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise M fg. (Yang zho u)
(Dong N ai) C o., Ltd . C hanh C o ., Ltd.(V ietnam) Binh (Fuzhou ) Co., Ltd. (Kunshan) Co., Ltd. (Suzhou) Co., Ltd. (Tianjin ) Co ., Ltd. (Dongguan) Co ., Ltd. (Shanghai ) Co ., Ltd. (Qingdao ) Co ., Ltd. (Nanjing ) Co., Ltd. (Guangzhou ) Co ., Ltd. (Xiamen) Co ., Ltd. (Zhongshan ) Co., Ltd. (Jiaxing) Co., Ltd. (Yangzhou ) Co., Ltd. Investm ent C o., Ltd .
10% 50%
35.4%
K unshan YF Y
Note � 100% of Ownership , Unless Otherwise Stated . Advertising and Printing C o., 50 %
Ltd .
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(II)

I)	I)	I)	I)
(II) Basic information of the various affiliated enterprises Up to Thursday, December 31, 2020				Unit: thousand NT$ (NT$ unless otherwise specified)
	Date of		Paid-in capital
Company name		Address		Main businesses/products
	establishment

YFY PackagingInc.	2005/04/26	12F,No. 51,ChongqingS. Road Sec. 2,Taipei	4,101,500	Production and sales ofpaper andpaperproducts.
Pek Crown Paper Co., Ltd.	1983/10/29	No. 46, Ju Yi Rd., Da Jia District, Taichung	300,000	Production, trading and import/export of papers, cardboards, containers, and related materials.
Yuen Yan Paper Co.,Ltd.	1995/10/16	No. 8-1,Dapuding,Dongguan Li,Jhunan Township,Miaoli	121,275	Production,trade and import/export of corrugated boards and corrugated boxes.
Union Paper Corp.	1973/05/08	No. 65,Reinung,LinzhungVillage,Linnei Township,Yulin	1,035,300	Production, processing,and sellingofpaperproducts.
China Color PrintingCo.,Ltd.	1961/09/27	No. 229,Baochiao Rd.,Xindian District,New Taipei	662,486	Printing, photography, plate making,bindingand related design andplanning.
YFY Development Corp.	1986/12/30	14F,No. 51,ChongqingS. Road Sec. 2,Taipei	1,128,207	Real estate investment development.
YFY Consumer Products Co.,Ltd.	1986/10/29	16F,No. 51,ChongqingS. Road Sec. 2,Taipei	2,449,060	Production and sales ofpaper, paperproducts and household cleaning products.
Yuen FoongShopCo.,Ltd.	2014/9/19	16F,No. 51,ChongqingS. Road Sec. 2,Taipei	50,000	Wholesale retail industry.
Shin Foong Specialty and Applied Materials Co.,Ltd.	1979/07/17	No. 55, Zhongshan Road Section 3, Taiyuan Village, Fangliao Township,PingtungCounty	1,061,241	Production and sales of latex and adhesives.
YFY Paradigm Investment Co.,Ltd.	1987/10/23	14F,No. 51,ChongqingS. Road Sec. 2,Taipei	1,467,262	General investment.
San Ying Enterprise Co., Ltd.	1962/04/14	11F, No. 51, Chongqing S. Road Sec. 2, Taipei	25,000	Engineering of various water treatment and design and construction of measurement facilities used in environmentalpollutionprevention engineering.
Fidelis IT Solutions Co., Ltd.	2000/07/06	15F, No. 51, Chongqing S. Road Sec. 2, Taipei	28,570	Wholesale and retailing of information software, information processing, electronic information service and relevant equipment.
Ever Growing Agriculture Biotechnology Co.,Ltd.	1999/11/27	16F, No. 51, Chongqing S. Road Sec. 2, Taipei	214,557	Manufacturing and wholesale of agricultural services, fertilizers and cleaning products.
LiVEBRiCKS Inc.	2012/02/09	16F,No. 51,ChongqingS. Road Sec. 2,Taipei	77,000	Informationprocessingservice.
YEON Technologies Co.,Ltd.	2006/09/22	17F,No. 51,ChongqingS. Road Sec. 2,Taipei	25,000	Design and sales of RFIDproducts and related system integration services.
YFY Biotech Management Company	2003/11/27	14F,No. 51,ChongqingS. Road Sec. 2,Taipei	264,300	Investment consulting.
Company name	Date of establishment	Address	Paid-in capital	Main businesses/products
YFY PackagingInc.	2005/04/26	12F,No. 51,ChongqingS. Road Sec. 2,Taipei	4,101,500	Production and sales ofpaper andpaperproducts.

��

Unit: thousand NT$ (NT$ unless otherwise specified)

	Date of
Company name		Address	Paid-in capital	Main businesses/products
	establishment

Effion Enertech Co.,Ltd.	2008/12/08	14F,No. 51,ChongqingS. Road Sec. 2,Taipei	700,000	Management of cogeneration,heat supply,and energytechnologyservices.
YFY Corporate Advisory & Services Co., Ltd.	2012/12/22	15F, No. 51, Chongqing S. Road Sec. 2, Taipei	30,000	Management consulting services.
ChungHwa PulpCorp.	1968/07/05	No. 100,Guanghua Street,Ji-an Township,Hualien	11,028,353	Pulpandpaperproduction,sale and afforestation operations.
Genovella Renewables Inc.	2010/08/30	No. 100, Guanghua Street, Ji-an Township, Hualien	5,000	Fertilizer manufacturing, retail, food and beverage retail, specialty crop farming, edible mushroom farming, refractory material manufacturing, cement and concrete manufacturing, ready-mixed concrete manufacturing, building materials wholesale, refractory material wholesale, building materials retail, refractory material retail,manpower dispatch.
Hwa FongInvestment Co.,Ltd.	1994/02/04	12F,No. 51,ChongqingS. Road Sec. 2,Taipei	36,000	General investment.
YFY Japan Co., Ltd.	1990/11/26	3-2-11 Nishishinjuku, Shinjuku, Tokyo, Japan	JPY 10,000	Import and export of paper and related chemical materials; trading of related equipment.
YFY Mauritius Corp.	2003/01/16	2nd Floor, Cerne House, La Chaussee, Port Louis, Mauritius	USD 322,502	General investment.
YFY Global Investment Ltd.	1989/11/30	4 Asias Street, 3050 Limassol, Cyprus	USD 363,690	General investment.
YFY International Ltd.	1989/11/30	4 Asias Street, 3050 Limassol, Cyprus	USD 79,000	General investment.
YFY Packaging(BVI)Corp.	2007/10/18	Portcullis TrustNet Chambers, P.O. Box 3444 Road Town, Tortola, British Virgin Islands	USD 58,134	General investment.
YFY Biopulp Technology Limited	2012/10/30	OMC Chambers, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands	USD 150	General investment.
Yuen Foong Yu Consumer Products Investment Limited	2004/11/08	Vistra Corporate Services Centre,Ground Floor NPF Building, Beach Road,Apia,Samoa	USD 150,013	General investment.
YFY RFID Technologies Co.,Ltd.	2004/08/05	Palm Grove House P.O. Box 438, Road Town, Tortola, British Virgin Islands	USD 5,330	General investment.
YFY RFID Co. Limited	2010/06/25	13/F Amber Commercial Building, 70 Morrison Hill Road, Wanchai, HongKong	USD 25,600	General investment.

��

Unit: thousand NT$ (NT$ unless otherwise specified)

	Date of
Company name		Address	Paid-in capital	Main businesses/products
	establishment

YFY Cayman Co., Ltd.	2007/03/27	The Grand Pavilion Commercial Centre Oleander Way, 802 West Bay Road,Grand Cayman,KY1-1208 Cayman Islands	USD 35,616	General investment.
YFY International Labuan Co., Ltd.	2006/08/18	Level 15(A2), Main Office Tower, Financial Park, 87000 Labuan FT, Malaysia	USD 900	General investment.
YFY Packaging Capital Corp.	2015/01/05	Portcullis TrustNet Chambers 4thFloor Ellen Skelton Building 3076 Sir Francis Drake Highway Road Town, Tortola British Virgin Islands VG1110	USD 0.2	General investment.
CHP International(BVI)Corporation	1990/03/15	Citco Brulding, Wickhams Can, P.O. Box 662, Road Town, Tortola, British Virgin Island	USD 61,040	General investment.
YFY Packaging (Yangzhou) Investment Co., Ltd.	2012/12/05	No. 168, Chuen Jiang Rd., Economic Development Park, Yuangzhou, Jiangsu	USD 86,707	General investment, paper products and trading of paper products.
Yuen Foong Yu Papers (Guangzhou) Co., Ltd.	1990/10/30	No. 5, Siayuan Rd., Economic Technology Development District,	USD 9,500	Production, printing and sales of all types of paperboard and cardboard boxes.
		Huangpu,Guangzhou,Guangdong
Yuen Foong Yu Papers (Xiamen) Co., Ltd.	1990/03/26	No.6-12 Changhe Rd., Xinyuan Building, Upper Warehouse District,	USD 6,500	Production, printing and sales of all types of paperboard and cardboard boxes.
		Huli Zhai,Xiamen,Fujian
Yuen Foong Yu Paper Enterprise (Zhongshan)	2001/05/16	No. 189, Yixian Rd., Torch Development District, Zhongshan,	USD	Production, printing and sales of all types of paperboard and cardboard boxes.
Co.,Ltd.		Guangdong	6,000
Yuen Foong Yu Paper Enterprise (Dongguan)	2003/03/11	Fong Yien Industrial Park, Yentien Section, Longping Rd., Fenggang	USD	Production, printing and sales of all types of paperboard and cardboard boxes.
Co.,Ltd.		Town,DongGuan,GuangdongProvince	6,000
Yuen Foong Yu Paper Enterprise (Nanjing)	2001/08/24	No. 1-2, Hengtai Rd., Nanjing Economic and Technological	USD	Production, printing and sales of all types of paperboard and cardboard boxes.
Co.,Ltd.		Development Zone,Nanjing,Jiangsu Province	9,959
Yuen Foong Yu Paper Enterprise (Qingdao)	2002/11/15	Liu Ting Industrial Park, Liu Ting, Cheng Yang District, Quingdao,	USD	Production, printing and sales of all types of paperboard and cardboard boxes.
Co.,Ltd.		Shandong	8,000
Yuen Foong Yu Paper Enterprise (Jiaxing) Co.,Ltd.	2003/11/24	No. 795, Zhong Shan W. Rd. and Xiuxin Rd., Xiu Zhou Industrial District,Jiaxing,Zhejiang	USD 5,000	Production, printing and sales of all types of paperboard and cardboard boxes.
Yuen Foong Yu Paper Enterprise (Kunshan) Co.,Ltd.	1995/08/10	No. 999, YFY Rd., Yu Shan Town, Kunshan, Jiangsu	USD 11,000	Production, printing and sales of all types of paperboard and cardboard boxes.
Yuen Foong Yu Paper Enterprise (Suzhou) Co., Ltd.	2002/01/31	No. 168, Yin Zhong S. Rd. and Jiang Xing Rd., Hedong Industrial Zone, Wuzhong Economic Development Area, Suzhou Industrial District,Jiangsu	USD 7,000	Production, printing and sales of all types of paperboard and cardboard boxes.
Yuen Foong Yu Paper Enterprise (Shanghai) Co.,Ltd.	2003/01/24	No. 1236, Guinan Road, Shihudang Town, Songjiang District, Shanghai	USD 8,000	Production, printing and sales of all types of paperboard and cardboard boxes.
Yuen Foong Yu Paper Enterprise (Tianjin) Co.,Ltd.	2001/11/08	No. 19 Shuangchenzhong Rd., Beichen Development District, Tianjin	USD 8,000	Production, printing and sales of all types of paperboard and cardboard boxes.
Yuen Foong Yu Paper Enterprise (Fuzhou) Co.,Ltd.	2004/02/11	No. 17, Changxing East Road, Mawei District, Fujian County, Fuzhou	USD 5,000	Production, printing and sales of all types of paperboard and cardboard boxes.
Yuen Foong Yu Paper MFG (Yangzhou) Co., Ltd.	2004/11/24	No. 168, Chuen Jiang Rd., Economic Development Park, Yuangzhou, Jiangsu	USD 244,695	Production sales of all types of paper and paperboard.
Yuen Foong Yu Family Care (Kunshan) Co., Ltd.	2004/12/28	No. 999, YFY Rd., Yu Shan Town, Kunshan, Jiangsu	USD 30,000	Production and sales of toilet paper, paper towels and napkins.
Yuen Foong Yu Consumer Products (Yangzhou)Co.,Ltd.	2011/11/18	No. 168, Chuen Jiang Rd., Economic Development Park, Yuangzhou, Jiangsu	USD 30,000	Production and sales of toilet paper, paper towels and napkins.
YFY Investment Co., Ltd.	2008/11/26	Rm. 301, 3F, Honghui Xinhui Garden, No. 6, Alley 4718, Gonghexin Rd.,Jing’an District,Shanghai	USD 115,000	General investment and trading of paper products.
Shanghai Yuen Foong Yu International Co., Ltd.	2015/05/13	Room 1307, 13F, No. 55 Xili Rd., Pilot Free Trade Zone, Shanghai	RMB 1,000	International trade and re-exportation.
YFY Paper Mfg.(Jiangyin)Co.,Ltd.	1993/11/08	No. 258 South River Rd.,ChengJiangTown,JiangYin City,Jiangsu	USD 14,900	Production, processingand sales of all types ofpaper andpaperboard.
Shenzhen Jinglun Paper Co., Ltd.	2008/06/24	Rm. 1705, Tongxin Building, No. 5020, Binhe Road, Futian Community,Futian District,Shenzhen,Guangdong	RMB 3,200	Sales of paper products and cargo and technology imports/exports.

��

Unit: thousand NT$ (NT$ unless otherwise specified)

	Date of
Company name		Address	Paid-in capital	Main businesses/products
	establishment

YFY Advertising & Printing (Kunshan) Co., Ltd.	2004/09/07	No. 999, YFY N. Rd., Yu Shan Town, Kunshan, Jiangsu	USD 3,000	Design, production and distribution of various domestic advertising materials, plate makingandprinting.
Kunshan Actview Carbon Technology Co., Ltd.	2002/01/15	No. 11, Cai Mao Rd., Zhou Shi Town, Kunshan, Jiangsu	USD 1,260	R&D, manufacturing and sales of active carbon and related products.
Yuen Foong Yu Blue Economy Natural Resource(Yangzhou)Co.,Ltd.	2011/05/18	No. 168, Chuen Jiang Rd., Bali Town, Economic Development Park, Yuangzhou,Jiangsu	USD 8,000	Development of agricultural recycling and production technologies and related consultingand services.
Arizon RFID Technology Co., Ltd.	2004/06/11	No. 88 Wuzhou E. Rd., Economic Development Park, Yuangzhou, Jiangsu	RMB 194,290	Production of various high-frequency and ultra-high frequency RFID INLAY and label cards.
Yangzhou YEON Technologies Co., Ltd.	2007/09/18	No. 88 Wuzhou E. Rd., Economic Development Park, Yuangzhou, Jiangsu	RMB 8,000	Design and distribution of RFID and related assemblies, as well as smart identification systems and reception antennas.
YFY Capital Holdings Corp.	2013/03/28	Palm Gove House, P.O. Box 438, Road Town,Tortola, British Virgin Islands	USD 8,060	General investment.
YFY (Shanghai) Commercial Factoring Co., Ltd.	2013/07/01	Room 20, Building 49, No. 6999, Chuansha Rd., Pudong New Area, Shanghai	RMB 50,000	Export factoring, domestic factoring, and business factoring-related consulting services;development of credit risk managementplatforms.
Guangdong Dingfung Pulp & Paper Co., Ltd.	2000/08/18	Shouyue Village, Nanjie Township, Guangning County, Zhaoqing, Guangdong	USD 85,630	Production and marketing of pulp, writing/printing paper, and dowling paper.
Zhaoqing Dingfung Forestry Co., Ltd.	2006/04/01	Shouyue Village, Nanjie Township, Guangning County, Zhaoqing, Guangdong	USD 21,880	Cultivating and marketing seedlings; afforestation, logging and other forestry businesses includingsales, processing,and transportation.
Hwa Fong Paper (Hong Kong) Co., Ltd.	1993/06/14	2F, No. 22-28, Shatin Industrial Building, Wo Shui Rd., Fo Tan, Shatin, NT,HK	HKD 116,000	Trading, printing and sales of all types of paper products; paper-related businesses.
Syntax Communication (H.K.) Ltd.	1985/05/31	2F, No. 22-28, Shatin Industrial Building, Wo Shui Rd., Fo Tan, Shatin, NT,HK	HKD 34,088	Trading, printing and sales of all types of paper products; paper-related businesses.
YFY Jupiter(BVI)Inc.	2005/11/30	Portcullis Chambers, 4thFloor, Ellen Skelton Building, 3076 Sir Francis Drake Highway,Road Town,Tortola,British Virgin Islands VG1110	USD 1,308	General investment.
YFY Jupiter Ltd.	1997/06/02	1501-2, 15/F. Yen Sheng Centre, 64 Hoi Yuen Road Kwun Tong, Kowloon,HongKong	HKD 0.003	Packaging design and paper trading.
YFY Jupiter US, Inc.	2014/09/27	180 West Adams, 2nd Floor, Chicago, IL 60603, USA	USD 1	Packaging design and paper trading.
Mobius105 Ltd.	2006/07/25	1501-2, 15/F. Yen Sheng Centre, 64 Hoi Yuen Road Kwun Tong, Kowloon,HongKong	HKD 10	General investment.
YFY Jupiter Trading (Shenzhen) Ltd.	2007/11/27	Unit 410, Xinggang Tongchuanghui Tianshu Building, No. 6099, Bao’an Boulevard, Qiaotou Community, Fuhai Neighborhood, Bao'an District, Shenzhen,Guangdong	USD 350	Packaging design and paper trading.
Kunshan YFY Jupiter Green Packing Ltd.	2012/01/17	Plant 4, No. 999, YFY Rd., Yu Shan Town, Kunshan, Jiangsu	RMB 2,000	Packaging design and paper trading.
Jupiter Supply Chain Management Services (Shenzhen)Co.	2015/05/21	Room 201, Building A, No. 1, Qianhai Shenzhen-Hong Kong Modern Service IndustryCooperation Zone,Shenzhen,Guangdong	RMB 0	Supply chain management-related services.
Jupiter Prestige Group Holdings Limited	2012/05/01	TAH House, Aviation Way, Southend-on-Sea, Essex SS2 6UN	GBP 151	General investment.
Jupiter Prestige Group North America Inc.	2005/07/13	Coles Store Support Centre, L2 M7 800 Toorak Road, Hawthorn East, VIC 3123	USD 1	Graphic design.
Opal BPM Limited	2013/11/08	48-50 St John Street, London, EC1M 4DG	USD 1.676	Process system design and support.
Opal BPM India Private Limited	2015/10/21	436 Level-4, 6/24, East Patel Nagar, New Delhi 110008, Delhi, India	INR 100	System process coding.
Jupiter Prestige Group Australia PTY Ltd.	2012/01/19	PKF, 440 Collins Street, Melbourne VIC 3000, Australia	USD 0.09	Graphic design.
Jupiter Prestige Group Europe Ltd.	2003/02/03	601 London Load, Westcliff-on-sea, Essex, SS0 9PE	USD 51	Graphic design.

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Unit: thousand NT$ (NT$ unless otherwise specified)

	Date of
Company name		Address	Paid-in capital	Main businesses/products
	establishment

Jupiter Prestige Group Asia Ltd.	2010/06/17	17/F Yen Sheng Centre, 64 Hoi Yuen Road Kwun Tong, Kowloon, Hong Kong	HKD 0.1	Graphic design.
YFY Jupiter Malaysia Sdn. Bhd.	2016/01/12	Level 2, No.11, Jalan PJU 1A/41B, NZX Commercial Centre, Ara Jaya, 47301 PetalingJaya,Selangor	MYR 1,000	Package design.
YFY Jupiter Mexico, S de R.L.	2016/03/14	Ciudad Juarez, Chihuahua, Mexico	MXN 3	Package design.
Spectiv Brands, LLC	2017/03/17	121 South 8th Street, Suite 800, Minneapolis, MN 55402	USD 0	Product distribution.
YFY Paper (HK) Co. Ltd.	2017/03/24	Rm 1702, Sino Centre, 582-592 Nathan Rd., MK, Kln. HK	HKD 0	International trade and selling of household products.
Opal BPM Consulting Ltd.	2017/04/28	601 London Load, Westcliff-on-sea, Essex, SS0 9PE	GBP 1	System-related consulting services.
Arizon RFID Technology (Hong Kong) Co., Ltd.	2017/10/02	Rm 2702-03, C. C. Wu Building, 302-8 Hennessy Road, Wan Chai, HK	USD 12,000	Hardware products for radio-frequency identification (RFID) systems, software system development,and tagdesign.
Contrast LLC	2018/01/12	3411 Silverside Road, Tatnall Building Ste 104, Wilmington, New Castle,DE 19810,USA	USD 172.5	Brand design.
Winsong Packaging Investment Company Ltd.	2018/01/29	16F, Railway Plaza, 39 Chatham Road South, Tsim Sha Tsui, Kowloon, HK	USD 13,600	Company investment and selling of cardboard boxes.
YFY Packaging(Ha Nam)Co., Ltd.	2018/04/02	Part of Lot J, Dong Van II Industrial Park, Bach Thuong Commune, Duy Tien District,Ha Nam Province,Vietnam	USD 12,400	Production, printing and sales of all types of paperboard and cardboard boxes.
Willpower Industries Limited	2004/03/30	P.O. BOX 957 Offshore Incorporations Centre, Road Town, Tortola, British Virgin Islands	USD 15,500	Company investment and selling of cardboard boxes.
Yuen Foong Yu Paper Enterprise(Vietnam)Binh DuongCo.,Ltd.	2015/11/20	No 20 VSIP II-A, Street 31 VSIP II-A Industrial Park, Vinh Tan Village, Tan Uyen district,Binh DuongProvince	USD 10,500	Production, printing and sales of all types of paperboard and cardboard boxes.
Yuen Foong Yu Paper Enterprise(Vietnam)Co.,Ltd.	2005/11/29	Lot E3-E6 Duc Hoa 1 Industrial Park, hamlet 5, Duc Hoa Dong Village, Duc Hoa district,LongAn Province	USD 5,100	Production, printing and sales of all types of paperboard and cardboard boxes.
Yuen Foong Yu Paper Enterprise(Vietnam)Binh Chanh Co.,Ltd.	2015/07/10	Lot K1-K3 Street 10 Hai Son Industrial Park, Binh Tien 2 hamlet, Duc Hoa Ha Village,Duc Hoa district,LongAn Province	USD 1,200	Production, printing and sales of all types of cardboard boxes.
Yuen Foong Yu Paper Enterprise(Dong Nai)Co.,Ltd.	2003/11/26	Group 1, Hamlet 8, Binh Son Village, Long Thanh District, Dong Nai Province,Vietnam.	USD 10,000	Production, printing and sales of all types of paperboard and cardboard boxes.
YFY Jupiter Indonesia, PT PMA	2018/07/30	Satrio Tower Jalan Prof. Dr. Satrio Lot C4 Unit 1 Lantai 6	IDR 2,500,000	Package design.
Jupiter Vietnam Company Limited	2018/10/02	Floor 1, H3 Building, No. 384 Hoang Dieu Street, Ward 6, District 4, Ho Chi Minh City,Vietnam	VND 1,129,700	Package design.
Sustainable Carbonhydrate Innovation Co., Ltd.	2019/01/17	14F, No. 51, Chongqing S. Road Sec. 2, Taipei	30,000	Research and development.
YFY Packaging Thai Binh Co., Ltd.	2019/03/01	Vu Quy Industrial Park, Vu Qui Village, Kien Xuong district, Thai Binh Province	USD 1,200	Production, printing and sales of all types of cardboard boxes.
Arizon Japan Co., Ltd.	2019/08/08	3-2-11 Nishishinjuku, Shinjuku, Tokyo, Japan	JPY 50,000	Sales and import/export of hardware products and software systems for radio-frequency identification (RFID) systems; consulting and training services for radio-frequencyidentification(RFID)systems.
Zhaoqing Xinchuan Green Technology Co., Ltd.	2019/09/19	Shouyue Village, Nanjie Township, Guangning County, Zhaoqing, Guangdong	RMB 2,000	Development of environmental protection equipment and technologies, construction of wastewater, waste gas, noise, and solid waste treatment projects, solid waste treatment projects, pure water treatment projects, environmental protection equipment installation, calibration, and operations, environmental protection technology consulting, sales of environmental protection equipment, chemical materials,and import and export ofgoods or technologies.
Shin Foong Trading Sdn. Bhd.	2020/02/18	C23A, Ttdi Plaza Jalan Wan Kadir 3 Taman Tun Dr Ismail 60000 Kuala Lumpur W.P. Kuala Lumpur Malaysia	MYR 1,500	Trading of synthetic rubber emulsion and industrial chemical products.

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(III) Basic information of Directors, Supervisors, and Presidents of affiliates

December 31, 2020 Unit: No. of shares/shares, investment amount/NT$

				Shares held	Shares held
Company name	Title		Name or representative	Number of	Percent
				shares	shares(%)
YFY Packaging Inc.	Chairman Director Director Director Director Supervisor President	Willie Tsai (Representative of YFY Inc..) Felix Ho (Representative of YFY Inc..) Tian Wang Wu (Representative of YFY Inc..) K. T. Yin (Representative of YFY Inc..) Zhe-Hong Ou (Representative of YFY Inc..) C. F. Wu (Representative of YFY Inc..) Tian Wang Wu		410,150,000	100.0
Pek Crown Paper Co., Ltd.	Chairman Director Director Supervisor President	Yan-Chung Chang (Representative of YFY Packaging Inc.) Zhe-Hong Ou (Representative of YFY Packaging Inc.) Yuan-Huang Zhang (Representative of YFY Packaging Inc.) Kai-Chun Kang (Representative of YFY Paradigm Investment Co., Ltd.) Yuan-Huang Zhang		20,027,557 10,000	66.8 0.03
Yuen Yan Paper Co., Ltd.	Chairman Director Director Supervisor Supervisor President	Yan-Chung Chang (Representative of YFY Inc..) Zhe-Hong Ou (Representative of YFY Inc..) S.R. Liao (Representative of Hwa Yuan Enterprises Co., Ltd.) Yo-Hui Liu (Representative of YFY Paradigm Investment Co., Ltd.) Y. M. Kuo (Representative of Hwa Yuan Enterprises Co., Ltd.) Zhe-Hong Ou		6,178,500 1,980,000 9,000 3,960,000	50.9 16.3 0.07 32.7
Union Paper Corp.	Chairman Director Director Director Director Supervisor President	Wei-Yen Liu (Representative of YFY Inc..) Jung-Ming Lin (Representative of YFY Inc..) Rui-He Chen (Representative of YFY Inc..) Hung-Te Chen (Representative of YFY Inc..) Lee-Zhu Chang C. F. Wu (Representative of YFY Paradigm Investment Co., Ltd.) Wei-Yen Liu		19,584,000 1,081,200 4,283,232	18.9 1.0 4.1
China Color Printing Co., Ltd.	Chairman Vice Chairman Director Director Director Director Director Supervisor Supervisor Supervisor President	Chung-Yi Chang (Representative of YFY Inc..) Hung-Yi Ho (Representative of Shin Kang Jie BVI Corp.) Pi-Yao Lin (Representative of Shin Kang Jie BVI Corp.) Jian-Nan Liao (Representative of Shin Kang Jie BVI Corp.) S. C. Ho (Representative of YFY Inc..) Vincent Chan (Representative of YFY Inc..) Rui-He Chen (Representative of YFY Inc..) Zhi-Qing Min (Representative of Gao Cheng Investment Co.) C. F. Wu (Representative of Gao Cheng Investment Co.) Yu-Tsong Ho (Representative of Motai Investments Ltd.) Chung-Yi Chang		32,896,330 27 1,000 2,000,000	49.7 0.0 0.0 3.0

YFY Development Corp.	Chairman Director Director Supervisor President	Willie Tsai (Representative of YFY Inc..) Jung-Chun Lin (Representative of YFY Inc..) Shang-Ming Chen (Representative of YFY Inc..) C. F. Wu (Representative of YFY Inc..) Willie Tsai		112,820,686	100.0
YFY Consumer Products Co., Ltd.	Chairman Director Director Director Independent Director Independent Director Independent Director President	Felix Ho (Representative of YFY Inc..) Willie Tsai (Representative of YFY Inc..) Zong-Chun Li (Representative of YFY Inc..) Zhi Hong Xu Mei-Li Su Chih-Chien Lin Wan-Chuan Hsieh Zhi Hong Xu		158,004,565 400,000	64.52 0.16

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December 31, 2020 Unit: No. of shares/shares, investment amount/NT$

				Shares held	Shares held
Company name	Title	Name or	representative		Percent shares
				Number of shares
					(%)

Yuen Foong Shop Co., Ltd.	Chairman Director Director Supervisor President	Felix Ho (Representative of YFY Consumer Products Co.,		5,000,000	100.0
		Ltd.)
		Zhi Hong Xu (Representative of YFY Consumer Products
		Co., Ltd.)
		Shi-Wei Liu (Representative of YFY Consumer Products Co.,
		Ltd.)
		Pei-Wen Chen (Representative of YFY Consumer Products
		Co., Ltd.) Shi-Wei Liu
Shin Foong Specialty and Applied Materials Co., Ltd.	Chairman Director Director Director	Melody Chiu (Representative of YFY Inc..) Kirk Hwang (Representative of YFY Inc..) Zhi-Min Xu (Representative of YFY Inc..) Yu-Hui Ho (Representative of Ho Shi Investment Co. Ltd.) Po-Young Chiu Xi-Cheng Yan Chang-Mou Yang Zhi-Min Xu		51,871,248 1,805,466	48.9 1.7
	Independent
	Director
	Independent
	Director
	Independent
	Director President
	Chairman Director Director Supervisor President	Willie Tsai (Representative of YFY Inc..) K. T. Yin (Representative of YFY Inc..) Zhi-Qing Min (Representative of YFY Inc..) C. F. Wu (Representative of YFY Inc..) Zhi-Qing Min		146,726,235	100.0
YFY Paradigm Investment Co., Ltd.


San Ying Enterprise Co., Ltd.	Chairman Director Director Supervisor President	C. C. Huang (Representative of YFY Inc..) S. C. Ho (Representative of YFY Inc..) K. T. Yin (Representative of YFY Inc..) C. F. Wu (Representative of YFY Inc..) C. C. Huang		2,500,000	100.0
Fidelis IT Solutions Co., Ltd.	Chairman Director Director Supervisor President	Hsianmin Chen (Representative of YFY Inc..) Ray Chien (Representative of YFY Inc..) S. C. Ho (Representative of YFY Inc..) C. F. Wu (Representative of YFY Inc..) Ray Chien		2,857,000	100.0
Ever Growing Agriculture Biotechnology Co., Ltd.	Chairman Director Director Supervisor President			18,245,944 3,209,775	85.0 15.0
		Felix Ho (Representative of YFY Consumer Products Co.,
		Ltd.)
		Xian-Ming Guo (Representative of YFY Consumer Products
		Co., Ltd.)
		Zhi-Hong Xu (Representative of YFY Consumer Products
		Co., Ltd.) Pao-Yu Hsieh (Representative of Cheng Yu Co., Ltd.) Xian-Ming Guo

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December 31, 2020 Unit: No. of shares/shares, investment amount/NT$

				Shares held	Shares held
Company name	Title	Name o	r representative	Number of	Percent shares
				shares	(%)
LiVEBRiCKS Inc.	Chairman Director Director Supervisor President	Shi-Wei Liu (Representative of YFY Paradigm Investment Co., Ltd.) Felix Ho (Representative of YFY Paradigm Investment Co., Ltd.) Zhi-Hong Xu (Representative of YFY Paradigm Investment Co., Ltd.) Zhi-Qing Min (Representative of YFY Paradigm Investment Co., Ltd.) Shi-Wei Liu		7,700,002	100.0
YEON Technologies Co., Ltd.	Chairman Director Director Supervisor President	Bing-Yi Lin (Representative of YFY RFID Technologies Co., Ltd.) Zhi-Qing Min (Representative of YFY RFID Technologies Co., Ltd.) Guo-Feng Gao (Representative of YFY RFID Technologies Co., Ltd.) Su-Ping Lian (Representative of YFY RFID Technologies Co., Ltd.) Guo-Feng Gao		2,500,001	100.0
YFY Biotech Management Company	Chairman Director Director Supervisor President	Hong-Jen Chang (Representative of YFY Paradigm Investment Co., Ltd.) S. C. Ho (Representative of YFY Paradigm Investment Co., Ltd.) Yi-Xue Cai (Representative of YFY Paradigm Investment Co., Ltd.) Zhi-Qing Min (Representative of YFY Paradigm Investment Co., Ltd.) Hong-Jen Chang		26,430,000	100.0
Effion Enertech Co., Ltd.	Chairman Director Director Supervisor President	C. C. Huang (Representative of YFY Inc..) S. C. Ho (Representative of YFY Inc..) K. T. Yin (Representative of YFY Inc..) C. F. Wu (Representative of YFY Development Corp.) C. C. Huang		34,300,000 700,000	49.0 1.0
YFY Corporate Advisory & Services Co., Ltd.	Chairman Director Director Supervisor President	Willie Tsai (Representative of YFY Inc..) Claudia Kung (Representative of YFY Inc..) Vincent Chan (Representative of YFY Inc..) C. F. Wu (Representative of YFY Inc..) Willie Tsai		3,000,000	100.0
Chung Hwa Pulp Corp.	Chairman Director Director Director Director Director	Kirk Hwang (Representative of YFY Inc..) S. C. Ho (Representative of YFY Inc..) Felix Ho (Representative of YFY Inc..) Chih-Cheng Huang (Representative of YFY Paradigm Investment Co., Ltd.)		627,827,989 7,752,732	56.9 0.70
		Guu-Fong Lin (Representative of YFY Paradigm Investment Co.,
	Independent	Ltd.) Rui-He Chen (Representative of YFY Paradigm Investment Co., Ltd.) Ling-Han Zhang Shi-Lei Lu Yi Li Chih-Cheng Huang
	Director
	Independent
	Director
	Independent
	Director President
Genovella Renewables Inc.	Director	Shih-Hsiung Wu (Representative of Hwa Fong Investment Co., Ltd.)		Investment amount: 5,000,000	Investment Percentage 100.0
Hwa Fong Investment Co., Ltd.	Chairman Director Director Supervisor	Guu-Fong Lin (Representative of Chung Hwa Pulp Corp.) Chih-Cheng Huang (Representative of Chung Hwa Pulp Corp.) K. T. Yin (Representative of Chung Hwa Pulp Corp.) Guan-Jun Lin(Representative of ChungHwa PulpCorp.)		3,600,000	100.0

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December 31, 2020 Unit: No. of shares/shares, investment amount/NT$

				Shares held	Shares held
Company name	Title	Name or	representative		Percent shares
				Number of shares
					(%)

YFY Japan Co., Ltd.	Director Director Director Supervisor	Zhi-Shu Luo He (Representative of YFY Inc..) S. C. Ho (Representative of YFY Inc..) Felix Ho (Representative of YFY Inc..) Zhi-Qing Min (Representative of YFY Inc..)		200	100.0
YFY Mauritius Corp.	Director Director Director Director	Willie Tsai Felix Ho C. C. Huang Pines Ltd.
YFY Global Investment Ltd.	Director Director	Ning-Ning Su Willie Tsai
YFY International Ltd.	Director Director	Ning-Ning Su Willie Tsai
YFY Packaging(BVI)Corp.	Director	YFY Packaging Inc.		58,134,277.24	100.0
YFY Biopulp Technology Ltd.	Director	Felix Ho
Yuen Foong Yu Consumer Products Investment Limited	Director Director	S. C. Ho Felix Ho
YFY RFID Technologies Co., Ltd.	Director	YFY Global Investment Ltd.		5,330,000	100.0
YFY RFID Co. Limited	Director Director	YFY Global Investment Ltd. Felix Ho		25,600,000	100.0
YFY Cayman Co., Ltd.	Chairman Director Director	Tian Wang Wu Willie Tsai Tsung-Min Chang
YFY International Labuan Co., Ltd.	Director	YFY Cayman Co., Ltd.		900,000	100.0
YFY Packaging Capital Corp.	Director	YFY Cayman Co., Ltd.		200	100.0
CHP International (BVI)Corporation	Director Director	Kirk Hwang (Representative of Chung Hwa Pulp Corp.) Guu-Fong Lin (Representative of Chung Hwa Pulp Corp.)		61,039,956	100.0
YFY Packaging (Yangzhou)	Chairman	C. C. Huang (Representative of YFY Mauritius Corp.)		Investment USD	Investment
Investment Co., Ltd.	Director	Jun-Lang Huang (Representative of YFY Mauritius Corp.)		86,707,159.45	Percentage
	Director	Felix Ho (Representative of YFY Mauritius Corp.)			100.0
	Supervisor	K. T. Yin (Representative of YFY Mauritius Corp.)
	President	Jun-Lang Huang

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December 31, 2020 Unit: No. of shares/shares, investment amount/NT$

				Shares held	Shares held
Company name	Title	Name or	representative		Percent shares
				Number of shares
					(%)

Yuen Foong Yu Papers (Guangzhou) Co., Ltd.	Chairman Director Director Supervisor President	Zhong-Cheng Dou (Representative of YFY Mauritius Corp.) C. C. Huang (Representative of YFY Mauritius Corp.) Yu-Qin Xiong (Representative of Guangzhou High-Tech Investment Group Co., Ltd.) Vincent Chan (Representative of YFY Mauritius Corp.) Zhong-Cheng Dou		Investment USD 8,906,250 Investment USD 593,750	Investment Percentage 93.75 Investment Percentage 6.25
Yuen Foong Yu Papers (Xiamen) Co., Ltd.	Chairman Director Director Supervisor President	Zhong-Cheng Dou (Representative of YFY Mauritius Corp.) C. C. Huang (Representative of YFY Mauritius Corp.) Yun-Wei Wang (Representative of YFY Mauritius Corp.) Shao-Yu Chen (Representative of YFY Mauritius Corp.) Yu-Hsu Chang		Investment USD 6,500,000	Investment Percentage 100.0
Yuen Foong Yu Paper Enterprise (Zhongshan) Co., Ltd.	Chairman Director Director Supervisor President	Zhong-Cheng Dou (Representative of YFY Mauritius Corp.) C. C. Huang (Representative of YFY Mauritius Corp.) Yun-Wei Wang (Representative of YFY Mauritius Corp.) Shao-Yu Chen (Representative of YFY Mauritius Corp.) Hong-Yi Zhang		Investment USD 6,000,000	Investment Percentage 100.0
Yuen Foong Yu Paper Enterprise (Dongguan) Co., Ltd.	Chairman Director Director Supervisor President	Zhong-Cheng Dou (Representative of YFY Mauritius Corp.) C. C. Huang (Representative of YFY Mauritius Corp.) Yun-Wei Wang (Representative of YFY Mauritius Corp.) Shao-Yu Chen (Representative of YFY Mauritius Corp.) Cheng-Chia Li		Investment USD 6,000,000	Investment Percentage 100.0
Yuen Foong Yu Paper Enterprise (Nanjing) Co., Ltd.	Chairman Director Director Supervisor President	Zhao-Kun Wang (Representative of YFY Mauritius Corp.) C. C. Huang (Representative of YFY Mauritius Corp.) Ming-Shu Hsu (Representative of Yuen Foong Yu Paper Enterprise (Kunshan) Co., Ltd.) Shao-Yu Chen (Representative of YFY Mauritius Corp.) Zhao-Kun Wang		Investment USD 8,958,825.93 Investment USD 1,000,000	Investment Percentage 89.96 Investment Percentage 10.04
Yuen Foong Yu Paper Enterprise (Qingdao) Co., Ltd.	Chairman Director Director Supervisor President	Wen Nan Sun (Representative of YFY Mauritius Corp.) C. C. Huang (Representative of YFY Mauritius Corp.) Ming-Shu Hsu (Representative of YFY Mauritius Corp.) Shao-Yu Chen (Representative of YFY Mauritius Corp.) Hong-Ming Chu		Investment USD 8,000,000	Investment Percentage 100.0
Yuen Foong Yu Paper Enterprise (Jiaxing) Co., Ltd.	Chairman Director Director Supervisor President	De-Ming Liao (Representative of YFY Mauritius Corp.) C. C. Huang (Representative of YFY Mauritius Corp.) Ming-Shu Hsu (Representative of YFY Mauritius Corp.) Shao-Yu Chen (Representative of YFY Mauritius Corp.) Ren-De Fu		Investment USD 5,000,000	Investment Percentage 100.0
Yuen Foong Yu Paper Enterprise	Chairman Director Director Supervisor President	Zhao-Kun Wang (Representative of YFY Mauritius Corp.) C. C. Huang (Representative of YFY Mauritius Corp.) Ming-Shu Hsu (Representative of YFY Mauritius Corp.) Shao-Yu Chen (Representative of YFY Mauritius Corp.) Zhao-Kun Wang		Investment USD 11,000,000	Investment Percentage 100.0
(Kunshan) Co., Ltd.

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December 31, 2020 Unit: No. of shares/shares, investment amount/NT$

		Name o	Shares held	Shares held
Company name	Title		Number of	Percent shares

			shares	(%)

Yuen Foong Yu Paper Enterprise (Suzhou) Co., Ltd.	Chairman Director Director Supervisor President	Zhao-Kun Wang (Representative of YFY Mauritius Corp.) C. C. Huang (Representative of YFY Mauritius Corp.) Ming-Shu Hsu (Representative of YFY Mauritius Corp.) Shao-Yu Chen (Representative of YFY Mauritius Corp.) Ming-Jen Liu	Investment USD	Investment
			7,000,000	Percentage 100.0

Yuen Foong Yu Paper Enterprise (Shanghai) Co., Ltd.	Chairman Director Director Supervisor President	De-Ming Liao (Representative of YFY Mauritius Corp.) C. C. Huang (Representative of YFY Mauritius Corp.) Ming-Shu Hsu (Representative of YFY Mauritius Corp.) Shao-Yu Chen (Representative of YFY Mauritius Corp.) Liang-Li Chen	Investment USD	Investment
			8,000,000	Percentage 100.0

Yuen Foong Yu Paper Enterprise (Tianjin) Co., Ltd.	Chairman Director Director Supervisor President	Wen Nan Sun (Representative of YFY Mauritius Corp.) C. C. Huang (Representative of YFY Mauritius Corp.) Ming-Shu Hsu (Representative of YFY Mauritius Corp.) Shao-Yu Chen (Representative of YFY Mauritius Corp.) Yung-Chih Chen	Investment USD	Investment
			8,000,000	Percentage 100.0

Yuen Foong Yu Paper Enterprise (Fuzhou) Co., Ltd.	Chairman Director Director Supervisor President	Zhong-Cheng Dou (Representative of YFY Mauritius Corp.) C. C. Huang (Representative of YFY Mauritius Corp.) Yun-Wei Wang (Representative of YFY Mauritius Corp.) Shao-Yu Chen (Representative of YFY Mauritius Corp.) Yo Wei Chu, chief of plant as proxy	Investment USD	Investment
			5,000,000	Percentage 100.0

Yuen Foong Yu Paper MFG	Chairman Director Director Director Director Supervisor President	C. C. Huang (Representative of YFY Mauritius Corp.) S. C. Ho (Representative of YFY Mauritius Corp.) Felix Ho (Representative of YFY Mauritius Corp.) Jun-Lang Huang (Representative of YFY Mauritius Corp.) Chia-Feng Yeh (Representative of YFY Mauritius Corp.) K. T. Yin (Representative of YFY Mauritius Corp.) Chia-Feng Yeh	Investment USD 158,000,000	Investment Percentage 64.6
(Yangzhou) Co., Ltd.
Yuen Foong Yu Family Care (Kunshan) Co., Ltd.	Chairman Director Director Supervisor President	Zong-Chun Li (Representative of YFY Investment Corp. Ltd.) Shi-Yang Zeng (Representative of YFY Investment Corp. Ltd.) Ming-Fa Tang (Representative of YFY Investment Corp. Ltd.) Pei-Wen Chen (Representative of YFY Investment Corp. Ltd.) Zong-Chun Li	Investment USD	Investment Percentage 100.0
			30,000,000
Yuen Foong Yu Consumer Products	Chairman Director Director Supervisor President	Zong-Chun Li (Representative of YFY Investment Corp. Ltd.) Shi-Yang Zeng (Representative of YFY Investment Corp. Ltd.) Ming-Fa Tang (Representative of YFY Investment Corp. Ltd..) Pei-Wen Chen (Representative of YFY Investment Corp. Ltd.) Zong-Chun Li	Investment USD	Investment Percentage 100.0
(Yangzhou) Co., Ltd.			30,000,000

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		December 31,2020 Unit: No. of shares/shares,investment amount/NT$	December 31,2020 Unit: No. of shares/shares,investment amount/NT$	December 31,2020 Unit: No. of shares/shares,investment amount/NT$
		Name or representative	Shares held
Company name	Title		Number of	Percent shares

			shares	(%)

YFY Investment Co., Ltd.	Chairman	Felix Ho (Representative of Yuen Foong Yu Consumer Products	Investment	Investment
		Investment Limited)	USD	Percentage
	Director	Zong-Chun Li (Representative of Yuen Foong Yu Consumer	115,000,000	100.0
		Products Investment Limited)
	Director	K. T. Yin (Representative of Yuen Foong Yu Consumer Products
		Investment Limited)
	Supervisor	Pei-Wen Chen (Representative of Yuen Foong Yu Consumer
		Products Investment Limited)
	President	Zong-Chun Li

Shanghai Yuen Foong Yu International Co., Ltd.	Managing director Supervisor President	Shi-Wei Liu (Representative of Yuen Foong Shop Co., Ltd.) Zhi-Qing Min (Representative of Yuen Foong Shop Co., Ltd.) Shi-Wei Liu	Investment RMB 1,000,000	Investment Percentage 100.0
YFY Paper Mfg. (Jiangyin) Co., Ltd.	Chairman Director Director Director Director Supervisor President	Jun-Lang Huang (Representative of YFY International Ltd.) Melody Chiu (Representative of YFY International Ltd.) Hsianmin Chen (Representative of YFY International Ltd.) Vincent Chan (Representative of YFY International Ltd.) Kuang-Wei Chan (Representative of Cheng Jian Town Investment Co., Ltd.) K. T. Yin (Representative of YFY International Ltd.) Jun-Lang Huang	Investment USD 14,006,000 Investment USD 894,000	Investment Percentage 94.0 Investment Percentage 6.0
Shenzhen Jinglun Paper Co., Ltd.	Chairman Di	Chih-Cheng Huang (Representative of Guangdong Dingfung Pulp & Paper Co., Ltd.) Rui-He Chen (Representative of Guangdong Dingfung Pulp & Paper Co., Ltd.) Zheng-Zhong Kuang (Representative of Guangdong Dingfung Pulp & Paper Co., Ltd.) Vincent Chan (Representative of Guangdong Dingfung Pulp & Paper Co., Ltd.) Zheng-Zhong Kuang	Investment	Investment Percentage 100.0
			RMB 3,200,000

	rector	Paper Co., Ltd.
	Director Supervisor President
YFY Advertising & Printing (Kunshan) Co., Ltd.	Director Director Supervisor	C J Chang (Representative of Yuen Foong Yu Paper (Xiamen) Co., Ltd.) Jian Wang (Representative of Yuen Foong Yu Papers (Guangzhou) Co., Ltd.) Yu-Yang Wang (Representative of Yuen Foong Yu Papers (Guangzhou) Co., Ltd.)	Investment USD 1,500,000 Investment USD 1,500,000	Investment Percentage 50.0 Investment Percentage 50.0
Kunshan Actview Carbon Technology Co., Ltd.	Chairman Director Director Director Director Supervisor President	C. C. Huang (Representative of San Ying Enterprise Co., Ltd.) Zhi-Qing Min (Representative of San Ying Enterprise Co., Ltd.)	Investment USD 836,080 Investment USD 424,000	Investment Percentage 66.4 Investment Percentage 33.6
		Jin-Bang Zhang (Representative of San Ying Enterprise Co.,
		Ltd.) He-Xin Li (Representative of China Carbon Technology) Rui-Xu Li (Representative of China Carbon Technology) Shao-Yu Chen (Representative of San Ying Enterprise Co., Ltd.) C. C. Huang
Yuen Foong Yu Blue Economy Natural Resource (Yangzhou) Co., Ltd.	Chairman Director Director Supervisor President	Jun-Lang Huang (Representative of YFY International Ltd.) C. C. Huang (Representative of YFY International Ltd.) Jui-Chih Huang (Representative of YFY International Ltd.) Vincent Chan (Representative of YFY International t Ltd.) Jun-Lang Huang	Investment USD 8,000,000	Investment Percentage 100.0

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December 31, 2020 Unit: No. of shares/shares, investment amount/NT$

				Shares held	Shares held
Company name	Title	Name or	representative		Percent shares
				Number of shares
					(%)

Arizon RFID Technology Co., Ltd.	Chairman Director Director Director Director Director	Felix Ho Bing-Yi Lin Hong-Shi Wen Yung-Heng Chen Wan-Chuan Lin Jung-Tsung Chien Hsiao-Ming Cheng Hai-Ying Cheng Hai Xu K. T. Yin Yuan-Pei Zhang Qiu-Yue Xia Bing-Yi Lin
	Independent
	Director
	Independent
	Director
	Independent
	Director Supervisor Supervisor Supervisor President
Yangzhou YEON Technologies Co., Ltd.	Chairman Director Director Supervisor President	Bing-Yi Lin (Representative of Arizon RFID Technology Co., Ltd.) Hong-Shi Wen (Representative of Arizon RFID Technology Co., Ltd.) Guo-Feng Gao (Representative of Arizon RFID Technology Co., Ltd.) Su-Ping Lian (Representative of Arizon RFID Technology Co., Ltd.) Hong-Shi Wen		Investment RMB 8,000,000	Investment Percentage 100.0
YFY Capital Holdings Corp.	Director	Melody Chiu
YFY (Shanghai) Commercial Factoring Co., Ltd.	Chairman Director Director Supervisor President	Melody Chiu (Representative of YFY Capital Holdings Corp.) K. T. Yin (Representative of YFY Capital Holdings Corp.) Cheng-Wei Chou (Representative of YFY Capital Holdings Corp.) Vincent Chan (Representative of YFY Capital Holdings Corp.) Melody Chiu		Investment RMB 50,000,000	Investment Percentage 100.0
Guangdong Dingfung Pulp & Paper Co., Ltd.	Chairman Director Director Supervisor President	Guu-Fong Lin (Representative of CHP International (BVI) Corp.) Chih-Cheng Huang (Representative of CHP International (BVI) Corp.) Kirk Hwang (Representative of YFY International Ltd.) K. T. Yin (Representative of YFY International Ltd.) Guu-Fong Lin		Investment USD 51,378,000 Investment USD 34,252,000	Investment Percentage 60.0 Investment Percentage 40.0
Zhaoqing Dingfung Forestry Co., Ltd.	Chairman Director Director Supervisor President	Guu-Fong Lin (Representative of Guangdong Dingfung Pulp & Paper Co., Ltd.) Kirk Hwang (Representative of CHP International (BVI) Corp.) Chih-Cheng Huang (Representative of YFY International Ltd.) K. T. Yin (Representative of YFY International Ltd.) Guu-Fong Lin		Investment USD 14,500,000 Investment USD 4,428,000 Investment USD 2,952,000	Investment Percentage 66.27 Investment Percentage 20.24 Investment Percentage 13.49
Hwa Fong Paper (Hong Kong) Co., Ltd.	Director Director Director	Vincent Chan Aubrey Tsai Zheng-Zhong Kuang
Syntax Communication (H.K.) Ltd.	Director Director Director President	Chih-Cheng Huang (Representative of CHP International (BVI) Corp.) Zheng-Zhong Kuang (Representative of CHP International (BVI) Corp.) Guan-Jun Lin (Representative of CHP International (BVI) Corp.) Zheng-Zhong Kuang		34,088,182	100.0

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December 31, 2020 Unit: No. of shares/shares, investment amount/NT$

				Shares	held
Company name	Title	Name or	representative		Percent shares
				Number of shares
					(%)

YFY Jupiter(BVI)Inc.	Chairman Director Director Director Director Director	Felix Ho S. C. Ho Bing-Yi Lin Wen-Fu Chen Mitch Crews Nancy A. Schachtner		838,190 574,661	6.6 4.5
YFY Jupiter Ltd.	Director Director Director	Wen-Fu Chen Chun Tu YFY Jupiter(BVI)Inc.		3	100.0
YFY Jupiter US, Inc.	Director Director Director	Mitch Crews Wen-Fu Chen Pei-Ling Dai
Mobius105 Ltd.	Director Director Director	Pei-Ling Dai Wen-Fu Chen YFY Jupiter(BVI)Inc.		10,000	100.0
YFY Jupiter Trading (Shenzhen) Ltd.	Chairman Director Director Supervisor President	Wen-Fu Chen Li-Jia Chen Xing-Jun Lin Pei-Ling Dai Xing-Jun Lin
Kunshan YFY Jupiter Green Packing Ltd.	Director Director Director Supervisor President	Wen-Fu Chen Kuo-Lung Lee Xue-Yi Lu Pei-Ling Dai Wen-Fu Chen
Jupiter Supply Chain Management Services (Shenzhen) Co.	Chairman Director Director Supervisor President	Wen-Fu Chen Li-Jia Chen Xing-Jun Lin Pei-Ling Dai Xing-Jun Lin
Jupiter Prestige Group Holdings Limited	Director Director Director	Mark Raymond White Mitch Crews Felix Ho		50,375	33.3
Jupiter Prestige Group North America Inc.	Director Director Director	Mitch Crews Pei-Ling Dai Mark Raymond White

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December 31, 2020 Unit: No. of shares/shares, investment amount/NT$

			Shares	held
Company name	Title	Name or representative		Percent shares
			Number of shares
				(%)

Opal BPM Limited	Director Director Director Director Director	Mark Raymond White Christopher Ebbs Mattew Mintman Pei-Ling Dai Bing-Yi Lin	100 75	10.0 7.5
Opal BPM India Private Limited	Director Director Director Director	Mark Raymond White Prem Chand Mali Dias Jacob Christopher Ebbs
Jupiter Prestige Group Australia PTY Ltd.	Director Director Director Director Director	Mark Raymond White Alison Jane Crisp Justin Desmond McCartney Pei-Ling Dai Mitch Crews
Jupiter Prestige Group Europe Ltd.	Director Director Director Director	Mark Raymond White Alison Jane Crisp Mitch Crews Pei-Ling Dai
Jupiter Prestige Group Asia Ltd.	Director Director Director Director Director	Mark Raymond White Alison Jane Crisp Mark Lee Mitch Crews Pei-Ling Dai
YFY Jupiter Malaysia SDN. BHD.	Director Director Director	Wen-Fu Chen Pei-Ling Dai Chan Chea Fang
YFY Jupiter Mexico, S. de R.L.	Director Director Director Director	Wen-Fu Chen Pei-Ling Dai Kuo-Lung Lee Mitch Crews
Spectiv Brands, LLC	Director Director	Mitch Crews Pei-Ling Dai
YFY Paper (HK) Co. Ltd.	Director	Yuen Foong Shop Co., Ltd.
Opal BPM Consulting Ltd.	Director Director Director Director Director	Mark Raymond White Christopher Ebbs Matthew Mintman Bing-Yi Lin Pei-Ling Dai
Arizon RFID Technology (Hong Kong) Co., Ltd.	Director Director	Bing-Yi Lin (Representative of Arizon RFID Technology Co., Ltd.) Hong-Shi Wen (Representative of Arizon RFID Technology Co., Ltd.)	Investment USD 12,000,000	100.0

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December 31, 2020 Unit: No. of shares/shares, investment amount/NT$

			Shares held	Shares held
Company name	Title	Name or representative		Percent shares
			Number of shares
				(%)

Contrast LLC	Director	Mark White
Winsong Packaging Investment Company Ltd.	Chairman Director Director Director Director	Yan-Chung Chang (Representative of YFY Cayman Co., Ltd.) Tsung-Min Chang (Representative of YFY Cayman Co., Ltd.) Che-Hsiang Chang (Representative of YFY Cayman Co., Ltd.) Chih-Bang Chang (Representative of Up High Developments Limited) Yu-Wei Chang (Representative of Up High Developments Limited)	9,520,000 4,080,000	70.0 30.0
YFY Packaging(Ha Nam)Co., Ltd.	Chairman Director President	Liang-Hsing Huang (Representative of Winsong Packaging Investment Company Ltd.) Tsung-Min Chang (Representative of Winsong Packaging Investment Company Ltd.) Liang-HsingHuang	12,400,000	100.0
Willpower Industries Limited	Chairman Director Director Director Director President	Felix Ho (Representative of YFY Cayman Co., Ltd.) Tsung-Min Chang (Representative of YFY Cayman Co., Ltd.) Hsianmin Chen (Representative of YFY Cayman Co., Ltd.) Yu-Chi Li (Representative of Great Pacific Investments Limited) Nai-Yung Tsai (Representative of Great Pacific Investments Limited) Tsung-Min Chang	8,550,000 6,950,000	55.16 44.84
Yuen Foong Yu Paper Enterprise(Vietnam)Binh Duong Co., Ltd.	Chairman Director Director President	Tsung-Min Chang (Representative of Willpower Industries Limited) Yan-Chung Chang (Representative of Willpower Industries Limited) Chia-Li Chang (Representative of Willpower Industries Limited) Tsung-Min Chang	10,500,000	100.0

Yuen Foong Yu Paper Enterprise(Vietnam)Co., Ltd.	Chairman Director Director Director Director Director Director President	Tsung-Min Chang (Representative of Willpower Industries Limited) Felix Ho (Representative of Willpower Industries Limited) Nai-Yung Tsai (Representative of Great Pacific Investments Limited) Chia-Li Chang (Representative of Great Pacific Investments Limited) Hsianmin Chen (Representative of Willpower Industries Limited) Yi-An Li (Representative of Willpower Industries Limited) Ching-San Chang (Representative of Willpower Industries Limited) Tsung-Min Chang	5,100,000	100.0
Yuen Foong Yu Paper Enterprise(Vietnam)Binh Chanh Co., Ltd.	Chairman President	Tsung-Min Chang (Representative of Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd.) Tsung-Min Chang	1,200,000	100.0
Yuen Foong Yu Paper Enterprise(Dong Nai)Co., Ltd.	Chairman Director Director President	Yi-An Li (Representative of Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd.) Tsung-Min Chang (Representative of Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd.) Hui-Sheng Chen (Representative of Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd.) Tsung-Min Chang	10,000,000	100.0
YFY Jupiter Indonesia, PT PMA	Director Supervisor	Li-Jia Chen Pei-Ling Dai

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December 31, 2020 Unit: No. of shares/shares, investment amount/NT$

			Shares held	Shares held
Company name	Title	Name or representative		Percent shares
			Number of shares
				(%)

Jupiter Vietnam Company Limited	representative	Li-Jia Chen



Sustainable Carbonhydrate Innovation Co., Ltd.	Chairman Director Director Supervisor President	Ya-Hui Huang (Representative of YFY Inc..) S. C. Ho (Representative of YFY Inc..) P. Y. Hsu (Representative of YFY Inc..) C. F. Wu (Representative of YFY Inc..) Ya-Hui Huang	3,000,000	100.0
YFY Packaging Thai Binh Co., Ltd.	Chairman Director President	Liang-Hsing Huang (Representative of Winsong Packaging Investment Company Ltd.) Yan-Chung Chang (Representative of Winsong Packaging Investment Company Ltd.) Liang-Hsing Huang	1,200,000	100.0
Arizon Japan Co., Ltd.	Director Director Director Supervisor	Felix Ho (Representative of Arizon RFID Technology Co., Ltd.) Bing-Yi Lin (Representative of Arizon RFID Technology Co., Ltd.) Xiao-Zhi Luo He Nai-Hsia Wu	Investment JPY 50,000,000	Investment Percentage 100.0
Zhaoqing Xinchuan Green Technology Co., Ltd.	Chairman Director Director Supervisor	Guu-Fong Lin (Representative of Guangdong Dingfung Pulp & Paper Co., Ltd.) Yun-Chang Qin (Representative of Guangdong Dingfung Pulp & Paper Co., Ltd.) Tsong-Yun Lin (Representative of Guangdong Dingfung Pulp & Paper Co., Ltd.) Ssu-I Hou (Representative of Guangdong Dingfung Pulp & Paper Co., Ltd.)	Investment RMB 2,000,000	Investment Percentage 100.0
Shin Foong Trading Sdn. Bhd.	Director Director Director	Zhi-Min Xu (Representative of Shin Foong Specialty and Applied Materials Co., Ltd.) Wen-Chun Lo (Representative of Shin Foong Specialty and Applied Materials Co., Ltd.) YAP KIM MAY (Representative of Shin Foong Specialty and Applied Materials Co., Ltd.)	1,500,000	100.0

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(IV) Financial overview and performance of affiliated companies December 31, 2020 Unit: NT$ thousand

							Current profit	Earnings per
			Total		Operating	Operating
Company name	Paid-in capital	Total assets		Net worth			and loss (after	share (NT$)
			liabilities		revenue	profit
							tax)	(after taxes)

YFY PackagingInc.	4,101,500	15,982,412	8,839,603	7,142,809	12,189,262	1,417,306	1,043,942	2.55
Pek Crown Paper Co.,Ltd.	300,000	892,664	418,400	474,264	1,219,484	60,291	53,323	1.78
Yuen Yan Paper Co.,Ltd.	121,275	148,210	1,584	146,626	-	(3,127)	6,116	0.50
Union Paper Corp.	1,035,300	1,677,740	447,194	1,230,546	1,803,484	48,154	58,321	0.56
China Color PrintingCo.,Ltd.	662,486	1,081,771	179,597	902,174	442,609	(6,354)	14,980	0.23
YFY Development Corp.	1,128,207	4,308,858	2,175,015	2,133,843	804,108	(12,043)	141,561	1.25
YFY Consumer Products Co.,Ltd.	2,449,060	6,813,489	2,779,581	4,033,908	5,900,941	1,073,316	1,487,228	6.12
Yuen FoongShopCo.,Ltd.	50,000	394,538	303,748	90,790	1,253,532	49,583	39,598	7.92
Shin Foong Specialty and Applied Materials Co., Ltd.	1,061,241	5,960,230	1,116,200	4,844,030	5,268,419	2,202,655	1,777,831	16.85
YFY Paradigm Investment Co.,Ltd.	1,467,262	3,308,944	976,001	2,332,943	-	(18,088)	99,939	0.68
San YingEnterprise Co.,Ltd.	25,000	78,385	15,419	62,966	95,936	21,640	19,925	7.97
Fidelis IT Solutions Co.,Ltd.	28,570	160,168	103,209	56,959	128,167	(4,354)	164	0.06
Ever GrowingAgriculture Bio-tech Co.,Ltd.	214,557	556,567	237,636	318,931	338,692	71,019	56,720	.64
LiVEBRiCKS Inc.	77,000	3,702	1,218	2,484	2,035	164	189	0.02
YEON Technologies Co.,Ltd.	25,000	4,805	61	4,744	13,701	12,975	15,226	6.09
YFY Biotech Management Company	264,300	312,138	53,191	258,947	-	(45,432)	(43,994)	(1.66)
Effion Enertech Co.,Ltd.	700,000	460,361	50	460,311	-	(452)	(121,033)	(1.73)
YFY Corporate Advisory& Services Co.,Ltd.	30,000	115,543	73,346	42,197	216,571	12,609	9,673	3.22
ChungHwa PulpCorp.	11,028,353	29,517,826	14,732,847	14,784,979	16,720,832	(150,501)	(201,797)	(0.18)
Genovella Renewables Inc.	5,000	23,211	9,053	14,158	30,634	6,054	4,729
Hwa FongInvestment Co.,Ltd.	36,000	51,981	175	51,806	-	(168)	5,206	1.45
YFY Japan Co.,Ltd.	2,763	134,380	18,258	116,122	251,043	(6,378)	(3,825)	(19,125.00)
YFY Mauritius Corp.	9,184,849	6,580,307	177	6,580,130	-	(534)	15,751	0.05
YFY International Ltd.	10,357,881	17,868,037	2,130,060	15,737,977	-	(15,775)	2,215,208	6.09
YFY Global Investment Ltd.	2,249,920	5,998,759	25,379	5,973,380	-	(9,586)	341,358	4.32
YFY Packaging(BVI)Corp.	1,655,664	410	-	410	-	-	(47,148)	(0.81)
YFY BiopulpTechnologyLtd.	4,272	242	-	242	-	(129)	(129)	(0.86)
Yuen FoongYu Consumer Products Investment Ltd.	4,272,370	2,987,775	-	2,987,775	-	-	565,151	3.77
YFY RFID Technologies Co.,Ltd.	151,798	10,871	-	10,871	-	(228)	15,006	2.82
YFY RFID Co.,Ltd.	729,088	3,067,685	169	3,067,516	-	(70)	197,863	7.73
YFY Cayman Co.,Ltd.	1,014,332	1,547,529	45,995	1,501,534	-	(57,589)	1,092,114	30.66
YFY International Labuan Co.,Ltd.	25,632	18,335	-	18,335	-	(673)	964,805	1,072.01
YFY PackagingCapital Corp.	6	21	-	21	-	-	-
CHP International(BVI)Corporation	1,738,418	4,977,433	3,112	4,974,321	-	(2,077)	(122,856)	(2.01)
YFY Packaging (Yangzhou)Investment Co.,Ltd.	2,469,415	3,712,591	3,608,926	103,665	8,698,153	58,993	(144,336)
Yuen FoongYu Papers(Guangzhou)Co.,Ltd.	270,560	799,628	290,655	508,973	1,261,274	29,926	22,686
Yuen FoongYu Papers(Xiamen)Co.,Ltd.	185,120	479,077	605,601	(126,524)	629,379	(7,852)	(17,033)
Yuen Foong Yu Paper Enterprise (Zhongshan) Co., Ltd.	170,880	1,254,926	221,191	1,033,735	844,299	82,502	74,627
Yuen Foong Yu Paper Enterprise (Dongguan) Co., Ltd.	170,880	968,882	463,759	505,123	915,530	59,967	49,779
Yuen Foong Yu Paper Enterprise (Nanjing) Co., Ltd.	283,632	1,044,075	577,785	466,290	945,683	71,301	49,278
Yuen Foong Yu Paper Enterprise (Qingdao) Co., Ltd.	227,840	1,326,402	305,721	1,020,681	657,679	52,460	53,427
Yuen FoongYu Paper Enterprise(Jiaxing)Co.,Ltd.	142,400	439,902	316,428	123,474	565,640	(3,019)	(8,043)
Yuen Foong Yu Paper Enterprise (Kunshan) Co., Ltd.	313,280	910,239	326,471	583,768	555,958	26,615	29,464
Yuen FoongYu Paper Enterprise(Suzhou)Co.,Ltd.	199,360	705,193	437,422	267,771	811,958	40,402	34,240
Yuen Foong Yu Paper Enterprise (Shanghai) Co., Ltd.	227,840	1,007,459	587,422	420,037	1,007,888	98,184	71,949
Yuen FoongYu Paper Enterprise(Tianjin)Co.,Ltd.	227,840	1,365,148	529,089	836,059	858,671	38,694	57,460
Yuen FoongYu Paper Enterprise(Fuzhou)Co.,Ltd.	142,400	293,257	452,915	(159,658)	237,796	(7,894)	(21,458)
Yuen FoongYu Paper MFG(Yangzhou)Co.,Ltd.	6,968,914	15,238,536	14,077,253	1,161,283	10,931,157	(260,250)	(359,518)
Yuen FoongYu FamilyCare(Kunshan)Co.,Ltd.	854,400	316,549	52,287	264,262	542,243	(2,524)	(149,296)
Yuen Foong Yu Consumer Products (Yangzhou) Co.,Ltd.	854,400	1,523,197	375,321	1,147,876	2,083,429	56,700	31,484
YFY Investment Co.,Ltd.	3,275,200	3,411,795	1,369,264	2,042,531	4,995,726	310,657	526,241
Shanghai Yuen FoongYu International Co., Ltd.	4,365	216	2,350	(2,134)	-	(54)	(133)

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							Current profit	Earnings per
			Total		Operating	Operating
Company name	Paid-in capital	Total assets		Net worth			and loss (after	share (NT$)
			liabilities		revenue	profit
							tax)	(after taxes)

YFY Paper Mfg.(Jiangyin)Co.,Ltd.	424,352	385,675	36,164	349,511	-	(2,357)	1,220,742
Shenzhen Jinglun Paper Co.,Ltd.	13,967	888,505	745,158	143,347	1,574,770	32,957	23,885
YFY Advertising& Printing (Kunshan)Co.,Ltd.	85,440	629	477,019	(476,390)	-	(42)	(12,866)
Kunshan Actview Carbon TechnologyCo.,Ltd.	35,885	53,831	746	53,085	-	(2,748)	3,350
Yuen Foong Yu Blue Economy Natural Resource (Yangzhou)Co.,Ltd.	227,840	99,459	139	99,320	122,252	2,411	4,157
Arizon RFID TechnologyCo., Ltd.	848,040	3,702,913	403,536	3,299,377	1,658,759	240,479	224,416	1.16
Yangzhou YEON Technologies Co., Ltd.	34,919	80,573	20,229	60,344	86,413	7,520	7,219
YFY Capital Holdings Corp.	229,549	72,223	-	72,223	-	(20)	(124,627)	(15,462.41)
YFY(Shanghai)Commercial FactoringCo.,Ltd.	218,241	72,580	596	71,984	-	(127,630)	(124,608)
GuangdongDingfungPulp& Paper Co., Ltd.	2,438,742	6,121,740	1,599,613	4,522,127	1,749,840	(304,025)	(284,085)
ZhaoqingDingfungForestryCo., Ltd.	623,142	3,850,710	945,806	2,904,904	241,981	19,012	22,526
Hwa FongPaper(HongKong)Co.,Ltd.	426,068	74,791	4,236	70,555	-	(22,433)	(21,423)	(0.18)
Syntax Communication(H.K.)Ltd.	125,206	14,847	2,783	12,064	17,701	(1,792)	(1,127)	(0.03)
YFY Jupiter(BVI),Inc.	37,253	997,969	184,277	813,692	-	(4,549)	218,205	24.08
YFY Jupiter Ltd.	0.011	901,310	764,889	136,421	1,370,888	25,661	62,778	20,926,000.00
YFY Jupiter US, Inc.	28	136,109	315,087	(178,978)	18,560	(52,641)	2,028	20.28
Mobius105 Ltd.	37	426,784	63,799	362,985	288,789	3,483	242,617	24,261.70
YFY Jupiter Trading (Shenzhen)Ltd.	9,968	664,242	359,384	304,858	1,008,059	62,184	185,515
Kunshan YFY Jupiter Green PackingLtd.	8,730	596,088	488,241	107,847	1,136,523	54,329	42,966
Jupiter Supply Chain Management Services (Shenzhen)Co.	-	50,201	10,547	39,654	-	36,642	31,266
Jupiter Prestige GroupHoldings Limited	5,880	301,053	83,376	217,677	9,101	(2,071)	44,117	291.85
Jupiter Prestige GroupNorth America Inc.	28	71,607	100,547	(28,940)	88,037	(33,672)	(39,654)	(396.54)
Opal BPM Limited	48	73,289	28,753	44,536	84,573	32,386	19,917	19,917.00
Opal BPM India Private Limited	39	2,416	530	1,886	1,008	289	(301)	(30.10)
Jupiter Prestige GroupAustralia PTY Ltd.	3	24,199	20,067	4,132	79,119	11,367	7,687	76,870.00
Jupiter Prestige GroupEurope Ltd.	1,434	270,006	33,355	236,651	104,570	(1,619)	59,366	1,978.87
Jupiter Prestige GroupAsia Ltd.	0.37	210,646	53,506	157,140	269,191	47,038	54,237	542,370.00
YFY Jupiter Malaysia SDN. BHD.	7,084	97,492	77,987	19,505	138,658	11,453	9,086	9.09
YFY Jupiter Mexico, S. de R. L.	4	187,489	228,126	(40,637)	246,518	3,347	3,515
Spectiv Brands, LLC	-	721	60,465	(59,744)	2,510	(3,442)	(3,442)
YFY Paper(HK)Co. Ltd.	-	-	-	-	-	-	-
Opal BPM ConsultingLtd.	39	39	-	39	-	-	-
Arizon RFID Technology(HongKong) Co., Ltd.	341,760	428,428	101,904	326,524	145,463	(19,829)	(17,178)	(1.43)
Contrast LLC	2,694	5,564	4,252	1,312	15,698	(8,225)	(9,707)
WinsongPackagingInvestment CompanyLtd.	387,328	357,068	2,985	354,083	-	(202)	(2,357)	(0.17)
YFY Packaging(Ha Nam)Co., Ltd	353,152	1,220,455	912,044	308,411	959,261	(17,356)	(10,689)	(0.86)
Willpower Industries Limited	441,440	2,289,789	12,138	2,277,651	(145)	(28,497)	394,268	25.44
Yuen Foong Yu Paper Enterprise(Vietnam)Binh DuongCo.,Ltd.	299,040	1,187,160	804,999	382,161	1,426,237	105,103	71,972	6.85
Yuen FoongYu Paper Enterprise(Vietnam)Co., Ltd.	145,248	2,043,118	417,202	1,625,916	1,683,105	198,208	342,682	67.19
Yuen Foong Yu Paper Enterprise(Vietnam)Binh Chanh Co.,Ltd.	34,176	186,090	102,877	83,213	428,351	27,390	24,381	20.32
Yuen Foong Yu Paper Enterprise(Dong Nai)Co., Ltd.	284,800	1,314,057	453,573	860,484	1,616,359	235,381	173,154	17.32
YFY Jupiter Indonesia, PT PMA	5,068	192,681	160,476	32,205	369,614	13,964	10,920	4,368.00
Jupiter Vietnam CompanyLimited	1,393	52,588	46,613	5,975	113,331	5,976	4,910
Sustainable Carbonhydrate Innovation Co., Ltd.	30,000	42,742	11,489	31,253	46,490	(2,062)	(845)	(0.28)
YFY PackagingThai Binh Co., Ltd.	34,176	94,616	45,990	48,626	244,096	9,817	8,524	7.10
Arizon Japan Co., Ltd.	13,815	14,519	6,487	8,032	41,223	(3,437)	(3,443)	(3,443.00)
ZhaoqingXinchuan Green TechnologyCo., Ltd.	8,730	10,095	639	9,456	619	49	44
Shin FoongTradingSdn. Bhd.	10,626	17,694	8,106	9,588	8,503	(795)	(413)	(0.28)

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(V) Consolidated financial statements of various affiliated enterprises:

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2020 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard No. 10, “Consolidated Financial Statements.” Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we have not prepared a separate set of consolidated financial statements of affiliates.

Very truly yours,

YFY INC.

By:

FELIX HO Chairman March 19, 2021

��

II. Progress of Private Placement of Securities During the Last Year and Up to the Print Date of the Annual Report N/A
III. Holding or Disposal of the Company’s Shares by Subsidiaries in the Past year and Up to the Print Date of the Annual Report: N/A

IV. Other supplemental information N/A

V. Any Incidents with Material Impact on Shareholder Equity or Security Price as Described Under Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act in the Last Year and Up to the Print Date for the Annual Report: N

��

YFY Inc. and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2020 and 2019 and Inde�enden� A�di�� Re��

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance �i�h �he �Cri�eria Go�erning Prepara�ion of Affilia�ion Repor�s, Consolida�ed B�siness Repor�s and Consolida�ed Financial S�a�emen�s of Affilia�ed En�erprises� for �he �ear ended December 31, 2020 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard No. 10, �Consolida�ed Financial S�a�emen�s.� Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we have not prepared a separate set of consolidated financial statements of affiliates.

Very truly yours,

YFY INC.

By:

FELIX HO Chairman March 19, 2021

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders YFY Inc.

Opinion

We have audited the accompanying consolidated financial statements of YFY Inc. and its subsidiaries (collec�i�el� referred �o as �he �Gro�p�), �hich comprise �he consolida�ed balance shee�s as of December 31, 2020 and 2019, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Rep�blic of China. O�r responsibili�ies �nder �hose s�andards are f�r�her described in �he A�di�ors� Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Ke� a�di� ma��ers of �he Gro�p�s consolida�ed financial s�a�emen�s for �he �ear ended December 31, 2020 are stated as follows:

Estimation of Expected Credit Loss Recognized on Accounts Receivable

The acco�n�s recei�able of �he Gro�p�s significant components are material in amount. In consideration of transactions with various counterparties, the recoverability of accounts receivable is subject to not only each c�s�omer�s financial condi�ion b�� also managemen��s es�ima�ion and j�dgmen�. Therefore, we identified the estimation of expected credit loss recognized on accounts receivable as a key audit matter.

For related policies and relevant information on the estimation of expected credit loss of accounts receivable, refer to Notes 4, 5 and 11 to the accompanying consolidated financial statements.

The key audit procedures that we performed in respect of the expected credit loss on accounts receivable included the following:

We obtained and assessed the reasonableness of the method and the information used by management for the estimation of expected credit loss recognized on accounts receivable.
We tested sample items in the aging report on the balance sheet date and verified the correctness of the calculation of the expected credit loss.
We analyzed overdue receivables and performed sampling on the collection of overdue receivables after the balance sheet date. We assessed the reasonableness of the expected credit loss recognized on acco�n�s recei�able based on c�s�omers� his�orical payment records, credit line control and overdue receivables tracking.

Other Matter

We did not audit the financial statements as of and for the years ended December 31, 2020 and 2019 of Fidelis IT Solutions Co., Ltd., Sustainable Carbohydrate Innovation Co., Ltd., YFY Biotech Management Company, Livebricks Inc., Jupiter Prestige Group Holdings Limited and its subsidiaries, and the financial statements as of and for the year ended December 31, 2019 of Lotus Ecoscings & Engineering Co., Ltd., Syntax Communication (H.K.) Ltd., Ever Growing Agriculture Biotech Co., Ltd., the subsidiaries of Willpower Industries Ltd., the subsidiaries of Winsong Packaging Investment Company Limited, which are included in the consolidated financial statements of the Group, but such financial statements were audited by other auditors, whose reports have been furnished to us, and our opinion, in so far as it relates �o �he amo�n�s incl�ded in �he Gro�p�s consolida�ed financial s�a�emen�s for �hese s�bsidiaries, is based solely on the reports of other auditors. As of December 31, 2020 and 2019, the assets of these subsidiaries were NT$741,272 thousand and NT$6,716,882 thousand, respectively, representing 0.6% and 5.5% of the total consolidated assets. For the years ended December 31, 2020 and 2019, the net sales of these subsidiaries were NT$618,368 thousand and NT$6,657,616 thousand, respectively, representing 0.8% and 8.9% of the consolidated net sales. In addition, as of and for the years ended December 31, 2020 and 2019, the financial statements of Taiwan Genome Sciences, Inc. and Perpetual Prosperity Printing Technology Co., Ltd., an investment accounted for using the equity method, were audited by other auditors. Thus, our opinion, insofar as it relates to the calculation of the Gro�p�s share in �hese in�es�ees� profit or loss and other comprehensive income, is based solely on the report of other auditors. As of December 31, 2020 and 2019, the carrying amounts of these investees were NT$13,397 thousand and NT$112,618 thousand, respec�i�el�. These in�es�ees� ne� profi� or loss �ere incl�ded in �he Gro�p�s �o�al comprehensive income and loss for the years ended December 31, 2020 and 2019 which were a loss of NT$1,029 thousand and a loss of NT$36,103 thousand, respectively.

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

In preparing �he consolida�ed financial s�a�emen�s, managemen� is responsible for assessing �he Gro�p�s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the Gro�p�s financial repor�ing 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 �hole are free from ma�erial miss�a�emen�, �he�her d�e �o fra�d or error, and �o iss�e an a�di�ors� repor� that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effec�i�eness of �he Gro�p�s in�ernal con�rol.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Concl�de on �he appropria�eness of managemen��s �se of �he going concern basis of acco�n�ing and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Gro�p�s abili�� o con�in�e as a going concern. If �e concl�de �ha� a ma�erial �ncer�ain�� e�is�s, �e are req�ired �o dra� a��en�ion in o�r a�di�ors� 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 �he da�e of o�r a�di�ors� repor�. Ho�e�er, f��re e�en�s or condi�ions ma� ca�se �he Gro�p �o cease to continue as a going concern.
4 -
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the Group audit. We remain solely responsible for our audit opinion.

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 �herefore �he ke� a�di� ma��ers. We describe �hese ma��ers in o�r a�di�ors� 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 engagemen� par�ners on �he a�di� res�l�ing in �his independen� a�di�ors� repor� are H�i-Min Huang and Ya-Ling Wong.

Deloitte & Touche Taipei, Taiwan Republic of China March 19, 2021

Notice to Readers

Fo� �he con�enience of �eade��, �he a�di�o�� epo�� and �he accompan�ing con�olida�ed 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-lang�age independen� a�di�o�� report and consolidated financial statements shall prevail.

YFY INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS (Note 4) Cash and cash equivalents (Note 6) Current financial assets at fair value through profit or losses (Notes 7 and 32) Current financial assets at fair value through other comprehensive income (Note 8) Current financial assets at amortized cost (Notes 9 and 32) Notes receivable, net (Notes 11, 23 and 32) Accounts receivable, net (Notes 11 and 23) Accounts receivable due from related parties, net (Notes 23 and 31) Current inventories (Note 12) Current biological assets (Note 13) Prepayments Other current financial assets (Note 32) Other current assets, others (Note 10) Total current assets NON-CURRENT ASSETS (Note 4) Non-current financial assets at fair value through profit or loss (Notes 7 and 31) Non-current financial assets at fair value through other comprehensive income (Notes 8 and 31) Non-current financial assets at amortized cost (Note 9) Investments accounted for using equity method (Notes 16 and 31) Property, plant and equipment (Notes 17, 31 and 32) Right-of-use assets (Notes 18 and 32) Investment property, net (Note 19) Goodwill Deferred tax assets (Note 25) Prepayments for business facilities (Note 17) Other non-current assets, others (Notes 21 and 32) Total non-current assets TOTAL ASSETS LIABILITIES AND EQUITY CURRENT LIABILITIES (Note 4) Current borrowings (Notes 20 and 32) Short-term notes and bills payable (Note 20) Current financial liabilities at fair value through profit or loss (Note 7) Current contract liabilities (Note 23) Notes and accounts payable Accounts payable to related parties (Note 31) Other payables, others (Note 17) Current tax liabilities Current lease liabilities (Note 18) Other current liabilities, others Total current liabilities NON-CURRENT LIABILITIES (Note 4) Non-current portion of non-current borrowings (Notes 20 and 32) Deferred tax liabilities (Note 25) Non-current lease liabilities (Note 18) Net defined benefit liability, non-current (Note 21) Other non-current liabilities, others Total non-current liabilities Total liabilities EQUITY ATTRIBUTABLE TO OWNERS OF PARENT (Notes 4, 22, 27, 28 and 31) Share capital Capital surplus Retained earnings Other equity interest Total equity attributable to owners of parent NON-CONTROLLING INTERESTS Total equity TOTAL LIABILITIES AND EQUITY		2020 Amount % $ 6,283,121 5 2,718,224 2 5,492,949 4 2,300,849 2 3,453,523 3 11,811,120 10 98,198 - 9,049,118 7 3,327,526 3 2,027,902 2 28,147 - 530,179 - 47,120,856 38 - - 14,141,849 12 436,481 - 5,951,241 5 48,354,857 39 1,897,085 2 2,684,304 2 484,123 - 352,577 - 1,887,388 2 460,449 - 76,650,354 62 $ 123,771,210 100 $ 6,565,420 5 9,398,814 8 147,149 - 552,667 1 9,999,750 8 89,656 - 4,958,632 4 1,249,085 1 158,415 - 1,110,817 1 34,230,405 28 27,077,204 22 3,483,655 3 286,837 - 51,735 - 353,375 - 31,252,806 25 65,483,211 53 16,603,715 13 2,504,194 2 20,756,081 17 5,121,275 4 44,985,265 36 13,302,734 11 58,287,999 47 $ 123,771,210 100		2019
				Amount % $ 6,062,871 5 1,107,193 1 6,226,812 5 2,806,178 2 2,874,640 2 11,559,561 10 99,919 - 9,622,859 8 3,252,537 3 1,378,095 1 74,984 - 687,867 1 45,753,516 38 402,418 - 13,564,673 11 389,923 - 5,617,081 5 47,806,173 40 1,923,886 2 2,746,484 2 509,530 - 421,517 - 1,338,459 1 615,353 1 75,335,497 62 $ 121,089,013 100 $ 12,524,445 10 6,026,520 5 137,460 - 481,639 - 9,304,686 8 44,036 - 3,738,827 3 563,862 1 156,949 - 2,734,462 2 35,712,886 29 29,399,726 24 3,425,496 3 350,898 - 1,062,048 1 354,425 1 34,592,593 29 70,305,479 58 16,603,715 13 1,000,169 1 15,879,283 13 5,767,066 5 39,250,233 32 11,533,301 10 50,783,534 42 $ 121,089,013 100

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

(With Deloitte & Touche auditors� report dated March 19, 2021)

YFY INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE (Notes 4, 23 and 31) Net sales revenue Other operating revenue, net Total operating revenue OPERATING COSTS (Notes 12, 21, 24 and 31) Cost of sales Other operating costs Total operating costs GAIN (LOSS) ON CHANGES IN FAIR VALUE LESS COSTS TO SELL OF BIOLOGICAL ASSETS (Notes 4 and 13) GROSS PROFIT FROM OPERATIONS OPERATING EXPENSES (Notes 21, 24 and 31) Selling expenses Administrative expenses Research and development expenses Total operating expenses NET OPERATING INCOME NON-OPERATING INCOME AND EXPENSES Finance costs, net (Notes 4 and 24) Share of profit of associates accounted for using equity method, net (Notes 4 and 16) Interest income Rent income (Notes 19 and 31) Dividend income Other income, others (Note 15) Gain (loss) on disposal of property, plant and equipment Gain on disposal of non-current disposal groups held for sales (Note 14) Miscellaneous disbursements (Note 17)		2020 Amount % $ 61,258,136 84 11,976,410 16 73,234,546 100 50,437,986 69 7,815,484 11 58,253,470 80 333 - 14,981,409 20 5,256,096 7 3,687,296 5 435,113 1 9,378,505 13 5,602,904 7 (696,626) (1) 606,426 1 125,853 - 66,998 - 803,757 1 1,949,507 3 (134,893) - 356,826 - (175,173) -		2019
				Amount % $ 64,816,784 87 9,943,703 13 74,760,487 100 55,204,803 74 6,987,756 9 62,192,559 83 (6,089) - 12,561,839 17 5,407,146 7 3,812,692 5 351,192 1 9,571,030 13 2,990,809 4 (930,214) (1) 400,731 - 219,894 - 64,664 - 707,436 1 496,622 1 26,402 - - - (241,709) - (Continued)

YFY INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Foreign exchange gains (losses) (Note 35) Gains (losses) on financial assets or liabilities at fair value through profit or loss (Note 4) Total non-operating income and expenses PROFIT FROM CONTINUING OPERATIONS BEFORE TAX TAX EXPENSE (Notes 4 and 25) PROFIT FROM CONTINUING OPERATIONS OTHER COMPREHENSIVE INCOME (Notes 4, 21, 22 and 25) Components of other comprehensive income that will not be reclassified to profit or loss: Gains on remeasurements of defined benefit plans Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income Share of other comprehensive income of associates accounted for using equity method Components of other comprehensive income that will be reclassified to profit or loss: Exchange differences on translation Gains on hedging instruments Share of other comprehensive loss of associates accounted for using equity method Other comprehensive income (loss), net TOTAL COMPREHENSIVE INCOME FOR THE YEAR PROFIT, ATTRIBUTABLE TO: Profit, attributable to owners of parent Profit, attributable to non-controlling interests		2020 Amount % $ 696,352 1 (825,398) (1) 2,773,629 4 8,376,533 11 (1,772,630) (2) 6,603,903 9 549,618 1 (4,653) - 121,158 - 666,123 1 (679,314) (1) 1,285 - (13,660) - (691,689) (1) (25,566) - $ 6,578,337 9 $ 5,209,079 7 1,394,824 2 $ 6,603,903 9		2019
				Amount % $ (269,787) - 91,344 - 565,383 1 3,556,192 5 (896,569) (1) 2,659,623 4 59,553 - 3,403,929 5 202,134 - 3,665,616 5 (1,003,372) (2) 1,134 - (126,498) - (1,128,736) (2) 2,536,880 3 $ 5,196,503 7 $ 2,285,769 3 373,854 1 $ 2,659,623 4 (Continued)

YFY INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

COMPREHENSIVE INCOME, ATTRIBUTABLE TO: Comprehensive income, attributable to owners of parent Comprehensive income, attributable to non-controlling interests EARNINGS PER SHARE (Note 26) Basic earnings per share Diluted earnings per share		2020 Amount % $ 5,360,674 7 1,217,663 2 $ 6,578,337 9 $ 3.14 $ 3.14		2019
				Amount % $ 4,773,707 6 422,796 1 $ 5,196,503 7 $ 1.38 $ 1.38

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

(With Deloitte & Touche auditors� report dated March 19, 2021)

(Concluded)

YFY INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

					Equity Attributable to Owners of Parent
Share Capital Shares (In Thousands) Amount 1,660,372 $ 16,603,715 - - - - - - - - - - - - - - - - - - - - - - - - 1,660,372 16,603,715 - - - - - - - - - - - - - - - - - - - - - - - - 1,660,372 $ 16,603,715		CapitalSurplus		Total $ 989,929 - - - - (6,123 ) 3,085 (962 ) 14,240 - - - - 1,000,169 - - - - (338 ) 1,487 1,431,233 71,643 - - - - $ 2,504,194	Retained Earnings	Total $ 14,241,392 - (996,223 ) - - 555 - - 61 2,285,769 59,516 2,345,285 288,213 15,879,283 - (1,162,260 ) - - (17 ) - 27 (22,727 ) 5,209,079 552,880 5,761,959 299,816 $ 20,756,081	Other Equity	ains (Losses) on Hedging Instruments $ (7,010 ) - - - - - - - - - 633 633 - (6,377 ) - - - - - - - 2,285 - 1,067 1,067 - $ (3,025)
							Exchange Differences on Translation of Unrealized Gains (Losses) on Financial Assets Measured at Fair Value Through Other G Foreign Financial Statements Comprehensive Income $ (40,365 ) $ 3,674,848 - - - - - - - - - (555 ) - - - - - (61 ) - - (995,837) 3,423,626 (995,837) 3,423,626 - (288,213) (1,036,202 ) 6,809,645 - - - - - - - - - - - - 50,578 (27 ) 2,827 (353 ) - - (526,210) 123,858 (526,210) 123,858 - (299,816) $ (1,509,007) $ 6,633,307
Shares (In Thousands) 1,660,372 - - - - - - - - - - - - 1,660,372 - - - - - - - - - - - - 1,660,372	Treasury Shares $ 14,947 - - - - - - - - - - - - 14,947 - - - - - - - - - - - - $ 14,947	Consolidation Excess $ 293,124 - - - - - - - - - - - - 293,124 - - - - - - - - - - - - $ 293,124	Other $ 681,858 - - - - (6,123 ) 3,085 (962 ) 14,240 - - - - 692,098 - - - - (338 ) 1,487 1,431,233 71,643 - - - - $ 2,196,123		Legal Reserve Special Reserve Unappropriated Retained Earnings $ 3,415,373 $ 4,028,584 $ 6,797,435 144,000 - (144,000 ) - - (996,223 ) - (1 ) 1 - - - - - 555 - - - - - - - - 61 - - 2,285,769 - - 59,516 - - 2,345,285 - - 288,213 3,559,373 4,028,583 8,291,327 263,411 - (263,411 ) - - (1,162,260 ) - (26,770 ) 26,770 - - - - - (17 ) - - - - - 27 - - (22,727 ) - - 5,209,079 - - 552,880 - - 5,761,959 - - 299,816 $ 3,822,784 $ 4,001,813 $ 12,931,484

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

(Wi�h Deloi��e & To�che a�di�ors� repor� da�ed March 19, 2021)

10 -

YFY INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES, INDIRECT METHOD Profit before tax Adjustments to reconcile profit (loss) Depreciation and amortization expenses Expected credit loss (gain) Net loss (gain) on financial assets or liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share-based payments Share of profit of associates accounted for using equity method Loss on disposal of property, plant and equipment Gain on disposal of investment properties Gain on disposal of non-current disposal groups held for sale Loss on disposal of investments Impairment loss recognized on property, plant and equipment Write-downs of inventories Unrealized foreign exchange gain Loss (gain) arising from changes in fair value less costs to sell of biological assets Gain on disposal of land use rights (Note 15) Loss from lease modification Changes in operating assets and liabilities Decrease (increase) in current financial assets at fair value through profit or loss, mandatorily measured at fair value Decrease (increase) in notes receivable, net Decrease (increase) in accounts receivable, net Decrease (increase) in accounts receivable due from related parties, net Decrease (increase) in current inventories Decrease (increase) in current biological assets Decrease (increase) in prepayments Decrease (increase) in other current assets, others Increase (decrease) in financial liabilities held for trading Increase (decrease) in current contract liabilities Increase (decrease) in notes and accounts payable Increase (decrease) in accounts payable to related parties Increase (decrease) in other payable, others Increase (decrease) in other current liabilities, others Increase (decrease) in net defined benefit liability, non-current Cash inflow generated from operations Interest received Dividends received	2020 $ 8,376,533 4,329,947 94,624 825,398 696,626 (125,853) (803,757) 58,152 (606,426) 134,893 - (356,826) - 60,016 28,305 (885,847) (333) (1,389,329) 12,697 (990,128) (756,100) (46,340) 1,721 326,300 (23,231) (706,283) (173,564) (998,978) 69,053 826,225 45,628 842,117 55,648 (323,291) 8,597,597 95,605 1,173,100	2019 $ 3,556,192 4,209,698 (30,759) (91,344) 930,214 (219,894) (707,436) 31,683 (400,731) 236 (26,638) - 997 - 84,850 (117,880) 6,089 - - 771,620 759,436 (96,169) (8,743) 1,329,001 (75,863) (289,560) 99,712 (514,105) 16,165 1,184,873 118,095 81,138 365,118 (120,116) 10,845,879 200,973 1,138,691 (Continued)

11 -

YFY INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Interest paid Income taxes paid Net cash flows generated from operating activities CASH FLOWS USED IN INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income Acquisition of financial assets at amortized cost Proceeds from disposal of financial assets at amortized cost Acquisition of financial assets for hedging Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Proceeds from disposal of subsidiaries Proceeds from capital reduction of investments accounted for using equity method Proceeds from disposal of non-current disposal groups held for sale (Note 14) Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of right-of-use assets Proceeds from disposal of investment properties Decrease in other financial assets Increase in other non-current assets, others Increase in other current liabilities, others Net cash flows used in investing activities CASH FLOWS USED IN FINANCING ACTIVITIES Increase in current borrowings Decrease in current borrowings Increase in short-term notes and bills payable Decrease in short-term notes and bills payable Repayments of long-term debt Payments of lease liabilities Increase in other non-current liabilities, others Cash dividends paid Change in non-controlling interests Overdue dividends received Net cash flows used in financing activities	2020 $ (676,970) (1,120,955) 8,068,377 (23,880) 62,712 99,612 - 436,340 - - - - - 749,344 (5,078,679) 77,213 - - 43,516 (112,693) - (3,746,515) - (5,893,661) 3,372,294 - (2,271,411) (214,027) 8,251 (1,162,260) 2,085,370 1,487 (4,073,957)	2019 $ (814,295) (798,952) 10,572,296 (5) 283,222 66,769 (1,854,993) - (174) (3,770) 60 (406) 199,432 - (3,890,640) 130,438 (147,333) 30,013 35,784 (62,910) 1,365,735 (3,848,778) 1,159,513 - - (670,116) (4,172,787) (166,571) 115,209 (996,223) (417,540) 3,088 (5,145,427) (Continued)

12 -

YFY INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

2020
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
EQUIVALENTS
$ (27,655)

NET INCREASE IN CASH AND CASH EQUIVALENTS
220,250
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR

6,062,871

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
$ 6,283,121

The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche auditors� report dated March 19, 2021)

2019
$ (173,831)

1,404,260

4,658,611
$ 6,062,871
(Concluded)

13 -

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

YFY INC. AND SUBSIDIARIES

1. GENERAL INFORMATION

YFY Inc. (�he �Compan��) �as incorpora�ed in Kaohsi�ng in Febr�ar� 1950. The Compan��s shares ha�e been listed on the Taiwan Stock Exchange (TWSE) since February 1977.

The Company was originally principally engaged in the manufacture and sale of paper and paper-related products and the design, manufacture and sale of equipment. To increase its sales and competitiveness, the Company carried out a restructuring of the organization and spin-off of its specialized divisions. The Company spun off the assets, liabilities, and operations of its consumer products and packaging segments to its subsidiaries, Yuen Foong Yu Consumer Products Co., Ltd., in October 2007 and YFY Packaging Inc., in September 2005.

In addition, the Company spun off the assets, liabilities and operations of its paper and cardboard business segment to Chung Hwa Pulp Corporation (CHPC) and acquired the shares issued by CHPC on October 1, 2012. After this transaction, CHPC became a subsidiary of the Company, and the Company became an investment holding company, with investment as its main business.

The consolidated financial statements of the Company and its subsidiaries, hereto forth collectively referred �o as �he Gro�p, are presen�ed in �he Compan��s f�nc�ional c�rrenc�, �he Ne� Tai�an dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolida�ed financial s�a�emen�s �ere appro�ed b� �he Compan��s board of direc�ors on Febr�ar� 26, 2021.

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

a. Initial application of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the �IFRSs�) endorsed and iss�ed in�o effec� b� �he Financial S�per�isor� Commission (FSC)

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have any ma�erial impac� on �he Gro�p�s acco�n�ing policies.

b. The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2021

New IFRSs Amendments to IFRS 4 �E��ension of �he Temporar� E�emp�ion from Appl�ing IFRS 9� Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 �In�eres� Ra�e Benchmark Reform - Phase 2�	Effective Date Announced by IASB
	Effective immediately upon promulgation by the IASB January 1, 2021

14 -

As of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of the above standards and in�erpre�a�ions �ill ha�e on �he Gro�p�s financial posi�ion and financial performance and �ill disclose the relevant impact when the assessment is completed.

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

New IFRSs
�Ann�al Impro�emen�s �o IFRS S�andards 2018-2020�

Amendmen�s �o IFRS 3 �Reference �o �he Concep��al Frame�ork�

Amendmen�s �o IFRS 10 and IAS 28 �Sale or Con�rib��ion of Asse�s
be��een an In�es�or and i�s Associa�e or Join� Ven��re�

IFRS 17 �Ins�rance Con�rac�s�

Amendments to IFRS 17

Amendmen�s �o IAS 1 �Classifica�ion of Liabili�ies as C�rren� or
Non-c�rren��

Amendmen�s �o IAS 1 �Disclos�re of Acco�n�ing Policies�

Amendmen�s �o IAS 8 �Defini�ion of Acco�n�ing Es�ima�es�

Amendmen�s �o IAS 16 �Proper��, Plan� and Eq�ipmen� - Proceeds
before In�ended Use�

Amendmen�s �o IAS 37 �Onero�s Con�rac�s - Cost of Fulfilling a
Con�rac��

Effective Date
Announced by IASB (Note 1)

January 1, 2022 (Note 2)
January 1, 2022 (Note 3)
To be determined by IASB
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023 (Note 4)
January 1, 2023 (Note 5)
January 1, 2022 (Note 6)
January 1, 2022 (Note 7)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after Jan�ar� 1, 2022. The amendmen�s �o IAS 41 �Agric�l��re� �ill be applied prospec�i�el� �o the fair value measurements on or after the annual reporting periods beginning on or after Jan�ar� 1, 2022. The amendmen�s �o IFRS 1 �Firs�-�ime Adop�ions of IFRSs� �ill be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.
Note 4: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 5: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 6: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 7: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.
15 -
1) Amendmen�s �o IAS 1 �Classifica�ion of Liabili�ies as C�rren� or Non-c�rren��

The amendments clarify that for a liability to be classified as non-current, the Group shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether the Group will exercise that right. The amendments also clarify that, if the right to defer settlement is subject to compliance with specified conditions, the Group must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date.

The amendments stipulate that, for the purpose of liability classification, the aforementioned se��lemen� refers �o a �ransfer of cash, o�her economic reso�rces or �he Gro�p�s o�n eq�i�� instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of �he Gro�p�s o�n eq�i�� ins�r�men�s, and if s�ch op�ion is recogni�ed separately as equity in accordance �i�h IAS 32 �Financial Ins�r�men�s: Presen�a�ion�, �he aforemen�ioned �erms �o�ld no� affect the classification of the liability.

2) Amendmen�s �o IAS 1 �Disclos�re of Acco�n�ing Policies�

The amendments specify that the Group should refer to the definition of material to determine its material accounting policy information to be disclosed. Accounting policy information is material if it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments also clarify that:

Accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed;
The Group may consider the accounting policy information as material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial; and
Not all accounting policy information relating to material transactions, other events or conditions is itself material.

The amendments also illustrate that accounting policy information is likely to be considered as material to the financial statements if that information relates to material transactions, other events or conditions and:

a) The Group changed its accounting policy during the reporting period and this change resulted in a material change to the information in the financial statements;
b) The Group chose the accounting policy from options permitted by the standards;
c) The acco�n�ing polic� �as de�eloped in accordance �i�h IAS 8 �Acco�n�ing Policies, Changes in Acco�n�ing Es�ima�es and Errors� in �he absence of an IFRS �ha� specificall� applies;
d) The accounting policy relates to an area for which the Group is required to make significant judgements or assumptions in applying an accounting policy, and the Group discloses those judgements or assumptions; or
e) The accounting is complex and users of the financial statements would otherwise not understand those material transactions, other events or conditions.
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3) Amendmen�s �o IAS 8 �Defini�ion of Acco�n�ing Es�ima�es�

The amendments define that accounting estimates are monetary amounts in financial statements that are subject to measurement uncertainty. In applying accounting policies, the Group may be required to measure items at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, the Group uses measurement techniques and inputs to develop accounting estimates to achieve the objective. The effects on an accounting estimate of a change in a measurement technique or a change in an input are changes in accounting estimates unless they result from the correction of prior period errors.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of other standards and in�erpre�a�ions �ill ha�e on �he Gro�p�s financial posi�ion and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

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

b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value, biological assets (excluding bearer plants) which are measured at fair value less costs to sell, net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets, investments accounted for using the equity method and the lower of cost or net realizable value on inventories.

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

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

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within twelve months after the reporting period; and
3) Cash and cash equivalents, unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.
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Current liabilities include:

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

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

d. Basis of consolidation

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

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

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

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

Changes in �he Gro�p�s o�nership in�eres�s in s�bsidiaries �ha� do no� res�l� in �he Gro�p losing con�rol over the subsidiaries are accounted for as equity transactions. The carrying amoun�s of �he Gro�p�s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and any investment retained in the former subsidiary at its fair value at the date when control is lost and (ii) the assets (including any goodwill) less liabilities and any non-controlling interests of the former subsidiary at their carrying amounts at the date when control is lost. The Group accounts for all amounts recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Group had directly disposed of the related assets or liabilities.

The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition of an investment in an associate or financial assets.

Refer to Note 15 and Tables 10 and 11 for more information on subsidiaries (including the percentage of ownership and main business).

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e. Foreign currencies

In preparing the financial statements of each individual group entity, transactions in currencies other �han �he en�i��s f�nc�ional c�rrenc� (foreign c�rrencies) are recogni�ed a� �he ra�es of e�change prevailing at the dates of the transactions.

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

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

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purpose of presenting consolidated financial statements, the functional currencies of the Company and its foreign operations (including subsidiaries and associates in other countries that use currency different from the currency of the Company) are translated into the presentation currency - the New Taiwan dollars as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income (attributed to the owners of the Company and non-controlling interests as appropriate).

On �he disposal of a foreign opera�ion (i.e., a disposal of �he Compan��s en�ire in�eres� in a foreign operation, or a disposal involving the loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Company losing control over the subsidiary, the proportionate share of accumulated exchange differences is re-attributed to non-controlling interests of the subsidiary and is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

f. Inventories

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

g. Biological assets

Biological assets are measured at cost plus transaction costs on initial recognition, and subsequently measured at fair value less costs to sell. The gains and losses arising from the change in fair value less costs to sell are recognized in profit or loss when they are incurred.

Agricultural produce harvested from biological assets is measured initially at fair value less costs to sell at the point of harvest, subsequently transferred to inventory and accounted for accordingly.

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h. Investment in associates

An associate is an entity over which the Group has significant influence and that is not a subsidiary.

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

Under the equity method, investments in an associate are initially recognized at cost and adjusted �hereaf�er �o recogni�e �he Gro�p�s share of �he profi� or loss and o�her comprehensi�e income of �he associa�e. The Gro�p also recogni�es �he changes in �he Gro�p�s share of eq�i�� of associa�es.

Any excess of the cost of acquisition over the Gro�p�s share of �he ne� fair �al�e of �he iden�ifiable assets and liabilities of an associate at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group�s share of the net fair value of the identifiable assets and liabilities over the cost acquisition, after reassessment, this is recognized immediately in profit or loss.

When the Group subscribes for additional new shares of the associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of �he Gro�p�s propor�iona�e in�eres� in �he associa�e. The Gro�p records s�ch a difference as an adjustment to investments, with the corresponding amount charged or credited to capital surplus - changes in �he Gro�p�s share of eq�i�� of associa�es. If �he Gro�p�s o�nership in�eres� is red�ced d�e �o the additional subscription of the new shares of associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for by the equity method is insufficient, the shortage is debited to retained earnings.

When �he Gro�p�s share of losses of an associa�e equals or exceeds its interest in that associate (which includes any carrying amount of the investment accounted for by the equity method and long-term in�eres�s �ha�, in s�bs�ance, form par� of �he Gro�p�s ne� in�es�men� in �he associa�e), �he Gro�p discontinues recognizing its share of further losses, if any. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

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

The Group discontinues the use of the equity method from the date on which its investment ceases to be an associate. Any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities.

When a group entity transacts with its associate, profits and losses resulting from the transactions with �he associa�e are recogni�ed in �he Gro�p� consolida�ed financial s�a�ements only to the extent of interests in the associate that are not related to the Group.

i. Property, plant and equipment

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

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

Except for freehold land which is not depreciated, depreciation on property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis.

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

j. Investment properties

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

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

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

k. Goodwill

Goodwill arising from the acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is alloca�ed �o each of �he Gro�p�s cash-generating units or groups of cash-generating units (referred to as cash-generating units) that is expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually or more frequently when there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then pro rata to the other assets of the unit based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. An impairment loss recognized for goodwill is not reversed in subsequent periods.

l. Impairment of property, plant and equipment, right-of-use assets and intangible assets other than goodwill

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

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

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

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

m. Non-current disposal groups held for sale

Disposal groups are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the disposal groups are available for immediate sale in their present condition. To meet the criteria for the sale being highly probable, the appropriate level of management must be committed to the sale, and the sale should be completed within 1 year from the date of classification.

If the control of a subsidiary will be lost during the sale, all of the assets and liabilities of that subsidiary will be classified as held for sale, regardless whether the Group will retain a non-controlling interest in that subsidiary after the sale.

Non-current disposal groups classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Recognition of depreciation of those assets will cease.

n. Financial instruments

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

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

1) Financial assets

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

a) Measurement categories

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost and investments in equity instruments at fair value through other comprehensive income (i.e., FVTOCI).

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i. Financial assets at FVTPL

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

Financial assets at FVTPL are subsequently measured at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss incorporate any dividends or interest earned on the financial asset. Fair value is determined in the manner described in Note 30.

ii. Financial assets at amortized cost

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

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

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

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

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

A financial asset is credit impaired when one or more of the following events have occurred:

i) Significant financial difficulty of the issuer or the borrower;
ii) Breach of contract, such as a default;
iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or
iv) The disappearance of an active market for that financial asset because of financial difficulties.
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Cash equivalents include time deposits and repurchase agreements collateralized by bonds with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

iii Investments in equity instruments at FVTOCI

On initial recognition, the Group may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, they will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when �he Gro�p�s righ� �o recei�e �he di�idends is es�ablished, �nless �he di�idends clearl� represent a recovery of part of the cost of the investments.

b) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost.

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

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

For internal credit risk management purposes, the Group determines that the following situations indicate that a financial asset is in default (without taking into account any collateral held by the Group) when internal or external information show that the debtor is unlikely to pay its creditors.

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

c) Derecognition of financial assets

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

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On derecognition of a financial asset at amortized cost in its entirety, the difference between the asse��s carr�ing amo�n� and �he s�m of �he considera�ion recei�ed and recei�able is recogni�ed in profit or loss. On derecognition of an investment in an equity instrument at FVTOCI, the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Financial liabilities

a) Subsequent measurement

Except for financial liabilities at FVTPL, all the financial liabilities are measured at amortized cost using the effective interest method. Financial liabilities are classified as at fair value through profit or loss when such financial liabilities are either held for trading or designated as at fair value through profit or loss.

Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss does not incorporate any interest or dividends paid on the financial liability. Fair value is determined in the manner described in Note 30.

b) Derecognition of financial liabilities

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

3) Derivative financial instruments

The Group enters into a variety of derivative financial instruments to manage its exposure to foreign exchange rate risks and interest rate risks, including foreign exchange forward contracts, combined option contracts and currency exchange contracts.

Derivatives are initially recognized at fair value at the date on which the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument; in which event, the timing of the recognition in profit or loss depends on the nature of the hedge relationship. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is negative, the derivative is recognized as a financial liability.

Derivatives embedded in hybrid contracts, which contain financial asset hosts within the scope of IFRS 9, are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets that is within the scope of IFRS 9 (e.g. financial liabilities) are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts and the host contracts are not measured at FVTPL.

o. Hedge accounting

The Group designates certain hedging instruments as cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

The effective portion of gains or losses on derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gains or losses relating to the ineffective portion are recognized immediately in profit or loss.

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The associated gains or losses that were recognized in other comprehensive income are reclassified from equity to profit or loss as a reclassification adjustment in the line item relating to the hedged item in the same period when the hedged item affects profit or loss. If a hedge of a forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, the associated gains and losses that were recognized in other comprehensive income are removed from equity and are included in the initial cost of the non-financial asset or non-financial liability.

The Group discontinues hedge accounting only when the hedging relationship ceases to meet the qualifying criteria; for instance, when the hedging instrument expires or is sold, terminated or exercised. The cumulative gain or loss on the hedging instrument that was previously recognized in other comprehensive income (from the period in which the hedge was effective) remains separately in equity until the forecasted transaction occurs. When a forecasted transaction is no longer expected to occur, the gains or losses accumulated in equity are recognized immediately in profit or loss.

p. Provisions

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

q. Revenue recognition

Revenue from merchandise sales mainly comes from sales of various types of paper and cardboard products. When control over the ownership of goods has been transferred, revenue and receivables are recognized; advance receipts received before the merchandise has been transferred are recognized as a contractual liability.

The Group does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

r. Leases

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

1) The Group as lessor

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

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

2) The Group as lessee

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

Right-of-use assets are initially measured at present value of the lease payments and subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

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

Lease liabilities are initially measured at the present value of the lease payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily de�ermined, �he Gro�p �ses �he lessee�s incremen�al borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change in future lease payments resulting from a change in an index, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. For a lease modification that is not accounted for as a separate lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset of lease modifications that decreased the scope of the lease, and recognizing in profit or loss any gain or loss on the partial or full termination of the lease; making a corresponding adjustment to the right-of-use asset of all other lease modifications. Lease liabilities are presented on a separate line in the consolidated balance sheets.

s. Borrowing costs

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

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

t. Government grants

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

Government grants related to income are recognized in other income on a systematic basis over the periods in which the Group recognizes as expenses the related costs that the grants intend to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue and recognized in profit or loss on a systematic and rational basis over the useful lives of the related assets.

u. Employee benefits

1) Short-term employee benefits

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

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

27 -

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost) and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Ne� defined benefi� liabili�ies (asse�s) represen� �he ac��al defici� (s�rpl�s) in �he Gro�p�s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

v. Share-based payment arrangements

The fair value at the grant date of the employee share options is expensed on a straight-line basis over �he �es�ing period, based on �he Gro�p�s bes� es�ima�es of �he n�mber of shares or options that are expected to ultimately vest, with a corresponding increase in capital surplus - employee share options. It is recognized as an expense in full at the grant date if vested immediately.

At the end of each reporting period, the Group revises its estimate of the number of employee share options that are expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expenses reflect the revised estimate, with a corresponding adjustment to capital surplus - employee share options and non-controlling interests.

w. Taxation

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

1) Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.

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

Adj�s�men�s of prior �ears� �a� liabili�ies are added �o or ded�c�ed from �he c�rren� �ear�s �a� provision.

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences or unused loss carryforwards to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

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

28 -

will be sufficient taxable profit against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

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

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

3) Current and deferred taxes for the year

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively.

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In �he applica�ion of �he Gro�p�s acco�n�ing policies, management is required to make judgments, estimations and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

The Group considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

a. Estimated impairment of trade receivables

The provision for impairment of account receivables is based on assumptions about risk of default and expected loss rates. The Group uses judgment in making these assumptions and in selecting the inputs �o �he impairmen� calc�la�ion, based on �he Gro�p�s his�orical e�perience, e�is�ing marke� condi�ions as well as forward looking estimates as of the end of each reporting period. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

b. Fair value measurement of equity investments in unlisted shares

The fair value measurement of equity investments in unlisted shares is determined by the estimated fair value under appropriate valuation methods primarily based on in�es�ees� financial posi�ions, opera�ion results and recent financing activities, the market transaction prices of similar investments, market conditions and the required discount factors. As such, the estimated fair value may be different from the actual disposal price in the future.

29 -

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents Time deposits Repurchase agreements collateralized by bonds		December 31	December 31
		2020 $ 18,420 4,925,981 1,203,720 135,000 $ 6,283,121	2019 $ 33,372 4,470,772 1,522,727 36,000 $ 6,062,871

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL)

Financial assets at FVTPL-current Financial assets mandatorily classified as at FVTPL Derivative financial assets (not under hedge accounting) Foreign exchange forward contracts Combined option contracts Currency exchange contracts Non-derivative financial assets Mutual funds Hybrid financial assets Structured deposits Financial assets at FVTPL-non-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Subordinated bank debentures Financial liabilities at FVTPL-current Financial liabilities held for trading Derivative financial liabilities (not under hedge accounting) Foreign exchange forward contracts Combined option contracts		December 31	December 31
		2020 $ 8,896 - - 1,124,623 1,584,705 $ 2,718,224 $ - $ 147,149 - $ 147,149	2019 $ 14,995 12,668 32 644,774 434,724 $ 1,107,193 $ 402,418 $ 112,240 25,220 $ 137,460

30 -

At the end of the reporting period, outstanding foreign exchange forward contracts not under hedge accounting were as follows:

					Notional Amount
			Currency	Maturity Date	(In Thousands)
December	31,	2020
Buy			USD:RMB	2021.01.07-2021.01.29	USD30,000
Buy			USD:NTD	2021.01.12-2021.01.15	USD1,400
Buy			JPY:USD	2021.01.19	JPY250,000
Sell			USD:NTD	2021.01.04-2021.03.15	USD38,500
Sell			RMB:USD	2021.01.08-2021.06.04	RMB1,753,959
December	31,	2019
Buy			USD:RMB	2020.01.06-2020.01.21	USD30,000
Buy			USD:NTD	2020.01.16-2020.01.21	USD6,000
Sell			USD:NTD	2020.01.02-2020.02.27	USD37,800
Sell			RMB:USD	2020.01.06-2020.03.11	RMB2,102,251

The Group entered into foreign exchange forward contracts to manage exposures to exchange rate fluctuations of foreign currency denominated assets and liabilities.

At the end of the reporting period, outstanding combined option contracts not under hedge accounting were as follows:

					Notional Amount
			Currency	Maturity Date	(In Thousands)
December	31,	2019
Buy			USD:RMB	2020.07.06-2020.10.26	USD40,000
Sell			USD:RMB	2020.07.06-2020.10.26	USD40,000

The Group entered into combined option contracts to manage exposures to exchange rate fluctuations of foreign currency denominated assets and liabilities.

At the end of the reporting period, outstanding currency exchange contracts not under hedge accounting were as follows:

			Notional Amount
	Currency	Maturity Date	(In Thousands)
December 31, 2019
Currency exchange contracts	JPY:USD	2020.03.16	JPY250,000/
			USD2,308

The Group entered into currency exchange contracts to manage exposures to exchange rate fluctuations of foreign currency denominated assets and liabilities.

31 -

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

(FVTOCI)

Investments in equity instruments at FVTOCI-current Domestic investments Listed shares Investments in equity instruments at FVTOCI-non-current Domestic investments Listed shares Unlisted shares Foreign investments Unlisted shares		December 31	December 31
		2020 $ 5,492,949 $ 9,179,080 4,662,504 13,841,584 300,265 $ 14,141,849	2019 $ 6,226,812 $ 9,500,327 3,838,772 13,339,099 225,574 $ 13,564,673

The Group invested in listed and unlisted on domestic or foreign equity securities, and elected to designate these investments in equity instruments as at FVTOCI.

The Group acquired Zhen Ding Technology Holding Limi�ed (�ZDTHL�) �hro�gh s�ock e�change. The Compan��s board of direc�ors appro�ed �he s�ock e�change of all of i�s o�nership of Board�ek Elec�ronics Corpora�ion (�BEC�) for o�nership of �ZDTHL� in Ma� 2020. The s�ock e�change �as cond�c�ed a� an exchange ra�io of 1 ordinar� share of �BEC� for 0.2 ne�l� iss�ed ordinar� share of �ZDTHL�. The abo�e stock exchange has been completed on November 4, 2020.

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Time deposits with original maturities of more than 3 months and not exceeding 1 year Time deposits with original maturities of more than 1 year Non-current Time deposits with original maturities of more than 1 year		December 31	December 31
		2020 $ 2,300,849 - $ 2,300,849 $ 436,481	2019 $ 2,801,178 5,000 $ 2,806,178 $ 389,923

The ranges of interest rates for time deposits with original maturities of more than 3 months and not exceeding 1 year were 0.23%-1.40% and 0.63%-3.05%, respectively, as at the end of the reporting period.

The ranges of interest rates for time deposits with original maturities of more than 1 year were 3.96%-3.99% and 1.07%-3.96%, respectively, as at the end of the reporting period.

Refer to Note 32 for pledge information relating to investments in financial assets at amortized cost which is set as guarantees provided on certain commitments.

32 -

10. DERIVATIVE FINANCIAL INSTRUMENTS FOR HEDGING

Derivative financial assets under hedge accounting - current (accounted for as other current assets, others) Foreign exchange forward contracts		December	31
		2020 $ 54	2019 $ 24

The Gro�p�s hedge s�ra�eg� is �o en�er foreign e�change for�ard con�rac�s �o a�oid i�s e�change ra�e exposure to certain foreign currency receipts and payments and to manage its exchange rate exposure in relation to foreign currency denominated forecasted purchases. When forecasted purchases actually take place, the carrying amounts of the non-financial hedged items will be adjusted accordingly.

The terms of the foreign exchange forward contracts were negotiated to match the terms of the respective designated hedged items. The outstanding foreign exchange forward contracts at the end of the reporting period were as follows:

					Notional Amount
			Currency	Maturity Date	(In Thousands)
December	31,	2020
Buy			EUR:NTD	2021.01.29	EUR300
December	31,	2019
Buy			EUR:NTD	2020.01.31	EUR300

11. NOTES RECEIVABLES AND ACCOUNTS RECEIVABLE

Notes receivable Notes receivable Less: Allowance for impairment loss Accounts receivable Accounts receivable Less: Allowance for impairment loss		December 31	December 31
		2020 $ 3,456,289 (2,766) $ 3,453,523 $ 12,238,625 (427,505) $ 11,811,120	2019 $ 2,883,707 (9,067) $ 2,874,640 $ 11,968,575 (409,014) $ 11,559,561

Notes receivable and accounts receivable were generated by operating activities.

The Group reviews the recoverable amounts at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts.

33 -

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix by reference to the past defa�l� e�perience of �he deb�or and an anal�sis of �he deb�or�s c�rren� financial posi�ion, adj�s�ed for general economic conditions of the industry in which the debtors operate and an assessment of both the c�rren� as �ell as �he forecas�ed direc�ion of economic condi�ions a� �he repor�ing da�e. As �he Gro�p�s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to �he Gro�p�s differen� c�s�omer base.

December 31, 2020

Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost December 31, 2019 Gross carrying amount Loss allowance (Lifetime ECLs) Amortized cost	Not Past Due $ 14,737,565 (40,368) $ 14,697,197 Not Past Due $ 14,059,643 (68,038) $ 13,991,605	Less than 90 Days 91 to 180 Days 181 to 360 Days Over 361 Days $ 526,498 $ 44,107 $ 9,171 $ 377,573 (6,533) (23,934) (2,718) (356,718) $ 519,965 $ 20,173 $ 6,453 $ 20,855 Less than 90 Days 91 to 180 Days 181 to 360 Days Over 361 Days $ 399,738 $ 98,377 $ 24,562 $ 269,962 (48,661) (26,251) (7,111) (268,020) $ 351,077 $ 72,126 $ 17,451 $ 1,942	Total $ 15,694,914 (430,271) $ 15,264,643 Total $ 14,852,282 (418,081) $ 14,434,201

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

Balance at January 1 Add: Net remeasurement of loss allowance Less: Amounts written off Effect of foreign currency exchange differences Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2020 $ 418,081 94,624 (85,898) 3,464 $ 430,271	2019 $ 506,720 (30,759) (45,457) (12,423) $ 418,081

As of December 31, 2020 and 2019, the Group disco�n�ed a por�ion of i�s banker�s accep�ance bills in mainland China with an aggregate carrying amount of $1,070,531 thousand and $1,251,178 thousand. For information on the transfer of financial instruments, refer to Note 30.

The carrying amount of notes receivable pledged as collateral was disclosed in Note 32.

12. INVENTORIES

Finished and purchased goods Materials Work-in-process		December 31	December 31
		2020 $ 4,091,494 4,222,595 735,029 $ 9,049,118	2019 $ 4,198,193 4,652,174 772,492 $ 9,622,859

34 -

The cost of goods sold for the years ended December 31, 2020 and 2019 included inventory write-downs of $28,305 thousand and $84,850 thousand, respectively.

13. BIOLOGICAL ASSETS

Balance at January 1 Increases due to planting Gain (loss) on changes in fair value less costs to sell Decreases due to harvest Effect of foreign currency exchange differences Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 3,252,537 122,125 333 (98,894) 51,425 $ 3,327,526	2019 $ 3,317,475 201,244 (6,089) (125,381) (134,712) $ 3,252,537

The Gro�p�s biological asse�s are e�cal�p��s loca�ed in G�angdong Pro�ince, Zhaoqing Ci��. The eucalyptus is mainly grown for pulp manufacturing.

The fair values of biological assets (before deducting costs to sell) which are recurring fair value measurements were as follows:

Eucalyptus (Level 3)		December 31	December 31
		2020 $ 3,437,755	2019 $ 3,360,128

The movements in the fair value of the assets within Level 3 of the hierarchy were as follows:

Balance at January 1 Increases due to planting Gain (loss) on changes in fair value less costs to sell Decreases due to harvesting Effect of foreign currency exchange differences Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 3,360,128 126,964 346 (102,812) 53,129 $ 3,437,755	2019 $ 3,396,946 211,239 (6,392) (131,608) (110,057) $ 3,360,128

14. NON-CURRENT DISPOSAL GROUPS CLASSIFIED AS HELD FOR SALE

On June 22, 2020, the board of directors of the subsidiary, YFY Investment Co., Ltd., resolved to dispose of all of its ownership of YFY Family Paper (Beijing) Co., Ltd. The contract was signed in July 2020 with an estimated amount of RMB180,000 thousand. The Group expects to complete the sale within 12 months. Thus, the assets, liabilities, and equity attributable to that subsidiary were reclassified as held for sale and were presented separately in the consolidated balance sheets for the six months ended June 30, 2020. The sales proceeds substantially exceeded the carrying amount of the related net assets and, accordingly, no impairment losses were recognized after remeasurement at the lower of carrying amount and fair value less costs to sell.

The Group completed the disposal in August 2020 and lost control of the subsidiary. The sales proceeds of RMB180,000 thousand were fully collected in October 2020.

35 -

a. Consideration received from disposals

YFY Family Paper (Beijing) Co., Ltd. Cash $ 773,734

b. Analysis of assets and liabilities on the date control was lost

	YFY Family	YFY Family
	Paper (Beijing)
	Co., Ltd.
Current assets
Cash	$	309
Accounts receivable		52,378
Other current assets, others		48,907
Non-current assets
Property, plant and equipment		361,976
Right-of-use assets		21,640
Other non-current assets, others		901
Current liabilities
Other payables, others		(50,537)
Other current liabilities, others		(24,290)
Net assets disposed of	$	411,284
Gain on disposal of non-current disposal groups held for sale
	YFY Family
	Paper (Beijing)
	Co., Ltd.
Consideration received	$	773,734
Disposal fees		(24,081)
Net assets disposed of		(411,284)
Reclassification of other comprehensive income in respect of subsidiaries		19,880
Effect of foreign currency exchange differences		(1,423)
Gain on disposals (accounted for as gain on disposal of non-current disposal groups
held for sale)	$	356,826
Net cash inflow on disposals of subsidiaries
	YFY Family
	Paper (Beijing)
	Co., Ltd.
Consideration received in cash	$	773,734
Less: Disposal fees		(24,081)
Less: Cash balance disposed of		(309)
	$	749,344

c. Gain on disposal of non-current disposal groups held for sale

d. Net cash inflow on disposals of subsidiaries
36 -

15. SUBSIDIARIES

a. Subsidiaries included in the consolidated financial statements (for the diagram of investment structure of the Group as at December 31, 2020, refer to Table 1):

Investor
Investee
Main Business
YFY Inc.
Chung Hwa Pulp Corporation
Pulp and paper production, trading and forestry
business
YFY International Limited
Investment and holding
YFY Global Investment Limited
Investment and holding
Yuen Foong Yu Consumer Products
Co., Ltd.
Production and sale of high quality paper and
paper - related merchandise
Shin Foong Specialty and Applied
Materials Co., Ltd.
Production and sale of SBR (styrene butadiene
rubber) latex
China Color Printing Co., Ltd.
Design and print of magazines, posters and
books
YFY Venture Capital Investment Co.,
Ltd.
Investment and holding
Effion Enertech Co., Ltd.
To operate cogeneration and provide power
technology
YFY Development Corp. (originally
named as YFY Capital Co., Ltd.)
Real estate investment and development
YFY Corporate Advisory & Services
Co., Ltd.
Consulting
Union Paper Corp.
Manufacture and sale of paper
YFY Paradigm Investment Co., Ltd.
Investment and holding
San Ying Enterprise Co., Ltd.
Design and construct water processing
construction and environmental facilities
Lotus Ecoscings & Engineering Co.,
Ltd.
Construction of sewage treatment plants and
incinerators
YFY Japan Co., Ltd
Trade of paper, chemical material and
machinery
Yuen Yan Paper Container Co., Ltd.
Sale and manufacture of corrugated paper and
materials
YFY Inc.
Fidelis IT Solutions Co., Ltd.
a. Provides services in information software and
information processing.
b. Wholesale of information software and
electric appliance.
Sustainable Carbohydrate Innovation
Co., Ltd.
Research and development.
YFY Packaging Inc.
Production and sale of high-quality craft paper
and corrugated paper
YFY International Limited YFY Cayman Co., Ltd.
Investment and holding
Guangdong Dingfung Pulp & Paper
Co., Ltd.
Pulp and paper production and trading business
Zhaoqing Dingfung Forestry Co., Ltd. Seedling cultivation and sales, reforestation,
sales-cum-forest logging and other forestry,
processing and transportation.
Hwa Fong Paper (Hong Kong) Co.,
Ltd.
Sale and print of paper merchandise
YFY Paper Mfg. (Jiangyin) Co., Ltd. Manufacture, sale and print of cardboard and
paper
Yuen Foong Yu Blue Economy
Natural Resource (Yangzhou) Co.,
Ltd.
Technological development of agricultural
resource recycling
YFY Biopulp Technology Limited
Investment and holding
YFY Mauritius Corp.
Investment and holding
Yuen Foong Yu Blue
Economy Natural
Resource (Yangzhou)
Co., Ltd.
YFY Firstpak Packaging (Yangzhou)
Co., Ltd.
Manufacture and sale of product packaging;
design, manufacture and sale of packaging
equipment and molding equipment
YFY Mauritius Corp.
YFY Paper Mfg. (Yangzhou) Co.,
Ltd.
Manufacture and sale of paper
YFY Packaging (Yangzhou)
Investment Co., Ltd.
Investment and holding
YFY Paper Enterprise (Qingdao) Co.,
Ltd.
Manufacture and sale of paper and cardboard
YFY Paper Enterprise (Kunshan) Co.,
Ltd.
Manufacture and sale of paper and cardboard
YFY Paper Enterprise (Zhongshan)
Co., Ltd.
Manufacture and sale of paper and cardboard
YFY Paper Enterprise (Guangzhou)
Co., Ltd.
Manufacture and sale of paper and cardboard
YFY Paper Enterprise (Dongguan)
Co., Ltd.
Manufacture and sale of paper and cardboard
YFY Paper Enterprise (Tianjin) Co.,
Ltd.
Manufacture and sale of paper and cardboard

Proportion of Ownership
(%)
December 31
2020
2019
Remark
57.8
56.9
16)
100.0
100.0
100.0
100.0
64.5
100.0
12)
48.9
49.5
1)
49.7
49.7
1)
-
100.0
14)
49.0
49.0
100.0
100.0
14) & 20)
100.0
100.0
18.9
18.9
1)
100.0
100.0
14)
100.0
100.0
-
100.0
14)
100.0
100.0
50.9
50.9
100.0
100.0
100.0
100.0
5)
100.0
-
13) & 20)
-
100.0
13)
40.0
40.0
13.5
13.5
100.0
100.0
94.0
94.0
2)
100.0
100.0
60.0
60.0
100.0
-
13)
-
-
6)
64.6
64.6
19)
100.0
100.0
19)
100.0
100.0
19)
100.0
100.0
19)
100.0
100.0
19)
93.8
93.8
19)
100.0
100.0
19)
100.0
100.0
19)

(Continued)

37 -

Investor
Investee
Main Business
YFY Paper Enterprise (Suzhou) Co.,
Ltd.
Manufacture and sale of paper and cardboard
YFY Paper Enterprise (Xiamen) Co.,
Ltd.
Manufacture and sale of paper and cardboard
YFY Paper Enterprise (Shanghai)
Co., Ltd.
Manufacture and sale of paper and cardboard
YFY Paper Enterprise (Jiaxing) Co.,
Ltd.
Manufacture and sale of paper and cardboard
YFY Paper Enterprise (Nanjing) Co.,
Ltd.
Manufacture and sale of paper and cardboard
YFY Paper Enterprise (Fuzhou) Co.,
Ltd.
Manufacture and sale of paper and cardboard
YFY Packaging
(Yangzhou) Investment
Co., Ltd.
YFY Paper Mfg. (Yangzhou) Co.,
Ltd.
Manufacture and sale of paper
YFY Paper Enterprise
(Kunshan) Co., Ltd.
YFY Paper Enterprise (Nanjing) Co.,
Ltd.
Manufacture and sale of paper and cardboard
YFY Cayman Co., Ltd.
YFY International Labuan Co., Ltd.
Investment and holding
YFY Mauritius Corp.
Investment and holding
YFY Packaging Capital Corp.
Investment and holding
Winsong Packaging Investment
Company Limited
Investment and holding
Willpower Industries Ltd.
Sale of various paper product
Winsong Packaging
Investment Company
Limited
YFY Packaging (Ha Nam) Co., Ltd. Manufacture and sale of paper and cardboard
YFY Packaging Thai Binh Co., Ltd.
Manufacture and sale of paper and cardboard
Willpower Industries Ltd. Yuen Foong Yu Paper Enterprise
(Vietnam) Binh Duong Co., Ltd.
Manufacture and sale of paper and cardboard
Yuen Foong Yu Paper Enterprise
(Vietnam) Co., Ltd.
Manufacture and sale of paper and cardboard
Yuen Foong Yu Paper
Enterprise (Vietnam)
Co., Ltd.
Yuen Foong Yu Paper Enterprise
(Vietnam) Binh Chanh Co., Ltd.
Manufacture and sale of cardboard
Yuen Foong Yu Paper Enterprise
(Dong Nai) Co., Ltd.
Manufacture and sale of paper and cardboard
YFY International Labuan YFY Jupiter (BVI) Inc.
Investment and holding
Co., Ltd.
YFY Packaging Inc.
Production and sale of high-quality craft paper
and corrugated paper
YFY Jupiter (BVI) Inc.
Mobius105 Ltd.
Investment and holding
YFY Jupiter Limited
Design of packaging and sale of paper
Jupiter Prestige Group Holdings
Limited
Investment and holding
YFY Jupiter US, Inc.
Design of packaging and sale of paper
YFY Jupiter Malaysia Sdn. Bhd.
Design of packaging and sale of paper
YFY Jupiter Indonesia, PT PMA
Design of packaging
YFY Jupiter US, Inc.
Innovativ Packaging Worldwide, LLC Design of packaging and sale of paper
YFY Jupiter Mexico, S. de R.L.
Design of packaging and sale of paper
Spectiv Brands, LLC
General trade
Mobius105 Ltd.
YFY Jupiter (Shenzhen) Ltd.
Design of packaging and sale of paper
YFY Jupiter Malaysia Sdn. Bhd.
Design of packaging and sale of paper
YFY Jupiter Mexico, S. de R.L.
Design of packaging and sale of paper
YFY Jupiter Indonesia, PT PMA
Design of packaging
Jupiter Vietnam Company Limited
Design of packaging
YFY Jupiter (Shenzhen)
Ltd.
Kunshan YFY Jupiter Green
Packaging Ltd.
Design of packaging and sale of paper
YFY Jupiter Supply Chain
Management Services (Shenzhen)
Limited
Design of packaging and sale of paper
Jupiter Prestige Group
Holdings
Jupiter Prestige Group Europe
Limited
Graphic design
Limited
Jupiter Prestige Group Australia Pty
Ltd.
Graphic design
Opal BPM Limited
Design of process system and assistance of
graphic design
Jupiter Prestige Group North America
Inc.
Design of packaging and sale of paper
Jupiter Prestige Group
North America Inc.
Contrast LLC
Brand Design
Jupiter Prestige Group
Europe Limited
Jupiter Prestige Group Asia Limited
Graphic design
Opal BPM Limited
Opal BPM India Private Limited
Workflow system coding
Opal BPM Consulting Limited
Consulting services of workflow system coding
YFY Paper Enterprise
(Guangzhou) Co., Ltd.
Kunshan YFY Advertising and
Printing Co., Ltd.
Design and print of advertisements
YFY Paper Enterprise
(Xiamen) Co., Ltd.
Kunshan YFY Advertising and
Printing Co., Ltd.
Design and print of advertisements
Kunshan YFY Advertising
and Printing Co., Ltd.
Shanghai YFY Advertising and
Printing Co., Ltd.
Printing service of publications

Proportion of Ownership
(%)
December 31
2020
2019
Remark
100.0
100.0
19)
100.0
100.0
19)
100.0
100.0
19)
100.0
100.0
19)
90.0
90.0
19)
100.0
100.0
19)
35.4
35.4
19)
10.0
10.0
19)
100.0
100.0
-
48.8
13)
100.0
100.0
70.0
70.0
55.2
55.2
100.0
100.0
100.0
100.0
5)
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
-
35.4
13)
-
100.0
13)
100.0
100.0
100.0
100.0
57.0
57.0
100.0
100.0
99.0
99.0
1.0
1.0
-
100.0
18)
1.0
1.0
100.0
100.0
100.0
100.0
1.0
1.0
99.0
99.0
99.0
99.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
82.5
82.5
100.0
100.0
60.0
60.0
100.0
100.0
100.0
100.0
100.0
100.0
50.0
50.0
50.0
50.0
-
-
8)
(Continued)

38 -

Investor
Investee
Main Business
YFY Packaging Inc.
YFY Packaging (BVI) Corp.
Investment and holding
Pek Crown Paper Co., Ltd.
Manufacture and sale of containers
YFY Cayman Co., Ltd.
Investment and holding
YFY Packaging (BVI)
Corp.
YFY Mauritius Corp.
Investment and holding
YFY Global Investment
YFY RFID Co., Limited
Investment and holding
Limited
YFY Jupiter (BVI) Inc.
Investment and holding
YFY RFID Technologies Co., Ltd.
Investment and holding
YFY RFID Co., Limited
Arizon RFID Technology Co., Ltd.
(originally named as Arizon RFID
Technologies (Yangzhou) Co.,
Ltd.)
Sale and design of RFID (radio frequency
identification) products
Arizon RFID Technology
Co., Ltd. (originally
Yeon Technologies (Yangzhou) Co.,
Ltd.
Sale and design of RFID (radio frequency
identification) products
named as Arizon RFID
Technologies,
Arizon RFID Technologies (Hong
Kong) Co., Ltd.
Product distribution and R&D services
(Yangzhou) Co. Ltd.)
Arizon JAPAN Co., Ltd.
Product distribution and technological
consulting services
YFY RFID Technologies
Co., Ltd.
Yeon Technologies Co., Ltd.
Sale and design of RFID (radio frequency
identification) products
Yuen Foong Yu Consumer
Products Co., Ltd.
Yuen Foong Yu Consumer Products
Investment Limited
Investment and holding
Ever Growing Agriculture Biotech
Co., Ltd.
Wholesale of agriculture products
Yuen Foong Shop Co., Ltd.
Sale of consumer products by e-commerce
Yuen Foong Yu Consumer
Products Investment
Limited
YFY Investment Co., Ltd.
Investment and holding and sale of paper
YFY Investment Co., Ltd. YFY Family Paper (Beijing) Co., Ltd. Manufacture and sale of tissue paper and
napkins
YFY Family Care (Kunshan) Co.,
Ltd.
Manufacture and sale of tissue paper and
napkins
Yuen Foong Yu Consumer Products
(Yangzhou) Co., Ltd.
Manufacture and sale of tissue paper and
napkins
Shin Foong Specialty and
Applied Materials Co.,
Ltd.
Shin Foong Trading Sdn. Bhd.
Sale of SBR (styrene butadiene rubber) and
industrial chemicals
YFY Development Corp.
(originally named as
Chung Hwa Pulp Corporation
Pulp and paper production, trading and forestry
business
YFY Capital Co., Ltd.)
Yuen Foong Yu Consumer Products
Co., Ltd.
Production and sale of high quality paper and
paper - related merchandise
Effion Enertech Co., Ltd.
To operate cogeneration and provide power
technology
YFY Venture Capital
Investment Co., Ltd.
Effion Enertech Co., Ltd.
To operate cogeneration and provide power
technology
Effion Enertech Co., Ltd.
YFY Capital Holdings Corp.
Investment and holding
YFY Capital Holdings
Corp.
YFY (Shanghai) Financial Services
Co., Ltd.
Export factoring, domestic factoring, business
factoring and related consulting services,
development of credit risk management
platform.
YFY Paradigm Investment Union Paper Corp.
Manufacture and sale of paper
Co., Ltd.
YFY Biotech Management Co., Ltd.
Consulting
Chung Hwa Pulp Corporation
Pulp and paper production, trading and forestry
business
Yuen Foong Shop Co., Ltd.
Sale of consumer products by e-commerce
Livebricks Inc.
Information processing services
Yuen Foong Yu Consumer Products
Co., Ltd.
Production and sale of high quality paper and
paper - related merchandise
Yuen Yan Paper Container Co., Ltd.
Sale and manufacture of corrugated paper and
materials
Pek Crown Paper Co., Ltd.
Manufacture and sale of containers
Yuen Foong Shop Co.,
Ltd.
Shanghai YFY International Trade
Co., Ltd.
General trade
Yuen Foong Shop (HK) Limited
General trade
Lotus Ecoscings &
Engineering Co.,
Yuen Yan Paper Container Co., Ltd.
Sale and manufacture of corrugated paper and
materials
Ltd.
Pek Crown Paper Co., Ltd.
Manufacture and sale of containers
Chung Hwa Pulp Corporation
Pulp and paper production, trading and forestry
business
San Ying Enterprise Co.,
Ltd.
Kunshan Actview Carbon
Technology Co., Ltd.
Manufacture and sale of active carbon
Chung Hwa Pulp
CHP International (BVI) Corporation Investment and holding
Corporation
Effion Enertech Co., Ltd.
To operate cogeneration and provide power
technology
Hwa Fong Investment Co., Ltd.
Investment and holding

Proportion of Ownership
(%)
December 31
2020
2019
Remark
100.0
100.0
66.8
66.8
100.0
-
13)
-
51.2
13)
100.0
100.0
81.1
44.0
13) & 17)
100.0
100.0
86.5
86.5
4)
100.0
100.0
100.0
100.0
100.0
100.0
7)
100.0
100.0
100.0
100.0
85.0
85.0
100.0
50.0
9)
100.0
100.0
-
100.0
11)
100.0
100.0
100.0
100.0
100.0
-
10)
0.1
0.1
16)
2.1
-
12)
1.0
-
-
1.0
100.0
100.0
100.0
100.0
4.1
4.1
1)
100.0
100.0
0.7
0.7
16)
-
50.0
9)
100.0
100.0
6.4
-
12)
0.07
-
0.03
-
100.0
100.0
100.0
100.0
-
0.07
-
0.03
-
0.01
66.4
66.4
100.0
100.0
49.0
49.0
100.0
100.0
(Continued)

39 -

Investor
Investee
Main Business
CHP International (BVI)
Corporation
Guangdong Dingfung Pulp & Paper
Co., Ltd.
Pulp and paper production and trading business
Zhaoqing Dingfung Forestry Co., Ltd. Seedling cultivation and sales, reforestation,
sales-cum-forest logging and other forestry,
processing and transportation
Syntax Communication (H.K.)
Limited
Sale and print of paper merchandise
Hwa Fong Investment Co.,
Ltd.
Effion Enertech Co., Ltd.
To operate cogeneration and provide power
technology
Genovella Renewables Inc.
(originally named as Kuang Hwa
Fertilizer Limited Company)
Sale and production of fertilizer, retail sale of
food products and groceries, plant cultivation,
refractory materials manufacturing, cement
and concrete products manufacturing,
refractory materials wholesale and sale of
building material, manpower services and
wholesale and sale of chemistry raw
materials
Union Paper Corp.
Manufacture and sale of paper
Guangdong Dingfung Pulp
& Paper Co., Ltd.
Zhaoqing Dingfung Forestry Co., Ltd. Seedling cultivation and sales, reforestation,
sales-cum-forest logging and other forestry,
processing and transportation
Shenzhen Jinglun Paper Co., Ltd.
Sale of paper merchandise and import/export
business
Zhaoqing Xinchuan Green
Technology Co., Ltd.
Environmental equipment technology research
and development; construction of wastewater,
flue gas, noise and solid waste treatment;
pure water treatment construction;
environmental technology consulting; sale of
environmental protection equipment and
chemical raw material; import and export of
cargo and technology

Proportion of Ownership
(%)
December 31
2020
2019
Remark
60.0
60.0
20.2
20.2
100.0
100.0
3)
1.0
1.0
100.0
100.0
0.02
-
1) & 15)
66.3
66.3
100.0
100.0
100.0
100.0
7)
(Concluded)

Remarks:

1) China Color Printing Co., Ltd. and Union Paper Co., Ltd. were deemed subsidiaries because the Group had substantial control over them even though the Group held less than 50% equity interest in each of �he s�bsidiaries� �oting shares; the Group disposed of its partial ownership of Shin Foong Specialty and Applied Materials Co., Ltd. and equity changes such as employee share options, which reduced its shareholding ratio to 48.9%. Shin Foong Specialty and Applied Materials Co., Ltd. was deemed a subsidiary since the Group did not cease to have control over these subsidiaries.
2) According �o �he resol��ion of �he Compan��s board of �he direc�ors, YFY Paper Mfg. (Jiang�in) Co., Ltd. signed the land reserve agreement with Jiangyin Land Reserve Center and Jiangyin City People�s Go�ernmen� Chengjiang S�b-district Office in August 2018, with an amount of RMB369,829 thousand. The land reserve project has been completed in September 2020. The Group recognized gain on disposal of land use rights with an amount of $1,389,329 thousand (RMB 324,404 thousand, accounted for as Other income, others), refer to Table 7.
3) To boost management performance, the Group carried out a restructuring of the organization, and sold all of the shares of Syntax Communication (H.K.) Limited owned by YFY International Limited to CHP International (BVI) Corporation in January 2019.
4) In December 2018, �he Compan��s board of �he direc�ors passed �he applica�ion of �he Ari�on RFID Technologies (Yangzhou) Co., L�d. on �he s�ock e�change in mainland China, and �he shareholders� temporary meeting passed the resolution in February 2019. The change of the name to Arizon RFID Technolog� Co., L�d. �as resol�ed in �he shareholders� mee�ing in April 2019. The Company has summited IPO application in June 2020.
40 -
5) Sustainable Carbohydrate Innovation Co., Ltd. and YFY Packaging Thai Binh Co., Ltd. were established in January and March 2019 separately and have been included in the consolidated financial statements since then.
6) YFY Firstpak Packaging (Yangzhou) Co., Ltd. entered the bankruptcy procedure in May 2019. Due �o �he Gro�p�s loss of con�rol, i� has no� been incl�ded in �he consolida�ed financial s�a�emen�s since June 2019. The court ruled that YFY Firstpak Packaging (Yangzhou) Co., Ltd. declared bankruptcy in June 2020.
7) Arizon JAPAN Co., Ltd. and Zhaoqing Xinchuan Green Technology Co., Ltd. were established in August and September 2019 separately and have been included in the consolidated financial statements since then.
8) Shanghai YFY Advertising and Printing Co., Ltd. entered the cancellation of registration in October 2019. D�e �o �he Gro�p�s loss of con�rol, i� has no� been incl�ded in �he consolida�ed financial statements since October 2019.
9) To boost management performance, the Group carried out a restructuring of the organization and sold the 50% shares of Yuen Foong Shop Co., Ltd. owned by YFY Paradigm Investment Co., Ltd. to Yuen Foong Yu Consumer Products Co., Ltd. in March 2020.
10) Shin Foong Trading Sdn. Bhd. was established in February 2020 and has been included in the consolidated financial statements since then.
11) In response to the changes in the mainland China market, the board of directors of the subsidiary, YFY Investment Co., Ltd., resolved to dispose of all of its ownership of YFY Family Paper (Beijing) Co., Ltd. in June 2020. The disposal has been completed in August 2020, refer to Note 14 and Table 5.
12) The Company sold 2.1% and 6.5% of its shares in Yuen Foong Yu Consumer Products Co., Ltd. to YFY Development Corp. (originally named as YFY Capital Co., Ltd.) and YFY Paradigm Investment Co., Ltd., respectively, in June 2020. Due to equity changes such as employee share options conversion of Yuen Foong Yu Consumer Prod�c�s Co., L�d. and �he Gro�p�s par�ial disposal of shares in Yuen Foong Yu Consumer Products Co., Ltd. to designated persons and financial investors from July through October in 2020, the shareholding ratio of the Group in Yuen Foong Yu Consumer Products Co., Ltd. was reduced to 73.0% (which comprise 64.5% owned by the Company, 6.4% owned by YFY Paradigm Investment Co., Ltd., and 2.1% owned by YFY Development Corp. (originally named as YFY Capital Co., Ltd.). Yuen Foong Yu Consumer Products Co., Ltd. was deemed as subsidiary since the Group did not cease to have control over this subsidiary.
13) In response to the overseas operation mode of its subsidiaries and the application of YFY Packaging Inc. on the stock exchange in Taiwan and to boost management performance, �he Compan��s board of directors approved the overseas investment structure adjustment in July 2020. The Group has completed the overseas investment structure adjustment in November 2020. The Group sold the 100% shares of YFY Packaging Inc. owned by YFY International Labuan Co., Ltd. to the Company, the 100% shares of YFY Cayman Co., Ltd. owned by YFY International Limited to YFY Packaging Inc., the 51.2% shares of YFY Mauritius Corp. owned by YFY Packaging (BVI) Corp. and 48.8% shares of YFY Mauritius Corp. owned by YFY Cayman Co., Ltd. to YFY International Limited and the 35.4% shares of YFY Jupiter (BVI) Inc. owned by YFY International Labuan Co., Ltd. to YFY Global Investment Limited.
41 -
14) The Compan��s board of direc�ors appro�ed �he merger of its subsidiary YFY Paradigm Investment Co., Ltd. and Lotus Ecoscings & Engineering Co., Ltd. and the merger of its subsidiary YFY Capital Co., Ltd. and YFY Venture Capital Investment Co., Ltd. in August 2020. The reference date of the above mergers was October 7, 2020 and the mergers have been completed. The board of direc�ors of YFY Capi�al Co., L�d. appro�ed �he name change from YFY Capi�al Co., L�d. �o �YFY De�elopmen� Corp.� in Oc�ober 2020.
15) Hwa Fong Investment Co., Ltd. acquired 0.02% ownership of Union Paper Corp. from August through October in 2020.
16) Due to equity changes such as purchase of treasury shares, the shareholding ratio of the Group in Chung Hwa Pulp Corporation was increased to 58.6% (which comprise 57.8% owned by the Company, 0.7% owned by YFY Paradigm Investment Co., Ltd., and 0.1% owned by YFY Development Corp. (originally named as YFY Capital Co., Ltd.).
17) Due to equity changes such as overseas investment structure adjustment and purchase of treasury shares, the shareholding ratio of the YFY Global Investment Limited in YFY Jupiter (BVI) Inc. was increased to 81.1%.
18) Innovativ Packaging Worldwide, LLC entered the cancellation of registration in October 2020. Due �o �he Gro�p�s loss of con�rol, i� has no� been incl�ded in the consolidated financial statements since October 2020.
19) In order to improve the investment management efficiency and management performance of packaging b�siness in mainland China, �he Compan��s board of direc�ors appro�ed �he in�es�men� structure adjustment of packaging business in mainland China in December 2020. The Company plans to proceed with the investment structure adjustment which included13 subsidiaries with YFY Packaging (Yangzhou) Investment Co., Ltd. as the holding company. The investment structure adjustment will involve the following subsidiaries: YFY Packaging (Yangzhou) Investment Co., Ltd., YFY Paper Mfg. (Yangzhou) Co., Ltd., YFY Paper Enterprise (Qingdao) Co., Ltd., YFY Paper Enterprise (Kunshan) Co., Ltd., YFY Paper Enterprise (Zhongshan) Co., Ltd., YFY Paper Enterprise (Guangzhou) Co., Ltd., YFY Paper Enterprise (Dongguan) Co., Ltd., YFY Paper Enterprise (Tianjin) Co., Ltd., YFY Paper Enterprise (Suzhou) Co., Ltd., YFY Paper Enterprise (Xiamen) Co., Ltd., YFY Paper Enterprise (Shanghai) Co., Ltd., YFY Paper Enterprise (Jiaxing) Co., Ltd., YFY Paper Enterprise (Nanjing) Co., Ltd., and YFY Paper Enterprise (Fuzhou) Co., Ltd. The Company has summited application in February 2021.
20) In order to specialize on its major business opera�ion, �he Compan��s board of direc�ors appro�ed �he �di�ision spin-off capi�al red�c�ion proposal� �ha� spin-off assets, liabilities and business operation of the Chenggong plant of YFY Packaging Inc., integrate them into YFY Development Corp. (originally named as YFY Capital Co., Ltd.), and issue new shares by YFY Development Corp. (originally named as YFY Capital Co., Ltd.) as the consideration for the transfer of the division in January 2021.

Refer to Tables 10 and 11 for the information on place of incorporation and principal place of business.

Except for YFY Japan Co., L�d., s�bsidiaries �hich incl�ded �he Gro�p�s consolida�ed financial statements were audited. Management believes there will not be a material differences even if the financial statements were audited.

42 -
b. Details of subsidiaries that have material non-controlling interests

	Proportion of Ownership and Voting Rights Held by Non-controlling Interests	Proportion of Ownership and Voting Rights Held by Non-controlling Interests
	December 31
	2020 2019 41.4% 42.3% December 31
2020 2019 $ 12,893,835 $ 13,098,672 19,776,398 17,999,745 (12,035,465) (11,116,249) (3,649,014) (2,587,144) 16,985,754 17,395,024 94,109 94,109 $ 17,079,863 $ 17,489,133 $ 8,717,003 $ 8,782,815 6,162,085 6,428,525 2,200,775 2,277,793 $ 17,079,863 $ 17,489,133 For the Year Ended December 31
	2020 $ 18,616,694 $ (312,392) 39,592 $ (272,800) $ (117,535) (84,262) (110,595) $ (312,392)	2019 $ 20,689,397 $ (302,084) 34,337 $ (267,747) $ (141,516) (103,582) (56,986) $ (302,084) (Continued)

43 -

Total comprehensive loss attributable to: Owners of Chung Hwa Pulp Corporation Non-controlling interests of Chung Hwa Pulp Corporation Non-con�rolling in�eres�s of Ch�ng H�a P�lp Corpora�ion�s subsidiaries Net cash inflow (outflow) from: Operating activities Investing activities Financing activities Effects of exchange rate changes Net cash outflow Dividends paid to non-controlling interests	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ (112,175) (83,607) (77,018) $ (272,800) $ 268,561 (1,727,833) 1,365,672 1,479 $ (92,121) $ -	2019 $ (62,941) (53,641) (151,165) $ (267,747) $ 820,599 (1,117,239) 206,848 3,023 $ (86,769) $ 163,126 (Concluded)

16. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Material associates E Ink Holdings Inc. Associates that are not individually material		December 31	December 31
		2020 $ 5,218,727 732,514 $ 5,951,241	2019 $ 4,974,565 642,516 $ 5,617,081

Refer �o Tables 10 and 11 �Informa�ion on In�es�ees� for the nature of activities, principal place of business and country of incorporation of the associates.

a. Material associates

Name of Associate E Ink Holdings Inc.	Proportion of Ownership and Voting Rights
	December 31
	2020 2019 16.3% 16.3%

The investments in E Ink Holdings Inc. was accounted for using the equity method since the Group had significant influence over E Ink Holdings Inc. even though the Company held less than 20% of the in�es�ee�s �o�ing shares.

In 2013, the Group increased its investment in E Ink Holdings Inc. by buying 40,000 thousand shares of �he in�es�ee�s pri�a�el� placed ordinar� shares for $658,000 �ho�sand. Under �he rela�ed reg�la�ions, privately placed ordinary shares should not be transferred within three years from the date of acquisition. E Ink Holdings Inc. has not yet completed publishing procedures as of March 19, 2021, the report date. The other rights and obligations are the same as those of ordinary shares.

44 -

Fair values (Level 1) of investments in E Ink Holdings Inc. with available published price quotations are summarized as follows (excluding the privately placed ordinary shares):

	December 31	December 31
	2020 $ 6,625,941	2019 $ 4,520,975

The summarized financial information below represents amounts shown in the financial statements of E Ink Holdings Inc. prepared in accordance with IFRSs and has been adjusted by the Group for equity accounting purposes:

Current assets Non-current assets Current liabilities Non-current liabilities Equity Non-controlling interests Propor�ion of �he Gro�p�s o�nership Equity attributable to the Group Goodwill Carrying amount Operating revenue Net profit for the year Other comprehensive income Total comprehensive income for the year		December 31	December 31
	2020 2019 $ 21,914,321 $ 21,634,060 23,886,312 19,986,889 (11,564,821) (9,206,675) (3,191,039) (2,961,490) 31,044,773 29,452,784 (536,163) (452,645) $ 30,508,610 $ 29,000,139 16.3% 16.3% $ 4,965,267 $ 4,721,105 253,460 253,460 $ 5,218,727 $ 4,974,565 For the Year Ended December 31
		2020 $ 15,362,855 $ 3,673,688 181,826 $ 3,855,514	2019 $ 13,601,676 $ 3,173,597 199,613 $ 3,373,210

b. Aggregate information of associates that are not individually material

The Gro�p�s share of: Net profit (loss) for the year Other comprehensive income Total comprehensive income for the year	For the Year Ende	For the Year Ende	d December 31
		2020 $ 21,800 74,206 $ 96,006	2019 $ (102,093) 42,637 $ (59,456)

45 -

Except for YJY Packaging Ltd., JLD Logistics Ltd., Foster and Balyis (Prestige) Limited., Chengdu JieLianDa Warehousing Co., Ltd., Chengdu JieLianDa Supply Chain Co., Ltd., Chengdu JingShiTong Packing Co., Ltd. in 2020 and 2019 and Chengdu YongJunYu Environmental Protection Packing Co., Ltd. in 2019, investments accounted for using the equity method and the share of profit or loss and other comprehensive income (loss) of those investments were calculated based on the audited financial statements. Management believes there is no material impact on the equity method accounting or the calculation of the share of profit or loss and other comprehensive income, from the financial statements of associates that have been audited.

17. PROPERTY, PLANT AND EQUIPMENT

Freehold Land Cost Balance at January 1, 2020 $ 12,387,825 Additions 400 Disposals - Transfer from prepayments for business facilities 1,560,000 Transfer from construction - Transfers to held for sale - Transfers from investment properties - Effect of foreign currency exchange differences - Balance at December 31, 2020$ 13,948,225 Accumulated depreciation and impairment Balance at January 1, 2020 $ 2,597 Depreciation expense - Impairment losses - Disposals - Transfers to held for sale - Transfers from investment properties - Effect of foreign currency exchange differences - Balance at December 31, 2020$ 2,597 Carrying amounts at December 31, 2020 $ 13,945,628 Cost Balance at January 1, 2019 $ 12,386,227 Additions 1,598 Disposals - Transfer from prepayments for business facilities - Transfer from construction - Outflow through business combinations - Effect of foreign currency exchange differences - Reclassification - Balance at December 31, 2019$ 12,387,825	Buildings Machinery and Equipment $ 15,019,244 $ 64,160,307 73,876 658,407 (6,255 ) (1,534,795 ) 193,340 432,285 261,930 1,298,196 (301,252 ) (364,544 ) 82,702 - 60,471 217,503 $ 15,384,056 $ 64,867,359 $ 6,994,554 $ 42,323,097 496,743 2,658,166 - 46,387 (5,721 ) (1,333,344 ) (159,447 ) (165,044 ) 24,044 - 27,176 140,892 $ 7,377,349 $ 43,670,154 $ 8,006,707 $ 21,197,205 $ 15,004,779 $ 63,796,253 207,131 842,999 (234,149 ) (933,808 ) 23,809 632,968 338,760 842,789 - (32,067 ) (321,086 ) (988,827 ) - - $ 15,019,244 $ 64,160,307	Miscellaneous Equipment $ 12,821,896 312,441 (416,850 ) 31,900 484,437 (193,487 ) - 34,156 $ 13,074,493 $ 9,308,478 787,565 13,629 (406,729 ) (172,816 ) - 16,543 $ 9,546,670 $ 3,527,823 $ 12,866,364 318,679 (404,864 ) 94,968 105,922 (1,123 ) (158,050 ) - $ 12,821,896	Construction in Progress Total $ 2,045,627 $ 106,434,899 1,686,262 2,731,386 - (1,957,900 ) - 2,217,525 (2,044,563 ) - - (859,283 ) - 82,702 (9,832) 302,298 $ 1,677,494 $ 108,951,627 $ - $ 58,628,726 - 3,942,474 - 60,016 - (1,745,794 ) - (497,307 ) - 24,044 - 184,611 $ - $ 60,596,770 $ 1,677,494 $ 48,354,857 $ 1,835,666 $ 105,889,289 1,584,506 2,954,913 - (1,572,821 ) - 751,745 (1,287,471 ) - (91,610 ) (124,800 ) 12,778 (1,455,185 ) (8,242) (8,242) $ 2,045,627 $ 106,434,899 (Continued)

46 -

Freehold Land Accumulated depreciation and impairment Balance at January 1, 2019 $ 2,597 Depreciation expense - Disposals - Outflow through business combinations - Effect of foreign currency exchange differences - Balance at December 31, 2019$ 2,597 Carrying amounts at December 31, 2019 $ 12,385,228	Buildings Machinery and Equipment $ 6,782,131 $ 41,101,708 485,278 2,615,028 (167,279 ) (882,730 ) - (10,671 ) (105,576) (500,238) $ 6,994,554 $ 42,323,097 $ 8,024,690 $ 21,837,210	Miscellaneous Equipment $ 9,055,841 746,301 (392,138 ) (751 ) (100,775) $ 9,308,478 $ 3,513,418	Construction in Progress Total $ - $ 56,942,277 - 3,846,607 - (1,442,147 ) - (11,422 ) - (706,589) $ - $ 58,628,726 $ 2,045,627 $ 47,806,173 (Concluded)

Some equipments of the Group had been idle at the end of 2020. The Group carried out a review of the recoverable amounts of the related equipments were lower than their carrying amounts or equal to zero. The review led to the recognition of an impairment loss of $60,016 thousand, which was recognized in miscellaneous disbursements for the year ended December 31, 2020.

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

Buildings Main buildings 15-55 years Others 3-50 years Machinery and equipment 3-20 years Miscellaneous equipment 3-50 years

The non-cash investing activities of the Group for the years ended December 31, 2020 and 2019 were as follows:

Acquisition of property, plant and equipment Changes in prepayments for business facilities Changes in payment of payables on equipment (accounted for as other payables, others)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 2,731,386 2,784,501 (437,208) $ 5,078,679	2019 $ 2,954,913 932,257 3,470 $ 3,890,640

For the amounts of collateral pledged for bank borrowings, refer to Note 32.

47 -

18. LEASE ARRANGEMENTS

a. Right-of-use assets

	December 31	December 31
2020 2019 $ 1,457,802 $ 1,426,492 331,266 404,535 108,017 92,859 $ 1,897,085 $ 1,923,886 For the Year Ended December 31
	2020 2019 $ 168,009 $ 290,819 $ 42,965 $ 44,160 137,427 105,095 56,510 61,017 $ 236,902 $ 210,272 December 31
	2020 2019 $ 158,415 $ 156,949 $ 286,837 $ 350,898 December 31
2020 2019 1.02%-1.68% 1.21%-1.68% 1.02%-11.70% 1.06%-11.70% 1.02%-6.00% 1.06%-6.00% For the Year Ended December 31
	2020 $ 232,867 $ 463,872	2019 $ 225,339 $ 557,828

b. Lease liabilities

c. Other lease information

48 -

19. INVESTMENT PROPERTIES

Amount

Cost
Balance at January 1, 2020

Reclassification to property, plant and equipment
Effect of foreign currency exchange differences

Balance at December 31, 2020

Accumulated depreciation and impairment
Balance at January 1, 2020

Depreciation expense
Reclassification to property, plant and equipment
Effect of foreign currency exchange differences

Balance at December 31, 2020

Carrying amounts at December 31, 2020

Cost
Balance at January 1, 2019

Disposals
Effect of foreign currency exchange differences

Balance at December 31, 2019

Accumulated depreciation and impairment
Balance at January 1, 2019

Depreciation expense
Disposals
Effect of foreign currency exchange differences

Balance at December 31, 2019

Carrying amounts at December 31, 2019

$ 2,950,751
(82,702)

(285)
$ 2,867,764
$ 204,267
3,320
(24,044)

(83)
$ 183,460
$ 2,684,304
$ 2,960,820
(6,634)

(3,435)
$ 2,950,751
$ 201,664
6,866
(3,259)

(1,004)
$ 204,267
$ 2,746,484

The fair values of the investment properties owned by the Group were $8,596,534 thousand and $7,150,310 thousand as of December 31, 2020 and 2019, respectively The valuations were partially made by the Group using market transaction prices for similar properties and not by independent qualified professional valuers. The rental incomes were $50,349 thousand for 2020 and $49,623 thousand for 2019, respectively.

The investment properties held by the Group are depreciated over their estimated useful lives of 20 to 55 years, using the straight-line method.

All of �he Gro�p�s in�es�men� proper�� as held �nder freehold in�eres�s.

49 -

20. BORROWINGS

a. Current borrowings

Bank credit loans Bank secured loans		December 31	December 31
		2020 $ 6,268,373 297,047 $ 6,565,420	2019 $ 12,230,641 293,804 $ 12,524,445

Current borrowings include bank credit and bank secured loans. As of December 31, 2020 and 2019, the interest rate intervals of bank credit loans were 0.52%-3.95% per annum and 0.92%-5.56% per annum, respectively. As of December 31, 2020 and 2019, the interest rate of bank secured loans were 1.21%-1.48% per annum and 2.85%-3.15% per annum, respectively.

b. Short-term notes and bills payable

Short-term notes and bills payable are commercial paper due within one year. Interest rate intervals on these bills payable were 0.78%-0.91% per annum and 0.98%-1.17% per annum as of December 31, 2020 and 2019, respectively.

c. Non-current borrowings

Syndicated loans Long-term bank credit loans Long-term bank secured loans		December 31	December 31
		2020 $ 23,723,101 3,176,220 177,883 $ 27,077,204	2019 $ 24,842,647 3,858,000 699,079 $ 29,399,726

Long-term bank loans included secured, credit and syndicated loans. Secured and credit loans expire in April 2027 and have interest rate intervals of 0.39%-2.40% per annum and 0.98%-5.45% per annum as of December 31, 2020 and 2019, respectively; syndicated loans with monthly interest payments expire in December 2025 and have interest rate intervals of 1.79% per annum and 1.79%-1.80% per annum as of December 31, 2020 and 2019, respectively.

21. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company and certain subsidiaries of the Group adopted a pension plan under the Labor Pension Ac� (�he �LPA�), �hich is a s�a�e-managed defined contribution plan. Under the LPA, an entity makes monthly contribu�ions �o emplo�ees� indi�id�al pension acco�n�s a� 6% of mon�hl� salaries and �ages.

The emplo�ees of �he Gro�p�s s�bsidiar� in mainland China are members of a s�a�e-managed retirement benefit plan operated by the government of mainland China. The subsidiary is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions.

50 -

The employees of �he Gro�p�s s�bsidiar� in Vie�nam are members of a s�a�e-managed retirement benefit plan operated by the government of Vietnam. The subsidiary of that area is required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions.

b. Defined benefit plans

The Company and certain subsidiaries of the Group in accordance with the Labor Standards Act is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company and certain subsidiaries contribute amounts equal to certain percentage of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in �he commi��ee�s name. The pension f�nd is managed b� �he Bureau of Labor Funds, Ministr� of Labor (��he B�rea��); �he Gro�p has no righ� �o infl�ence �he in�es�men� polic� and strategy.

The amo�n�s incl�ded in �he consolida�ed balance shee�s in respec� of �he Gro�p�s defined benefi� plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities (assets) Defined benefit assets (accounted for as other non-current assets, others) Defined benefit liabilities		December 31	December 31
		2020 $ 3,038,106 (3,068,216) (30,110) 81,845 $ 51,735	2019 $ 3,184,816 (2,138,170) 1,046,646 15,402 $ 1,062,048

Movements in net defined benefit liabilities (assets) were as follows:

Present Value
of the Defined
Benefit
Obligation
Fair Value of
the Plan Assets
Balance at January 1, 2020
$ 3,184,816
$ (2,138,170)

Service cost
Current service cost
42,775
-
Net interest expense (income)

30,547

(22,353)

Recognized in profit or loss

73,322

(22,353)

Remeasurement
Return on plan assets
-
(814,956)
Actuarial loss
Changes in financial assumptions
98,119
-
Experience adjustments
29,814
-
Changes in demographic assumptions

1

-

Recognized in other comprehensive income
(loss)

127,934

(814,956)

Net Defined
Benefit
Liabilities
(Assets)
$ 1,046,646
42,775

8,194

50,969

(814,956)

98,119

29,814

1

(687,022)
(Continued)

51 -

Present Value
of the Defined
Benefit
Obligation
Fair Value of
the Plan Assets
Contributions from the employer
$ -
$ (421,802)
Benefits paid
(329,065)
329,065
Liabilities extinguished on settlement

(18,901)

-

Balance at December 31, 2020
$ 3,038,106
$ (3,068,216)

Balance at January 1, 2019
$ 3,370,162
$ (2,118,752)

Service cost
Current service cost
48,848
-
Net interest expense (income)

48,327

(30,878)

Recognized in profit or loss

97,175

(30,878)

Remeasurement
Return on plan assets
-
(180,820)
Actuarial loss
Changes in financial assumptions
105,276
-
Experience adjustments
1,104
-
Changes in demographic assumptions

2

-

Recognized in other comprehensive income
(loss)

106,382

(180,820)

Contributions from the employer
-
(189,562)
Benefits paid
(381,842)
381,842
Liabilities extinguished on settlement

(7,061)

-

Balance at December 31, 2019
$ 3,184,816
$ (2,138,170)

Net Defined
Benefit
Liabilities
(Assets)
$ (421,802)
-

(18,901)
$ (30,110)
$ 1,251,410
48,848

17,449

66,297

(180,820)
105,276
1,104

2

(74,438)

(189,562)
-

(7,061)
$ 1,046,646
(Concluded)

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans were as follows:

Operating costs Operating expenses	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 32,431 18,538 $ 50,969	2019 $ 38,223 28,074 $ 66,297

Through the defined benefit plans under the Labor Standards Act, the Group is exposed to the following risks:

1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2 year time deposit with local banks. The pension fund monitoring committee of the Group invested the pension fund in domestic equity securities. The income from the investment in the equity securities will affect the fair value of plan assets and the status of financial contribution.
52 -
2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan�s in�es�men�s.
3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rates Expected rates of salary increase	December 31
	2020 2019 0.50% 1.00% 1.00%-1.50% 1.00%-1.50%

If possible reasonable changes in each of the significant actuarial assumptions occur and all other assumptions remain constant, the present value of the defined benefit obligation will increase (decrease) as follows:

Discount rates 0.125% increase 0.125% decrease Expected rates of salary increase 0.125% increase 0.125% decrease		December	31
		2020 $ (23,695) $ 24,076 $ 25,130 $ (26,708)	2019 $ (26,871) $ 27,227 $ 27,583 $ (26,777)

The sensitivity analysis presented above might not have been representative of the actual change in the present value of the defined benefit obligation because it was unlikely that the changes in assumptions had occurred in isolation of one another, i.e., some of the assumptions might have been correlated.

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		December 31
	2020 2019 $ 108,912 $ 110,861 3.5-9.8 years 4.1-10.5 years

22. EQUITY

a. Ordinary shares

Numbers of shares authorized (in thousands) Value of shares authorized Number of shares issued and fully paid (in thousands) Value of shares issued		December 31	December 31
		2020 2,200,000 $ 22,000,000 1,660,372 $ 16,603,715	2019 2,200,000 $ 22,000,000 1,660,372 $ 16,603,715

53 -

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

b. Capital surplus

Depending on the source, capital surplus may be used in these ways: (1) arising from shares issued in excess of par (including share premiums from the issuance of ordinary shares for mergers, treasury share transactions, and excess of the consideration received over the carrying amount of the s�bsidiaries� ne� asse�s d�ring disposal or acq�isi�ion) - may be used to offset a deficit; in addition, when the Company has no deficit, this capital surplus may be distributed as cash dividends, or may be �ransferred �o share capi�al once a �ear �i�hin a cer�ain percen�age of �he Compan��s capi�al s�rpl�s; (2) arising from the effect of changes in ownership interests in subsidiaries due to equity transactions other than actual disposals or acquisitions - may be used to offset a deficit.; (3) arising from changes in equity in associates - may be used in compliance with related regulations if the capital surplus source is either of the foregoing two sources.

c. Retained earnings and dividend policy

Under the dividend policy as set forth in the amended Articles, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations or in the necessary situation, and then any remaining profit together with any undistributed retained earnings shall be used for distribution of dividends and bonuses to shareholders.

In making its dividend policy, the Company takes into account future capital expenditures and working capital requirements. Based on this policy, dividends should be distributed as follows:

1) At least 20% as cash dividends; and
2) The remainder after the distribution of cash dividends as share dividends. If there is a requirement for capital expenditures, the Company may distribute only share dividends.

The board of directors of the Company is authorized to adopt a special resolution to distribute dividends and bon�ses in cash and a repor� of s�ch dis�rib��ion sho�ld be s�bmi��ed in �he shareholders� mee�ing.

Appropriation of earnings to the legal reserve shall be made until the legal reserve equals the Compan��s paid-in capital. The legal reserve may be used to offset deficits. If the Company has no defici� and �he legal reser�e has e�ceeded 25% of �he Compan��s paid-in capital, the excess may be transferred to capital or distributed in cash.

Items referred to under Rule No. 1010012865, Rule No. 1010047490 and Rule No. 1030006415 issued b� �he FSC and �he direc�i�e �i�led �Q�es�ions and Ans�ers for Special Reser�es Appropria�ed Follo�ing Adop�ion of IFRSs� sho�ld be appropriated to or reversed from a special reserve by the Compan�. For an� s�bseq�en� re�ersal of �he ded�c�ion in o�her shareholders� eq�i��, �he appropria�e amount of earnings distribution should be reversed from the net debit balance.

54 -

The appropriations of earnings for 2019 and 2018 appro�ed in �he shareholders� mee�ings on J�ne 22, 2020 and June 25, 2019, respectively, were as follows:

Legal reserve Cash dividends	Appropriation of Earnings For the Year Ended December 31 2019 2018 $ 263,411 $ 144,000 1,162,260 996,223	Dividends Per Share (NT$)
		For the Year Ended December 31
		2019 2018 $0.7 $0.6

The appropria�ions of earnings for 2020 had been proposed b� �he Compan��s board of direc�ors on February 26, 2021. The appropriations and dividends per share were as follows:

	Appropriation	Appropriation	Dividends Per
	of	Earnings	Share (NT$)
Legal reserve	$	606,583
Cash dividends		2,490,557	$1.5

The above appropriation for cash dividends had been resolved by the board of directors; the other proposed appropria�ions �ill be resol�ed b� �he shareholders� mee�ing �o be held on Ma� 17, 2021.

d. Special reserves

For the Year Ended December 31 2020 2019 Beginning at January 1 $ 4,028,583 $ 4,028,584 Reversal: Disposal of property, plant and equipment - (1) Disposal of partial interests in subsidiaries (26,770) - Balance at December 31 $ 4,001,813 $ 4,028,583 Other equity items Exchange Differences on Translation of Foreign Financial Statements Unrealized Gains (Losses) on Financial Assets Measured at Fair Value Through Other Comprehensive Income Gains (Losses) on Hedging Instruments Total 2020 Balance at January 1 $ (1,036,202) $ 6,809,645 $ (6,377) $ 5,767,066 Exchange differences on translation of foreign financial statements (513,143) - - (513,143) Unrealized gains on financial assets measured at FVTOCI - 7,817 - 7,817 Gains on hedging instruments - - 1,067 1,067 (Continued)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 4,028,583 - (26,770) $ 4,001,813 Gains (Losses) on Hedging Instruments $ (6,377) - - 1,067	2019 $ 4,028,584 (1) - $ 4,028,583 Total $ 5,767,066 (513,143) 7,817 1,067 (Continued)

e. Other equity items

55 -

f.	Exchange Differences on Translation of Foreign Financial Statements Unrealized Gains (Losses) on Financial Assets Measured at Fair Value Through Other Comprehensive Income Gains (Losses) on Hedging Instruments Total Share of other comprehensive income (loss) of associates accounted for using equity method $ (13,067) $ 116,041 $ - $ 102,974 Changes in ownership interest in subsidiaries 2,827 (353) 2,285 4,759 Disposal of partial interests in subsidiaries 50,578 (27) - 50,551 Cumulative unrealized gains of equity instruments transferred to retained earnings due to disposal - (299,816) - (299,816) Balance at December 31 $ (1,509,007) $ 6,633,307 $ (3,025) $ 5,121,275 2019 Balance at January 1 $ (40,365) $ 3,674,848 $ (7,010) $ 3,627,473 Exchange differences on translation of foreign financial statements (876,616) - - (876,616) Unrealized gains on financial assets measured at FVTOCI - 3,229,678 - 3,229,678 Gains on hedging instruments - - 633 633 Share of other comprehensive income (loss) of associates accounted for using equity method (119,221) 193,948 - 74,727 Changes in equity of associates accounted for using equity method - (555) - (555) Changes in ownership interest in subsidiaries - (61) - (61) Cumulative unrealized gains of equity instruments transferred to retained earnings due to disposal - (288,213) - (288,213) Balance at December 31 $ (1.036,202) $ 6,809,645 $ (6,377) $ 5,767,066 (Concluded) Non-controlling interests For the Year Ended December 31 2020 2019 Balance at January 1 $ 11,533,301 $ 11,470,524 Share of profit for the year 1,394,824 373,854 Other comprehensive income (loss) for the year: Exchange differences on translation of foreign financial statements (166,171) (126,756) Unrealized gains (losses) on financial assets measured at FVTOCI (12,470) 174,251 (Continued)	Exchange Differences on Translation of Foreign Financial Statements Unrealized Gains (Losses) on Financial Assets Measured at Fair Value Through Other Comprehensive Income Gains (Losses) on Hedging Instruments Total Share of other comprehensive income (loss) of associates accounted for using equity method $ (13,067) $ 116,041 $ - $ 102,974 Changes in ownership interest in subsidiaries 2,827 (353) 2,285 4,759 Disposal of partial interests in subsidiaries 50,578 (27) - 50,551 Cumulative unrealized gains of equity instruments transferred to retained earnings due to disposal - (299,816) - (299,816) Balance at December 31 $ (1,509,007) $ 6,633,307 $ (3,025) $ 5,121,275 2019 Balance at January 1 $ (40,365) $ 3,674,848 $ (7,010) $ 3,627,473 Exchange differences on translation of foreign financial statements (876,616) - - (876,616) Unrealized gains on financial assets measured at FVTOCI - 3,229,678 - 3,229,678 Gains on hedging instruments - - 633 633 Share of other comprehensive income (loss) of associates accounted for using equity method (119,221) 193,948 - 74,727 Changes in equity of associates accounted for using equity method - (555) - (555) Changes in ownership interest in subsidiaries - (61) - (61) Cumulative unrealized gains of equity instruments transferred to retained earnings due to disposal - (288,213) - (288,213) Balance at December 31 $ (1.036,202) $ 6,809,645 $ (6,377) $ 5,767,066 (Concluded) Non-controlling interests For the Year Ended December 31 2020 2019 Balance at January 1 $ 11,533,301 $ 11,470,524 Share of profit for the year 1,394,824 373,854 Other comprehensive income (loss) for the year: Exchange differences on translation of foreign financial statements (166,171) (126,756) Unrealized gains (losses) on financial assets measured at FVTOCI (12,470) 174,251 (Continued)
		2020 2019 $ 11,533,301 $ 11,470,524 1,394,824 373,854 (166,171) (126,756) (12,470) 174,251 (Continued)

56 -

Gains on hedge instruments Remeasurement on defined benefit plans Share of other comprehensive income of associates accounted for using the equity method Cash dividends Changes in equity of associates accounted for using equity method Changes in ownership interests in subsidiaries Difference between consideration and carrying amount of subsidiaries acquired or disposed Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 218 (4,682) 5,944 (271,679) (877) (101,350) 925,676 $ 13,302,734	2019 $ 501 (1,624) 2,570 (377,401) (439) 10,612 7,209 $ 11,533,301 (Concluded)

23. REVENUE

Revenue from contracts with customers - revenue from sale of goods Other operating revenue Contract balances December 31, 2020 Notes receivable, net $ 3,453,523 Accounts receivable, net $ 11,811,120 Accounts receivable due from related parties, net$ 98,198 Contract liabilities - sale of goods $ 552,667	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 61,258,136 11,976,410 $ 73,234,546 December 31, 2019 $ 2,874,640 $ 11,559,561 $ 99,919 $ 481,639	2019 $ 64,816,784 9,943,703 $ 74,760,487 January 1, 2019 $ 3,700,326 $ 11,676,010 $ 91,176 $ 481,727

24. NET PROFIT

a. Finance costs

Interest on bank loans Interest on lease liabilities Less: Capitalization amount of interest	For the Year Ended	For the Year Ended	December 31
		2020 $ 692,354 12,135 (7,863) $ 696,626	2019 $ 926,238 14,426 (10,450) $ 930,214

57 -

Information about capitalized interest was as follows:

For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
2020 2019 0.79%-1.44% 0.99%-3.60% For the Year Ended December 31
2020 2019 $ 3,942,474 $ 3,846,607 3,320 6,866 236,902 210,272 147,251 145,953 $ 4,329,947 $ 4,209,698 $ 3,767,894 $ 3,647,509 414,802 416,236 $ 4,182,696 $ 4,063,745 $ 33,793 $ 40,635 113,458 105,318 $ 147,251 $ 145,953 For the Year Ended December 31
	2020 $ 168,154 50,969 219,123 58,152 8,333,614 $ 8,610,889 $ 5,071,895 3,538,994 $ 8,610,889	2019 $ 176,494 66,297 242,791 31,683 8,007,962 $ 8,282,436 $ 4,955,446 3,326,990 $ 8,282,436

58 -
d. Compensation of employees and remuneration of directors

The Company accrued compensation of employees and remuneration of directors at the rates no less than 0.1% and no higher than 2%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. The compensation of employees and remuneration of directors for the years ended December 31, 2020 and 2019 which have been approved by the Compan��s board of direc�ors on Febr�ar� 26, 2021 and March 23, 2020, �ere as follo�s:

Accrual rate

Compensation of employees Remuneration of directors Amount	For the Year Ended December 31
	2020 2019 0.10% 0.10% 0.41% 0.56%

Compensation of employees Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31
	2020 Cash $ 5,361 22,000	2019
		Cash $ 2,282 12,500

If there is a change in the amounts after the annual consolidated financial statements were authorized for issue, the differences are recorded as a change in the accounting estimate.

There is no difference between the actual amounts of compensation of employees and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2019 and 2018.

Information on the compensation of employees and remuneration of directors resolved by the Compan��s board of direc�ors is a�ailable a� �he Marke� Obser�a�ion Pos� S�s�em �ebsi�e of �he Tai�an Stock Exchange.

25. INCOME TAXES

a. Major components of income tax expense recognized in profit or loss

Current tax In respect of the current year Income tax on unappropriated earnings Adjustment for prior periods Land value increment tax Deferred tax In respect of the current year Adjustment for prior periods Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,710,455 60,856 12,678 - (11,573) 214 $ 1,772,630	2019 $ 861,739 20,245 28,540 1,520 (19,436) 3,961 $ 896,569

59 -

A reconciliation of accounting profit and income tax expense was as follows:

Income before tax Income tax expense calculated at the statutory rate (20%) Nondeductible expenses in determining taxable income Tax-exempt income (loss) Land value increment tax Additional income tax under the Income Basic Tax Act Unrecognized loss carryforwards and deductible temporary differences Income tax on unappropriated earnings Loss carryforwards Investment tax credit Overseas company withholding income taxes Effect of different tax rate of entities in the Group operating in other jurisdictions Adj�s�men�s for prior �ears� �a� Income tax expense recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 8,376,533 $ 1,675,307 22,043 (578,139) - 40,925 457,016 60,856 (27,409) (2,792) 5,219 106,712 12,892 $ 1,772,630	2019 $ 3,556,192 $ 711,238 36,533 (320,545) 1,520 4,865 279,181 20,245 (11,892) (2,209) 67,369 77,763 32,501 $ 896,569

In July 2019, the president of the ROC announced the amendments to the Statute for Industrial Innovation, which stipulate that the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings. When calculating the tax on unappropriated earnings, the Group only deducts the amount of the unappropriated earnings that has been reinvested in capital expenditure.

In addition, in accordance with Rule No. 10904558730 issued by the Ministry of Finance, some subsidiaries of the Group has deducted the amount of dividends distributed in 2020 attributable to the increase in the beginning retained earnings for 2018 as a result of initial adoption of IFRS 9 and IFRS 15 when calculating the tax on unappropriated earnings for 2018.

b. Income tax recognized in other comprehensive income (loss)

Deferred tax In respect of the current year Remeasurement on defined benefit plan Exchange differences on translation of foreign financial statements Share of the other comprehensive income of associates	For the Year Ended	For the Year Ended	December 31
		2020 $ 137,404 (113) 372 $ 137,663	2019 $ 14,888 - 436 $ 15,324

60 -

c. Deferred tax assets and liabilities

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

For the year ended December 31, 2020

Opening
Balance
Recognized in
Profit or Loss
Recognized in
Other
Comprehensive
Income (Loss)
Deferred tax assets
Defined benefit plan
$ 174,005
$ 28,335 $ (137,959)
Loss carryforwards
49,440
(2,798)
-
Allowance for impaired
receivables
17,720
(7,610)
-
Payable for annual leave
23,979
1,719
-
Unrealized loss on
inventories
36,680
6,219
-
Deferred revenue
21,237
36,765
-
Others

98,456

7,257

113

$ 421,517
$ 69,887
$ (137,846)

Deferred tax liabilities
Reserve for land revaluation
increment tax
$ 3,313,013
$ -
$ -
Others

112,483

58,528

(555)

$ 3,425,496
$ 58,528
$ (555)

For the year ended December 31, 2019
Opening
Balance
Recognized in
Profit or Loss
Recognized in
Other
Comprehensive
Income (Loss)
Deferred tax assets
Defined benefit plan
$ 216,638
$ (27,452) $ (15,181)
Loss carryforwards
24,918
24,573
-
Allowance for impaired
receivables
18,004
42
-
Payable for annual leave
29,297
(5,251)
-
Unrealized loss on
inventories
17,118
19,735
-
Deferred revenue
16,111
5,126
-
Others

87,326

14,174

-

$ 409,412
$ 30,947
$ (15,181)

Deferred tax liabilities
Reserve for land revaluation
increment tax
$ 3,313,013
$ -
$ -

Others

98,573

15,472

(293)

$ 3,411,586
$ 15,472
$ (293)

Exchange
Differences
Closing Balance
$ - $ 64,381
(40)
46,602
(5)
10,105
28
25,726
192
43,091
-
58,002

(1,156)

104,670
$ (981)
$ 352,577
$ - $ 3,313,013

186

170,642
$ 186
$ 3,483,655
Exchange
Differences
Closing Balance
$ -
$ 174,005
(51)
49,440
(326)
17,720
(67)
23,979
(173)
36,680
-
21,237

(3,044)

98,456
$ (3,661)
$ 421,517
$ $ 3,313,013

(1,269)

112,483
$ (1,269)
$ 3,425,496

Deferred tax assets
Defined benefit plan

Loss carryforwards
Allowance for impaired
receivables
Payable for annual leave
Unrealized loss on
inventories
Deferred revenue
Others

Deferred tax liabilities
Reserve for land revaluation
increment tax

Others

61 -
d. Unused loss carryforwards for which no deferred tax assets have been recognized in the consolidated balance sheets

Loss carryforwards Expire in 2020 Expire in 2021 Expire in 2022 Expire in 2023 Expire in 2024 Expire in 2025 Expire in 2026 Expire in 2027 Expire in 2028 Expire in 2029 Expire in 2030 Unlimited (Note)		December 31	December 31
		2020 $ - 1,574,772 131,704 1,385,658 883,034 512,924 14,028 9,531 398 802 401,272 12,658 $ 4,926,781	2019 $ 1,551,615 1,641,281 165,038 1,412,769 781,212 145,022 14,028 32,207 900 34,600 - - $ 5,778,672

Note: Generated from Hong Kong subsidiaries.

e. Information about unused loss carryforwards

Loss carryforwards as of December 31, 2020 comprised of:

Unused Amount	Expiry Year
$ 1,574,772	2021
131,704	2022
1,385,658	2023
927,193	2024
512,924	2025
14,028	2026
10,908	2027
12,676	2028
174,819	2029
402,180	2030
12,658	Unlimited (Note)
$ 5,159,520

Note: Generated from Hong Kong subsidiaries.

62 -

f. Income tax approved situation

The Company
Yuen Foong Yu Consumer Products Co., Ltd.
Hwa Fong Investments Co., Ltd.
Effion Enertech Co., Ltd.
Shin Foong Specialty and Applied Materials Co., Ltd.
China Color Printing Co., Ltd.
YFY Paradigm Investment Co., Ltd.
Yuen Yan Paper Container Co., Ltd.
Fidelis IT Solutions Co., Ltd.
YFY Biotech Management Co., Ltd.
Genovella Renewables Inc. (originally named as Kuang Hwa Fertilizer
Limited Company)
Livebricks Inc.
San Ying Enterprise Co., Ltd.
Ever Growing Agriculture Biotech Co., Ltd.
YFY Packaging Inc.
Union Paper Corp.
Pek Crown Paper Co., Ltd.
YFY Corporate Advisory & Service Co., Ltd.
YFY Development Corp. (originally named as YFY Capital Co., Ltd.)
Yuen Foong Shop Co., Ltd.
Chung Hwa Pulp Corporation
Yeon Technologies Co., Ltd.
Sustainable Carbohydrate Innovation Co., Ltd. (Note 1)
YFY Venture Capital Investment Co., Ltd. (Note 2)
Lotus Ecoscings & Engineering Co., Ltd. (Note 2)

Final Approved Year

2016
2016
2019
2018
2018
2018
2018
2018
2018
2018
2018
2018
2018
2018
2018
2018
2018
2018
2018
2018
2018
2017
-
2018
2018

Note 1: Sustainable Carbohydrate Innovation Co., Ltd. was established in January 2019 and has not been approved since then.
Note 2: YFY Venture Capital Investment Co., Ltd. and Lotus Ecoscings & Engineering Co., Ltd. have been liquidated after being merged by YFY Development Corp. (originally named as YFY Capital Co., Ltd.) and YFY Paradigm Investment Co., Ltd. in October 2020, refer to Note 15.

26. EARNINGS PER SHARE

Basic earnings per share (NT$) Diluted earnings per share (NT$)	For	the Year Ended December 31	the Year Ended December 31
		2020 $ 3.14 $ 3.14	2019 $ 1.38 $ 1.38

63 -

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

Net Profit for the Year

Profit for the year attributable to owners of the Company Earnings used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 5,209,079 $ 5,209,079	2019 $ 2,285,769 $ 2,285,769

Number of Share (In Thousands)

Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares: Compensation of employees Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 1,660,372 230 1,660,602	2019 1,660,372 197 1,660,569

If the Group offered to settle compensation paid to employees in cash or shares, the Group assumed the entire amount of the compensation would be settled in shares, and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, if the effect is dilutive. Such dilutive effect of the potential shares was included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year.

27. SHARE-BASED PAYMENT ARRANGEMENTS

a. Employee share options plan of the subsidiary - Yuen Foong Yu Consumer Products Co., Ltd.

	Number of
	Options (In
	Thousands of
Employee Share Options	Units)	Exercise	Price
Granted in July 2020	3,320	$	15
Weighted-average fair value of options granted in July 2020
(NT$)	$ 14.3

64 -

Information on employee share options certificates that the subsidiary issued is as follows:

Share Options Certificates Balance at January 1 Options granted Options expired Options exercised Balance at December 31 Options exercisable, end of period	For the Year Ended December 31, 2020
	Number of Options (Units) Exercise Price - 3,320,000 (50,000) (3,270,000) - - $ 15

The subsidiary measured employee share options by using the Black-Scholes-Merton Option Pricing Model, and the inputs to the models were as follows:

Share price at the grant date $29.3 Exercise price $15 Expected volatility (%) 45.69 Expected lives (years) 0.02 Expected dividend yield (%) Expected grant (%) 100 Risk free interest rate (%) 0.28

The employee benefit expenses recognized on the employee share option plans were $47,476 thousand for the years ended December 31, 2020 with a corresponding same amount recognized in capital surplus - employee share options.

b. Employee share options plan of the subsidiary - Shin Foong Specialty and Applied Materials Co., Ltd.

In order �o a��rac� and re�ain �he professional �alen�s needed b� �he s�bsidiar�, impro�e �he emplo�ees� cohesion and sense of belonging to the subsidiary, and jointly create the interests of subsidiary and shareholders, the board of directors of the subsidiary resolved to issue 2,318 employee share options in April 2016. Each option entitles the holder to subscribe for 1,000 ordinary shares of Shin Foong Specialty and Applied Materials Co., Ltd. The eligible participants for share options are the full-time employees who meet certain specific requirements of the subsidiary. The options granted are valid for 5 years and exercisable at the following vesting conditions after the second anniversary from the grant date. Under the terms of the plan, share options are granted at an exercise price equal to or not less than its net value per share as reported in the financial reports for the most recent fiscal period audited by the CPA a� �he iss�e da�e. For an� s�bseq�en� changes in �he s�bsidiar��s capi�al s�r�c��re, �he e�ercise price is adjusted according to the terms. The subsidiary resolved to distribute cash dividends in the shareholders� meeting in 2020. Thus, the exercise price was adjusted from $18.3 to $17.7 in August 2020.

	The Ratio of
	Entitled
	Exercise (%)
Vesting Conditions	(Accumulated)
The second anniversary from the grant date	50
The third anniversary from the grant date	75
The fourth anniversary from the grant date	100

65 -

Information on compensatory employee share options issued in April 2016 is as follows:

	Number of
	Options (In
	Thousands of
Employee Share Options	Units)	Exercise	Price
Granted in April 2016	2,318	$	23
Weighted-average fair value of options granted in April 2016
(NT$)	$ 50.97

Information on employee share options certificates that the subsidiary issued is as follows:

Share Options Certificates Balance at January 1 Options expired Options exercised Balance at December 31 Options exercisable, end of period		For	the Year Ended	the Year Ended	December 31
		2020	Exercise Price ($) $ 17.7		2019
		Number of Options (Units) 1,591,000 - (1,241,000) 350,000 350,000			Number of Options (Units) 1,810,000 (4,000) (215,000) 1,591,000 1,059,000	Exercise Price ($) $ 18.3

Information about the outstanding share options at each balance sheet date is as follows:

Exercise price per share (NT$) Weighted average remaining contractual life	December 31
	2020 2019 $ 17.7 $ 18.3 0.33 years 1.33 years

The subsidiary measured employee share options by using the Black-Scholes-Merton Option Pricing Model, and the inputs to the models were as follows:

Share price at the grant date $73.21 Exercise price $23 Expected volatility (%) 31.09-31.92 Expected lives (years) 3.5-4.5 Expected dividend yield (%) Expected grant (%) 100 Risk free interest rate (%) 0.53-0.58

The employee benefit expenses recognized on the employee share option plans $10,676 thousand and $31,683 thousand for the years ended December 31, 2020 and 2019 with a corresponding same amount recognized in capital surplus - employee share options, respectively.

66 -
c. Employee share options plan of the subsidiary - YFY Packaging Inc.

28. EQUITY TRANSACTIONS WITH NON-CONTROLLING INTERESTS

The Company disposed of its ownership of Yuen Foong Yu Consumer Products Co., Ltd. for the year ended December 31, 2020 and reduced its ownership to 64.5%. As of December 31, 2020, the shareholding ratio of the Group in Yuen Foong Yu Consumer Products Co., Ltd. was reduced to 73.0%.

The Company disposed of its ownership of Shin Foong Specialty and Applied Materials Co., Ltd. for the year ended December 31, 2020. Thus, the shareholding ratio of the Group in Shin Foong Specialty and Applied Materials Co., Ltd. was reduced to 48.9%.

The above transactions were accounted for as equity transactions since the Group did not cease to have control over the subsidiary.

		Shin Foong	Shin Foong
	Yuen Foong Yu	Specialty and
	Consumer		Applied
	Products Co.,	Materials Co.,
	Ltd.		Ltd
Consideration received	$ 2,347,812	$	9,339
The proportionate share of the carrying amount of the net assets of
the subsidiary transferred to non-controlling interests	(873,607)		(1,733)
Reattribution of other equity to non-controlling interests
Exchange differences on translation of foreign financial statements	(50,578)		-
Differences recognized from equity transactions	$ 1,423,627	$	7,606
Line items adjusted for equity transactions
Capital surplus - difference between consideration received or paid
and �he carr�ing amo�n� of �he s�bsidiaries� ne� asse�s d�ring
actual disposal or acquisition	$ 1,423,627	$	7,606

29. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance. The capital structure of the Group consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Group (comprising issued capital, reserves, retained earnings, other equity and non-controlling interests).

67 -

30. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments that are not measured at fair value

The management of the Group considers that the carrying amounts of those financial assets and financial liabilities that are not measured at fair value recognized in the consolidated financial statements approximate their fair values or their fair values cannot be reliably measured.

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

December 31, 2020 Financial assets at FVTPL Derivative financial assets Mutual funds Structured deposits Financial assets held for hedging (accounted for as other current assets, others) Derivative financial assets Financial assets at FVTOCI Equity instruments Listed shares Unlisted shares Financial liabilities at FVTPL Derivative financial liabilities	Level 1 $ - 1,124,623 - $ 1,124,623 $ - $ 14,672,029 - $ 14,672,029 $ -	Level 2 $ 8,896 - 1,584,705 $ 1,593,601 $ 54 $ - - $ - $ 147,149	Level 3 $ - - - $ - $ - $ - 4,962,769 $ 4,962,769 $ -	Total $ 8,896 1,124,623 1,584,705 $ 2,718,224 $ 54 $ 14,672,029 4,962,769 $ 19,634,798 $ 147,149

68 -

December 31, 2019

Financial assets at FVTPL Derivative financial assets Mutual funds Subordinated bank debentures Structured deposits Financial assets held for hedging (accounted for as other current assets, others) Derivative financial assets Financial assets at FVTOCI Equity instruments Listed shares Unlisted shares Financial liabilities at FVTPL Derivative financial liabilities	Level 1 $ - 644,774 - - $ 644,774 $ - $ 15,727,139 - $ 15,727,139 $ -	Level 2 $ 27,695 - 402,418 434,724 $ 864,837 $ 24 $ - - $ - $ 137,460	Level 3 $ - - - - $ - $ - $ - 4,064,346 $ 4,064,346 $ -	Total $ 27,695 644,774 402,418 434,724 $ 1,509,611 $ 24 $ 15,727,139 4,064,346 $ 19,791,485 $ 137,460

There were no transfers between Levels 1 and 2 for the years ended December 31, 2020 and 2019.

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

For the year ended December 31, 2020

Balance at January 1, 2020 Recognized in other comprehensive income (accounted for as unrealized gain (loss) on investments in equity instruments designated as at FVTOCI) Purchases Disposals Re��rn of capi�al �pon in�es�ees� capi�al red�c�ion Effects of foreign currency exchange differences Balance at December 31, 2020	Financial Assets at FVTOCI	Financial Assets at FVTOCI
		Equity Instruments $ 4,064,346 1,050,082 23,880 (62,712) (99,612) (13,215) $ 4,962,769

69 -

For the year ended December 31, 2019

Balance at January 1, 2019 Recognized in other comprehensive income (accounted for as unrealized gain (loss) on investments in equity instruments designated as at FVTOCI) Purchases Disposals Re��rn of capi�al �pon in�es�ees� capi�al reduction Effects of foreign currency exchange differences Balance at December 31, 2019	Financial Assets at FVTOCI	Financial Assets at FVTOCI
		Equity Instruments $ 3,390,158 913,308 5 (167,940) (66,769) (4,416) $ 4,064,346

3) Valuation techniques and inputs used to make Level 2 fair value measurement

Financial Instruments
Structured deposits
Subordinated bank
debentures
Derivatives - foreign
exchange forward
contracts, combined
option contracts and
currency exchange
contracts

Valuation Techniques and Inputs

Discounted cash flow method: The future cash flow is estimated
based on the observable interest rate at the end of the period,
discounted at the market interest rate.
Discounted cash flow method: The future cash flow is estimated
based on the discount rate that reflects the current borrowing rate
of the bond issuer at the end of the period.
The fair value of each derivative contract is determined using the
discounted cash flow method and: (a) The average exchange rate
(i.e., difference between the highest and the lowest exchange
ra�es) of �he co�n�erpar�ies� financial institutions in accordance
with the Reuters quoting system, or (b) The daily spot exchange
rate quoted by financial institutions.

4) Valuation techniques and inputs used to make Level 3 fair value measurement

Financial Instruments
Unlisted shares

Valuation Techniques and Inputs

(Continued)

70 -

Valuation Techniques and Inputs

Financial Instruments

Income approach: Discounted cash flows are determined based on the present value of the expected future economic benefits that will be derived from the investment. Unobservable inputs mainly include the long-term growth rate, discount rate and the discount of liquidity. The fair value will increase if the long-term growth rate increases, discount rate decreases or the discount for liquidity decreases.

(Concluded)

c. Categories of financial instruments

Financial assets FVTPL Mandatorily classified as at FVTPL FVTOCI Derivative instruments in designated hedge accounting relationships Amortized cost (1) Financial liabilities FVTPL Held for trading Amortized cost (2)	December 31
	2020 2019 $ 2,718,224 $ 1,509,611 19,634,798 19,791,485 54 24 24,411,439 23,868,076 147,149 137,460 58,089,476 61,038,240

1) The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, notes receivable, net, accounts receivable, net, accounts receivables due from related parties, net and other financial assets.
2) The balances include financial liabilities measured at amortized cost, which comprise current borrowings, short-term notes and bills payable, notes and accounts payable, accounts payables to related parties, other payables, others, and non-current borrowings.
d. Financial risk management objectives and policies

The Gro�p�s main �arge� of financial risk managemen� �as �o manage �he marke� risk rela�ed �o operating activity (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk. To reduce the potential and detrimental influence of the fluctuations in market on the Gro�p�s financial performance, �he Gro�p �as de�o�ed �o iden�if�, analyze and estimate related financial risk factor which may lead to unfavorable effect on the financial performance of the Group, and conduct related program to lower and hedge financial risk.

The Group seeks to minimize the effects of these risks by using both derivative and non-derivative financial instruments to avoid risk exposures. The use of financial instruments was governed by the Gro�p�s policies appro�ed b� �he board of direc�ors, �hich pro�ided �ri��en principles on foreign exchange risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits was reviewed by the internal auditors on a continuous basis. The Group did not enter into or trade financial instruments, derivative financial instruments, for speculative purposes.

71 -

1) Market risk

The Gro�p�s ac�i�i�ies e�posed i� primaril� �o �he financial risks of changes in foreign c�rrenc� exchange rates, interest rates and equity prices.

a) Foreign currency risk

The Group had foreign currency denominated assets and liabilities, which exposed it primarily to the financial risks of changes in foreign currency exchange rates. The Group used foreign exchange forward contracts, combined option contracts and currency exchange contracts to eliminate the risk of foreign currency exposure. These foreign exchange forward contracts are in�ended �o red�ce �he infl�ence of �he e�change ra�e fl�c��a�ions on �he Gro�p�s income.

Sensitivity analysis

For the proportion of financial assets and liabilities that had significant influence on the Group, the risk was measured by considering the net position of foreign currency forward contracts, combined option contracts and currency exchange contracts that are undue.

The Group was mainly exposed to the USD and RMB.

The follo�ing �able de�ails �he Gro�p�s sensi�ivity to a 5% increase and decrease in the f�nc�ional c�rrenc� agains� �he rele�an� foreign c�rrencies. 5% represen�s managemen��s assessment of the reasonably possible change in foreign exchange rate. The sensitivity analysis included only outstanding foreign forward currency denominated monetary items and adjusts their translation at the end of the reporting period for a 5% change in foreign currency rates. A positive number below indicates an increase in pre-tax profit associated with New Taiwan dollars strengthening 5% against the relevant currency. For a 5% weakening of New Taiwan dollars against the relevant currency, there would be an equal and opposite impact on pre-tax profit and the balances below would be negative.

Influence to profit or loss at 5% variance USD RMB	For the Year Ended	For the Year Ended	December 31
		2020 $ 17,515 $ (161,599)	2019 $ 45,342 $ (113,298)

b) Interest rate risk

The Group was exposed to interest rate risk arising from borrowing at both fixed and floating interest rates.

The carr�ing amo�n� of �he Gro�p�s financial asse�s and financial liabili�ies �i�h e�pos�re �o interest rates at the end of the reporting period were as follows:

Fair value interest rate risk Financial assets Financial liabilities Lease liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2020 2019 $ 4,106,856 $ 4,832,471 9,398,814 6,026,520 445,252 507,847 4,925,981 4,470,772 33,642,624 41,924,171

72 -

Sensitivity analysis

The sensi�i�i�� anal�sis belo� �as de�ermined based on �he Gro�p�s e�pos�re �o in�eres� ra�es for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of each liability outstanding at the end of the reporting period was outstanding for the whole year. A 0.25% basis point increase or decrease was used when reporting interest rate risk internally to key management personnel and represents managemen��s assessmen� of �he reasonabl� possible change in in�eres� ra�es.

If interest rates had been 0.25% basis point higher/lower and all other variables were held cons�an�, �he Gro�p�s pos�-tax profit for the years ended December 31, 2020 and 2019 would have decreased/increased by $57,433 thousand and $74,907 thousand, respectively.

c) Other price risk

The Group was exposed to equity and commodity price risk through its investments in equity securities and mutual funds. The management of the Group manages risk by holding different risk portfolios.

Sensitivity analysis

The sensitivity analyses below were determined based on the exposure to equity and commodity price risks at the end of the reporting period.

If equity and commodity prices had been 5% higher/lower, pre-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $56,231 thousand and $32,239 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL, and the pre-tax other comprehensive income for the years ended December 31, 2020 and 2019 would have increased/decreased by $981,740 thousand and $989,574 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

The Gro�p�s sensi�i�i�y to price risk of investments in equity securities decreased during the year, which was mainly due to the fair value of equity investments decreased.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss �o �he Gro�p. As a� �he end of �he repor�ing period, �he Gro�p�s ma�im�m exposure to credit risk, which will cause a financial loss to the Group due to failure to discharge an obligation by the counterparties, is arising from the carrying amount of the respective recognized financial assets which comprise receivables from operating activities and financial assets from investing activities as stated in the consolidated balance sheets.

The Gro�p�s c�s�omer base is �as� and various industries. The Group continuously evaluated the financial conditions of those customers.

To maintain the quality of the accounts receivable, the Group has built a credit risk management procedure to reduce the credit risk from specific customer. The credit evaluation of individual customer includes considering factors that will affect its payment ability such as financial condition, past transaction records and current economic conditions.

Credit risk of bank deposits, fixed - income investments and other financial instruments with banks is e�al�a�ed and moni�ored b� �he Gro�p�s financial depar�men�. Since �he co�n�erpar�ies are credi��or�h� banks and financial ins�i��ions �i�h good credi� ra�ing, �h�s, �here�s no significan� credit risk.

73 -
3) Liquidity risk

The objective of liquidity risk management is to maintain adequate cash and cash equivalents with high liquidity and sufficient bank facilities that business operation requires and to ensure the Group has sufficient financial flexibility.

As of December 31, 2020 and 2019, the amount of unused financing facilities were $54,579,359 thousand and $48,530,126 thousand, respectively.

The follo�ing �able de�ails �he Gro�p�s remaining con�rac��al ma��ri�� for i�s non-derivative financial liabilities with agreed repayment periods by financial institutions. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. The tables included both interest and principal cash flows. Specifically, loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the financial institutes choosing to exercise their rights.

To the extent that interest cash flows paid at floating rate, the undiscounted amount was derived from the interest rate curve at the end of the reporting period.

December 31, 2020 Non-derivative financial liabilities Floating interest rate liabilities Fixed interest rate liabilities Lease liabilities December 31, 2019 Non-derivative financial liabilities Floating interest rate liabilities Fixed interest rate liabilities Lease liabilities	Less than 1 Year $ 7,044,065 9,403,000 181,981 $ 16,629,046 Less than 1 Year $ 13,066,868 6,029,000 164,673 $ 19,260,541	1 - 5 Years $ 27,627,689 - 314,123 $ 27,941,812 1 - 5 Years $ 30,363,623 - 427,578 $ 30,791,201	5+ Years $ 748,756 - 29,451 $ 778,207 5+ Years $ - - - $ -

74 -
e. Transfers of financial assets

The Gro�p �ransferred a por�ion of i�s banker�s accep�ance bills in mainland China �o o�her bank in order to generate operating income. As the Group has transferred substantially all risks and rewards rela�ing �o �hese bills recei�able, i� derecogni�ed �he f�ll carr�ing amo�n� of �he banker�s accep�ance bills. The Gro�p�s disco�n�ed and recei�ed amo�n� and �he ranges of in�eres� ra�es �ere as follo�s:

The discounted amount The received amount Interest rates	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 1,070,531 $ 1,050,367 1.95%-3.84%	2019 $ 1,251,178 $ 1,215,813 2.80%-3.47%

31. TRANSACTIONS WITH RELATED PARTIES

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

a. Names and categories of related parties

Related Party Relationship with the Group Hsin-Yi Enterprise Co., Ltd. Entities with key management personnel Yuen Foong Paper Co., Ltd. Entities with key management personnel Wei-Li Tsai Entities with key management personnel Taiwan Global BioFund Co., Ltd. Associate YFY Biotech Co., Ltd. Associate E Ink Holdings Inc. Associate Transcend Optronics (Yangzhou) Co., Ltd. Associate Chengdu JieLianDa Warehousing Co., Ltd. Associate Chengdu YongJunYu Environmental Protection Packing Associate (Note 1) Co., Ltd. Chengdu JingShiTong Packing Co., Ltd. Associate (Note 2) JLD Logistics Ltd. Associate YJY Packaging Ltd. Associate YFY Green Food (Shanghai) Co., Ltd. Associate YuanHan Materials Inc. Associate Vinh Phu Packing And Printing Company Limited Associate SinoPac Financial Holdings Co., Ltd. Substantive related party SinoPac Securities Corporation Substantive related party SinoPac Leasing Corporation Substantive related party Bank SinoPac Substantive related party Beautone Co., Ltd. Substantive related party Hsinex International Corp. Substantive related party Fu Hwa Development Enterprise Co., Ltd. Substantive related party Hsin-Yi Foundation Substantive related party Hsin-Yi Foundation & Publishing Co., Ltd Substantive related party YFY BioTechnology (Kunshan) Co., Ltd. Substantive related party Lui Co., Ltd. Substantive related party Hsin Yuan Investment Co., Ltd. Substantive related party (Continued)

75 -

Relationship with the Group


Related Party Ho-Jielai Co., Ltd. Chen Yu Co., Ltd. Ho Tien Co., Ltd. Shanghai Futai Food Co., Ltd. Hoi Toy&Play Corporation YFY Co., Ltd. Synmax Biochemical Co., Ltd. Taiwan Stock Exchange Corporation	Relationship with t
	Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party Substantive related party

(Concluded)

Note 1: YFY Jupiter (Shenzhen) Ltd. disposed of the entire equity interest in Chengdu YongJunYu Environmental Protection Packing Co., Ltd. in June 2019, and a change in identity of the latter from associate to non-related party. Therefore, only the transactions that occurred as of the end of June 2019 are listed.
Note 2: YFY Jupiter (Shenzhen) Ltd. acquired 35% ownership of Chengdu JingShiTong Packing Co., Ltd. in June 2019, and became an associate.
b. Operating revenue

Related Party Category/Name Substantive related party Entities with key management personnel Associate	For the Year Ended	For the Year Ended	December 31
		2020 $ 223,777 73,730 22,417 $ 319,924	2019 $ 286,297 69,628 430,261 $ 786,186

For sales of goods or providing services between related parties, the prices and terms of receivables were based on the agreements between parties.

c. Purchases of goods

Related Party Category/Name Associate Substantive related party Entities with key management personnel	For the Year Ended	For the Year Ended	December 31
		2020 $ 222,428 5,344 4,171 $ 231,943	2019 $ 121,451 9,288 3,367 $ 134,106

For purchases of goods between related parties, the prices and terms of payables were based on the agreements between parties.

76 -

d. Receivables from related parties

Line Item Related Party Category/Name Receivables from related Substantive related party parties Beautone Co., Ltd. Others Associate Taiwan Global BioFund Co., Ltd. Others Entities with key management personnel Yuen Foong Paper Co., Ltd. Others		December	31
		2020 $ 38,108 5,291 43,399 27,106 10,648 37,754 16,771 274 17,045 $ 98,198	2019 $ 49,513 3,356 52,869 27,106 4,447 31,553 15,214 283 15,497 $ 99,919

The outstanding accounts receivable from related parties are unsecured and no expected credit losses should be recognized after estimating.

e. Payables to related parties

Line Item Related Party Category/Name Payables to related parties Associate YJY Packaging Ltd. Vinh Phu Packing And Printing Company Limited JLD Logistics Ltd. Others Entities with key management personnel Hsin-Yi Enterprise Co., Ltd. Others Substantive related party		December	31
		2020 $ 41,760 29,870 8,739 460 80,829 5,196 1,150 6,346 2,481 $ 89,656	2019 $ 27,882 - 4,697 2,267 34,846 5,211 1,993 7,204 1,986 $ 44,036

The outstanding accounts payable to related parties were unsecured.

f. Acquisitions of property, plant and equipment

Related Party Category/Name Substantive related party	For the Year Ended	For the Year Ended	December 31
		2020 $ 116	2019 $ -

77 -

g. Disposal of financial assets

Related Party Category/Name Line Item Number of Shares Underlying Assets Associate Investments accounted for using equity method 337,000 Ordinary shares Entities with key management personnel Investments accounted for using equity method 100,000 Ordinary shares	Proceeds Gain (Loss) on Disposal $ 11,447 (Note) 3,400 (Note) $ 14,847

In response to the initial public offering of Yuen Foong Yu Consumer Products Co., Ltd, the Company conducted the share diversification. The Company disposed of partial ownership of Yuen Foong Yu Consumer Products Co., Ltd. to shareholders and employees of the Company.

Note: Since the Group did not cease to have control over this subsidiary, the transactions were accounted for as equity transactions. Gain (loss) on disposal is recognized in capital surplus, refer to Note 28.

h. Others

Rental income

Related Party Category/Name Entities with key management personnel Yuen Foong Paper Co., Ltd. Others Substantive related party Associate	For the Year Ended	For the Year Ended	December 31
		2020 $ 7,920 159 8,079 7,213 1,207 $ 16,499	2019 $ 7,886 159 8,045 7,238 1,207 $ 16,490

Rental expenses (accounted for as operating expenses)

Related Party Category/Name Entities with key management personnel Substantive related party Associate	For the Year Ended	For the Year Ended	December 31
		2020 $ 43,687 1,685 98 $ 45,470	2019 $ 43,903 1,944 246 $ 46,093

Depending on the agreements, rental income and expenses were received or paid by per month or per half-year.

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Other

In No�ember 2015, �he Gro�p bo�gh� Bank SinoPac�s 3rd unsecured perpetual non-cumulative subordinated financial debentures issued in 2015, which amounted to $400,000 thousand (accounted for as non-current financial assets at FVTPL) and had an interest rate of 3.9%. The debentures had been redeemed by Bank SinoPac in November 2020.

As of December 31, 2019, the interest receivables was $2,418 thousand.

In June 2019, the Group purchased part of the shares of New Medical Imaging Co., Ltd., HenKan Pharmaceutical Co., Ltd., NeuroSky, Inc., Elixir Pharmaceuticals, ACM Medical Technologies, Inc. and Nereus Pharmaceuticals Inc. from Taiwan Global BioFund Co., Ltd. for $2 thousand (accounted for as non-current financial assets at FVTOCI).

In June 2019, the Group disposed of the entire equity interest in Hanmore Investment Corporation (accounted for as non-current financial assets at FVTOCI) to Joway Investment Co., Ltd., the disposal price was $126,619 thousand, accumulated profit or loss of $130,139 thousand is transferred from the unrealized gains (losses) on financial assets measured at FVTOCI to retained earnings.

i. Compensation of key management personnel

Salaries and benefits Bonuses and executive fees	For the Year Ended	For the Year Ended	December 31
		2020 $ 96,790 1,831 $ 98,621	2019 $ 86,920 1,597 $ 88,517

The remuneration of directors and key executives was determined by the remuneration committee with regard to the performance of individuals and market trends.

32. ASSETS PLEDGED OR MORTGAGED

The following assets had been pledged or mortgaged as collateral for bank loans, guarantees provided on certain commitments, bank acceptance bills and other credit facilities:

Notes receivable, net Property, plant and equipment Land use rights (accounted for as right-of-use assets) Structured deposit (accounted for as current financial assets at fair value through profit or loss) Pledged time deposits (accounted for as current financial assets at amortized cost, other current financial assets and other non-current assets, others)		December 31	December 31
		2020 $ 2,044,721 1,157,532 103,881 73,373 31,270 $ 3,410,777	2019 $ 1,558,197 1,645,813 112,288 - 77,643 $ 3,393,941

79 -

33. SIGNIFICANT COMMITMENTS AND CONTINGENT LIABILITIES

As of December 31, 2020 and 2019, unused letters of credit for purchases of raw materials and machinery and equipment amounted to approximately $799,883 thousand and $375,497 thousand, respectively.

As of December 31, 2020, the contract of commitment to acquire land, property, plant and equipment amounted to $2,767,256 thousand. The outstanding payment was $1,180,333 thousand.

34. OTHER ITEMS

Due to the impact of the COVID-19 pandemic, some of �he Gro�p�s s�bsidiaries, c�s�omers and s�ppliers were required to implemen� policies s�ch as isola�ion and �ra�el res�ric�ions, �hich ca�sed �he Gro�p�s operating revenue to decline for the year ended December 31, 2020. However, due to the hot sales of anti-epidemic concep� prod�c�s, �he Gro�p�s opera�ing profi� increased. Therefore, there was no significant impac� on �he Gro�p�s o�erall opera�ion. Beca�se man� co�n�ries are s�ill �nder lockdo�n and �he global economic situation continues to be tightened, the Group will continue to evaluate the impact of subsequent epidemics on operations.

35. SIGNIFICANT FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Gro�p en�i�ies� significan� financial asse�s and liabili�ies denomina�ed in foreign c�rrencies aggrega�ed by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follow:

Foreign currency assets Monetary items RMB USD VND Foreign currency liabilities Monetary items USD USD	December 31, 2020
	Foreign Currencies (In Thousands) Exchange Rate Carrying Amount $ 2,494,422 0.153 (RMB:USD) $ 10,887,696 89,334 28.48 (USD:NTD) 2,544,222 1,035,394,362 0.00004 (VND:USD) 1,276,649 52,828 28.48 (USD:NTD) 1,504,546 41,706 6.524 (USD:RMB) 1,187,776

80 -

Foreign currency assets Monetary items RMB RMB USD VND Foreign currency liabilities Monetary items USD	December 31, 2019
	Foreign Currencies (In Thousands) Exchange Rate Carrying Amount $ 2,107,281 0.143 (RMB:USD) $ 9,055,977 522,249 4.297 (RMB:NTD) 2,244,350 58,288 29.98 (USD:NTD) 1,747,485 865,884,366 0.00004 (VND:USD) 1,120,235 86,736 6.9762 (USD:RMB) 2,600,348

For the years ended December 31, 2020 and 2019, realized and unrealized net foreign exchange gain (loss) were a gain of $696,352 thousand and a loss $269,787 thousand, respectively. It is impractical to disclose net foreign exchange gain (loss) by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of the group entities.

36. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions:
1) Financing provided to others. (Table 2)
2) Endorsements/guarantees provided. (Table 3)
3) Marketable securities held (excluding investment in subsidiaries, associates and joint controlled entities). (Table 4)
4) Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the paid-in capital. (Table 5)
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital. (Table 6)
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital. (Table 7)
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 8)
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 9)
9) Trading in derivative instruments. (Notes 7 and 10)
10) Intercompany relationships and significant intercompany transactions. (Table 12)
81 -
b. Information on investees (Table 10)
c. Information on investments in mainland China
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 11)
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period. (None)
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period. (Table 8)
- c) The amount of property transactions and the amount of the resultant gains or losses. (None)
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes. (Table 3)
- e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds. (Table 2)
- f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services. (None)
d. Information of major shareholders ： List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder. (Table 13)

37. SEGMENT INFORMATION

The follo�ing �as an anal�sis of �he Gro�p�s re�en�e and res�l�s b� repor�able segmen�.

For the year ended December 31, 2020 Revenue from external customers Revenue from other internal operating segments Segment revenue Eliminations Consolidated revenue Total profit or loss for reportable segments Eliminations Segment profit or loss Finance costs Net loss on fair value change of financial instruments at fair value through profit or loss Foreign exchange gain Net non-operating income and expenses Profit before income tax	Business Unit of Pulp and Fine Paper $ 15,547,483 3,069,211 $ 18,616,694 $ (390,177)	Business Unit of Container - Board and Packaging in Taiwan $ 15,144,381 2,985,239 $ 18,129,620 $ 1,945,833	Business Unit of Container - Board and Packaging in Mainland China $ 17,510,196 153,271 $ 17,663,467 $ 275,057	Business Unit of Consumer Products $ 10,131,901 15,837 $ 10,147,738 $ 1,545,970	Business Unit of Special Materials $ 5,038,649 229,770 $ 5,268,419 $ 2,201,860	Other Segment Total $ 9,861,936 $ 73,234,546 841,168 7,294,496 $ 10,703,104 80,529,042 (7,294,496) $ 73,234,546 $ (31,479) $ 5,547,064 55,840 5,602,904 (696,626 ) (825,398 ) 696,352 3,599,301 $ 8,376,533 (Continued)

82 -

For the year ended December 31, 2019 Revenue from external customers Revenue from other internal operating segments Segment revenue Eliminations Consolidated revenue Total profit or loss for reportable segments Eliminations Segment profit or loss Finance costs Net gain on fair value change of financial instruments at fair value through profit or loss Foreign exchange loss Net non-operating income and expenses Profit before income tax	Business Unit of Pulp and Fine Paper $ 16,801,826 3,887,571 $ 20,689,397 $ (383,777)	Business Unit of Container - Board and Packaging in Taiwan $ 15,230,007 1,651,372 $ 16,881,379 $ 1,315,821	Business Unit of Container - Board and Packaging in Mainland China $ 18,185,827 149,509 $ 18,335,336 $ 179,583	Business Unit of Consumer Products $ 11,262,332 187,774 $ 11,450,106 $ 756,873	Business Unit of Special Materials $ 2,982,091 289,112 $ 3,271,203 $ 624,790	Other Segment Total $ 10,298,404 $ 74,760,487 961,810 7,127,148 $ 11,260,214 81,887,635 (7,127,148) $ 74,760,487 $ 388,267 $ 2,881,557 109,252 2,990,809 (930,214 ) 91,344 (269,787 ) 1,674,040 $ 3,556,192 (Concluded)

The Group classifies its products into three segments in accordance with their characteristics as follows:

a. Pulp and fine paper segment

Manufacture and sale of cardboard, paper and pulp.

b. Containerboard and packaging segment in Taiwan

Manufacture and sale of paper for cardboard cases, colored cases and food containers.

c. Containerboard and packaging segment in mainland China

Manufacture and sale of paper for cardboard cases.

d. Consumer product segment

Manufacture and sale of tissue paper, napkins and detergents.

e. Special materials segment

Manufacture and sale of SBR (styrene butadiene rubber) latex.

The accounting policies of each segment are the same as those accounting policies stated in Note 4. The performance of segments is measured at income after tax. Revenue and profit between segments have been adjusted; these adjustments include the elimination of intra-segment transactions to reconcile the segment information with that reported for the Group as a whole.

83 -

Segment Total Assets

Segment assets Business unit of pulp and fine paper Business unit of containerboard and packaging in Taiwan Business unit of containerboard and packaging in mainland China Business unit of consumer products Business unit of special materials Other segments Adjustment and elimination Consolidated total assets		December 31	December 31
		2020 $ 32,670,233 19,991,380 22,346,822 7,541,547 5,964,918 76,691,804 (41,435,494) $ 123,771,210	2019 $ 31,098,417 23,479,771 22,662,272 8,066,456 4,120,492 75,011,225 (43,349,620) $ 121,089,013

Geographical Information

The Group operates in two principal geographical areas - Taiwan and mainland China.

The Gro�p�s re�en�e from con�in�ing opera�ions from e��ernal c�s�omers b� location of operations and information about its non-current assets by location of assets are detailed below.

Revenue from External Customers For the Year Ended December 31 2020 2019 $ 37,127,680 $ 37,249,337 25,517,545 27,062,033 10,589,321 10,449,117 $ 73,234,546 $ 74,760,487	Non-current Assets	Non-current Assets

	December 31
2020 $ 37,127,680 25,517,545 10,589,321 $ 73,234,546	2020 $ 34,804,721 17,723,781 3,239,704 $ 55,768,206	2019 $ 32,865,318 18,906,865 3,167,702 $ 54,939,885

Information about Major Customers

No single c�s�omer con�rib��ed 10% or more �o �he Gro�p�s re�en�e for bo�h 2020 and 2019.

84 -

TABLE 1

YFY INC. AND SUBSIDIARIES

DIAGRAM OF INVESTMENT STRUCTURE DECEMBER 31, 2020

==> picture [1087 x 621] intentionally omitted <==

----- Start of picture text -----

YFY Inc.
64.5% 18.9% 50.9% 49% 57.8% 48.9% 49.7%
Development Corp.YFY 2.1% Yuen Foong Yu Products Co., Consumer Ltd. Union Paper Corp. 4.1% Investment Co., YFY Paradigm Ltd. 0.07% Yuen Yan Paper Container Co., Ltd. Packaging YFY Inc. International LimitedYFY Enertech Co., Effion Ltd. 49% Chung Hwa CorporationPulp Solutions Co., Fidelis IT Ltd YFY Corporate Services Co., Advisory & Ltd. Enterprise Co., San Ying Ltd. Applied Materials Specialty and Shin Foong Co., Ltd Printing Co., China Color Ltd. YFY Global Investment Limited YFY Japan Co., Ltd. Innovation Co., Carbohydrate Sustainable Ltd.
0.02% 66.4%
6.4% Investment Hwa Fong 1% 1% Actview Carbon Kunshan TradingShin Foong Sdn.
0.1% Co., Ltd. Technology Co., Ltd. Bhd. YFY RFID
Development YFY Investment Hwa Fong Co. LimitedYFY RFID Technologies Co., Ltd.
0.7% 0.03% Corp. Co., Ltd. CHP
International 86.5%
Chung Hwa CorporationPulp Livebricks Inc. Management YFY Biotech Co., Ltd. Pek Crown Paper Co., Ltd. 66.8% YFY Capital Holdings Corp. Renewables Inc.Genovella Corporation(BVI) 81.1% Arizon RFID Technology Co., Ltd. Technologies Co., Ltd.Yeon
60% 20.2%
85% Yuen Foong Yu YFY (Shanghai) Services Co., Financial Ltd. Jinglun Paper Shenzhen Co., Ltd. Dingfung Pulp & Paper Co., Guangdong Ltd. 66.3% Forestry Co., Zhaoqing Dingfung Ltd. Communication (H.K.) LimitedSyntax Arizon RFID Yeon
Biotech Co., Ltd.Ever Growing Agriculture Investment Consumer Products Limited Shop Co., Ltd.Yuen Foong YFY Cayman Co., Ltd. (BVI) Corp.Packaging YFY Xinchuan Green Zhaoqing 40% 13.5% YFY Jupiter (BVI) Inc. (Hong Kong) Technologies Co., Ltd. Technologies (Yangzhou) Co., Ltd. Arizon JAPAN Co., Ltd.
Technology Co.,
Ltd.
57% 99% 1%
94% 60%
Investment Co., Ltd.YFY Trade Co., Ltd. Shanghai YFY International Yuen Foong Shop (HK) Limited (Hong Kong) Hwa Fong Co., LtdPaper YFY Paper (Jiangyin) Co., Ltd.Mfg. Mauritius Corp.YFY Natural Resource (Yangzhou) Co., Yuen Foong Yu Blue Economy Ltd. YFY Biopulp Technology Limited Group HoldingsJupiter Prestige Limited YFY Jupiter Limited YFY Jupiter US, Inc. YFY Jupiter Sdn. Bhd.Malaysia 1% Mobius105 Ltd. 99% Indonesia, PT YFY Jupiter PMA
1%
99%
82.5%
YFY Family (Kunshan) Co., Ltd.Care (Yangzhou ) Co., Yuen Foong Yu Consumer Products Ltd. Willpower Industries 55.2%Ltd. Company LimitedInvestment Packaging Winsong 70% Capital Corp.Packaging YFY International Labuan Co., YFY Ltd. Jupiter Prestige Group North America Inc.60% Group Australia Jupiter Prestige Pty Ltd Jupiter Prestige Group Europe Limited Opal BPM Limited Brands, LLCSpectiv Mexico,S.de YFY Jupiter R.L. YFY Jupiter (Shenzhen) Ltd. Jupiter VietnamCompany Limited
Paper Enterprise Yuen Foong Yu (Vietnam) Co., Paper Enterprise Yuen Foong Yu (Vietnam) Binh Packaging (Ha Nam) YFY Packaging Thai Binh YFY Contrast LLC Jupiter Prestige Group Asia Limited Opal BPMLimitedPrivateIndia ConsultingOpal BPMLimited Packaging Ltd.Kunshan YFY Jupiter Green Supply Chain Management YFY Jupiter (Shenzhen ) Services Limited
Ltd. Duong Co., Ltd. Co.,Ltd. Co.,Ltd.
90% 93.8% 64.6%
Yuen Foong Yu Yuen Foong Yu YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Paper YFY Packaging
Paper Enterprise Paper Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Enterprise Mfg. (Yangzhou)
(Dong Nai) Co., (Vietnam) Binh (Fuzhou) Co., (Kunshan) (Suzhou) Co., (Tianjin) Co., (Dongguan) (Shanghai) (Qingdao) (Nanjing) (Guangzhou) (Xiamen) Co., (Zhongshan) (Jiaxing) Co., (Yangzhou) Investment Co.,
Ltd. Chanh Co., Ltd. Ltd. Co., Ltd. Ltd. Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Co., Ltd. Ltd. Co., Ltd. Ltd. Co., Ltd. Ltd.
10% 50%
35.4%
Kunshan YFY
Note ： 100% of Ownership, Unless Otherwise Stated. Advertising and 50%
Printing Co.,
Ltd.
----- End of picture text -----

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TABLE 2

YFY INC. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

No.	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate (%)	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 1)	Aggregate Financing Limits (Note 1)	Note
													Item	Value
1	YFY Global Investment Limited	Yeon Technologies Co., Ltd. YFY Cayman Co., Ltd. YFY Cayman Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY International Limited	Other receivables from related parties Other receivables from related parties Long-term receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes Yes Yes	$ 15,125 120,760 664,180 920,480 1,270,500	$ - - - 916,612 1,196,160	$ - - - 916,612 882,880	- - - 2.50 2.00	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	$ - - - - -	Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements	$ - - - - -	- - - - -	$ - - - - -	$ 537,529 10,750,574 10,750,574 10,750,574 10,750,574	$ 2,150,115 10,750,574 10,750,574 10,750,574 10,750,574	Note 2 Note 2 Note 2 Note 2 Note 2
2	YFY International Limited	YFY Paper Enterprise (Zhongshan) Co., Ltd. YFY Paper Enterprise (Jiaxing) Co., Ltd. YFY Paper Enterprise (Suzhou) Co., Ltd. YFY Paper Enterprise (Qingdao) Co., Ltd. YFY Paper Enterprise (Shanghai) Co., Ltd. YFY Paper Enterprise (Dongguan) Co., Ltd. YFY Paper Enterprise (Kunshan) Co., Ltd. YFY Paper Enterprise (Nanjing) Co., Ltd. YFY Paper Enterprise (Tianjin) Co., Ltd. YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Paper Enterprise (Guangzhou) Co., Ltd.	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes	61,107 120,539 161,084 261,899 200,587 305,537 219,162 276,144 314,457 890,423 6,392,839 131,497	30,554 120,032 160,407 260,798 199,909 218,241 218,241 274,984 313,394 593,615 5,936,152 130,945	- 120,032 160,407 199,690 199,909 218,241 218,241 274,984 313,394 593,615 5,936,152 -	3.75 3.50 3.50-3.75 3.50-3.75 3.50 3.50-3.75 3.75 3.50 3.50 2.50 2.50 3.75	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- - - - - - - - - - - -	Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements	- - - - - - - - - - - -	- - - - - - - - - - - -	- - - - - - - - - - - -	39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 7,872,605	39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 39,363,025 7,872,605	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2
3	YFY Paper Enterprise (Guangzhou) Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Packaging (Yangzhou) Investment Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	49,700 49,700	49,532 49,532	3,724 4,480	3.25 3.25	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	49,532 49,532	198,127 198,127	Note 2 Note 2
4	YFY Paper Enterprise (Kunshan) Co., Ltd.	YFY (Shanghai) Financial Services Co., Ltd. YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd.	Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes	131,497 979,845 979,845	- 976,534 976,534	- 82,607 358,239	- 3.25 3.25	Short-term financing Short-term financing Short-term financing	- - -	Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements	- - -	- - -	- - -	1,107,478 1,107,478 1,107,478	1,107,478 1,107,478 1,107,478	Note 2 Note 2 Note 2
5	YFY Paper Enterprise (Qingdao) Co., Ltd.	YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	1,939,011 1,939,011	1,932,459 1,932,459	230,750 619,930	3.25 3.25	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	1,932,459 1,932,459	1,932,459 1,932,459	Note 2 Note 2
6	YFY Paper Enterprise (Nanjing) Co., Ltd.	YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	834,958 834,958	832,136 832,136	71,635 81,156	3.25 3.25	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	832,136 832,136	832,136 832,136	Note 2 Note 2
																(Continued)

86 -

No.	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate (%)	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 1)	Aggregate Financing Limits (Note 1)	Note
													Item	Value
7	YFY Paper Enterprise (Dongguan) Co., Ltd.	YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	$ 911,861 911,861	$ 908,779 908,779	$ 235,911 311,070	3.25 3.25	Short-term financing Short-term financing	$ - -	Financing for working capital requirements Financing for working capital requirements	$ - -	- -	$ - -	$ 908,779 908,779	$ 908,779 908,779	Note 2 Note 2
8	YFY Paper Enterprise (Tianjin) Co., Ltd.	YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	1,560,268 1,560,268	1,554,995 1,554,995	274,762 564,316	3.25 3.25	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	1,554,995 1,554,995	1,554,995 1,554,995	Note 2 Note 2
9	YFY Paper Enterprise (Zhongshan) Co., Ltd.	YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	1,921,848 1,921,848	1,915,354 1,915,354	185,317 512,827	3.25 3.25	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	1,915,354 1,915,354	1,915,354 1,915,354	Note 2 Note 2
10	YFY Paper Enterprise (Suzhou) Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Packaging (Yangzhou) Investment Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	467,328 467,328	465,749 465,749	19,189 124,207	3.25 3.25	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	465,749 465,749	465,749 465,749	Note 2 Note 2
11	YFY Packaging (Yangzhou) Investment Co., Ltd.	YFY Paper Enterprise (Shanghai) Co., Ltd. YFY Paper Enterprise (Zhongshan) Co., Ltd. YFY Paper Enterprise (Tianjin) Co., Ltd. YFY Paper Enterprise (Kunshan) Co., Ltd. YFY Paper Enterprise (Dongguan) Co., Ltd. YFY Paper Enterprise (Qingdao) Co., Ltd. YFY Paper Enterprise (Nanjing) Co., Ltd. YFY Paper Enterprise (Suzhou) Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Paper Enterprise (Jiaxing) Co., Ltd. YFY Paper Enterprise (Fuzhou) Co., Ltd. YFY Paper Enterprise (Xiamen) Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Paper Enterprise (Guangzhou) Co., Ltd.	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes	548,721 548,721 548,721 548,721 548,721 548,721 548,721 548,721 1,097,443 548,721 548,721 548,721 548,721 54,872	501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 25,077	- - - - - - - - 43 2,609 22,005 23,964 239,083 -	3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.25 3.50 3.50 3.50 3.50 3.50	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- - - - - - - - - - - - - -	Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements	- - - - - - - - - - - - - -	- - - - - - - - - - - - - -	- - - - - - - - - - - - - -	501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 25,077	501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 501,538 100,307	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2
12	YFY Paper Enterprise (Shanghai) Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Packaging (Yangzhou) Investment Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	695,769 695,769	693,417 693,417	74,255 226,238	3.25 3.25	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	693,417 693,417	693,417 693,417	Note 2 Note 2
13	YFY Paper Enterprise (Jiaxing) Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Packaging (Yangzhou) Investment Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	297,981 297,981	263,343 263,343	- 59,935	3.25 3.25	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	263,343 263,343	263,343 263,343	Note 2 Note 2
14	YFY Paper Mfg. (Yangzhou) Co., Ltd.	YFY Family Paper (Beijing) Co., Ltd. Yuen Foong Yu Consumer Products (Yangzhou) Co., Ltd. YFY Investment Co., Ltd.	Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes	438,324 438,324 438,324	- - -	- - -	- - -	Short-term financing Short-term financing Short-term financing	- - -	Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements	- - -	- - -	- - -	- 3,055,387 3,055,387	- 3,055,387 3,055,387	Note 3 Note 2 Note 2
																(Continued)

87 -

No.	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate (%)	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 1)	Aggregate Financing Limits (Note 1)	Note
													Item	Value
		YFY Family Care (Kunshan) Co., Ltd. Yuen Foong Yu Blue Economy Natural Resource (Yangzhou) Co., Ltd. Kunshan YFY Jupiter Green Packaging Ltd. YFY Jupiter (Shenzhen) Ltd. Shenzhen Jinglun Paper Co., Ltd. YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Paper Enterprise (Shanghai) Co., Ltd. YFY Paper Enterprise (Zhongshan) Co., Ltd. YFY Paper Enterprise (Tianjin) Co., Ltd. YFY Paper Enterprise (Kunshan) Co., Ltd. YFY Paper Enterprise (Dongguan) Co., Ltd. YFY Paper Enterprise (Qingdao) Co., Ltd. YFY Paper Enterprise (Nanjing) Co., Ltd. YFY Paper Enterprise (Suzhou) Co., Ltd. Guangdong Dingfung Pulp & Paper Co., Ltd. YFY Paper Enterprise (Jiaxing) Co., Ltd. YFY Paper Enterprise (Xiamen) Co., Ltd. Shanghai YFY International Trade Co., Ltd. YFY Packaging (Yangzhou) Investment Co., Ltd. Kunshan YFY Advertising and Printing Co., Ltd. YFY Paper Enterprise (Fuzhou) Co., Ltd. YFY Paper Mfg. (Jiangyin) Co., Ltd. YFY Paper Enterprise (Guangzhou) Co., Ltd.	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes	$ 438,324 224,382 224,382 224,382 224,382 438,324 438,324 438,324 438,324 438,324 438,324 438,324 438,324 438,324 438,324 438,324 438,324 3,092 438,324 438,324 438,324 224,382 224,382	$ - 152,769 152,769 152,769 152,769 436,482 436,482 436,482 436,482 436,482 436,482 436,482 436,482 436,482 436,482 436,482 436,482 3,082 436,482 436,482 436,482 152,769 152,769	$ - - - - - - - - - - - - - - - 39 1,094 2,335 9,234 367,277 383,910 - -	- 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.50 3.25 3.50 3.50 3.50 3.50	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	$ - - - - - - - - - - - - - - - - - - - - - - -	Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements	$ - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - -	$ - - - - - - - - - - - - - - - - - - - - - - -	$ 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 152,769 152,769	$ 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 3,055,387 611,077 611,077	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2
15	Yuen Foong Yu Blue Economy Natural Resource (Yangzhou) Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd.	Other receivables from related parties	Yes	111,570	95,083	82,326	3.25	Short-term financing	-	Financing for working capital requirements	-	-	-	190,167	190,167	Note 2
16	YFY Jupiter (Shenzhen) Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd.	Other receivables from related parties	Yes	311,343	310,291	147,986	3.25	Short-term financing	-	Financing for working capital requirements	-	-	-	620,582	620,582	Note 2
17	Kunshan YFY Jupiter Green Packaging Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd.	Other receivables from related parties	Yes	138,365	124,326	123,893	3.25	Short-term financing	-	Financing for working capital requirements	-	-	-	248,653	248,653	Note 2
18	YFY Cayman Co., Ltd.	YFY Paper Enterprise (Shanghai) Co., Ltd. YFY Paper Enterprise (Jiaxing) Co., Ltd. YFY Paper Enterprise (Shanghai) Co., Ltd. YFY Paper Enterprise (Tianjin) Co., Ltd.	Long-term receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes Yes	56,982 120,539 143,770 231,435	- - - -	- - - -	- - - -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements	- - - -	- - - -	- - - -	26,195,852 26,195,852 26,195,852 26,195,852	26,195,852 26,195,852 26,195,852 26,195,852	Note 2 Note 2 Note 2 Note 2
																(Continued)

88 -

No.	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate (%)	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 1)	Aggregate Financing Limits (Note 1)	Note
													Item	Value
18	YFY Cayman Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd.	Other receivables from related parties Long-term receivables from related parties Long-term receivables from related parties	Yes Yes Yes	$ 262,994 596,121 1,840,960	$ - - -	$ - - -	- - -	Short-term financing Short-term financing Short-term financing	$ - - -	Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements	$ - - -	- - -	$ - - -	$ 26,195,852 26,195,852 26,195,852	$ 26,195,852 26,195,852 26,195,852	Note 2 Note 2 Note 2
19	YFY RFID Co. Limited	YFY Cayman Co., Ltd. YFY International Limited	Other receivables from related parties Other receivables from related parties	Yes Yes	214,775 213,142	- 202,208	- 202,208	- 1.00	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	5,439,192 5,439,192	5,439,192 5,439,192	Note 2 Note 2
20	Hwa Fong Paper (Hong Kong) Co., Ltd.	YFY Cayman Co., Ltd. YFY International Limited	Long-term receivables from related parties Other receivables from related parties	Yes Yes	93,775 81,054	- 74,048	- 74,048	- 1.00	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	182,398 182,398	182,398 182,398	Note 2 Note 2
21	YFY Jupiter (BVI) Inc.	YFY Jupiter US, Inc. YFY Jupiter Indonesia, PT PMA	Other receivables from related parties Other receivables from related parties	Yes Yes	30,794 45,285	- -	- -	- -	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	261,626 261,626	261,626 261,626	Note 2 Note 2
22	YFY Jupiter Limited	YFY Jupiter Indonesia, PT PMA YFY Jupiter US, Inc.	Other receivables from related parties Other receivables from related parties	Yes Yes	45,030 89,188	42,720 76,941	42,720 76,941	9.00 1.60-3.60	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	145,839 145,839	145,839 145,839	Note 2 Note 2
23	Guangdong Dingfung Pulp & Paper Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd.	Other receivables from related parties	Yes	497,365	481,166	110,063	3.25	Short-term financing	-	Financing for working capital requirements	-	-	-	481,166	1,924,663	Note 2
24	CHP International (BVI) Corporation	Zhaoqing Dingfung Forestry Co., Ltd. Shenzhen Jinglun Paper Co., Ltd. Guangdong Dingfung Pulp & Paper Co., Ltd. YFY International Limited	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes Yes	363,000 183,944 1,121,182 302,500	341,760 183,322 1,117,393 -	341,760 183,322 1,117,393 -	1.50-2.50 2.10 2.10-3.10 -	Short-term financing Short-term financing Short-term financing Short-term financing	- - - -	Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements	- - - -	- - - -	- - - -	1,950,945 1,950,945 1,950,945 487,736	1,950,945 1,950,945 1,950,945 1,950,945	Note 2 Note 2 Note 2 Note 2
25	Shenzhen Jinglun Paper Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd.	Other receivables from related parties	Yes	11,941	11,900	1,164	3.25	Short-term financing	-	Financing for working capital requirements	-	-	-	11,900	47,602	Note 2
26	Yuen Foong Yu Consumer Products Co., Ltd.	Yuen Foong Yu Consumer Products (Yangzhou) Co., Ltd.	Other receivables from related parties	Yes	802,133	-	-	-	Short-term financing	-	Financing for working capital requirements	-	-	-	1,227,933	1,227,933	Note 2
27	Yuen Foong Yu Consumer Products Investment Limited	YFY Investment Co., Ltd. YFY Investment Co., Ltd.	Long-term receivables from related parties Long-term receivables from related parties	Yes Yes	453,750 453,750	427,200 427,200	427,200 427,200	2.00 2.00	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	4,845,802 4,845,802	4,845,802 4,845,802	Note 2 Note 2
28	YFY Family Care (Kunshan) Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Investment Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	444,868 412,867	- 411,471	- 75,801	- 3.25	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	41,147 822,943	164,589 822,943	Note 2 Note 2
29	Yuen Foong Yu Consumer Products (Yangzhou) Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Investment Co., Ltd.	Other receivables from related parties Other receivables from related parties	Yes Yes	1,098,840 1,113,526	- 1,109,763	- -	- 3.25	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	110,976 2,219,525	443,905 2,219,525	Note 2 Note 2
30	YFY Family Paper (Beijing) Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd.	Other receivables from related parties	Yes	458,002	-	-	-	Short-term financing	-	Financing for working capital requirements	-	-	-	-	-	Note 3
																(Continued)

89 -

No.	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period	Ending Balance	Actual Borrowing Amount	Interest Rate (%)	Nature of Financing	Business Transaction Amounts	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral	Collateral	Financing Limit for Each Borrower (Note 1)	Aggregate Financing Limits (Note 1)	Note
													Item	Value
31	YFY Investment Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd. Shanghai YFY International Trade Co., Ltd. YFY Family Care (Kunshan) Co., Ltd. Yuen Foong Yu Consumer Products (Yangzhou) Co., Ltd.	Other receivables from related parties Other receivables from related parties Other receivables from related parties Other receivables from related parties	Yes Yes Yes Yes	$ 1,477,841 3,092 1,494,711 1,494,711	$ - 3,082 1,489,660 1,489,660	$ - - - 77,301	- 3.50 3.50 3.50	Short-term financing Short-term financing Short-term financing Short-term financing	$ - - - -	Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements Financing for working capital requirements	$ - - - -	- - - -	$ - - - -	$ 148,966 2,979,320 2,979,320 2,979,320	$ 595,864 2,979,320 2,979,320 2,979,320	Note 2 Note 2 Note 2 Note 2
32	YFY International Labuan Co., Ltd.	YFY International Limited YFY Cayman Co., Ltd.	Other receivables from related parties Long-term receivables from related parties	Yes Yes	102,068 102,850	- -	- -	- -	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	14,348,964 14,348,964	14,348,964 14,348,964	Note 2 Note 2
33	YFY Mauritius Corp.	YFY Cayman Co., Ltd. YFY International Limited	Long-term receivables from related parties Other receivables from related parties	Yes Yes	302,500 302,250	- 284,800	- 284,800	- 2.00	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	12,319,774 12,319,774	12,319,774 12,319,774	Note 2 Note 2
34	Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd.	Vinh Phu Packing And Printing Company Limited	Other receivables from related parties	Yes	58,590	18,495	18,495	3.40	Short-term financing	-	Financing for working capital requirements	-	-	-	518,253	518,253	-
35	YFY Packaging (BVI) Corp.	YFY Cayman Co., Ltd.	Long-term receivables from related parties	Yes	38,974	-	-	-	Short-term financing	-	Financing for working capital requirements	-	-	-	6,380,791	6,380,791	Note 2
36	YFY Development Corp. (originally named as YFY Capital Co., Ltd.)	Fidelis IT Solutions Co., Ltd.	Other receivables from related parties	Yes	50,000	50,000	50,000	1.05	Short-term financing	-	Financing for working capital requirements	-	-	-	285,528	285,528	Note 2
37	San Ying Enterprise Co., Ltd.	YFY Venture Capital Investment Co., Ltd.	Other receivables from related parties	Yes	50,000	-	-	-	Short-term financing	-	Financing for working capital requirements	-	-	-	-	-	Note 4
38	Effion Enertech Co., Ltd.	YFY Paradigm Investment Co., Ltd. (Note 5) YFY Development Corp. (originally named as YFY Capital Co., Ltd.) (Note 6)	Other receivables from related parties Other receivables from related parties	Yes Yes	110,000 200,000	110,000 122,000	110,000 122,000	1.05 1.05	Short-term financing Short-term financing	- -	Financing for working capital requirements Financing for working capital requirements	- -	- -	- -	232,264 232,264	232,264 232,264	Note 2 Note 2
39	YFY Japan Co., Ltd	YFY International Limited	Other receivables from related parties	Yes	70,575	69,075	69,075	0.50	Short-term financing	-	Financing for working capital requirements	-	-	-	202,643	202,643	Note 2

Note 1: a. In the provision of loans due to b�siness dealings, �o�al loans sho�ld no� e�ceed 40% of �he lender�s ne� eq�i�� for �he prior �ear �hile indi�id�al loans sho�ld not exceed the total purchases and sales between the lender and the borrower for the prior year. In the provision of short-term loans, both individual and total loans each sho�ld no� e�ceed 40% of �he lender�s ne� eq�i�� for �he prior �ear. To s�m �p, in �he pro�ision of b�siness dealings and short-term financing, both aggregate loans and individual loans should not exceed 80% of the lender�s ne� eq�i�� for �he prior �ear.

b. YFY Inc.�s �holl�-owned foreign subsidiaries are not subject to the foregoing 40% and 80% limits when they provide financing to each other. For s�bsidiaries of YFY Inc., if �he loan is for �he borro�er�s b�siness purposes or for short-�erm financing, �he amo�n� of financing sho�ld no� e�ceed ��ice of �he lender�s ne� equity as of the end of the prior year.

c. For YFY Inc.�s o�her foreign s�bsidiaries �ha� are no� �holl�-owned, Guangdong Dingfung Pulp & Paper Co., Ltd., Shenzhen Jinglun Paper Co., Ltd., Yuen Foong Yu Blue Economy Natural Resource (Yangzhou) Co., Ltd., YFY Jupiter (Shenzhen) Ltd., and Kunshan YFY Jupiter Green Packaging Ltd., their individual contributions to a cash pool to be used for lending purposes should not exceed 10% of their respective net equities as of the end of the prior year.

d. CHP In�erna�ional (BVI) Corpora�ion�s financing �o YFY In�erna�ional Limi�ed is for re�ol�ing credi� facili�� p�rposes. Thus, the financing amount should not e�ceed 10% of �he lender�s ne� eq�i��.

Note 2: In preparing the consolidated financial statements, the transaction has been eliminated.

Note 3: The Group completed the disposal of YFY Family Paper (Beijing) Co., Ltd. in August 2020 and lost control of the subsidiary. Thus, the limit of individual loans and total loans provided to YFY Family Paper (Beijing) Co., Ltd. is zero.

Note 4: San Ying En�erprise Co., L�d.�s financing �o YFY Ven��re Capi�al In�es�men� Co., L�d. �as �ermina�ed in A�g�s� 2020. YFY Venture Capital Investment Co., Ltd. was merged and dissolved in October 2020. Thus, the limit of individual loans and total loans provided to YFY Venture Capital Investment Co., Ltd. is zero.

Note 5: Lotus Ecoscings & Engineering Co., Ltd. was merged with YFY Paradigm Investment Co., Ltd on October 7, 2020.

Note 6: YFY Venture Capital Investment Co., Ltd. was merged with YFY Development Corp. (originally named as YFY Capital Co., Ltd.) on October 7, 2020.

(Concluded)

90 -

TABLE 3

YFY INC. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

No.	Endorser/Guarantor	Endorsee/Guarantee		Limits on Endorsement/ Guarantee Given on Behalf of Each Party (Note 1)	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collaterals	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in the Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit (Note 2)	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries	Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Companies in Mainland China
		Name	Relationship
0	Endorsement/guarantee YFY Inc.	YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd.	Note 3 a. Note 3 a.	$ 58,875,350 58,875,350	$ 302,500 3,981,664	$ 283,713 2,841,488	$ - 760,394	$ - -	0.63 6.32	$ 78,500,466 78,500,466	Yes Yes	No No	Yes Yes
1	YFY Cayman Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Packaging (Ha Nam) Co., Ltd.	Note 3 b. Note 3 b. Note 3 a.	19,646,889 19,646,889 19,646,889	175,100 227,910 468,875	- - -	- - -	- - -	- - -	26,195,852 26,195,852 26,195,852	No No Yes	No No No	Yes Yes No
2	Willpower Industries Ltd.	Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd. Yuen Foong Yu Paper Enterprise (Vietnam) Binh Duong Co., Ltd. Yuen Foong Yu Paper Enterprise (Dong Nai) Co., Ltd. Vinh Phu Packing And Printing Company Limited	Note 3 a. Note 3 a. Note 3 a. Note 3 c.	2,846,473 2,846,473 2,846,473 189,765	444,450 1,028,500 400,005 112,640	427,200 968,320 299,040 108,468	165,462 426,219 33,412 84,022	- - - -	18.76 42.51 13.13 4.76	3,795,298 3,795,298 3,795,298 189,765	Yes Yes Yes No	No No No No	No No No No
3	Winsong Packaging Investment Company Limited	YFY Packaging Thai Binh Co., Ltd. YFY Packaging (Ha Nam) Co., Ltd.	Note 3 a. Note 3 a.	532,808 532,808	28,810 259,290	28,480 256,320	- -	- -	8.04 72.39	710,410 710,410	Yes Yes	No No	No No
0	Credit line (Note 4) YFY Inc.	Lotus Ecoscings & Engineering Co., Ltd. YFY (Shanghai) Financial Services Co., Ltd. YFY Venture Capital Investment Co., Ltd. YFY Global Investment Limited YFY Paradigm Investment Co., Ltd. YFY International Limited YFY Development Corp. (originally named as YFY Capital Co., Ltd.) YFY Jupiter Limited YFY Jupiter (BVI) Inc.	Note 3 a. Note 3 a. Note 3 a. Note 3 a. Note 3 a. Note 3 a. Note 3 a. Note 3 a. Note 3 a.	58,875,350 58,875,350 58,875,350 58,875,350 58,875,350 58,875,350 58,875,350 58,875,350 58,875,350	230,000 400,302 1,870,000 695,175 2,070,000 3,086,025 3,350,000 283,324 453,375	- - - 655,040 2,070,000 3,002,752 3,350,000 281,888 427,200	- - - 39,713 858,000 687,735 1,960,000 108,984 183,696	- - - - - - - - -	- - - 1.46 4.60 6.67 7.45 0.63 0.95	78,500,466 78,500,466 78,500,466 78,500,466 78,500,466 78,500,466 78,500,466 78,500,466 78,500,466	No No No No No No No No No	No No No No No No No No No	No No No No No No No No No
1	Chung Hwa Pulp Corporation	Hwa Fong Investment Co., Ltd. CHP International (BVI) Corporation Guangdong Dingfung Pulp & Paper Co., Ltd.	Note 3 a. Note 3 a. Note 3 a.	22,675,847 22,675,847 22,675,847	130,000 710,875 175,330	130,000 526,880 174,593	- 96,832 -	- - -	0.88 3.56 1.18	30,234,462 30,234,462 30,234,462	No No No	No No No	No No No
2	YFY Packaging Inc.	YFY Paper Enterprise (Tianjin) Co., Ltd. YFY Paper Enterprise (Qingdao) Co., Ltd. YFY Cayman Co., Ltd.	Note 3 b. Note 3 b. Note 3 a.	10,707,825 10,707,825 10,707,825	87,665 87,665 1,936,000	- - 1,053,760	- - -	- - -	- - 14.75	14,277,100 14,277,100 14,277,100	No No No	No No No	No No No

Note 1: Represen�s 150% of �he prior �ear�s ne� eq�i��, e�cep� Vinh Ph� Packaging And Prin�ing Compan� Limi�ed represen�s 10% of prior �ear�s ne� eq�i�� of Willpo�er Ind�s�ries L�d.

Note 2: Represen�s 200% of �he prior �ear�s ne� eq�i��, e�cep� Vinh Ph� Packaging And Prin�ing Compan� Limi�ed represen�s 10% of prior �ear�s ne� eq�i�� of Willpo�er Ind�s�ries L�d.

Note 3: The relationships between the guarantor and the guarantee are as follows:

a. Subsidiary.
b. Same ultimate parent company. c. Associate.
Note 4: In accordance with regulations, the credit lines jointly issued by the co-issuing parties are disclosed.
91 -

TABLE 4

YFY INC. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2020	December 31, 2020		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
YFY Inc.	Ordinary shares SinoPac Financial Holdings Co., Ltd. Zhen Ding Technology Holding Limited TaiGen Biopharmaceuticals Holdings Ltd. Canada Investment and Development Co., Ltd. Synmax Biochemical Co., Ltd. Universal Investment Co., Ltd. Fu Hwa Development Enterprise Co., Ltd. Taiwan Creative Industry Development Co., Ltd. Shin Taiwan Kubota Co., Ltd. China Trade and Development Corp. Taiwan Stock Exchange Corporation Sino Cell Technologies Ltd. Yuen Foong Paper Co., Ltd. KHL IB Venture Capital Co., Ltd. iXensor Co., Ltd. Beneficiary certificates SinoPac TWD Money Market Fund	- - Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 - Note 1 - Note 2 - - -	Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss	468,485,150 7,464,617 84,509,502 20,826,000 5,999,371 5,221,228 4,200,000 1,600,000 5,612 377,634 22,513,611 1,691,656 544,067 15,055,884 191,000 1,161,106	$ 5,364,155 850,966 1,931,042 183,214 81,446 34,318 58,282 16,150 61,397 3,265 3,155,583 14,234 10,495 371,960 3,897 16,283	4.2 0.8 11.8 12.9 13.9 3.0 14.0 8.0 5.5 0.6 3.0 10.0 0.7 14.9 0.4 -	$ 5,364,155 850,966 1,931,042 183,214 81,446 34,318 58,282 16,150 61,397 3,265 3,155,583 14,234 10,495 371,960 3,897 16,283	Note 3

(Continued)

92 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2020	December 31, 2020		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
YFY Paper Enterprise (Xiamen) Co., Ltd. YFY Global Investment Limited Shin Foong Specialty and Applied Materials Co., Ltd. China Color Printing Co., Ltd.	Share certificate Xiamen Taiwanese Investment Association Management Company Beneficiary certificates WI Harper INC Fund VII LP Special share Neutron Innovation (BVI) Ltd. Micareo Inc. Omni-ID Corporation Inc. Ordinary shares SinoPac Financial Holdings Co., Ltd. Foongtone Technology Co., Ltd. Beneficiary certificates SinoPac TWD Money Market Fund PIMCO GIS Total Return Bond Fund-E Class Mega Diamond Money Market Fund Beneficiary certificates Jih Sun Money Market Fund Ordinary shares China Development Financial Holding Corporation China Parcel Co., Ltd.	- - Note 1 - Note 1 - - - - - - - -	Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income	- - 1,692,250 8,124,999 4,067,937 21,891,143 2,884,415 8,558,748 218,899 40,171,624 2,417,123 9,959,081 463,917	RMB 70 thousand US$ 159 thousand US$ 3,700 thousand US$ 818 thousand US$ 4,734 thousand 250,654 71,972 120,025 86,905 610,221 36,136 92,619 4,730	- 0.2 6.5 19.9 5.6 0.2 11.8 - - - - 0.1 10.8	RMB 70 thousand US$ 159 thousand US$ 3,700 thousand US$ 818 thousand US$ 4,734 thousand 250,654 71,972 120,025 86,905 610,221 36,136 92,619 4,730

(Continued)

93 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2020	December 31, 2020		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
YFY Development Corp. (originally named as YFY Capital Co., Ltd.) YFY Paradigm Investment Co., Ltd.	Ordinary shares SinoPac Financial Holdings Co., Ltd. Medeon Biodesign, Inc. Advance Materials Corporation Co., Ltd. TaiGen Biopharmaceuticals Holdings Ltd. Quan Yuan Investment Co., Ltd. Taiwan Global BioFund Co., Ltd. Everterminal Co., Ltd. Ordinary shares SinoPac Financial Holdings Co., Ltd. Shen�s Ar� Prin�ing Co., L�d. Medeon Biodesign, Inc. Zhen Ding Technology Holding Limited TaiGen Biopharmaceuticals Holdings Ltd. Canada Investment and Development Co., Ltd. Locus Publishing Company Sino Cell Technologies Ltd. Foongtone Technology Co., Ltd. Taiwan Stock Exchange Corporation Overseas Investment & Development Co., Ltd. Echem Solutions Corp. Fu Hwa Development Enterprise Co., Ltd.	- - - - Note 1 Note 1 - - - - - - Note 1 Note 1 Note 1 Note 1 - - - -	Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income	212,289,885 203,484 1,542,258 1,265,000 5,250,000 5,600,000 2,401,920 143,442,904 43,109 118,791 467,106 17,654,353 2,574,000 1,402,386 1,691,343 1,370,730 1,557 1,000,000 819,684 1,050,000	$ 2,430,719 11,212 7,804 28,905 40,605 35,526 16,364 1,642,421 579 6,545 53,250 403,402 22,644 13,918 14,231 34,203 218 7,972 10,847 14,571	1.9 0.3 1.3 0.2 5.5 4.7 2.5 1.3 0.1 0.2 0.1 2.5 1.6 13.4 10.0 5.6 - 1.1 1.3 3.5	$ 2,430,719 11,212 7,804 28,905 40,605 35,526 16,364 1,642,421 579 6,545 53,250 403,402 22,644 13,918 14,231 34,203 218 7,972 10,847 14,571	Note 3

(Continued)

94 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2020	December 31, 2020		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
Fidelis IT Solutions Co., Ltd. Chung Hwa Pulp Corporation Hwa Fong Investment Co., Ltd. YFY Corporate Advisory & Services Co., Ltd. Union Paper Corp. YFY Japan Co., Ltd Effion Enertech Co., Ltd. Genovella Renewables Inc. (originally named as Kuang Hwa Fertilizer Limited Company)	Ordinary shares SinoPac Financial Holdings Co., Ltd. Ordinary shares SinoPac Financial Holdings Co., Ltd. NTU Innovation & Incubation Co., Ltd. Groundhog Technologies Inc. Direct Insight Inc. TaiGen Biopharmaceuticals Holdings Ltd. KHL IB Venture Capital Co., Ltd. Ordinary shares Everest Technology Inc. SinoPac Financial Holdings Co., Ltd. Beneficiary certificates SinoPac TWD Money Market Fund Beneficiary certificates SinoPac TWD Money Market Fund Ordinary shares Beautone Japan Co., Ltd. Beneficiary certificates SinoPac TWD Money Market Fund Beneficiary certificates SinoPac TWD Money Market Fund	- - Note 1 - - - - - - - - - - -	Current financial assets at fair value through other comprehensive income Current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Current financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss	7,455,438 99,809,327 800,000 275,000 265,000 15,315,356 15,055,884 150,000 2,394,960 3,628,568 8,847,876 440 3,705,287 97,099	$ 85,365 1,142,817 - - 3 349,956 371,960 - 27,422 50,887 124,079 JPY 115,507 thousand 51,962 1,361	0.1 0.9 6.3 1.0 1.0 2.1 14.9 0.2 - - - 36.7 - -	$ 85,365 1,142,817 - - 3 349,956 371,960 - 27,422 50,887 124,079 JPY 115,507 thousand 51,962 1,361

(Continued)

95 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account		December 31, 2020	December 31, 2020		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
San Ying Enterprise Co., Ltd. Yeon Technologies Co., Ltd. Sustainable Carbohydrate Innovation Co., Ltd. YFY Biotech Management Co., Ltd. Arizon RFID Technology Co., Ltd. (originally named as Arizon RFID Technologies (Yangzhou) Co., Ltd.)	Beneficiary certificates SinoPac TWD Money Market Fund Beneficiary certificates SinoPac TWD Money Market Fund Beneficiary certificates SinoPac TWD Money Market Fund Ordinary shares New Medical Imaging Co., Ltd. Neuro Sky, Inc. Elixir Pharmaceuticals Inc. ACM Medical Technologies, Inc. Nereus Pharmaceuticals Inc. Negotiable certificates of deposit RMB Large-denomination Certificate of Deposit for Corporate Clients No. 189 in 2020	- - - - - - - - -	Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at amortized cost	2,082,172 324,058 1,357,239 331,671 48,308,183 2,662,558 760,000 1,682,602 -	$ 3,187 4,544 19,033 693 - - - - RMB 50,000 thousand	- - - 7.2 10.3 2.2 7.3 0.9 -	$ 3,187 4,544 19,033 693 - - - - RMB 50,000 thousand

Note 1: The investor is a member of the board of directors or a supervisor.

Note 2: A member of the board of directors of the investor.

Note 3: The Group acquired Zhen Ding Technolog� Holding Limi�ed (�ZDTHL�) �hro�gh s�ock e�change. The Compan��s board of direc�ors appro�ed �he s�ock e�change of all of i�s o�nership of Board�ek Elec�ronics Corpora�ion (�BEC�) for o�nership of �ZDTHL� in Ma� 2020. The s�ock e�change �as cond�c�ed a� an e�change ra�io of 1 ordinar� share of �BEC� for 0.2 ne�l� iss�ed ordinar� share of �ZDTHL�. The above stock exchange has been completed on November 4, 2020.

(Concluded)

96 -

TABLE 5

YFY INC. AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

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

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counterparty	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Other Adjustments	Ending	Balance	Note
					Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount	Carrying Amount	Gain (Loss) on Disposal		Number of Shares	Amount
YFY Inc. YFY Development Corp. (originally named as YFY Capital Co., Ltd.) YFY Biotech Management Co., Ltd. Shin Foong Specialty and Applied Materials Co., Ltd. YFY Investment Co., Ltd. YFY International Labuan Co., Ltd. YFY International Limited YFY Packaging (BVI) Corp.	Ordinary shares Yuen Foong Yu Consumer Products Co., Ltd. YFY Packaging Inc. Boardtek Electronics Corporation Zhen Ding Technology Holding Limited Beneficiary certificates SinoPac TWD Money Market Fund Beneficiary certificates SinoPac TWD Money Market Fund Beneficiary certificates SinoPac TWD Money Market Fund Mega Diamond Money Market Fund Share certificate YFY Family Paper (Beijing) Co., Ltd. Ordinary shares YFY Packaging Inc. YFY Jupiter (BVI) Inc. Ordinary shares YFY Mauritius Corp. YFY Mauritius Corp. YFY Cayman Co., Ltd. Ordinary shares YFY Mauritius Corp.	Note 2 Note 2 Note 3 Note 3 Note 1 Note 1 Note 1 Note 1 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2	Designated persons and financial investors YFY International Labuan Co., Ltd. Zhen Ding Technology Holding Limited Zhen Ding Technology Holding Limited - - - - Huatong Development (HK) Limited YFY Inc. YFY Global Investment Limited YFY Packaging (BVI) Corp. YFY Cayman Co., Ltd. YFY Packaging Inc. YFY International Limited	- Subsidiary - - - - - - - Parent company Note 11 Note 11 Note 11 Note 11 Note 11	241,636,021 - 37,323,087 - - 23,829,970 5,009,518 - - 410,150,000 4,629,723 - - 339,918,142 165,000,000	$ 2,888,148 - 940,542 - - 333,005 70,004 - RMB 102,343 thousand US$ 238,110 thousand US$ 10,360 thousand - - US$ 459,899 thousand US$ 110,658 thousand	- 410,150,000 - 7,464,617 50,143,997 - 51,043,442 50,460,894 - - - 165,000,000 157,501,731 - -	$ - 7,222,888 - 940,542 702,000 - 715,000 740,000 - - - US$ 105,566 thousand US$ 100,768 thousand - -	83,631,456 (Note 8) - 37,323,087 - 50,143,997 23,829,970 47,494,212 10,289,270 - 410,150,000 4,629,723 - - 35,615,601 165,000,000	$ 2,604,471 (Note 8) - 940,542 - 702,042 333,174 665,119 130,028 RMB 180,000 thousand US$ 253,408 thousand US$ 10,800 thousand - - US$ 49,645 thousand US$ 105,566 thousand	$ 1,181,618 (Note 8) - 940,542 - 702,000 333,000 665,000 130,000 RMB 101,282 thousand (Note 10) US$ 273,216 thousand US$ 11,934 thousand - - US$ 53,627 thousand US$ 115,632 thousand	$ 1,422,853 (Notes 7 and 8) - - - 42 (Note 4) 174 (Note 4) 119 (Note 4) 28 (Note 4) RMB 78,718 thousand (Note 6) US$ (19,808 ) thousand (Note 7) US$ (1,134 ) thousand (Note 7) - - US$ (3,982 ) thousand (Note 7) US$ (10,066 ) thousand (Note 7)	$ 896,002 (Note 9) (98,505 ) (Note 9) - (89,576 ) (Note 5) - (5 ) (Note 4) 21 (Note 4) 221 (Note 4) RMB (6,663 ) thousand (Note 9) US$ 35,106 thousand (Note 9) US$ 1,574 thousand (Note 9) US$ 12,642 thousand (Note 9) US$ 12,068 thousand (Note 9) US$ (406,272 ) thousand (Note 9) US$ 4,974 thousand (Note 9)	158,004,565 410,150,000 - 7,464,617 - - 8,558,748 40,171,624 - - - 165,000,000 157,501,731 - -	$ 2,602,532 7,124,383 - 850,966 - - 120,025 610,221 - - - US$ 118,208 thousand US$ 112,836 thousand - -	- - - - - - - - - - - - - - -
															(Continued)

97 -

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counterparty	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Other Adjustments	Ending	Balance	Note
					Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount	Carrying Amount	Gain (Loss) on Disposal		Number of Shares	Amount
YFY Cayman Co., Ltd. YFY Global Investment Limited YFY Packaging Inc.	Ordinary shares YFY Mauritius Corp. Ordinary shares YFY Jupiter (BVI) Inc. Ordinary shares YFY Cayman Co., Ltd.	Note 2 Note 2 Note 2	YFY International Limited YFY International Labuan Co., Ltd. YFY International Limited	Note 11 Note 11 Note 11	157,501,731 5,742,619 -	US$ 105,630 thousand US$ 12,608 thousand -	- 4,629,723 35,615,601	$ - US$ 10,800 thousand 1,415,037	157,501,731 - -	US$ 100,768 thousand - -	US$ 110,377 thousand - -	US$ (9,609 ) thousand (Note 7) - -	US$ 4,747 thousand (Note 9) US$ 4,500 thousand (Note 9) 86,497 (Note 9)	- 10,372,342 35,615,601	$ - US$ 27,908 thousand 1,501,534	- - -

Note 1: Accounted for as current financial assets at FVTPL.

Note 2: Accounted for as investments accounted for using equity method.

Note 3: Accounted for non-current financial assets at FVTOCI.

Note 4: Accounted for as gain (loss) on the fair value change of financial instruments at FVTPL.

Note 5: Accounted for as unrealized gain (loss) on financial assets measured at FVTOCI.

Note 6: Accounted for as gain on disposal of non-current disposal groups held for sale.

Note 7: Accounted for as capital surplus.

Note 8: Included the 20,841,215 shares sold to YFY Development Corp. (originally named as YFY Capital Co., Ltd.) and YFY Paradigm Investment Co., Ltd. with an amount of $256,659 thousand. The carrying amount is $257,433 thousand and the gain on disposal recognized in capital surplus is $774 thousand.

Note 9: Incl�ded cash di�idends, re��rn of capi�al �pon in�es�ees� capi�al red�c�ion, e�change differences on �ransla�ion, share of profit (loss) of subsidiaries accounted for using equity method, net and gain (loss) on remeasurements of defined benefit plans.

Note 10: Included disposal fees with an amount of RMB5,602 thousand.

Note 11: Same ultimate parent company.

(Concluded)

98 -

TABLE 6

YFY INC. AND SUBSIDIARIES

ACQUISITION OF INDIVIDUAL REAL ESTATE AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Buyer	Property	Event Date	Transaction Amount	Payment Status	Counterparty	Relationship	Information on Previous Title Transfer If Counterparty	Information on Previous Title Transfer If Counterparty	Information on Previous Title Transfer If Counterparty	Is A Related Party	Pricing Reference	Purpose of Acquisition	Other Terms
							Property Owner	Relationship	Transaction Date	Amount
Chung Hwa Pulp Corporation Shin Foong Specialty and Applied Materials Co., Ltd.	Land and building with certain facilities located in Guanyin Land (Lot 1-62, Pingnan, Fangliao Township, Pingtung County)	2020/10/23 2020/12/1	$ 2,000,000 699,634	Payment according to contract progress, the company has paid $1,400,000 thousand as of December 31, 2020 Payment according to contract progress, the company has paid $140,000 thousand as of December 31, 2020	Alpha Beta Global Tapes And Adhesives Co., Ltd. Yieh Phui Enterprise Co., Ltd.	Non-related party Non-related party	- -	- -	- -	$ - -	Market price Reference market value and appraisal report	Build non-plastic materials development plant Based on business growth needs and future expansion plans	- -

99 -

TABLE 7

YFY INC. AND SUBSIDIARIES

DISPOSAL OF INDIVIDUAL REAL ESTATE AT PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

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

Seller	Property	Event Date	Original Acquisition Date	Carrying Amount	Transaction Amount	Collection	Gain (Loss) on Disposal	Counterparty	Relationship	Purpose of Disposal	Price Reference	Other Terms
YFY Paper Mfg. (Jiangyin) Co., Ltd.	Land use rights	2020/9/1	1994/1/5	RMB 45,425 thousand	RMB 369,829 thousand	The total amount has been received	RMB 324,404 thousand Note	Jiangyin Land Reserve Center and Jiangyin City People�s Government Chengjiang Sub-district Office	Non-related party	The relocation was carried out in line with the local go�ernmen��s urban planning policy	Based on the land reserve agreement	-

Note: The gain on disposal of land use rights is accounted for as other income, others.

100 -

TABLE 8

YFY INC. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Buyer	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Packaging Inc. Chung Hwa Pulp Corporation YFY Investment Co., Ltd. YFY Paper Enterprise (Suzhou) Co., Ltd. Ever Growing Agriculture Biotech Co., Ltd. Zhaoqing Dingfung Forestry Co., Ltd. YFY Family Care (Kunshan) Co., Ltd. YFY Family Paper (Beijing) Co., Ltd. Yuen Foong Yu Consumer Products (Yangzhou) Co., Ltd. Yuen Foong Yu Consumer Products Co., Ltd.	YFY Paper Enterprise (Guangzhou) Co., Ltd. YFY Paper Enterprise (Tianjin) Co., Ltd. YFY Paper Enterprise (Xiamen) Co., Ltd. YFY Paper Enterprise (Zhongshan) Co., Ltd. YFY Paper Enterprise (Qingdao) Co., Ltd. YFY Paper Enterprise (Dongguan) Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Paper Enterprise (Shanghai) Co., Ltd. YFY Paper Enterprise (Fuzhou) Co., Ltd. YFY Paper Enterprise (Jiaxing) Co., Ltd. Pek Crown Paper Co., Ltd. Chung Hwa Pulp Corporation Yuen Foong Yu Consumer Products Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Development Corp. (originally named as YFY Capital Co., Ltd.) Yuen Foong Yu Consumer Products Co., Ltd. Shenzhen Jinglun Paper Co., Ltd. Union Paper Corp. YFY Packaging Inc. Beautone Co., Ltd. Yuen Foong Yu Consumer Products (Yangzhou) Co., Ltd. YFY Paper Enterprise (Kunshan) Co., Ltd. Yuen Foong Yu Consumer Products Co., Ltd. Guangdong Dingfung Pulp & Paper Co., Ltd. YFY Investment Co., Ltd. YFY Investment Co., Ltd. YFY Investment Co., Ltd. YFY Family Care (Kunshan) Co., Ltd. Yuen Foong Shop Co., Ltd.	Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 a Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 c Note 1 a Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 a	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales	$ 706,152 538,848 417,510 368,382 302,163 384,021 5,390,093 157,486 135,367 107,819 784,631 1,114,494 133,327 1,195,306 800,236 409,135 1,462,855 694,398 184,907 198,821 1,099,186 292,762 330,058 219,947 542,162 229,502 1,809,504 271,442 883,180	8 6 5 4 3 4 62 2 2 1 6 9 1 10 5 2 9 4 1 1 22 36 97 91 100 99 87 13 15	In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms 3 months after transaction months 2 months after transaction months In agreed terms In agreed terms Half month after transaction month 2 months after transaction months 5 months after transaction month 1 month after transaction month 2 months after transaction months 1 month after transaction month In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms	$ - - - - - - - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - - - - - - -	$ 145,766 159,802 44,911 82,124 43,838 52,612 926,659 42,015 14,719 28,330 177,686 215,407 47,174 157,320 60,340 125,921 627,173 50,667 44,418 37,946 91,405 33,665 159,244 149,861 60,647 - 115,256 12,335 167,018	7 8 2 4 2 3 46 2 1 1 8 9 2 7 2 5 23 2 2 1 15 8 97 100 44 - 90 10 19	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 - Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2

(Continued)

101 -

Buyer	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchase/ Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
Guangdong Dingfung Pulp & Paper Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd. Arizon RFID Technology Co., Ltd. (originally named as Arizon RFID Technologies (Yangzhou) Co., Ltd.) Yuen Foong Yu Blue Economy Natural Resource (Yangzhou) Co., Ltd. Union Paper Corp. Shin Foong Specialty and Applied Materials Co., Ltd. YFY Japan Co., Ltd Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd. YFY Packaging (Ha Nam) Co., Ltd. YFY Packaging Thai Binh Co., Ltd. Yuen Foong Yu Paper Enterprise (Vietnam) Binh Duong Co., Ltd. Kunshan YFY Jupiter Green Packaging Ltd.	YFY Investment Co., Ltd. YFY Paper Enterprise (Nanjing) Co., Ltd. YFY Paper Enterprise (Suzhou) Co., Ltd. YFY Paper Enterprise (Guangzhou) Co., Ltd. YFY Paper Enterprise (Shanghai) Co., Ltd. YFY Paper Enterprise (Jiaxing) Co., Ltd. YFY Paper Enterprise (Dongguan) Co., Ltd. Arizon RFID Technologies (Hong Kong) Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd. Chung Hwa Pulp Corporation Chung Hwa Pulp Corporation Chung Hwa Pulp Corporation Yuen Foong Yu Paper Enterprise (Vietnam) Binh Chanh Co., Ltd. YFY Packaging Thai Binh Co., Ltd. YFY Packaging (Ha Nam) Co., Ltd. Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd. YJY Packaging Ltd.	Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 b Note 1 c	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Purchases	$ 819,909 459,645 455,652 151,929 417,078 263,723 175,606 108,251 121,051 161,140 192,954 232,652 200,030 122,933 115,619 105,520 136,237	47 4 4 1 4 2 2 7 99 9 4 93 12 13 47 7 13	2 months after transaction months In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms 4 months after transaction month In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms In agreed terms	$ - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - -	$ 119,490 63,648 48,223 38,731 93,993 48,244 16,739 20,764 14,997 18,985 78,534 - 62,511 14,241 9,813 13,557 41,528	23 2 1 1 2 1 - 6 18 7 27 - 15 6 22 4 10	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 -

Note 1: The relationships are as follows:

a. Subsidiary.
b. Parent company or the same ultimate parent company.

c. Substantive related party.

Note 2: In preparing the consolidated financial statements, the transaction has been eliminated.

(Concluded)

102 -

TABLE 9

YFY INC. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2020

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance (Note)	Turnover Rate	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Impairment Loss	Note
					Amount	Actions Taken
YFY Packaging Inc. Chung Hwa Pulp Corporation YFY Packaging (Yangzhou) Investment Co., Ltd. Yuen Foong Yu Consumer Products (Yangzhou) Co., Ltd. Yuen Foong Yu Consumer Products Co., Ltd. Ever Growing Agriculture Biotech Co., Ltd. Guangdong Dingfung Pulp & Paper Co., Ltd. Zhaoqing Dingfung Forestry Co., Ltd.	Chung Hwa Pulp Corporation Pek Crown Paper Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd. Shenzhen Jinglun Paper Co., Ltd. Yuen Foong Yu Consumer Products Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Paper Enterprise (Guangzhou) Co., Ltd. YFY Paper Enterprise (Tianjin) Co., Ltd. YFY Investment Co., Ltd. Yuen Foong Shop Co., Ltd. Yuen Foong Yu Consumer Products Co., Ltd. YFY Investment Co., Ltd. Guangdong Dingfung Pulp & Paper Co., Ltd.	Same ultimate parent company Subsidiary Same ultimate parent company Same ultimate parent company Same ultimate parent company Same ultimate parent company Same ultimate parent company Same ultimate parent company Parent company Subsidiary Parent company Same ultimate parent company Parent company	$ 215,407 177,686 157,320 627,173 125,921 926,659 145,766 159,802 115,256 167,018 159,244 119,490 149,861	4.62 4.89 3.29 2.16 4.66 5.82 5.72 5.29 6.62 8.74 2.19 7.23 2.08	$ - - - - - - - - - - - - -	- - - - - - - - - - - - -	$ 208,257 177,470 102,749 148,831 72,867 825,986 145,494 159,802 115,256 137,634 101,999 15,457 47,140	$ - - - - - - - - - - - - -

Note: In preparing the consolidated financial statements, the transaction has been eliminated.

103 -

TABLE 10

YFY INC. AND SUBSIDIARIES

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	As of	December 31, 2020	December 31, 2020	Net Income (Loss) of the Investee	Share of Profit(Loss)	Note
				December 31, 2020	December 31, 2019	Number of Shares	%	Carrying Amount
YFY Inc. YFY International Limited YFY Cayman Co., Ltd. Winsong Packaging Investment Company Limited	Chung Hwa Pulp Corporation E Ink Holdings Inc. YFY International Limited YFY Global Investment Limited Yuen Foong Yu Consumer Products Co., Ltd. Shin Foong Specialty and Applied Materials Co., Ltd. Taiwan Global BioFund Co., Ltd. China Color Printing Co., Ltd. YFY Venture Capital Investment Co., Ltd. Effion Enertech Co., Ltd. YFY Development Corp. (originally named as YFY Capital Co., Ltd.) YFY Corporate Advisory & Services Co., Ltd. Union Paper Corp. YFY Paradigm Investment Co., Ltd. San Ying Enterprise Co., Ltd. Lotus Ecoscings & Engineering Co., Ltd. YFY Japan Co., Ltd Yuen Yan Paper Container Co., Ltd. Fidelis IT Solutions Co., Ltd. Taiwan Genome Science, Inc. Sustainable Carbohydrate Innovation Co., Ltd. YFY Packaging Inc. YFY Cayman Co., Ltd. Hwa Fong Paper (Hong Kong) Co., Ltd. YFY Biopulp Technology Limited YFY Mauritius Corp. YFY International Labuan Co., Ltd. YFY Mauritius Corp. Willpower Industries Ltd. YFY Packaging Capital Corp. Winsong Packaging Investment Company Limited YFY Packaging (Ha Nam) Co., Ltd. YFY Packaging Thai Binh Co., Ltd.	Hualien, Taiwan Hsinchu, Taiwan Cyprus Cyprus Taipei, Taiwan Pingtung, Taiwan Taipei, Taiwan New Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Yunlin, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Japan Miaoli, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Cayman Islands Hong Kong, China British Virgin Islands Mauritius Malaysia Mauritius British Virgin Islands British Virgin Islands Hong Kong, China Vietnam Vietnam	Pulp and paper production, trading and forestry business Research, development, production and sale of thin-film transistor liquid crystal monitors Investment and holding Investment and holding Production and sale of high quality paper and paper-related merchandise Production and sale of SBR (styrene butadiene rubber) latex Biotechnology and biopharmaceutical business investment Design and printing of magazines, posters and books Investment and holding To operate cogeneration and provide power technology Real estate investment and development Consulting Manufacture and sale of paper Investment and holding Design and construction of water processing and environmental facilities Construction of sewage treatment plants and incinerators Trade of paper, chemical material and machinery Sale and manufacture of corrugated paper and materials 1. Provides services in information software and information processing. 2. Wholesale of information software and electric appliances. 1. Develop skills in genome medicine. 2. Manufacture and wholesale of chemical material. 3. Medicine testing. Researching and development Production and sale of high-quality craft paper and corrugated paper Investment and holding Sale and print of paper merchandise Investment and holding Investment and holding Investment and holding Investment and holding Sale of various paper products Investment and holding Investment and holding Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard	$ 5,715,988 1,361,355 11,956,125 2,153,335 1,046,360 72,960 169,700 190,068 - 343,000 1,540,033 30,000 200,700 619,177 - - 2,099 62,462 10,000 5,613 30,000 7,222,888 - US$ 13,520 thousand US$ 90 thousand US$ 206,334 thousand US$ 900 thousand - US$ 16,338 thousand - US$ 9,520 thousand US$$ 12,400 thousand US$ 1,200 thousand	$ 5,715,988 1,361,355 18,124,434 2,153,335 1,600,000 73,020 169,700 190,068 200,000 343,000 189,759 30,000 200,700 231,357 34,002 156,131 2,099 62,462 10,000 5,613 30,000 - US$ 391,850 thousand US$ 13,520 thousand US$ 90 thousand - US$ 165,901 thousand US$ 157,502 thousand US$ 16,338 thousand - US$ 9,520 thousand US$$ 12,400 thousand US$ 1,200 thousand	627,827,088 133,472,904 363,689,638 79,000,000 158,004,565 51,871,248 16,970,040 32,896,330 - 34,300,000 112,820,686 3,000,000 19,584,000 146,726,235 2,500,000 - 200 6,178,500 2,857,000 561,291 3,000,000 410,150,000 - 116,000,000 90,000 322,501,731 900,000 - 8,550,000 200 9,520,000 12,400,000 1,200,000	57.8 11.8 100.0 100.0 64.5 48.9 23.0 49.7 - 49.0 100.0 100.0 18.9 100.0 100.0 - 100.0 50.9 100.0 19.4 100.0 100.0 - 100.0 60.0 100.0 100.0 - 55.2 100.0 70.0 100.0 100.0	$ 8,596,617 3,595,979 15,737,977 5,973,380 2,602,532 2,367,344 430,897 449,718 - 215,659 2,133,843 42,197 232,759 2,332,943 62,966 - 116,122 74,701 56,959 11,443 31,253 7,124,383 - US$ 2,477 thousand US$ 5 thousand US$ 231,044 thousand US$ 644 thousand - US$ 44,115 thousand US$ 1 thousand US$ 8,703 thousand US$$ 10,829 thousand US$ 1,707 thousand	$ (201,797 ) 3,602,589 2,215,208 341,358 1,487,228 1,777,831 37,945 14,980 122,825 (121,033 ) 141,561 9,673 58,321 99,939 19,925 25,099 (3,825 ) 6,116 164 (4,543 ) (845 ) 1,043,942 US$ 36,959 thousand US$ (725 ) thousand US$ (4) thousand US$ 533 thousand US$ 32,651 thousand US$ 533 thousand US$ 13,343 thousand - US$ (80) thousand US$ (362 ) thousand US$ 288 thousand	$ (115,911 ) 422,545 2,224,225 341,358 1,235,450 872,019 7,798 7,438 122,825 (57,294 ) 141,561 9,673 11,021 99,939 19,925 25,099 (3,825 ) 3,116 164 (879 ) (845 ) 116,141 US$ 36,515 thousand US$ (725 ) thousand US$ (3) thousand US$ 3,653 thousand US$ 32,651 thousand US$ (1,524 ) thousand US$ 7,360 thousand - US$ (56) thousand US$ (362 ) thousand US$ 288 thousand	Notes 1 and 3 - Notes 1 and 3 Notes 1 and 3 Notes 1, 3 and 5 Notes 1 and 3 - Notes 1 and 3 Notes 1, 3 and 6 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1, 3 and 7 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 - Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3

(Continued)

104 -

Investor Company	Investee Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	As of	December 31, 2020	December 31, 2020	Net Income (Loss) of the Investee	Share of Profit(Loss)	Note
				December 31, 2020	December 31, 2019	Number of Shares	%	Carrying Amount
Willpower Industries Ltd. Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd. YFY International Labuan Co., Ltd. YFY Jupiter (BVI) Inc. YFY Jupiter US, Inc. Mobius105 Ltd. Jupiter Prestige Group Holdings Limited Jupiter Prestige Group Europe Limited Jupiter Prestige Group North America, Inc.	Yuen Foong Yu Paper Enterprise (Vietnam) Binh Duong Co., Ltd. Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd. Perpetual Prosperity Printing Technology Co., Ltd. Yuen Foong Yu Paper Enterprise (Vietnam) Binh Chanh Co., Ltd. Yuen Foong Yu Paper Enterprise (Dong Nai) Co., Ltd. YFY Jupiter (BVI) Inc. YFY Packaging Inc. Mobius105 Ltd. YFY Jupiter Limited Jupiter Prestige Group Holdings Limited YFY Jupiter US, Inc. YFY Jupiter Malaysia Sdn. Bhd. YFY Jupiter Indonesia, PT PMA Innovativ Packaging Worldwide, LLC YFY Jupiter Mexico, S. de R.L. Spectiv Brands, LLC YJY Packaging Ltd. JLD Logistics Ltd. YFY Jupiter Malaysia Sdn. Bhd. YFY Jupiter Mexico, S. de R.L. YFY Jupiter Indonesia, PT PMA Jupiter Vietnam Company Limited Jupiter Prestige Group Europe Limited Jupiter Prestige Group North America Inc. Jupiter Prestige Group Australia Pty Ltd. Opal BPM Limited Foster and Balyis (Prestige) Limited Jupiter Prestige Group Asia Limited Contrast LLC	Vietnam Vietnam British Virgin Islands Vietnam Vietnam British Virgin Islands Taipei, Taiwan Hong Kong, China Hong Kong, China United Kingdom USA Malaysia Indonesia USA Mexico USA Hong Kong, China Hong Kong, China Malaysia Mexico Indonesia Vietnam United Kingdom USA Australia United Kingdom United Kingdom Hong Kong, China USA	Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Sale of various paper products Manufacture and sale of cardboard Manufacture and sale of paper and cardboard Investment and holding Production and sale of high-quality craft paper and corrugated paper Investment and holding Design of packaging and sale of paper Investment and holding Design of packaging and sale of paper Design of packaging and sale of paper Design of packaging Design of packaging and sale of paper Design of packaging and sale of paper General trade General trade General trade Design of packaging and sale of paper Design of packaging and sale of paper Design of packaging Design of packaging Graphic design Design of packaging and sale of paper Graphic design Design of process system and assistance in graphic design Graphic design Graphic design Brand Design	US$ 10,500 thousand US$ 5,100 thousand US$ 4,500 thousand US$ 1,200 thousand US$ 6,285 thousand - - HK$ 10 thousand - GBP 100 thousand US$ 1 thousand MYR 990 thousand IDR 25,000 thousand - - - HK$ 4 thousand HK$ 4 thousand MYR 10 thousand MXN 3 thousand IDR$ 2,475,000 thousand VND 1,129,700 thousand GBP 30 thousand US$ 1 thousand - GBP 1 thousand - - US$ 57 thousand	US$ 10,500 thousand US$ 5,100 thousand US$ 4,500 thousand US$ 1,200 thousand US$ 6,285 thousand US$ 4,557 thousand US$ 165,754 thousand HK$ 10 thousand - GBP 100 thousand US$ 1 thousand - IDR 25,000 thousand - - - HK$ 4 thousand HK$ 4 thousand - MXN 3 thousand IDR$ 2,475,000 thousand VND 1,129,700 thousand GBP 30 thousand US$ 1 thousand - GBP 1 thousand - - US$ 173 thousand	10,500,000 5,100,000 4,500,000 1,200,000 10,000,000 - - 10,000 3 86,163 100,000 990,000 25 - - - 3,500 3,500 10,000 - 2,475 - 30,000 100,000 100 825 300 100 -	100.0 100.0 45.0 100.0 100.0 - - 100.0 100.0 57.0 100.0 99.0 1.0 - 1.0 100.0 35.0 35.0 1.0 99.0 99.0 100.0 100.0 100.0 100.0 82.5 33.3 100.0 60.0	US$ 13,419 thousand US$ 57,090 thousand US$ 3,519 thousand US$ 2,922 thousand US$ 30,214 thousand - - US$ 12,745 thousand US$ 4,790 thousand US$ 4,357 thousand - US$ 678 thousand US$ 1 thousand - - - US$ 155 thousand US$ 130 thousand US$ 7 thousand - US$$ 112 thousand US$ 210 thousand US$ 8,309 thousand - US$ 145 thousand US$ 1,290 thousand US$ 228 thousand US$ 5,518 thousand US$ 28 thousand	US$ 2,436 thousand US$ 11,597 thousand US$ 545 thousand US$ 825 thousand US$ 5,860 thousand US$ 7,384 thousand US$ 35,329 thousand US$ 8,211 thousand US$ 2,125 thousand US$ 1,493 thousand US$ 69 thousand US$ 307 thousand US$ 370 thousand US$ 1,087 thousand US$ 119 thousand US$ (116 ) thousand US$ 310 thousand US$ 204 thousand US$ 307 thousand US$ 119 thousand US$ 370 thousand US$ 166 thousand US$ 2,009 thousand US$ (1,342 ) thousand US$ 260 thousand US$ 674 thousand - US$ 1,835 thousand US$ (329 ) thousand	US$ 2,436 thousand US$ 11,597 thousand US$ 245 thousand US$ 825 thousand US$ 5,860 thousand US$ 2,026 thousand US$ 30,592 thousand US$ 8,211 thousand US$ 2,125 thousand US$ 851 thousand US$ 69 thousand US$ 304 thousand US$ 4 thousand US$ 1,087 thousand US$ 1 thousand US$ (116 ) thousand US$ 108 thousand US$ 71 thousand US$ 3 thousand US$ 118 thousand US$ 366 thousand US$ 166 thousand US$ 2,009 thousand US$ (1,342 ) thousand US$ 260 thousand US$ 556 thousand - US$ 1,835 thousand US$ (197 ) thousand	Notes 1 and 3 Notes 1 and 3 - Notes 1 and 3 Notes 1 and 3 Note 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1, 2 and 3 Notes 1 and 3 Note 3 Notes 1, 3 and 8 Notes 2 and 3 Notes 1, 2 and 3 - - Note 3 Notes 1, 2 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1, 2 and 3 Notes 1 and 3 Notes 1 and 3 - Notes 1 and 3 Notes 1 and 3
											(Continued)

105 -

Investor Company	Investee Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	As of	December 31, 2020	December 31, 2020	Net Income (Loss) of the Investee	Share of Profit(Loss)	Note
				December 31, 2020	December 31, 2019	Number of Shares	%	Carrying Amount
Opal BPM Limited YFY Packaging Inc. YFY Packaging (BVI) Corp. YFY Global Investment Limited YFY RFID Technologies Co., Ltd. Arizon RFID Technology Co., Ltd. (originally named as Arizon RFID Technologies (Yangzhou) Co., Ltd.) Yuen Foong Yu Consumer Products Co., Ltd. Yuen Foong Shop Co., Ltd. Shin Foong Specialty and Applied Materials Co., Ltd. YFY Development Corp. (originally named as YFY Capital Co., Ltd.) YFY Venture Capital Investment Co., Ltd. YFY Paradigm Investment Co., Ltd.	Opal BPM India Private Limited Opal BPM Consulting Limited YFY Packaging (BVI) Corp. Pek Crown Paper Co., Ltd. YFY Cayman Co., Ltd. YFY Mauritius Corp. YFY RFID Co. Limited YFY Jupiter (BVI) Inc. YFY RFID Technologies Co., Ltd. Yeon Technologies Co., Ltd. Arizon RFID Technologies (Hong Kong) Co., Ltd. Arizon JAPAN Co., Ltd. Yuen Foong Yu Consumer Products Investment Limited Ever Growing Agriculture Biotech Co., Ltd. Yuen Foong Shop Co., Ltd. Yuen Foong Shop (HK) Limited Shin Foong Trading Sdn. Bhd. Chung Hwa Pulp Corporation E Ink Holdings Inc. Yuen Foong Yu Consumer Products Co., Ltd. Taiwan Global BioFund Co., Ltd. Effion Enertech Co., Ltd. Taiwan Genome Science, Inc. E Ink Holdings Inc. Taiwan Global BioFund Co., Ltd. Effion Enertech Co., Ltd. Taiwan Genome Science, Inc. Union Paper Corp. YFY Biotech Management Co., Ltd. E Ink Holdings Inc. Chung Hwa Pulp Corporation Yuen Foong Shop Co., Ltd. Livebricks Inc. Yuen Foong Yu Consumer Products Co., Ltd. Taiwan Genome Science, Inc. Yuen Yan Paper Container Co., Ltd. Pek Crown Paper Co., Ltd.	India United Kingdom British Virgin Islands Taichung, Taiwan Cayman Islands Mauritius Hong Kong, China British Virgin Islands British Virgin Islands Taipei, Taiwan Hong Kong, China Japan Samoa Taipei, Taiwan Taipei, Taiwan Hong Kong, China Malaysia Hualien, Taiwan Hsinchu, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Hsinchu, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Yunlin, Taiwan Taipei, Taiwan Hsinchu, Taiwan Hualien, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Miaoli, Taiwan Taichung, Taiwan	Workflow system coding Consulting services of workflow system coding Investment and holding Manufacture and sale of containers Investment and holding Investment and holding Investment and holding Investment and holding Investment and holding Sale and design of RFID (radio frequency identification) products Product distribution and R&D services Product distribution and technical consulting services Investment and holding Wholesale of agriculture products Sale of consumer products in e-commerce General trade Sale of SBR (styrene butadiene rubber) and industrial chemicals Pulp and paper production, trading and forestry business Research, development, production and sale of thin-film transistor liquid crystal monitors Production and sale of high quality paper and paper-related merchandise Biotechnology and biopharmaceutical business investment To operate cogeneration and provide power technology 1. Develop skills in genome medicine. 2. Manufacture and wholesale of chemical material. 3. Medicine testing. Research, development, production and sale of thin-film transistor liquid crystal monitors Biotechnology and biopharmaceutical business investment To operate cogeneration and provide power technology 1. Develop skills in genome medicine. 2. Manufacture and wholesale of chemical material. 3. Medicine testing. Manufacture and sale of paper Consulting Research, development, production and sale of thin-film transistor liquid crystal monitors Pulp and paper production, trading and forestry business Sale of consumer products in e-commerce Information processing services Production and sale of high quality paper and paper-related merchandise 1. Develop skills in genome medicine. 2. Manufacture and wholesale of chemical material. 3. Medicine testing. Sale and manufacture of corrugated paper and materials Manufacture and sale of containers	INR 100 thousand GBP 1 thousand 2,213,770 219,623 1,415,037 - US$ 25,600 thousand US$ 16,862 thousand US$ 5,330 thousand US$ 1,187 thousand US$ 12,000 thousand JPY 50,000 thousand 3,845,458 107,595 55,041 - 10,568 15,206 627,142 63,446 71,070 5,766 1,625 - - - - 46,447 10,000 374,929 79,242 - 77,000 193,986 425 108 152	INR 100 thousand GBP 1 thousand 5,263,223 219,623 - US$ 165,000 thousand US$ 25,600 thousand US$ 6,062 thousand US$ 5,330 thousand US$ 1,187 thousand US$ 3,000 thousand JPY 50,000 thousand 3,845,458 107,595 25,000 - - 15,206 15,673 - - - - 412,244 29,073 7,000 760 46,447 10,000 296,300 77,666 25,000 77,000 - - - -	10,000 1,000 58,134,277 20,027,557 35,615,601 - 25,600,000 10,372,342 5,330,000 2,500,001 12,000,000 1,000 150,013,000 18,245,944 5,000,000 - 1,500,000 1,181,633 23,326,296 5,136,400 2,907,274 700,000 75,988 - - - - 4,283,232 26,430,000 7,872,000 7,752,732 - 7,700,002 15,704,815 19,874 9,000 10,000	100.0 100.0 100.0 66.8 100.0 - 100.0 81.1 100.0 100.0 100.0 100.0 100.0 85.0 100.0 100.0 100.0 0.1 2.1 2.1 3.9 1.0 2.6 - - - - 4.1 100.0 0.7 0.7 - 100.0 6.4 0.7 0.07 0.03	US$ 66 thousand US$ 1 thousand 410 307,430 1,501,534 - US$ 107,708 thousand US$ 27,908 thousand US$ 382 thousand US$ 167 thousand RMB 74,808 thousand RMB 1,840 thousand 2,987,775 256,030 81,039 - 9,588 16,071 683,052 84,603 74,093 4,603 1,549 - - - - 50,910 258,947 401,952 105,462 - 2,484 258,678 405 109 158	US$ (10) thousand - (47,148 ) 53,323 1,092,114 US$ 533 thousand US$ 6,696 thousand US$ 7,384 thousand US$ 508 thousand US$ 515 thousand RMB (4,011 ) thousand RMB (804 ) thousand 565,151 56,720 39,598 - (413 ) (201,797 ) 3,602,589 1,487,228 37,945 (121,033 ) (4,543 ) 3,602,589 37,945 (121,033 ) (4,543 ) 58,321 (43,994 ) 3,602,589 (201,797 ) 39,598 189 1,487,228 (4,543 ) 6,116 53,323	US$ (10) thousand - (47,148 ) 30,374 13,114 US$ (1,596 ) thousand US$ 6,696 thousand US$ 3,867 thousand US$ 508 thousand US$ 515 thousand RMB (4,011 ) thousand RMB (804 ) thousand 565,151 45,043 32,616 - (413 ) (218 ) 21,733 19,992 1,024 (1,181 ) (70 ) 52,113 470 (29 ) (49 ) 2,413 (43,994 ) 20,902 (1,408 ) 4,980 189 61,125 (18 ) 1 6	Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Notes 1 and 3 Note 3 - Notes 3 and 5 - Note 3 - - - Note 3 - Note 3 Notes 1 and 3 - Notes 3 Notes 1, 3and 4 Notes 1 and 3 Notes 3 and 5 - Note 3 Note 3

(Continued)

106 -

Investor Company	Investee Company	Location	Main Businesses and Products	Investment Amount	Investment Amount	As of	December 31, 2020	December 31, 2020	Net Income (Loss) of the Investee	Share of Profit(Loss)	Note
				December 31, 2020	December 31, 2019	Number of Shares	%	Carrying Amount
Lotus Ecoscings & Engineering Co., Ltd. Chung Hwa Pulp Corporation CHP International (BVI) Corporation Hwa Fong Investment Co., Ltd. Effion Enertech Co., Ltd.	Taiwan Genome Science, Inc. E Ink Holdings Inc. Yuen Yan Paper Container Co., Ltd. Pek Crown Paper Co., Ltd. Chung Hwa Pulp Corporation CHP International (BVI) Corporation Effion Enertech Co., Ltd. Taiwan Global BioFund Co., Ltd. Hwa Fong Investment Co., Ltd. E Ink Holdings Inc. Syntax Communication (H.K.) Limited Effion Enertech Co., Ltd. Union Paper Corp. Genovella Renewables Inc. (originally named as Kuang Hwa Fertilizer Limited Company) YFY Capital Holdings Corp. YFY Biotech Co., Ltd.	Taipei, Taiwan Hsinchu, Taiwan Miaoli, Taiwan Taichung, Taiwan Hualien, Taiwan British Virgin Islands Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Hsinchu, Taiwan Hong Kong, China Taipei, Taiwan Yunlin, Taiwan Hualien, Taiwan British Virgin Islands Taipei, Taiwan	1. Develop skills in genome medicine. 2. Manufacture and wholesale of chemical material. 3. Medicine testing. Research, development, production and sale of thin-film transistor liquid crystal monitors Sale and manufacture of corrugated paper and materials Manufacture and sale of containers Pulp and paper production, trading and forestry business Investment and holding To operate cogeneration and provide power technology Biotechnology and biopharmaceutical business investment Investment and holding Research, development, production and sale of thin-film transistor liquid crystal monitors Sale and print of paper merchandise To operate cogeneration and provide power technology Manufacture and sale of paper Sale and production of fertilizer, retail sale of food products and groceries, plant cultivation, refractory materials manufacturing, cement and concrete products manufacturing, refractory materials wholesale and sale of building material, manpower services and wholesale and sale of chemistry raw materials Investment and holding Wholesale of seeds, oil and agricultural products	$ - - - - - 1,747,085 343,000 32,832 36,000 329,000 US$ 466 thousand 7,000 103 5,000 243,625 36,000	$ 214 73,961 107 141 1,226 1,747,085 343,000 32,832 36,000 329,000 US$ 466 thousand 7,000 - 5,000 243,625 36,000	- - - - - 61,039,956 34,300,000 3,283,200 3,600,000 20,000,000 34,000,000 700,000 20,504 - 8,060 3,600,000	- - - - - 100.0 49.0 4.4 100.0 1.8 100.0 10.0 0.02 100.0 100.0 36.0	$ - - - - - 4,975,733 225,552 93,076 51,806 443,635 US$ 424 thousand 4,604 247 14,158 72,223 -	$ (4,543 ) 3,602,589 6,116 53,323 (201,797 ) (122,856 ) (121,033 ) 37,945 5,206 3,602,589 US$ (38) thousand (121,033 ) 58,321 4,729 (124,627 ) (98,055 )	$ (13 ) 4,018 3 12 (23 ) (123,756 ) (59,306 ) 1,686 5,206 63,315 US$ (38) thousand (1,210 ) 4 4,729 (124,627 ) -	- - Note 3 Note 3 Note 3 Notes 1 and 3 Note 3 - Notes 1 and 3 - Notes 1 and 3 Note 3 Note 3 Notes 1 and 3 Notes 1 and 3 -

Note 1: Subsidiary.

Note 2: The amount was reclassified from investments accounted for using the equity method to other liabilities.

Note 3: In preparing the consolidated financial statements, the transaction has been eliminated.

Note 4: To boost management performance, the Group carried out a restructuring of the organization, and sold the 50% shares of Yuen Foong Shop Co., Ltd. owned by YFY Paradigm Investment Co., Ltd. to Yuen Foong Yu Consumer Products Co., Ltd. in March 2020.

Note 5: In response to the initial public offering of Yuen Foong Yu Consumer Products Co., Ltd, the Group conducted the share diversification. The Group disposed of partial ownership of Yuen Foong Yu Consumer Products Co., Ltd. to YFY Development Corp. (originally named as YFY Capital Co., Ltd.) and YFY Paradigm Investment Co., Ltd. in June 2020, respectively.

Note 6: YFY Venture Capital Investment Co., Ltd. was merged with YFY Development Corp. (originally named as YFY Capital Co., Ltd.) on October 7, 2020.

Note 7: Lotus Ecoscings & Engineering Co., Ltd. was merged with YFY Paradigm Investment Co., Ltd on October 7, 2020.

Note 8: Inno�a�i� Packaging World�ide, LLC en�ered �he cancella�ion of regis�ra�ion in Oc�ober 2020. D�e �o �he Gro�p�s loss of con�rol, it has not been included in the consolidated financial statements since October 2020.

(Concluded)

107 -

TABLE 11

YFY INC. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. Information on investments in mainland China

Investee Company (Note 7)	Main Businesses and Products	Paid-in Capital (Note 1)	Method of Investment (Note 4)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2020 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020 (Note 1)	Net Income (Loss) of the Investee	Ownership of Direct or Indirect Investment (%)	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2020 (Note 1)	Accumulated Repatriation of Investment Income as of December 31, 2020
					Outward	Inward
YFY Paper Enterprise (Fuzhou) Co., Ltd. YFY Paper Enterprise (Kunshan) Co., Ltd. YFY Paper Enterprise (Suzhou) Co., Ltd. YFY Paper Enterprise (Tianjin) Co., Ltd. YFY Paper Enterprise (Dongguan) Co., Ltd. YFY Paper Enterprise (Shanghai) Co., Ltd. YFY Paper Enterprise (Qingdao) Co., Ltd. YFY Paper Enterprise (Nanjing) Co., Ltd. YFY Paper Enterprise (Guangzhou) Co., Ltd. YFY Paper Enterprise (Xiamen) Co., Ltd. YFY Paper Enterprise (Zhongshan) Co., Ltd.	Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard	$ 142,400 (US$ 5,000 thousand) 313,280 (US$ 11,000 thousand) 199,360 (US$ 7,000 thousand) 227,840 (US$ 8,000 thousand) 170,880 (US$ 6,000 thousand) 227,840 (US$ 8,000 thousand) 227,840 (US$ 8,000 thousand) 283,632 (US$ 9,959 thousand) 270,650 (US$ 9,500 thousand) 185,120 (US$ 6,500 thousand) 170,880 (US$ 6,000 thousand)	a.(a) a.(a) a.(a) a.(a) a.(a) a.(a) a.(a) a.(o) a.(a) a.(a) a.(a)	$ 42,720 (US$ 1,500 thousand) 199,360 (US$ 7,000 thousand) 199,360 (US$ 7,000 thousand) 227,840 (US$ 8,000 thousand) 56,960 (US$ 2,000 thousand) 231,058 (US$ 8,113 thousand) 227,840 (US$ 8,000 thousand) 256,320 (US$ 9,000 thousand) 213,600 (US$ 7,500 thousand) 185,120 (US$ 6,500 thousand) 136,704 (US$ 4,800 thousand)	$ - - - - - - - - - - -	$ - - - - - - - - - - -	$ 42,720 (US$ 1,500 thousand) 199,360 (US$ 7,000 thousand) 199,360 (US$ 7,000 thousand) 227,840 (US$ 8,000 thousand) 56,960 (US$ 2,000 thousand) 231,058 (US$ 8,113 thousand) 227,840 (US$ 8,000 thousand) 256,320 (US$ 9,000 thousand) 213,600 (US$ 7,500 thousand) 185,120 (US$ 6,500 thousand) 136,704 (US$ 4,800 thousand)	$ (21,458) 29,464 34,240 57,460 49,779 71,949 53,427 49,278 22,686 (17,033) 74,627	100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 93.8 100.0 100.0	$ (21,458) (Note 2) 29,464 (Note 2) 34,240 (Note 2) 57,460 (Note 2) 49,779 (Note 2) 71,949 (Note 2) 53,427 (Note 2) 49,278 (Note 2) 21,268 (Note 2) (17,033) (Note 2) 74,627 (Note 2)	$ - 583,768 267,771 836,059 505,123 420,037 1,020,681 466,290 486,036 - 1,033,735	$ - - - - - - - - - - -
												(Continued)

108 -

Investee Company (Note 7)	Main Businesses and Products	Paid-in Capital (Note 1)	Method of Investment (Note 4)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2020 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020 (Note 1)	Net Income (Loss) of the Investee	Ownership of Direct or Indirect Investment (%)	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2020 (Note 1)	Accumulated Repatriation of Investment Income as of December 31, 2020
					Outward	Inward
YFY Paper Enterprise (Jiaxing) Co., Ltd. YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Paper Mfg. (Jiangyin) Co., Ltd. Yuen Foong Yu Blue Economy Natural Resource (Yangzhou) Co., Ltd. Kunshan YFY Advertising and Printing Co., Ltd. Arizon RFID Technology Co., Ltd. (originally named as Arizon RFID Technologies (Yangzhou) Co., Ltd.) Yeon Technologies (Yangzhou) Co., Ltd. YFY Jupiter (Shenzhen) Ltd. Kunshan YFY Jupiter Green Packaging Ltd. YFY Jupiter Supply Chain Management Services (Shenzhen) Limited Chengdu JieLianDa Warehousing Co., Ltd. Chengdu JieLianDa Supply Chain Co., Ltd. Chengdu JingShiTong Packing Co., Ltd.	Manufacture and sale of paper and cardboard Investment and holding. Manufacture and sale of paper Manufacture, sale and print of cardboard and paper Technological development of agricultural resource recycling Design and print of advertisements Sale and design of RFID (radio frequency identification) products Sale and design of RFID (radio frequency identification) products Design of packaging and sale of paper Design of packaging and sale of paper Design of packaging and sale of paper General trade Management of supply chain General trade	$ 142,400 (US$ 5,000 thousand) 2,469,415 (US$ 86,707 thousand) 6,968,914 (US$ 244,695 thousand) 424,352 (US$ 14,900 thousand) 227,840 (US$ 8,000 thousand) 85,440 (US$ 3,000 thousand) 848,040 (RMB 194,290 thousand) 34,919 (RMB 8,000 thousand) 9,968 (US$ 350 thousand) 8,730 (RMB 2,000 thousand) - 6,547 (RMB 1,500 thousand) - 6,547 (RMB 1,500 thousand)	a.(a) a.(a) a.(b) a.(c) a.(c) a.(e) a.(f) a.(g) a.(h) a.(i) a.(i) a.(i) a.(i) a.(i)	$ 142,400 (US$ 5,000 thousand) 2,477,760 (US$ 87,000 thousand) 6,977,600 (US$ 245,000 thousand) 398,891 (US$ 14,006 thousand) 227,840 (US$ 8,000 thousand) - 723,164 (US$ 25,392 thousand) - - - - - - -	$ - - - - - - - - - - - - - -	$ - - - - - - - - - - - - - -	$ 142,400 (US$ 5,000 thousand) 2,477,760 (US$ 87,000 thousand) 6,977,600 (US$ 245,000 thousand) 398,891 (US$ 14,006 thousand) 227,840 (US$ 8,000 thousand) - 723,164 (US$ 25,392 thousand) - - - - - - -	$ (8,043) (144,336) (359,518) 1,220,742 4,157 (12,866) 224,416 7,219 185,515 42,966 31,266 2,019 39 (3,954)	100.0 100.0 100.0 94.0 100.0 100.0 86.5 86.5 81.1 81.1 81.1 28.4 28.4 28.4	$ (8,043) (Note 2) (144,336) (Note 2) (359,518) (Note 2) 1,171,008 (Note 2) 4,157 (Note 2) (12,866) (Note 2) 194,150 (Note 2) 6,245 (Note 2) 150,509 (Note 2) 34,858 (Note 2) 25,366 (Note 2) 573 (Note 6) 11 (Note 6) (1,123) (Note 6)	$ 123,474 103,665 1,161,283 328,540 99,320 - 2,854,403 52,205 247,332 87,497 32,172 2,950 - 2,637	$ - - - - - - - - - - - - - -
												(Continued)

109 -

Investee Company (Note 7)	Main Businesses and Products	Paid-in Capital (Note 1)	Method of Investment (Note 4)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2020 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020 (Note 1)	Net Income (Loss) of the Investee	Ownership of Direct or Indirect Investment (%)	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2020 (Note 1)	Accumulated Repatriation of Investment Income as of December 31, 2020
					Outward	Inward
YFY Investment Co., Ltd. YFY Family Care (Kunshan) Co., Ltd. YFY Family Paper (Beijing) Co., Ltd. (Note 8) Yuen Foong Yu Consumer Products (Yangzhou) Co., Ltd. Shanghai YFY International Trade Co., Ltd. Guangdong Dingfung Pulp & Paper Co., Ltd. Zhaoqing Dingfung Forestry Co., Ltd. Zhaoqing Xinchuan Green Technology Co., Ltd. Shenzhen Jinglun Paper Co., Ltd. YFY (Shanghai) Financial Services Co., Ltd. Kunshan Actview Carbon Technology Co., Ltd.	Investment and holding and sale of paper Manufacture and sale of tissue paper and napkins Manufacture and sale of tissue paper and napkins Manufacture and sale of tissue paper and napkins General trade Pulp and paper production and trading business Seedling cultivation and sales, reforestation, sales-cum-forest logging and other forestry, processing and transportation. Environmental equipment technology research and development; construction of wastewater, flue gas, noise and solid waste treatment; pure water treatment construction; environmental technology consulting; sale of environmental protection equipment and chemical raw material; import and export of cargo and technology Sale of paper merchandise and import/export business Export factoring, domestic factoring, business factoring and related consulting services, development of credit risk management platform Manufacture and sale of active carbon	$ 3,275,200 (US$ 115,000 thousand) 854,400 (US$ 30,000 thousand) 996,800 (US$ 35,000 thousand) 854,400 (US$ 30,000 thousand) 4,365 (RMB 1,000 thousand) 2,438,742 (US$ 85,630 thousand) 623,142 (US$ 21,880 thousand) 8,730 (RMB 2,000 thousand) 13,967 (RMB 3,200 thousand) 218,241 (RMB 50,000 thousand) 35,885 (US$ 1,260 thousand)	a.(j) a.(k) a.(k) a.(k) b.(a) a.(l) a.(m) a.(d) a.(d) a.(n) b.(b)	$ 3,275,200 (US$ 115,000 thousand) 854,400 (US$ 30,000 thousand) 996,800 (US$ 35,000 thousand) 854,400 (US$ 30,000 thousand) 4,365 (RMB 1,000 thousand) 626,560 (US$ 22,000 thousand) 210,182 (US$ 7,380 thousand) - - 218,241 (RMB 50,000 thousand) 23,809 (US$ 836 thousand)	$ - - - - - - - - - - -	$ - - - - - - - - - - -	$ 3,275,200 (US$ 115,000 thousand) 854,400 (US$ 30,000 thousand) 996,800 (US$ 35,000 thousand) 854,400 (US$ 30,000 thousand) 4,365 (RMB 1,000 thousand) 626,560 (US$ 22,000 thousand) 210,182 (US$ 7,380 thousand) - - 218,241 (RMB 50,000 thousand) 23,809 (US$ 836 thousand)	$ 526,241 (149,296) (28,536) 31,484 (133) (284,085) 22,526 44 23,885 (124,608) 3,350	73.0 73.0 - 73.0 73.0 75.2 75.2 75.2 75.2 79.3 66.4	$ 438,305 (Note 2) (114,778) (Note 2) (28,536) (Note 2) 25,220 (Note 2) (121) (Note 2) (212,917) (Note 2) 16,893 (Note 2) 35 (Note 2) 17,853 (Note 2) (98,789) (Note 2) 2,223 (Note 2)	$ 1,491,585 192,981 - 838,251 - 3,398,442 2,183,076 7,106 107,728 57,078 35,222	$ - - - - - - - - - - -
												(Continued)

110 -

Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2020 (Notes 1 and 5)	Investment Amounts Authorized by the Investment Commission, MOEA (Note 1)	Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$16,513,991	$17,453,621	$38,650,931

Note 1: Except for investment gain or loss which were translated at exchange rates of US$1=NT$29.549167 or RMB1=NT$4.28271 or EUR1=NT$33.708333, the rest were translated at exchange rates of US$1=NT$28.48 or RMB1=NT$4.364818 or EUR1=NT$35.02 as of December 31, 2020.

Note 2: Recognized from financial statements audited by the auditors for the same periods.

Note 3: Difference between the amount of the paid-in capital multiplied by percentage of ownership and the cumulative amount of investment exports from Taiwan at the end of year: Guangdong Dingfung Pulp & Paper Co., Ltd. and YFY Paper Enterprise (Guangzhou) Co., Ltd. capitalized retained earnings; YFY Paper Enterprise (Zhongshan) Co., Ltd., YFY Paper Enterprise (Kunshan) Co., Ltd., YFY Paper Enterprise (Dongguan) Co., Ltd. and YFY Paper Enterprise (Fuzhou) Co., Ltd. are subsidiaries reinvested earnings from China. YFY Jupiter (Shenzhen) Ltd. was acquired indirectly due to the acquirement of YFY Jupiter (BVI) Inc.

Note 4: Methods of investment and the related investors are as follow:

a. Investment in mainland China through companies set up in another company. The related investors are as follow:

(a) YFY Mauritius Corp. (b) YFY Mauritius Corp. and YFY Packaging (Yangzhou) Investment Co., Ltd. (c) YFY International Limited (d) Guangdong Dingfung Pulp & Paper Co., Ltd. (e) YFY Paper Enterprise (Xiamen) Co., Ltd. and YFY Paper Enterprise (Guangzhou) Co., Ltd. (f) YFY RFID Co., Ltd. (g) Arizon RFID Technology Co., Ltd. (originally named as Arizon RFID Technologies (Yangzhou) Co., Ltd.). (h) Mobius 105 Ltd. (i) YFY Jupiter (Shenzhen) Ltd. (j) Yuen Foong Yu Consumer Products Investment Limited (k) YFY investment Co., Ltd. (l) YFY International Limited and CHP International (BVI) Corporation (m) YFY International Limited, CHP International (BVI) Corporation and Guangdong Dingfung Pulp & Paper Co., Ltd. (n) YFY Capital Holdings Corp. (o) YFY Mauritius Corp. and YFY Paper Enterprise (Kunshan) Co., Ltd.

b. Direct investment in mainland China and the investors are as follows:
(a) Yuen Foong Shop Co., Ltd. (b) San Ying Enterprise Co., Ltd.

Note 5: In calculating the accumulated outward remittance for investment, the reinvestment amount of $3,474,503 thousand made by investor of mainland China has been deducted.

Note 6: Recognized from financial statements that have not been audited.

Note 7: Except Chengdu JieLianDa Warehousing Co., Ltd., Chengdu JieLianDa Supply Chain Co., Ltd., and Chengdu JingShiTong Packing Co., Ltd. are associates accounted for using the equity method, other investments have been eliminated in preparing the consolidated financial statements.

Note 8: On June 22, 2020, the board of directors of the subsidiary, YFY Investment Co., Ltd., resolved to dispose of all of its ownership of YFY Family Paper (Beijing) Co., Ltd. The contract was signed in July 2020. The disposal has been completed in August 2020.

In�es�men� in mainland China�s significan� �ransac�ion events that occur directly or indirectly through companies set up in another country are referred to in Tables 2, 3, 7, 8 and 12.

(Concluded)

111 -

TABLE 12

YFY INC. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

No.	Investee Company	Counterparty	Relationship		Transaction Details (Note)	Transaction Details (Note)
				Financial Statement Account	Amount	Payment Terms	% of Total Sales or Assets
1	YFY Packaging Inc.	Pek Crown Paper Co., Ltd. Chung Hwa Pulp Corporation Yuen Foong Yu Consumer Products Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd.	Subsidiary The same ultimate parent company The same ultimate parent company The same ultimate parent company	Sales Accounts receivable Sales Accounts receivable Sales Sales Accounts receivable	$ 784,631 177,686 1,114,494 215,407 133,327 1,195,306 157,320	By market price 3 months after transaction months By market price 2 months after transaction months By market price By market price In agreed terms	1.1 0.1 1.5 0.2 0.2 1.6 0.1
2	Chung Hwa Pulp Corporation	YFY Packaging Inc. YFY Development Corp. (originally named as YFY Capital Co., Ltd.) Shenzhen Jinglun Paper Co., Ltd. Yuen Foong Yu Consumer Products Co., Ltd. Union Paper Corp.	The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company	Sales Sales Sales Accounts receivable Sales Accounts receivable Sales	184,907 800,236 1,462,855 627,173 409,135 125,921 694,398	By market price By market price By market price 5 months after transaction month By market price 2 months after transaction months By market price	0.3 1.1 2.0 0.5 0.6 0.1 0.9
3	Shin Foong Specialty and Applied Materials Co., Ltd.	Chung Hwa Pulp Corporation	The same ultimate parent company	Sales	192,954	By market price	0.3
4	YFY Family Care (Kunshan) Co., Ltd.	YFY Investment Co., Ltd.	Parent company	Sales	542,162	By market price	0.7
5	YFY Investment Co., Ltd.	Yuen Foong Yu Consumer Products (Yangzhou) Co., Ltd.	Subsidiary	Sales	1,099,186	By market price	1.5
6	Yuen Foong Yu Consumer Products (Yangzhou) Co., Ltd.	YFY Investment Co., Ltd. YFY Family Care (Kunshan) Co., Ltd.	Parent company The same ultimate parent company	Sales Accounts receivable Sales	1,809,504 115,256 271,442	By market price In agreed terms By market price	2.5 0.1 0.4
7	YFY Paper Enterprise (Suzhou) Co., Ltd.	YFY Family Care (Kunshan) Co., Ltd.	The same ultimate parent company	Sales	292,762	By market price	0.4
8	YFY Family Paper (Beijing) Co., Ltd.	YFY Investment Co., Ltd.	Parent company	Sales	229,502	By market price	0.4
							(Continued)

112 -

No.	Investee Company	Counterparty	Relationship		Transaction Details (Note)	Transaction Details (Note)
				Financial Statement Account	Amount	Payment Terms	% of Total Sales or Assets
9	YFY Packaging (Yangzhou) Investment Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Paper Enterprise (Guangzhou) Co., Ltd. YFY Paper Enterprise (Tianjin) Co., Ltd. YFY Paper Enterprise (Xiamen) Co., Ltd. YFY Paper Enterprise (Dongguan) Co., Ltd. YFY Paper Enterprise (Qingdao) Co., Ltd. YFY Paper Enterprise (Zhongshan) Co., Ltd. YFY Paper Enterprise (Shanghai) Co., Ltd. YFY Paper Enterprise (Fuzhou) Co., Ltd. YFY Paper Enterprise (Jiaxing) Co., Ltd.	The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company	Sales Accounts receivable Sales Accounts receivable Sales Accounts receivable Sales Sales Sales Sales Sales Sales Sales	$ 5,390,093 926,659 706,152 145,766 538,848 159,802 417,510 384,021 302,163 368,382 157,486 135,367 107,819	By market price In agreed terms By market price In agreed terms By market price In agreed terms By market price By market price By market price By market price By market price By market price By market price	7.4 0.7 0.1 0.1 0.7 0.1 0.6 0.5 0.4 0.5 0.2 0.2 0.1
10	Yuen Foong Yu Consumer Products Co., Ltd.	Yuen Foong Shop Co., Ltd.	Subsidiary	Sales Accounts receivable	883,180 167,018	By market price In agreed terms	1.2 0.2
11	Guangdong Dingfung Pulp & Paper Co., Ltd.	YFY Investment Co., Ltd.	The same ultimate parent company	Sales Accounts receivable	819,909 119,490	By market price 2 months after transaction months	1.1 0.1
12	Zhaoqing Dingfung Forestry Co., Ltd.	Guangdong Dingfung Pulp & Paper Co., Ltd.	Parent company	Sales Accounts receivable	219,947 149,861	By market price In agreed terms	0.3 0.1
13	YFY Japan Co., Ltd	Chung Hwa Pulp Corporation	The same ultimate parent company	Sales	232,652	By market price	0.3
14	YFY Paper Mfg. (Yangzhou) Co., Ltd.	YFY Paper Enterprise (Nanjing) Co., Ltd. YFY Paper Enterprise (Shanghai) Co., Ltd. YFY Paper Enterprise (Suzhou) Co., Ltd. YFY Paper Enterprise (Guangzhou) Co., Ltd. YFY Paper Enterprise (Jiaxing) Co., Ltd. YFY Paper Enterprise (Dongguan) Co., Ltd.	The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company The same ultimate parent company	Sales Sales Sales Sales Sales Sales	459,645 417,078 455,652 151,929 263,723 175,606	By market price By market price By market price By market price By market price By market price	0.6 0.6 0.6 0.2 0.4 0.2
15	Ever Growing Agriculture Biotech Co., Ltd.	Yuen Foong Yu Consumer Products Co., Ltd.	Parent company	Sales Accounts receivable	330,058 159,244	By market price In agreed terms	0.5 0.1
16	Arizon RFID Technology Co., Ltd. (originally named as Arizon RFID Technologies (Yangzhou) Co., Ltd.)	Arizon RFID Technologies (Hong Kong) Co., Ltd.	Subsidiary	Sales	108,251	By market price	0.1
17	Union Paper Corp.	Chung Hwa Pulp Corporation	The same ultimate parent company	Sales	161,140	By market price	0.2
18	Yuen Foong Yu Blue Economy Natural Resource (Yangzhou) Co., Ltd.	YFY Paper Mfg. (Yangzhou) Co., Ltd.	The same ultimate parent company	Sales	121,051	By market price	0.2
19	Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd.	Yuen Foong Yu Paper Enterprise (Vietnam) Binh Chanh Co., Ltd.	Subsidiary	Sales	200,030	By market price	0.3
							(Continued)

113 -

No.	Investee Company	Counterparty	Relationship		Transaction Details (Note)	Transaction Details (Note)
				Financial Statement Account	Amount	Payment Terms	% of Total Sales or Assets
20	Yuen Foong Yu Paper Enterprise (Vietnam) Binh Duong Co., Ltd.	Yuen Foong Yu Paper Enterprise (Vietnam) Co., Ltd.	Parent company	Sales	$ 105,520	By market price	0.1
21	YFY Packaging (Ha Nam) Co., Ltd.	YFY Packaging Thai Binh Co., Ltd.	The same ultimate parent company	Sales	122,933	By market price	0.2
22	YFY Packaging Thai Binh Co., Ltd.	YFY Packaging (Ha Nam) Co., Ltd.	The same ultimate parent company	Sales	115,619	By market price	0.2

Note: In preparing the consolidated financial statements, the transaction has been eliminated.

(Concluded)

114 -

TABLE 13

YFY INC.

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2020

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Shou-Chung Ho Hsin-Yi Foundation	170,615,028 94,004,485	10.27 5.66

Note: The information of major shareholders presented in this table is provided by Taiwan Depository & Clearing Corporation based on the number of ordinary shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration by the Company as of the last business day for the current quarter.

115 -

YFY Inc.

Financial Statements for the Years Ended December 31, 2020 and 2019 and Inde�enden� A�di�� Re��

INDEPENDENT AUDITORS� REPORT

The Board of Directors and Shareholders YFY Inc.

Opinion

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors� Responsibilities for the Audit of the Financial Statements 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 based on our audits and the report of other auditors.

Key Audit Matters

Ke� audit matters of the Compan��s financial statements for the �ear ended December 31, 2020 are stated as follows:

The Valuation of Investments Accounted for Using the Equity Method

Under the investments accounted for using the equity method, the financial position and performance of some significant components of the Company will significantly affect the Company. The accounts receivable of significant components of the Company are material in amount. In consideration of transactions with various counterparties, the recoverability of accounts receivable is subject to not onl� each customer�s financial condition but also management�s estimation and judgment. Therefore, the estimation of expected credit loss recognized on accounts receivable has been identified as a key audit matter.

For related policies and relevant information about investments accounted for using the equity method, refer to Notes 4 and 9 to the accompanying financial statements.

The key audit procedures that we performed in respect of the valuation of investments accounted for using the equity method included the following:

We obtained and assessed the reasonableness of the method and the information used by management for the estimation of expected credit loss recognized on accounts receivable.
We tested sample items in the aging report on the balance sheet date and verified the correctness of the calculation of the expected credit loss.
We analyzed overdue receivables and performed sampling on the collection of overdue receivables after the balance sheet date. We assessed the reasonableness of the expected credit loss recognized on accounts recei�able based on customers� historical pa�ment records, credit line control and overdue receivables tracking.

Other Matter

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

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

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

A�� R��b�� A�� F��a��al Statements

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements for the year ended December 31, 2020 and are therefore the ke� 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 Hui-Min Huang and Ya-Ling Wong.

Deloitte & Touche Taipei, Taiwan Republic of China March 19, 2021

Notice to Readers

Fo� �he con�enience of �eade��, �he a�di�o�� epo�� and �he accompan�ing financial ��a�emen�� 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 independen� a�di�o�� epo�� and financial statements shall prevail.

YFY INC.

BALANCE SHEETS DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS (Note 4) Cash (Note 6) Current financial assets at fair value through profit or loss (Note 7) Accounts receivable due from related parties, net (Note 22) Other receivables Other current assets, others Total current assets NON-CURRENT ASSETS (Note 4) Non-current financial assets at fair value through profit or loss (Notes 7 and 22) Non-current financial assets at fair value through other comprehensive income (Note 8) Investments accounted for using equity method (Notes 9 and 22) Property, plant and equipment (Notes 10, 16 and 22) Right-of-use assets (Notes 11 and 16) Investment property, net (Notes 12 and 16) Deferred tax assets (Note 17) Prepaid pension cost (Note 14) Other non-current assets, others (Note 16) Total non-current assets TOTAL ASSETS LIABILITIES AND EQUITY CURRENT LIABILITIES (Note 4) Current borrowings (Note 13) Short-term notes and bills payable (Note 13) Accounts payable to related parties (Note 22) Other payables, others Current tax liabilities Current lease liabilities (Note 11) Other current liabilities, others Total current liabilities NON-CURRENT LIABILITIES (Note 4) Non-current portion of non-current borrowings (Note 13) Deferred tax liabilities (Note 17) Non-current lease liabilities (Note 11) Net defined benefit liability, non-current (Note 14) Other non-current liabilities, others Total non-current liabilities Total liabilities EQUITY (Notes 4 and 15) Share capital Capital surplus Retained earnings Other equity interest Total equity TOTAL LIABILITIES AND EQUITY		2020 Amount % $ 4,381 - 16,283 - 129 - 5,549 - 6,147 - 32,489 - - - 12,140,404 18 52,189,672 78 615,945 1 2,526 - 1,857,909 3 - - 37,265 - 21,363 - 66,865,084 100 $ 66,897,573 100 $ 805,000 1 929,046 2 10,539 - 85,367 - 101,347 - 1,264 - 14,842 - 1,947,405 3 19,544,992 29 412,016 1 1,279 - - - 6,616 - 19,964,903 30 21,912,308 33 16,603,715 25 2,504,194 4 20,756,081 31 5,121,275 7 44,985,265 67 $ 66,897,573 100		2019
				Amount % $ 6,496 - 58,218 - 426 - 117,291 - 3,808 - 186,239 - 160,964 - 11,801,339 19 49,408,023 77 619,312 1 4,549 - 1,858,761 3 101,728 - - - 32,940 - 63,987,616 100 $ 64,173,855 100 $ 1,977,000 3 1,128,937 2 1,407 - 58,609 - 10,143 - 1,835 - 14,570 - 3,192,501 5 20,624,915 32 350,656 1 2,704 - 746,342 1 6,504 - 21,731,121 34 24,923,622 39 16,603,715 26 1,000,169 1 15,879,283 25 5,767,066 9 39,250,233 61 $ 64,173,855 100

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

(With Deloitte & Touche auditors� report dated March 19, 2021)

YFY INC.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OPERATING REVENUE Investment (Note 4) OPERATING EXPENSES (Notes 14, 16 and 22) NET OPERATING INCOME NON-OPERATING INCOME AND EXPENSES Finance costs (Notes 4 and 16) Rent income (Notes 12 and 22) Dividend income Other income, others Gain on disposal of investment properties Miscellaneous disbursements Total non-operating income and expenses PROFIT FROM CONTINUING OPERATIONS BEFORE TAX TAX BENEFIT (EXPENSE) (Notes 4 and 17) PROFIT FROM CONTINUING OPERATIONS OTHER COMPREHENSIVE INCOME (Notes 4, 14, 15 and 17) Components of other comprehensive income that will not be reclassified to profit or loss: Gains on remeasurements of defined benefit plans Unrealized gains from investments in equity instruments measured at fair value through other comprehensive income Share of other comprehensive income (loss) of subsidiaries and associates accounted for using equity method		2020 Amount % $ 5,481,543 100 361,679 7 5,119,864 93 (285,625) (5) 50,745 1 415,469 8 30,378 - - - (752) - 210,215 4 5,330,079 97 (121,000) (2) 5,209,079 95 583,663 11 413,634 7 (320,559) (6) 676,738 12		2019
				Amount % $ 2,414,115 100 349,085 15 2,065,030 85 (336,147) (14) 50,057 2 366,404 15 29,066 2 26,105 1 (46) - 135,439 6 2,200,469 91 85,300 4 2,285,769 95 81,766 3 2,050,269 85 1,351,107 56 3,483,142 144 (Continued)

YFY INC.

STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Components of other comprehensive income that will be reclassified to profit or loss: Share of other comprehensive loss of subsidiaries and associates accounted for using equity method Other comprehensive income, net TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 18) Basic earnings per share Diluted earnings per share		2020 Amount % $ (525,143) (9) (525,143) (9) 151,595 3 $ 5,360,674 98 $ 3.14 $ 3.14		2019
				Amount % $ (995,204) (41) (995,204) (41) 2,487,938 103 $ 4,773,707 198 $ 1.38 $ 1.38

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

(With Deloitte & Touche auditors� report dated March 19, 2021)

(Concluded)

YFY INC.

STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Share Capital Shares (In Thousands) Amount 1,660,372 $ 16,603,715 - - - - - - - - - - - - - - - - - - - - - - 1,660,372 16,603,715 - - - - - - - - - - - - - - - - - - - - - - 1,660,372 $ 16,603,715		CapitalSurplus	CapitalSurplus	Retained Earnings	Other Equity
					Exchange Differences on Unrealized Gains (Losses) on Financial Assets Measured at Translation of Fair Value Foreign Through Other Financial Statements Comprehensive Income $ (40,365 ) $ 3,674,848 - - - - - - - (555 ) - - - - - (61 ) - - (995,837) 3,423,626 (995,837) 3,423,626 - (288,213) (1,036,202 ) 6,809,645 - - - - - - - - - - 50,578 (27 ) 2,827 (353 ) - - (526,210) 123,858 (526,210) 123,858 - (299,816) $ (1,509,007) $ 6,633,307
				Unappropriated Legal Reserve Special Reserve Retained Earnings $ 3,415,373 $ 4,028,584 $ 6,797,435 144,000 - (144,000 ) - - (996,223 ) - (1 ) 1 - - 555 - - - - - - - - 61 - - 2,285,769 - - 59,516 - - 2,345,285 - - 288,213 3,559,373 4,028,583 8,291,327 263,411 - (263,411 ) - - (1,162,260 ) - (26,770 ) 26,770 - - (17 ) - - - - - 27 - - (22,727 ) - - 5,209,079 - - 552,880 - - 5,761,959 - - 299,816 $ 3,822,784 $ 4,001,813 $ 12,931,484
Shares (In Thousands) 1,660,372 - - - - - - - - - - - 1,660,372 - - - - - - - - - - - 1,660,372	Treasury Shares $ 14,947 - - - - - - - - - - - 14,947 - - - - - - - - - - - $ 14,947	Consolidation Excess $ 293,124 - - - - - - - - - - - 293,124 - - - - - - - - - - - $ 293,124	Other $ 681,858 - - - (6,123 ) 3,085 (962 ) 14,240 - - - - 692,098 - - - (338 ) 1,487 1,431,233 71,643 - - - - $ 2,196,123

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

(With Deloitte & Touche auditors� report dated March 19, 2021)

YFY INC.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES, INDIRECT METHOD Profit before tax Adjustments to reconcile profit (loss) Depreciation and amortization expenses Net gain on financial assets or liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share-based payments Share of profit of subsidiaries and associates accounted for using equity method Gain on disposal of property, plant and equipment Gain on disposal of investment properties Gain on disposal of investments Unrealized foreign exchange loss Changes in operating assets and liabilities Decrease (increase) in current financial assets at fair value through profit or loss, mandatorily measured at fair value Decrease (increase) in accounts receivable due from related parties, net Decrease (increase) in other receivable Decrease (increase) in other current assets, others Increase (decrease) in accounts payable to related parties Increase (decrease) in other payable, others Increase (decrease) in other current liabilities, others Increase (decrease) in net defined benefit liability, non-current Cash outflow generated from (used in) operations Interest received Dividends received Interest paid Income taxes paid Net cash flows generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through other comprehensive income	2020 $ 5,330,079 12,081 (5,528) 285,625 (52) (415,469) 1,144 (5,481,543) (52) - - 1 202,000 297 102,014 (2,336) 9,132 28,002 272 (54,028) 11,639 6,479 2,209,417 (282,667) (2,915) 1,941,953 (11,940) 45,453 41,056	2019 $ 2,200,469 13,357 (6,354) 336,147 (29) (366,404) - (2,414,115) - (26,105) (241) - (38,000) 1,356 600 381 (129) 3,015 (3,106) (42,000) (341,158) 6,269 1,147,338 (339,375) (2,144) 470,930 - 452 17,230 (Continued)

YFY INC.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Proceeds from capital reduction of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Proceeds from disposal of investment properties Decrease (increase) in other non-current assets, others Net cash flows generated from investing activities CASH FLOWS USED IN FINANCING ACTIVITIES Increase (decrease) in current borrowings Decrease in short-term notes and bills payable Proceeds from long-term debt Repayments of long-term debt Payments of lease liabilities Increase (decrease) in other non-current liabilities, others Cash dividends paid Overdue dividends received Net cash flows used in financing activities EFFECT OF EXCHANGE RATE CHANGES ON CASH NET INCREASE (DECREASE) IN CASH CASH AT THE BEGINNING OF THE YEAR CASH AT THE END OF THE YEAR	2020 $ (1,054,579) 2,613,810 35,000 (260) 88 - 5,758 1,674,386 (1,172,000) (200,000) - (1,084,000) (1,792) 112 (1,162,260) 1,487 (3,618,453) (1) (2,115) 6,496 $ 4,381	2019 $ (30,000) - 213,071 (2,709) 9 26,106 (2,947) 221,212 147,000 (270,000) 428,236 - (1,725) (1,946) (996,223) 3,085 (691,573) - 569 5,927 $ 6,496

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

(With Deloitte & Touche auditors� report dated March 19, 2021)

(Concluded)

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NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

YFY INC.

1. GENERAL INFORMATION

YFY Inc. (the Compan�) �as incorporated in Kaohsiung in Februar� 1950. The Compan��s shares ha�e been listed on the Taiwan Stock Exchange (TWSE) since February 1977.

The financial statements of the Company are presented in the Compan��s functional currenc�, the Ne� Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The financial statements �ere appro�ed b� the Compan��s board of directors on Februar� 26, 2021.

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

a. Initial application of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the �IFRSs�) endorsed and issued into effect by the Financial Supervisory Commission (FSC).

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Compan��s accounting policies.

b. The IFRSs endorsed by the Financial Supervisory Commission (FSC) for application starting from 2021

New IFRSs Amendments to IFRS 4 �E�tension of the Temporar� E�emption from Appl�ing IFRS 9� Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 �Interest Rate Benchmark Reform - Phase 2�	Effective Date Announced by IASB
	Effective immediately upon promulgation by the IASB January 1, 2021

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As of the date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of the above standards and interpretations will have on the Compan��s financial position and financial performance and �ill disclose the rele�ant impact �hen the assessment is completed.

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

New IFRSs
�Annual Impro�ements to IFRS Standards 2018-2020�

Amendments to IFRS 3 �Reference to the Conceptual Frame�ork�

Amendments to IFRS 10 and IAS 28 �Sale or Contribution of Assets
bet�een an In�estor and its Associate or Joint Venture�

IFRS 17 �Insurance Contracts�

Amendments to IFRS 17

Amendments to IAS 1 �Classification of Liabilities as Current or
Non-current�

Amendments to IAS 1 �Disclosure of Accounting Policies�

Amendments to IAS 8 �Definition of Accounting Estimates�

Amendments to IAS 16 �Propert�, Plant and Equipment - Proceeds
before Intended Use�

Amendments to IAS 37 �Onerous Contracts - Cost of Fulfilling a
Contract�

Effective Date
Announced by IASB (Note 1)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The amendments to IFRS 9 will be applied prospectively to modifications and exchanges of financial liabilities that occur on or after the annual reporting periods beginning on or after Januar� 1, 2022. The amendments to IAS 41 �Agriculture� �ill be applied prospecti�el� to the fair value measurements on or after the annual reporting periods beginning on or after Januar� 1, 2022. The amendments to IFRS 1 �First-time Adoptions of IFRSs� �ill be applied retrospectively for annual reporting periods beginning on or after January 1, 2022.
Note 3: The amendments are applicable to business combinations for which the acquisition date is on or after the beginning of the annual reporting period beginning on or after January 1, 2022.
Note 4: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.
Note 5: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.
Note 6: The amendments are applicable to property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after January 1, 2021.
Note 7: The amendments are applicable to contracts for which the entity has not yet fulfilled all its obligations on January 1, 2022.
12 -
1) Amendments to IAS 1 �Classification of Liabilities as Current or Non-current�

The amendments clarify that for a liability to be classified as non-current, the Company shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights are in existence at the end of the reporting period, the liability is classified as non-current regardless of whether the Company will exercise that right. The amendments also clarify that, if the right to defer settlement is subject to compliance with specified conditions, the Company must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date.

The amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or the Compan��s o�n equit� instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that could, at the option of the counterparty, result in its settlement by a transfer of the Compan��s o�n equit� instruments, and if such option is recogni�ed separatel� as equit� in accordance �ith IAS 32 �Financial Instruments: Presentation�, the aforementioned terms �ould not affect the classification of the liability.

2) Amendments to IAS 1 �Disclosure of Accounting Policies�

The amendments specify that the Company should refer to the definition of material to determine its material accounting policy information to be disclosed. Accounting policy information is material if it can reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements. The amendments also clarify that:

Accounting policy information that relates to immaterial transactions, other events or conditions is immaterial and need not be disclosed;
The Company may consider the accounting policy information as material because of the nature of the related transactions, other events or conditions, even if the amounts are immaterial; and
Not all accounting policy information relating to material transactions, other events or conditions is itself material.

a) The Company changed its accounting policy during the reporting period and this change resulted in a material change to the information in the financial statements;
b) The Company chose the accounting policy from options permitted by the standards;
c) The accounting policy was developed in accordance �ith IAS 8 �Accounting Policies, Changes in Accounting Estimates and Errors� in the absence of an IFRS that specificall� applies;
d) The accounting policy relates to an area for which the Company is required to make significant judgements or assumptions in applying an accounting policy, and the Company discloses those judgements or assumptions; or
e) The accounting is complex and users of the financial statements would otherwise not understand those material transactions, other events or conditions.
13 -
3) Amendments to IAS 8 �Definition of Accounting Estimates�

The amendments define that accounting estimates are monetary amounts in financial statements that are subject to measurement uncertainty. In applying accounting policies, the Company may be required to measure items at monetary amounts that cannot be observed directly and must instead be estimated. In such a case, the Company uses measurement techniques and inputs to develop accounting estimates to achieve the objective. The effects on an accounting estimate of a change in a measurement technique or a change in an input are changes in accounting estimates unless they result from the correction of prior period errors.

Except for the above impact, as of the date the financial statements were authorized for issue, the Company is continuously assessing the possible impact that the application of other standards and interpretations �ill ha�e on the Compan��s financial position and financial performance and �ill disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (the �Regulations�).

b. Basis of preparation

The financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value, net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets and investments accounted for using the equity method.

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

When preparing the financial statements, the Company used the equity method to account for its investments in subsidiaries and associates. In order for the amounts of the net profit for the year, other comprehensive income (loss) for the year and total equity in the financial statements to be the same with the amounts attributable to the owners of the Company in its consolidated financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for using the equity method, the share of profit or loss of subsidiaries and associates, the share of other comprehensive income (loss) of subsidiaries and associates and the related equity items.

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c. Classification of current and non-current assets and liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within twelve months after the reporting period; and
3) Cash, unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

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

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

d. Foreign currencies

In preparing the Compan��s financial statements, transactions in currencies other than the entit��s functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purpose of presenting financial statements, the functional currencies of the Company and the Company entities (including subsidiaries and associates in other countries that use currency different from the currency of the Company) are translated into the presentation currency - the New Taiwan dollars as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

On the disposal of a foreign operation or a disposal involving the loss of control over a subsidiary that includes a foreign operation, all of the exchange differences accumulated in equity in respect of that operation are reclassified to profit or loss.

In relation to a partial disposal of a subsidiary that does not result in the Company losing control over the subsidiary, the proportionate share of accumulated exchange differences is included in the calculation of equity transactions but is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

15 -
e. Investments in subsidiaries

The Company uses the equity method to account for its investments in subsidiaries.

A subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recogni�e the Compan��s share of the profit or loss and other comprehensi�e income of the subsidiar�. The Compan� also recogni�es the changes in the Compan��s share of other equit� of subsidiaries.

Changes in the Compan��s o�nership interest in a subsidiar� that do not result in the Compan� losing control of the subsidiary are equity transactions. The Company recognizes directly in equity any difference between the carrying amount of the investment and the fair value of the consideration paid or received.

When the Compan��s share of losses of a subsidiar� e�ceeds its interest in that subsidiar� (�hich includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Compan��s net in�estment in the subsidiar�), the Compan� continues recognizing its share of further losses.

An� e�cess of the cost of acquisition o�er the Compan��s share of the net fair �alue of the identifiable assets and liabilities of a subsidiary that constitutes a business at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized Any e�cess of the Compan��s share of the net fair value of the identifiable assets and liabilities of a subsidiary that constitutes a business over the cost of acquisition is recognized immediately in profit or loss.

The Company assesses its investment for any impairment by comparing the carrying amount with the estimated reco�erable amount as assessed based on the in�estee�s financial statements as a �hole. If the recoverable amount of the investment subsequently increases, the Company recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized net of amortization or depreciation. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

When the Company loses control of a subsidiary, it recognizes the investment retained in the former subsidiary at its fair value at the date when control is lost. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of the previous investment at the date when control is lost is recognized as a gain or loss in profit or loss. Besides this, all amounts previously recognized in other comprehensive income in relation to that subsidiary are reclassified to profit and loss on the same basis as would be required if the Company had directly disposed of the related assets or liabilities.

Profits or losses resulting from downstream transactions are eliminated in full only in the parent compan��s financial statements. Profits and losses resulting from upstream transactions and transactions bet�een subsidiaries are recogni�ed onl� in the parent compan��s financial statements onl� to the extent of interests in the subsidiaries that are not related to the Company.

f. Investment in associates

An associate is an entity over which the Company has significant influence and that is not a subsidiary.

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

16 -

Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recogni�e the Compan��s share of the profit or loss and other comprehensi�e income of the associate. The Compan� also recogni�es the changes in the Compan��s share of the equit� of associates.

An� e�cess of the cost of acquisition o�er the Compan��s share of the net fair �alue of the identifiable assets and liabilities of an associate at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Compan��s share of the net fair �alue of the identifiable assets and liabilities o�er the cost acquisition, after reassessment, this is recognized immediately in profit or loss.

When the Company subscribes for additional new shares of the associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Compan��s proportionate interest in the associate. The Compan� records such a difference as an adjustment to investments, with the corresponding amount charged or credited to capital surplus - changes in the Compan��s share of equit� of associates. If the Compan��s o�nership interest is reduced due to the additional subscription of the new shares of associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for by the equity method is insufficient, the shortage is debited to retained earnings.

When the Compan��s share of losses of an associate equals or e�ceeds its interest in that associate (which includes any carrying amount of the investment accounted for by the equity method and long-term interests that, in substance, form part of the Compan��s net in�estment in the associate), the Company discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Company has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

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

The Company discontinues the use of the equity method from the date on which its investment ceases to be an associate. Any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities.

When the Company transacts with its associate, profits and losses resulting from the transactions with the associate are recogni�ed in the Compan�� financial statements onl� to the e�tent of interests in the associate that are not related to the Company.

g. Property, plant and equipment

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

Except for freehold land which is not depreciated, the depreciation on property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effect of any changes in estimates accounted for on a prospective basis.

17 -

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

h. Investment properties

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

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

i. Impairment of property, plant and equipment, right-of-use assets and intangible assets

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

j. Financial instruments

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

1) Financial assets

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

18 -

a) Measurement category

i. Financial assets at FVTPL

ii. Financial assets at amortized cost

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

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

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

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

A financial asset is credit impaired when one or more of the following events have occurred:

i) Significant financial difficulty of the issuer or the borrower;
ii) Breach of contract, such as a default;
iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or
19 -
iv) The disappearance of an active market for that financial asset because of financial difficulties.
iii. Investments in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Dividends on these investments in equity instruments are recognized in profit or loss when the Compan��s right to recei�e the di�idends is established, unless the di�idends clearl� represent a recovery of part of the cost of the investment.

b) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost.

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

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

For internal credit risk management purposes, the Company determines that the following situation indicate that a financial asset is in default (without taking into account any collateral held by the Company) when internal or external information show that the debtor is unlikely to pay its creditors.

c) Derecognition of financial assets

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

20 -

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset�s carr�ing amount and the sum of the consideration recei�ed and recei�able is recogni�ed in profit or loss. On derecognition of an investment in an equity instrument at FVTOCI, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

2) Financial liabilities
i. Subsequent measurement

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

ii. Derecognition of financial liabilities

k. Provisions

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

l. Leases

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

1) The Company as lessor

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

2) The Company as lessee

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

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

21 -

Lease liabilities are initially measured at the present value of the lease payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readil� determined, the Compan� uses the lessee�s incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change in future lease payments resulting from a change in an index, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. For a lease modification that is not accounted for as a separate lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset of lease modifications that decreased the scope of the lease, and recognizing in profit or loss any gain or loss on the partial or full termination of the lease; making a corresponding adjustment to the right-of-use asset of all other lease modifications. Lease liabilities are presented on a separate line in the balance sheets.

m. Borrowing costs

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

n. Employee benefits

1) Short-term employee benefits

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

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Compan��s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

22 -

o. Share-based payment arrangements

The fair value at the grant date of the employee share options is expensed on a straight-line basis over the �esting period, based on the Compan��s best estimates of the number of shares or options that are expected to ultimately vest, with a corresponding increase in investments accounted for using equity method. It is recognized as an expense in full at the grant date if vested immediately.

At the end of each reporting period, the Company revises its estimate of the number of employee share options that are expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expenses reflect the revised estimate, with a corresponding adjustment to investments accounted for using equity method.

p. Taxation

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

1) Current tax

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

Adjustments of prior �ears� ta� liabilities are added to or deducted from the current �ear�s ta� provision.

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences and unused loss carryforwards to the extent that it is probable that taxable profit will be available against which those deductible temporary differences can be utilized.

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

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

23 -
3) Current and deferred taxes for the year

5. CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

The Company considers the economic implications of the COVID-19 when making its critical accounting estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revisions affect only that period or in the period of the revisions and future periods if the revisions affect both current and future periods.

The fair value measurement of equity investment in unlisted shares is determined by the estimated fair �alue under appropriate �aluation methods primaril� based on in�estees� financial positions, operation results and recent financing activities, the market transaction prices of similar investments, market conditions and the required discount factors. As such, the estimated fair value may be different from the actual disposal price in the future.

6. CASH

Cash on hand Checking accounts and demand deposits		December	31
		2020 $ 281 4,100 $ 4,381	2019 $ 343 6,153 $ 6,496

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL)

Financial assets at FVTPL-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Mutual funds Financial assets at FVTPL-non-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Subordinated bank debentures		December 31	December 31
		2020 $ 16,283 $ -	2019 $ 58,218 $ 160,964

24 -

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (FVTOCI)

Investments in equity instruments at FVTOCI-non-current Domestic investments Listed shares Unlisted shares		December 31	December 31
		2020 $ 8,146,163 3,994,241 $ 12,140,404	2019 $ 8,585,824 3,215,515 $ 11,801,339

The Company invested in listed and unlisted on domestic equity securities, and elected to designate these investments in equity instruments as at FVTOCI.

The Compan� acquired Zhen Ding Technolog� Holding Limited (�ZDTHL�) through stock e�change. The Compan��s board of directors appro�ed the stock e�change of all of its o�nership of Boardtek Electronics Corporation (�BEC�) for o�nership of �ZDTHL� in Ma� 2020. The stock e�change �as conducted at an e�change ratio of 1 ordinar� share of �BEC� for 0.2 ne�l� issued ordinar� share of �ZDTHL�. The abo�e stock exchange has been completed on November 4, 2020.

9. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries Investments in associates		December 31	December 31
		2020 $ 48,151,353 4,038,319 $ 52,189,672	2019 $ 45,609,540 3,798,483 $ 49,408,023

a. Investment in subsidiaries

Listed company
Chung Hwa Pulp Corporation

Shin Foong Specialty and Applied Materials Co., Ltd.
Unlisted company
YFY International Limited
YFY Packaging Inc.
YFY Global Investment Limited
Yuen Foong Yu Consumer Products Co., Ltd.
YFY Paradigm Investment Co., Ltd.
YFY Development Corp. (originally named as YFY Capital
Co., Ltd.)
China Color Printing Co., Ltd.
Union Paper Co., Ltd.
Effion Enertech Co., Ltd.
YFY Japan Co., Ltd.

December 31

2020
2019
$ 8,596,617 $ 8,661,522
2,367,344
1,758,646
15,737,977
20,714,487
7,124,383
-
5,973,380
5,658,396
2,602,532
2,888,148
2,332,943
1,931,247
2,133,843
713,821
449,718
447,269
232,759
222,958
215,659
272,617
116,122
101,211
(Continued)

25 -

Yuen Yan Paper Container Co., Ltd. San Ying Enterprise Co., Ltd. Fidelis IT Solutions Co., Ltd. YFY Corporate Advisory & Service Co., Ltd. Sustainable Carbohydrate Innovation Co., Ltd. YFY Venture Capital Investment Co., Ltd. Lotus Ecoscings & Engineering Co., Ltd.		December 31	December 31
		2020 $ 74,701 62,966 56,959 42,197 31,253 - - $ 48,151,353	2019 $ 71,585 128,487 68,351 38,474 32,098 1,468,764 431,459 $ 45,609,540 (Concluded)

The percentage of ownership and voting rights held by the Company are as follows:

Name of Corporation
Chung Hwa Pulp Corporation
Shin Foong Specialty and Applied Materials Co., Ltd.
YFY International Limited
YFY Packaging Inc.
YFY Global Investment Limited
Yuen Foong Yu Consumer Products Co., Ltd.
YFY Paradigm Investment Co., Ltd.
YFY Development Corp. (originally named as YFY Capital Co.,
Ltd.)
China Color Printing Co., Ltd.
Union Paper Co., Ltd.
Effion Enertech Co., Ltd.
YFY Japan Co., Ltd.
Yuen Yan Paper Container Co., Ltd.
San Ying Enterprise Co., Ltd.
Fidelis IT Solutions Co., Ltd.
YFY Corporate Advisory & Service Co., Ltd.
Sustainable Carbohydrate Innovation Co., Ltd.
YFY Venture Capital Investment Co., Ltd.
Lotus Ecoscings & Engineering Co., Ltd.

December 31

2020
2019
57.8%
56.9%
48.9%
49.5%
100.0%
100.0%
100.0%
-
100.0%
100.0%
64.5%
100.0%
100.0%
100.0%
100.0%
100.0%
49.7%
49.7%
18.9%
18.9%
49.0%
49.0%
100.0%
100.0%
50.9%
50.9%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
-
100.0%
-
100.0%

Shin Foong Specialty and Applied Materials Co., Ltd. had equity changes such as employee share options conversion and the Compan��s partial disposal of shares of Shin Foong Specialt� and Applied Materials Co., Ltd., which reduced its shareholding ratio to 48.9%. Shin Foong Specialty and Applied Materials Co., Ltd. was deemed a subsidiary since the Company did not cease to have control over this subsidiary; China Color Printing Co., Ltd., Effion Enertech Co., Ltd. and Union Paper Co., Ltd. were deemed subsidiaries because the Company had substantial control over them even though the Company held less than 50% equit� interests in each of the subsidiaries� �oting shares.

26 -

The Company sold 2.1% and 6.5% of its shares in Yuen Foong Yu Consumer Products Co., Ltd. to YFY Development Corp. (originally named as YFY Capital Co., Ltd.) and YFY Paradigm Investment Co., Ltd., respectively, in June 2020. Due to equity changes such as employee share options conversion of Yuen Foong Yu Consumer Products Co., Ltd. and the Compan��s partial disposal of shares in Yuen Foong Yu Consumer Products Co., Ltd. to designated persons and financial investors from July through October in 2020, the shareholding ratio of the Company in Yuen Foong Yu Consumer Products Co., Ltd. was reduced to 64.5%. Yuen Foong Yu Consumer Products Co., Ltd. was deemed as subsidiary since the Company did not cease to have control over this subsidiary.

Refer to Note 28 in consolidated financial statements for the year ended December 31, 2020 for equity transactions with non-controlling interests.

In response to the overseas operation mode of its subsidiaries and the application of YFY Packaging Inc. on the stock e�change in Tai�an and to boost management performance, the Compan��s board of directors approved the overseas investment structure adjustment in July 2020. The Company has completed the overseas investment structure adjustment in November 2020. The Company acquired the 100% shares of YFY Packaging Inc. owned by YFY International Labuan Co., Ltd.

The Compan��s board of directors appro�ed the merger of its subsidiar� YFY Paradigm In�estment Co., Ltd. and Lotus Ecoscings & Engineering Co., Ltd. and the merger of its subsidiary YFY Capital Co., Ltd. and YFY Venture Capital Investment Co., Ltd. in August 2020. The reference date of the above mergers was October 7, 2020 and the mergers have been completed. The board of the directors of YFY Capital Co., Ltd. appro�ed the name change from YFY Capital Co., Ltd. to �YFY De�elopment Corp.� in October 2020.

Due to equity changes such as purchase of treasury shares, the shareholding ratio of the Company in Chung Hwa Pulp Corporation was increased to 57.8%.

In order to speciali�e on its major business operation, the Compan��s board of directors appro�ed the �di�ision spin-off capital reduction proposal� that spin-off assets, liabilities and business operation of the Chenggong plant of YFY Packaging Inc., integrate them into YFY Development Corp. (originally named as YFY Capital Co., Ltd.), and issue new shares by YFY Development Corp. (originally named as YFY Capital Co., Ltd.) as the consideration for the transfer of the division in January 2021.

Except for YFY Japan Co., Ltd., investments accounted for using the equity method and the share of profit or loss and other comprehensive income (loss) of those investments were calculated based on audited financial statements. Management believes there will not be a material differences even if the financial statements were audited.

b. Investments in associates

Material associates E Ink Holdings Inc. Associates that are not individually material Name of Associate E Ink Holdings Inc.		December 31
		2020 2019 $ 3,595,979 $ 3,419,509 442,340 378,974 $ 4,038,319 $ 3,798,483 Proportion of Ownership and Voting Rights
		December 31
		2020 2019 11.8% 11.8%

27 -
1) Material associates

Refer to Table 4 �Information on In�estees� for the nature of acti�ities, principal place of business and country of incorporation of the associates.

The investments in E Ink Holdings Inc. was accounted for using the equity method since the Company had significant influence over E Ink Holdings Inc. even though the Company held less than 20% of the in�estee�s �oting shares.

The investments accounted for using the equity method and the share of profit or loss and other comprehensive income (loss) of those in�estments �ere calculated based on the associates� audited financial statements.

In 2013, the Company increased its investment in E Ink Holdings Inc. by buying 20,000 thousand shares of the in�estee�s pri�atel� placed ordinar� shares for $329,000 thousand. Under the related regulations, privately placed ordinary shares should not be transferred within three years from the date of acquisition. E Ink Holdings Inc. has not yet completed publishing procedures as of March 19, 2021, the report date. The other rights and obligations are the same as those of ordinary shares.

Fair values (Level 1) of investments in E Ink Holdings Inc. with available published price quotations are summarized as follows (excluding the privately placed ordinary shares):

	December 31	December 31
	2020 $ 5,197,059	2019 $ 3,546,028

Current assets Non-current assets Current liabilities Non-current liabilities Equity Non-controlling interests Proportion of the Compan��s o�nership Equity attributable to the Company Goodwill Carrying amount		December 31	December 31
		2020 $ 21,914,321 23,886,312 (11,564,821) (3,191,039) 31,044,773 (536,163) $ 30,508,610 11.8% $ 3,588,714 7,265 $ 3,595,979	2019 $ 21,634,060 19,986,889 (9,206,675) (2,961,490) 29,452,784 (452,645) $ 29,000,139 11.8% $ 3,412,244 7,265 $ 3,419,509

28 -

Operating revenue Net profit for the year Other comprehensive income Total comprehensive income for the year	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 15,362,855 $ 3,673,688 181,826 $ 3,855,514	2019 $ 13,601,676 $ 3,173,597 199,613 $ 3,373,210

2) Aggregate information of associates that are not individually material

The Compan��s share of: Net profit (loss) for the year Other comprehensive income Total comprehensive income (loss) for the year	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 6,919 57,759 $ 64,678	2019 $ (54,087) 31,220 $ (22,867)

The investments in Taiwan Genome Science, Inc. was accounted for using the equity method since the Compan� and its subsidiaries held more than 20% of the in�estee�s �oting shares e�en though the Company held less than 20% of the in�estee�s �oting shares.

The investments accounted for using the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2020 and 2019 was based on the associates� financial statements which have been audited for the same years.

All the associates were accounted for using the equity method.

10. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2020 Additions Disposals Balance at December 31, 2020 Accumulated depreciation Balance at January 1, 2020 Depreciation expense Disposals Balance at December 31, 2020 Carrying amounts at December 31, 2020	Land $ 593,549 - - $ 593,549 $ - - - $ - $ 593,549	Buildings Machinery and Equipment Miscellaneous Equipment $ 157,897 $ 141,677 $ 89,833 - - 260 - - (11,621) $ 157,897 $ 141,677 $ 78,472 $ 135,334 $ 141,502 $ 86,808 2,554 86 951 - - (11,585) $ 137,888 $ 141,588 $ 76,174 $ 20,009 $ 89 $ 2,298	Total $ 982,956 260 (11,621) $ 971,595 $ 363,644 3,591 (11,585) $ 355,650 $ 615,945 (Continued)

29 -

Cost Balance at January 1, 2019 Additions Disposals Balance at December 31, 2019 Accumulated depreciation Balance at January 1, 2019 Depreciation expense Disposals Balance at December 31, 2019 Carrying amounts at December 31, 2019	Land $ 591,951 1,598 - $ 593,549 $ - - - $ - $ 593,549	Buildings Machinery and Equipment Miscellaneous Equipment $ 180,205 $ 141,677 $ 89,621 - - 1,111 (22,308) - (899) $ 157,897 $ 141,677 $ 89,833 $ 155,077 $ 141,416 $ 86,641 2,565 86 1,057 (22,308) - (890) $ 135,334 $ 141,502 $ 86,808 $ 22,563 $ 175 $ 3,025	Total $ 1,003,454 2,709 (23,207) $ 982,956 $ 383,134 3,708 (23,198) $ 363,644 $ 619,312

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

Buildings Main buildings 15-55 years Others 3-50 years Machinery and equipment 5-15 years Miscellaneous equipment 3-50 years

11. LEASE ARRANGEMENTS

a. Right-of-use assets

Carrying amounts Land Others Additions to right-of-use assets Depreciation charge for right-of-use assets Land Others		December	31
	2020 2019 $ 712 $ 1,018 1,814 3,531 $ 2,526 $ 4,549 For the Year Ended December 31
		2020 $ - $ 102 1,717 $ 1,819	2019 $ 3,047 $ 80 1,635 $ 1,715

30 -

b. Lease liabilities

Carrying amounts Current Non-current		December	31
		2020 $ 1,264 $ 1,279	2019 $ 1,835 $ 2,704

The discount rate for lease liabilities adopted b� the Compan��s assets �as 1.68%.

c. Other lease information

Expenses relating to short-term leases and low-value asset leases Total cash outflow for leases	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 6,770 $ 8,622	2019 $ 7,031 $ 8,837

12. INVESTMENT PROPERTIES

Cost
Balance at January 1, 2020 and at December 31, 2020

Accumulated depreciation
Balance at January 1, 2020

Depreciation expense

Balance at December 31, 2020

Carrying amounts at December 31, 2020

Cost
Balance at January 1, 2019

Disposals

Balance at December 31, 2019

Accumulated depreciation
Balance at January 1, 2019

Depreciation expense
Disposals

Balance at December 31, 2019

Carrying amounts at December 31, 2019

Amount
$ 1,955,936
$ 97,175

852
$ 98,027
$ 1,857,909
$ 1,958,326

(2,390)
$ 1,955,936
$ 98,511
1,053

(2,389)
$ 97,175
$ 1,858,761

31 -

The fair values of the investment properties owned by the Company were $7,593,118 thousand and $6,078,540 thousand as of December 31, 2020 and 2019, respectively. The valuation was partially made by the Company using market transaction prices for similar properties and not by independent qualified professional valuers. The rental incomes were $39,151 thousand and $38,463 thousand for the years ended December 31, 2020 and 2019, respectively.

The investment properties held by the Company were depreciated over their estimated useful lives of 20 to 55 years, using the straight-line method.

All of the Compan��s in�estment propert� �as held under freehold interests.

13. BORROWINGS

a. Current borrowings

Current borrowings are bank credit loans. As of December 31, 2020 and 2019, the interest rate intervals of bank credit loans were 0.81%-0.84% per annum and 0.98%-1.00% per annum, respectively.

b. Short-term notes and bills payable

Short-term notes and bills payable are commercial paper due within one year. Interest rate intervals on these notes and bills payable were 0.80%-0.85% per annum and 1.00%-1.02% per annum as of December 31, 2020 and 2019, respectively.

c. Non-current borrowings

Syndicated loans Long-term bank credit loans		December 31	December 31
		2020 $ 18,744,992 800,000 $ 19,544,992	2019 $ 19,124,915 1,500,000 $ 20,624,915

Long-term bank loans included credit and syndicated loans. Credit loans expire on maturity date and have interest rate intervals of 0.85% per annum and 1.02%-1.34% per annum as of December 31, 2020 and 2019, respectively; syndicated loans with monthly interest payments expire in December 2025 and have interest rate intervals of 1.79% per annum as of December 31, 2020 and 2019.

14. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Compan� adopted a pension plan under the Labor Pension Act (the �LPA�), �hich is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to emplo�ees� indi�idual pension accounts at 6% of monthl� salaries and �ages.

32 -

b. Defined benefit plans

The Company in accordance with the Labor Standards Act is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company amounts equal to certain percentage of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee�s name. The pension fund is managed by the Bureau of Labor Funds, Ministr� of Labor (�the Bureau�); the Compan� has no right to influence the investment policy and strategy.

The amounts included in the balance sheets in respect of the Compan��s defined benefit plans �ere as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities (assets)		December 31	December 31
		2020 $ 1,585,277 (1,622,542) $ (37,265)	2019 $ 1,690,148 (943,806) $ 746,342

Movements in net defined benefit liabilities (assets) were as follows:

Present Value
of the Defined
Benefit
Obligation
Fair Value of
the Plan Assets
Balance at January 1, 2020
$ 1,690,148
$ (943,806)

Service cost
Net interest expense (income)

16,172

(9,016)

Recognized in profit or loss

16,172

(9,016)

Remeasurement
Return on plan assets
-
(777,512)
Actuarial loss (gain)
Changes in financial assumptions
49,137
-
Experience adjustments

(1,204)

-

Recognized in other comprehensive loss
(income)

47,933

(777,512)

Contributions from the employer
-
(61,184)
Benefits paid

(168,976)

168,976

Balance at December 31, 2020
$ 1,585,277
$ (1,622,542)

Balance at January 1, 2019
$ 1,817,828
$ (927,279)

Service cost
Current service cost
182
-
Net interest expense (income)

26,042

(13,051)

Recognized in profit or loss

26,224

(13,051)

Net Defined
Benefit
Liabilities
(Assets)
$ 746,342

7,156

7,156

(777,512)
49,137

(1,204)

(729,579)

(61,184)

-
$ (37,265)
$ 890,549
182

12,991

13,173
(Continued)

33 -

Present Value
of the Defined
Benefit
Obligation
Fair Value of
the Plan Assets
Remeasurement
Return on plan assets
$ -
$ (143,115)
Actuarial loss (gain)
Changes in financial assumptions
53,654
-
Experience adjustments

(12,746)

-

Recognized in other comprehensive loss
(income)

40,908

(143,115)

Contributions from the employer
-
(55,173)
Benefits paid

(194,812)

194,812

Balance at December 31, 2019
$ 1,690,148
$ (943,806)

Net Defined
Benefit
Liabilities
(Assets)
$ (143,115)
53,654

(12,746)

(102,207)

(55,173)

-
$ 746,342
(Concluded)

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans was as follows:

Operating costs	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 7,156	2019 $ 13,173

Through the defined benefit plans under the Labor Standards Law, the Company is exposed to the following risks:

1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a two-year time deposit with local banks. The pension fund monitoring committee of the Company invested the pension fund in domestic equity securities. The income from the investment in the equity securities will affect the fair value of plan assets and the status of financial contribution.
2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan�s in�estments.
3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

Discount rates Expected rates of salary increase	December 31
	2020 2019 0.50% 1.00% 1.00%-1.50% 1.00%-1.50%

34 -

If possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

Discount rates 0.125% increase 0.125% decrease Expected rates of salary increase 0.125% increase 0.125% decrease		December	31
		2020 $ (12,534) $ 12,705 $ 12,629 $ (12,490)	2019 $ (13,692) $ 13,884 $ 13,870 $ (13,712)

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		December	31
		2020 $ 62,102 6.4 years	2019 $ 56,001 6.6 years

15. EQUITY

a. Ordinary shares

Numbers of shares authorized (in thousand) Value of shares authorized Number of shares issued and fully paid (in thousand) Value of shares issued		December 31	December 31
		2020 2,200,000 $ 22,000,000 1,660,372 $ 16,603,715	2019 2,200,000 $ 22,000,000 1,660,372 $ 16,603,715

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

b. Capital surplus

Depending on the source, capital surplus may be used in these ways: (1) arising from shares issued in excess of par (including share premiums from issuance of ordinary shares for mergers, treasury share transactions, and e�cess of the consideration recei�ed o�er the carr�ing amount of the subsidiaries� net assets during disposal or acquisition) - may be used to offset a deficit; in addition, when the Company has no deficit, this capital surplus may be distributed as cash dividends, or may be transferred to share capital once a year within a certain percentage of the Compan��s capital surplus; (2) arising from the effect of changes in ownership interests in subsidiaries due to equity transactions other than actual disposals or acquisitions - may be used to offset a deficit.; (3) arising from changes in equity in associates - may be used in compliance with related regulations if the capital surplus source is either of the foregoing two sources.

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c. Retained earnings and dividend policy

Under the dividends policy as set forth in the amended Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as a legal reserve of 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations or in the necessary situation, and then any remaining profit together with any undistributed retained earnings shall be used for distribution of dividends and bonuses to shareholders

In making its dividend policy, the Company takes into account future capital expenditures and working capital requirements. Based on this policy, dividends should be distributed as follows:

1) At least 20% as cash dividends; and
2) The remainder after the distribution of cash dividends as share dividends. If there is a requirement for capital expenditures, the Company may distribute only share dividends.

The board of directors of the Company is authorized to adopt a special resolution to distribute dividends and bonuses in cash and a report of such distribution should be submitted in the shareholders� meeting.

An appropriation of earnings to a legal reserve shall be made until the legal reserve equals the Compan��s paid-in capital. The legal reserve may be used to offset deficits. If the Company has no deficit and the legal reser�e has e�ceeded 25% of the Compan��s paid-in capital, the excess may be transferred to capital or distributed in cash.

Items referred to under Rule No. 1010012865, Rule No. 1010047490 and Rule No. 1030006415 issued by the FSC and in the directi�e titled �Questions and Ans�ers for Special Reser�es Appropriated Follo�ing Adoption of IFRSs� should be appropriated to or re�ersed from a special reser�e b� the Company. For any subsequent reversal of the deduction in other shareholders� equit�, the appropriate amount of earnings distribution should be reversed from the net debit balance.

The appropriations of earnings for 2019 and 2018, appro�ed in the shareholders� meetings on June 22, 2020 and June 25, 2019, respectively, were as follows:

Legal reserve Cash dividends	Appropriation of Earnings For the Year Ended December 31 2019 2018 $ 263,411 $ 144,000 1,162,260 996,223		Dividends Per Share (NT$)	Dividends Per Share (NT$)
			For the Year Ended December 31
			2019 $ 0.7	2018 $ 0.6

The appropriations of earnings for 2020 had been proposed b� the Compan��s board of directors on February 26, 2021. The appropriations and dividends per share were as follows:

	Appropriation	Appropriation	Dividends Per	Dividends Per
	of	Earnings	Share	(NT$)
Legal reserve	$	606,583
Cash dividends		2,490,557	$	1.5

The above appropriation for cash dividends had been resolved by the board of directors; the other proposed appropriations will be resolved by the shareholders in their meeting to be held on May 17, 2021.

36 -

d. Special reserves

Beginning at January 1 Reversal: Disposal of property, plant and equipment Disposal of partial interests in subsidiaries Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 4,028,583 - (26,770) $ 4,001,813	2019 $ 4,028,584 (1) - $ 4,028,583

e. Other equity items

Exchange of
Differences on
Translation of
Foreign
Financial
Statements
Unrealized
Gains (Losses)
on Financial
Assets
Measured at
Fair Value
Through Other
Comprehensive
Income
Gains (Losses)
on Hedging
Instruments
2020
Balance at January 1
$ (1,036,202) $ 6,809,645
$ (6,377)
Unrealized gains on financial assets
measured at FVTOCI

-
413,634
-
Share of other comprehensive income
(loss) of subsidiaries and associates
accounted for using equity method

(526,210)
(289,776)
1,067
Changes in ownership interest in
subsidiaries

2,827
(353)
2,285
Disposal of partial interests in
subsidiaries

50,578
(27)
-
Cumulative unrealized gains of equity
instruments transferred to retained
earnings due to disposal

-

(299,816)

-

Balance at December 31
$ (1,509,007)
$ 6,633,307
$ (3,025)

2019

Balance at January 1
$ (40,365) $ 3,674,848
$ (7,010)
Unrealized gains on financial assets
measured at FVTOCI

-
2,050,269
-
Share of other comprehensive income
(loss) of subsidiaries and associates
accounted for using equity method

(995,837)
1,373,357
633
Changes in equity of associates
accounted for using equity method

-
(555)
-
Changes in ownership interest in
subsidiaries

-
(61)
-
Cumulative unrealized gains of equity
instruments transferred to retained
earnings due to disposal

-

(288,213)

-

Balance at December 31
$ (1,036,202)
$ 6,809,645
$ (6,377)

Total
$ 5,767,066
413,634
(814,919)
4,759
50,551

(299,816)
$ 5,121,275
$ 3,627,473
2,050,269
378,153
(555)
(61)

(288,213)
$ 5,767,066

37 -

16. NET PROFIT

a. Finance costs

For the Year Ended	For the Year Ended	December 31
2020 $ 285,565 60 $ 285,625 For the Year Ended		2019 $ 336,066 81 $ 336,147 December 31
2020 $ 3,591 1,819 852 5,819 $ 12,081 $ 6,262 $ 5,819 For the Year Ended		2019 $ 3,708 1,715 1,053 6,881 $ 13,357 $ 6,476 $ 6,881 December 31
	2020 $ 2,442 7,156 9,598 1,144 169,731 $ 180,473 $ 180,473	2019 $ 2,573 13,173 15,746 - 154,663 $ 170,409 $ 170,409

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d. Compensation of employees and remuneration of directors

The Company accrued compensation of employees and remuneration of directors at the rates no less than 0.1% and no higher than 2%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. The compensation of employees and remuneration of directors for the years ended December 31, 2020 and 2019 which have been approved by the Compan��s board of directors on February 26, 2021 and March 23, 2020, respectively, were as follows:

Accrual rate

Compensation of employees Remuneration of directors Amount	For the Year Ended December 31
	2020 2019 0.10% 0.10% 0.41% 0.56%

Compensation of employees Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31
	2020 Cash $ 5,361 22,000	2019
		Cash $ 2,282 12,500

If there is a change in the amounts after the annual financial statements were authorized for issue, the differences are recorded as a change in the accounting estimate.

There is no difference between the actual amounts of compensation of employees and remuneration of directors paid and the amounts recognized in the financial statements for the years ended December 31, 2019 and 2018.

Information on the compensation of employees and remuneration of directors resolved by the Compan��s board of directors is a�ailable at the Market Obser�ation Post S�stem �ebsite of the Tai�an Stock Exchange.

17. INCOME TAXES

a. Major components of income tax expense (benefit) recognized in profit or loss

Current tax In respect of the current year Income tax on unappropriated earnings Adjustment for prior periods Land value increment tax Deferred tax In respect of the current year Income tax expense (benefit) recognized in profit or loss	For the Year Ended	For the Year Ended	December 31
		2020 $ 40,925 60,422 2,481 - 17,172 $ 121,000	2019 $ (110,928) 10,143 (1,191) 1,520 15,156 $ (85,300)

39 -

A reconciliation of accounting profit and income tax expense (benefit) was as follows:

Income before tax Income tax expense calculated at the statutory rate (20%) Nondeductible expenses in determining taxable income Tax-exempt income Additional income tax under the Income Basic Tax Act Income tax on unappropriated earnings Land value increment tax Unrecognized deductible temporary differences Tax receivables from subsidiary accounted for using the consolidated tax return system Adjustments for prior �ears� ta� Income tax expense (benefit) recognized in profit or loss	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 5,330,079 $ 1,066,016 148 (1,181,091) 40,925 60,422 - 132,099 - 2,481 $ 121,000	2019 $ 2,200,469 $ 440,094 1,769 (561,639) - 10,143 1,520 134,686 (110,682) (1,191) $ (85,300)

b. Income tax recognized in other comprehensive income (loss)

Deferred tax In respect of the current year Remeasurement on defined benefit plan Share of the other comprehensive loss of subsidiaries and associates	For the Year Ended	For the Year Ended	December 31
		2020 $ 145,916 (7,696) $ 138,220	2019 $ 20,441 (5,563) $ 14,878

c. Deferred tax assets and liabilities

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

For the year ended December 31, 2020

Deferred tax assets Temporary difference Defined benefit plan Deferred tax liabilities Temporary difference Reserve for land revaluation increment tax Defined benefit plan Others	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income (Loss) Closing Balance $ 101,728 $ (17,186) $ (84,542) $ - $ 350,116 $ - $ - $ 350,116 - - 61,374 61,374 540 (14) - 526 $ 350,656 $ (14) $ 61,374 $ 412,016

40 -

For the year ended December 31, 2019

Deferred tax assets Temporary difference Defined benefit plan Deferred tax liabilities Temporary difference Reserve for land revaluation increment tax Others	Opening Balance Recognized in Profit or Loss Recognized in Other Comprehensive Income (Loss) Closing Balance $ 137,339 $ (15,170) $ (20,441) $ 101,728 $ 350,116 $ - $ - $ 350,116 554 (14) - 540 $ 350,670 $ (14) $ - $ 350,656

d. Income tax approved situation

The application case for the year end of 2016 has been approved by taxing authority.

18. EARNINGS PER SHARE

Basic earnings per share (NT$) Diluted earnings per share (NT$)	For	the Year Ended December 31	the Year Ended December 31
		2020 $ 3.14 $ 3.14	2019 $ 1.38 $ 1.38

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

Net Profit for the Year

Profit for the year Earnings used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 5,209,079 $ 5,209,079	2019 $ 2,285,769 $ 2,285,769

Number of Share (In Thousands)

Weighted average number of ordinary shares in computation of basic earnings per share Effect of potentially dilutive ordinary shares: Compensation of employees Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 1,660,372 230 1,660,602	2019 1,660,372 197 1,660,569

41 -

If the Company offered to settle compensation paid to employees in cash or shares, the Company assumed the entire amount of the compensation would be settled in shares, and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, if the effect is dilutive. Such dilutive effect of the potential shares was included in the computation of diluted earnings per share until the shareholders resolve the number of shares to be distributed to employees at their meeting in the following year.

19. SHARE-BASED PAYMENT ARRANGEMENTS

Employee share options plan of the subsidiary - Yuen Foong Yu Consumer Products Co., Ltd.

In order to attract and retain the professional talents needed b� the subsidiar�, impro�e the emplo�ees� cohesion and sense of belonging to the subsidiary, and jointly create the interests of subsidiary and shareholders, the board of directors of the subsidiary resolved to issue 3,320 employee share options in July 2020. Each option entitles the holder to subscribe for 1,000 ordinary shares of Yuen Foong Yu Consumer Products Co., Ltd. The eligible participants for share options are the full-time employees (including the controlling companies and subordinate companies) who meet certain specific requirements. The options granted are valid for 0.02 years and the exercise price is $15 per share.

Information on compensatory employee share options issued to the employees of the Company in July 2020 is as follows:

	Number of
	Options
	(In Thousands
Employee Share Options	of Units)	Exercise	Price
Granted in July 2020	80	$	15
Weighted-average fair value of options granted in July 2020 (NT$)	$ 14.3

Information on employee share options certificates that the subsidiary issued is as follows:

Share Options Certificates Balance at January 1 Options granted Options exercised Balance at December 31 Options exercisable, end of period	For the Year Ended December 31, 2020
	Number of Options (Units) Exercise Price - 80,000 (80,000) - - $ 15

42 -

The subsidiary measured employee share options by using the Black-Scholes-Merton Option Pricing Model, and the inputs to the models were as follows:

Share price at the grant date $29.3 Exercise price $15 Expected volatility (%) 45.69 Expected lives (years) 0.02 Expected dividend yield (%) Expected grant (%) 100 Risk free interest rate (%) 0.28

The employee benefit expenses recognized on the employee share option plans were $1,144 thousand for the year ended December 31, 2020 with a corresponding same amount recognized in investments accounted for using equity method.

20. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance. The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Company (comprising issued capital, reserves, retained earnings, other equity and non-controlling interests).

21. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments that are not measured at fair value

The management of the Company considers that the carrying amounts of those financial assets and financial liabilities that are not measured at fair value recognized in the financial statements approximate their fair values or their fair values cannot be reliably measured.

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

December 31, 2020

Financial assets at FVTPL Mutual funds Financial assets at FVTOCI Equity instruments Listed shares Unlisted shares	Level 1 $ 16,283 $ 8,146,163 - $ 8,146,163	Level 2 $ - $ - - $ -	Level 3 $ - $ - 3,994,241 $ 3,994,241	Total $ 16,283 $ 8,146,163 3,994,241 $ 12,140,404

43 -

December 31, 2019

Financial assets at FVTPL Mutual funds Financial assets at FVTOCI Equity instruments Listed shares Unlisted shares	Level 1 $ 58,218 $ 8,585,824 - $ 8,585,824	Level 2 $ 160,964 $ - - $ -	Level 3 $ - $ - 3,215,515 $ 3,215,515	Total $ 219,182 $ 8,585,824 3,215,515 $ 11,801,339

There were no transfers between Levels 1 and 2 for the years ended December 31, 2020 and 2019.

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

For the year ended December 31, 2020

Balance at January 1, 2020 Recognized in other comprehensive income (accounted for as unrealized gain (loss) on investments in equity instruments designated as at FVTOCI) Purchases Disposals Return of capital upon in�estees� capital reduction Balance at December 31, 2020 For the year ended December 31, 2019 Balance at January 1, 2019 Recognized in other comprehensive income (accounted for as unrealized gain (loss) on investments in equity instruments designated as at FVTOCI) Disposals Return of capital upon in�estees� capital reduction Balance at December 31, 2019	Financial Assets at FVTOCI	Financial Assets at FVTOCI
	Equity Instruments $ 3,215,515 853,295 11,940 (45,453) (41,056) $ 3,994,241 Financial Assets at FVTOCI
		Equity Instruments $ 2,323,551 909,646 (452) (17,230) $ 3,215,515

3) Valuation techniques and inputs used for Level 2 fair value measurement

Financial Instruments Valuation Techniques and Inputs

Subordinated bank Discounted cash flow method: The future cash flow is estimated debentures based on the discount rate that reflects the current borrowing rate of the bond issuer at the end of the period.

44 -
4) Valuation techniques and inputs used for Level 3 fair value measurement

Financial Instruments
Unlisted shares

Valuation Techniques and Inputs

Asset-based approach: The fair value is determined based on the net
asset value of the investment target. The significant unobservable
inputs are discounted prices based on market liquidity and
non-controlling interests.
Market approach: The fair value is assessed according to the recent
transaction price of the investment target or similar market
transaction prices and market conditions. The significant
unobservable inputs are discounted prices for the lack of
marketability.
Income approach: Discounted cash flows are determined based on
the present value of the expected future economic benefits that
will be derived from the investment. Unobservable inputs mainly
include the long-term growth rate, discount rate and the discount
of liquidity. The fair value will increase if the long-term growth
rate increases, discount rate decreases or the discount for
liquidity decreases.

c. Categories of financial instruments

Financial assets FVTPL Mandatorily classified as at FVTPL FVTOCI Equity instruments Amortized cost (1) Financial liabilities Amortized cost (2)	December 31
	2020 2019 $ 16,283 $ 219,182 12,140,404 11,801,339 10,059 124,213 21,374,944 23,790,868

1) The balances include financial assets measured at amortized cost, which comprise cash, accounts receivable due from related parties, net and other receivables.
2) The balances include financial liabilities measured at amortized cost, which comprise current borrowings, short-term notes and bills payable, accounts payables to related parties, other payables, others, and non-current borrowings.
d. Financial risk management objectives and policies

The Compan��s main target of financial risk management �as to manage the market risk related to operating activity (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk. To reduce the potential and detrimental influence of the fluctuations in market on the Compan��s financial performance, the Compan� �as de�oted to identif�, anal��e and estimate related financial risk factor which may lead to unfavorable effect on the financial performance of the Company, and conduct related program to lower and hedge financial risk.

45 -

1) Market risk

The Compan��s acti�ities e�posed it primaril� to the financial risks of changes in interest rates and equity prices.

a) Interest rate risk

The Company was exposed to interest rate risk arising from borrowing at both fixed and floating interest rates.

The carr�ing amount of the Compan��s financial assets and financial liabilities �ith e�posure to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk Financial liabilities Lease liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31
	2020 2019 $ 929,046 $ 1,128,937 2,543 4,539 4,100 6,153 20,349,992 22,601,915

Sensitivity analysis

The sensiti�it� anal�sis belo� �as determined based on the Compan��s e�posure to interest rates for non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of each liability outstanding at the end of the reporting period was outstanding for the whole year. A 0.25% basis point increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management�s assessment of the reasonabl� possible change in interest rates.

If interest rates had been 0.25% basis points higher/lower and all other variables were held constant, the Compan��s post-tax profit for the years ended December 31, 2020 and 2019 would decreased/increased by $40,692 thousand and $45,192 thousand, respectively.

b) Other price risk

The Company was exposed to equity and commodity price risk through its investments in equity securities and mutual funds. The management of the Company manages risk by holding different risk portfolios.

Sensitivity analysis

The sensitivity analyses below were determined based on the exposure to equity and commodity price risks at the end of the reporting period.

If equity and commodity prices had been 5% higher/lower, pre-tax profit for the years ended December 31, 2020 and 2019 would have increased/decreased by $814 thousand and $2,911 thousand, respectively, as a result of the changes in fair value of financial assets at FVTPL, and the pre-tax other comprehensive income (loss) for the years ended December 31, 2020 and 2019 would have increased/decreased by $607,020 thousand and $590,067 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.

46 -

The Compan��s sensiti�it� to price risk of in�estments in equit� securities increased during the year, which was mainly due to the fair value of equity investments increased.

2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Compan�. As at the end of the reporting period, the Compan��s ma�imum exposure to credit risk, which will cause a financial loss to the Company due to failure to discharge an obligation by the counterparties, is arising from the carrying amount of the respective recognized financial assets as stated in the balance sheet.

The financial credit risk created by investing is evaluated and monitored b� the Compan��s financial department. Since the counterparties are creditworthy banks and financial institutions with good credit rating, thus, there�s no significant credit risk.

3) Liquidity risk

As of December 31, 2020 and 2019, the amount of unused financing facilities was $15,446,840 thousand and $12,728,040 thousand, respectively.

The follo�ing table details the Compan��s remaining contractual maturit� for its non-derivative financial liabilities with agreed repayment periods by financial institutions. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Company can be required to pay. The tables included both interest and principal cash flows. Specifically, loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the financial institutes choosing to exercise their rights.

To the extent that interest cash flows paid at floating rate, the undiscounted amount was derived from the interest rate curve at the end of the reporting period.

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

December 31, 2020

Non-derivative financial liabilities Floating interest rate liabilities Fixed interest rate liabilities Lease liabilities	Less than 1 Year $ 1,148,136 930,000 1,296 $ 2,079,432	1 - 5 Years $ 20,467,817 - 1,136 $ 20,468,953	5+ Years $ - - 225 $ 225

47 -

December 31, 2019

Non-derivative financial liabilities Floating interest rate liabilities Fixed interest rate liabilities Lease liabilities	Less than 1 Year $ 2,330,481 1,130,000 1,898 $ 3,462,379	1 - 5 Years $ 21,309,327 - 2,417 $ 21,311,744	5+ Years $ - - 410 $ 410

22. TRANSACTIONS WITH RELATED PARTIES

Besides disclosed in other note, details of transactions between the Company and other related parties are disclosed below.

a. Names and categories of related parties

Related Party

Relationship with the Company

Hsin-Yi Enterprise Co., Ltd. Entities with key management personnel Yuen Foong Paper Co., Ltd. Entities with key management personnel Wei-Li Tsai Entities with key management personnel Chung Hwa Pulp Corporation Subsidiary YFY Packaging Inc. Subsidiary YFY Jupiter (BVI) Inc. Subsidiary Fidelis IT Solutions Co., Ltd. Subsidiary Yuen Foong Yu Consumer Products Co., Ltd. Subsidiary YFY Corporate Advisory & Services Co., Ltd. Subsidiary China Color Printing Co., Ltd. Subsidiary Genovella Renewables Inc. (originally named as Subsidiary Kuang Hwa Fertilizer Limited Company) Sustainable Carbohydrate Innovation Co., Ltd. Subsidiary YFY Development Corp. (originally named as Subsidiary YFY Capital Co., Ltd.) YFY Paradigm Investment Co., Ltd. Subsidiary YFY Biotech Co., Ltd. Associate E Ink Holdings Inc. Associate YuanHan Materials Inc. Associate SinoPac Securities Corporation Substantive related party Hsin-Yi Foundation Substantive related party SinoPac Leasing Corporation Substantive related party Hsin-Yi Foundation & Publishing Co., Ltd. Substantive related party Ho Tien Co., Ltd. Substantive related party Hoi Toy&Play Corporation Substantive related party Lui Co., Ltd. Substantive related party Hsin Yuan Investment Co., Ltd. Substantive related party Hsinex International Corp. Substantive related party Fu Hwa Development Enterprise Co., Ltd. Substantive related party YFY Co., Ltd. Substantive related party

48 -

b. Receivables from related parties

Line Item Related Party Category/Name Receivables from related Associates parties YFY Biotech Co., Ltd. Subsidiaries Fidelis IT Solutions Co., Ltd. Chung Hwa Pulp Corporation Others		December	31
		2020 $ 109 18 - 2 20 $ 129	2019 $ 166 - 260 - 260 $ 426

The outstanding accounts receivable from related parties are unsecured and no expected credit losses should be recognized after estimating.

c. Payables to related parties

Line Item Related Party Category/Name Payables to related parties Subsidiaries YFY Corporate Advisory & Services Co., Ltd. Others Entities with key management personnel Hsin-Yi Enterprise Co., Ltd. Others Substantive related party SinoPac Securities Corporation Others Associates YFY Biotech Co., Ltd.		December	31
		2020 $ 9,497 44 9,541 694 1 695 272 3 275 28 $ 10,539	2019 $ 7 238 245 697 10 707 272 3 275 180 $ 1,407

The outstanding accounts payable to related parties are unsecured.

d. Acquisitions of property, plant and equipment

Related Party Category/Name Subsidiaries Fidelis IT Solutions Co., Ltd.	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 133	2019 $ -

49 -

e. Disposal of financial assets

Related Party Category/Name Line Item Number of Shares Underlying Assets Subsidiaries Investments accounted for using equity method 20,841,215 Ordinary shares Associate Investments accounted for using equity method 337,000 Ordinary shares Entities with key management personnel Investments accounted for using equity method 100,000 Ordinary shares	Proceeds Gain (Loss) on Disposal $ 256,659 (Note) 11,447 (Note) 3,400 (Note) $ 271,506

Note: Since the Company did not cease to have control over this subsidiary, the transactions were accounted for as equity transactions. Gain (loss) on disposal is recognized in capital surplus.

f. Others

Rental income

Related Party Category/Name Subsidiaries Chung Hwa Pulp Corporation Others Entities with key management personnel Yuen Foong Paper Co., Ltd. Others Substantive related party Associate	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 10,885 709 11,594 7,885 159 8,044 7,205 1,207 $ 28,050	2019 $ 10,885 709 11,594 7,885 159 8,044 7,177 1,207 $ 28,022

Rental expenses (accounted for as operating expenses) Related Party Category/Name Entities with key management personnel Subsidiary Substantive related party	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 6,625 114 31 $ 6,770	2019 $ 6,670 114 31 $ 6,815

50 -

Agency fee expenses (accounted for as operating expenses)

For the Year Ended December 31 Related Party Category/Name 2020 2019 Subsidiary YFY Corporate Advisory & Services Co., Ltd. $ 36,155 $ 46,630 Information service fee expense (accounted for as operating expenses) For the Year Ended December 31 Related Party Category/Name 2020 2019 Subsidiary $ 5,520 $ 5,520 Service agency fee expenses (accounted for as operating expenses) For the Year Ended December 31 Related Party Category/Name 2020 2019 Substantive related party $ 3,822 $ 3,801	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
Related Party Category/Name Subsidiary Service agency fee expenses (accounted for as operating expenses)
	2020 2019 $ 5,520 $ 5,520 For the Year Ended December 31
Related Party Category/Name Substantive related party
		2020 $ 3,822	2019 $ 3,801

Depending on the agreements, rental income and expenses, agency fee income and expense, as well as information service fee and service agency fee were received or paid by per month or per half-year.

Other

In No�ember 2015, the Compan� bought Bank SinoPac�s 3rd unsecured perpetual non-cumulative subordinated financial debentures issued in 2015, which amounted to $160,000 thousand (accounted for as non-current financial assets at FVTPL) and had an interest rate of 3.9%. The debentures had been redeemed by Bank SinoPac in November 2020.

As of December 31, 2019, the interest receivables were $964 thousand.

g. Compensation of key management personnel

Salaries and benefits Bonuses and executive fees	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2020 $ 75,960 771 $ 76,731	2019 $ 71,935 696 $ 72,631

The remuneration of directors and key executives was determined by the remuneration committee having regard to the performance of individuals and market trends.

23. OTHER ITEMS

Due to the impact of the COVID-19 pandemic, some of the Compan��s subsidiaries, customers and suppliers were required to implement policies such as isolation and travel restrictions. However, due to the hot sales of anti-epidemic concept products, the Compan��s in�estment re�enue increased for the �ear ended December 31, 2020. Therefore, there �as no significant impact on the Compan��s o�erall operation. Because many countries are still under lockdown and the global economic situation continues to be tightened, the Company will continue to evaluate the impact of subsequent epidemics on operations.

51 -

24. SIGNIFICANT FINANCIAL ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Compan��s significant financial assets and liabilities denominated in foreign currencies aggregated b� the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follow:

Foreign currency assets Investments in subsidiaries USD Foreign currency assets Investments in subsidiaries USD	December 31, 2020
	Foreign Currencies (In Thousands) Exchange Rate Carrying Amount $ 762,337 28.48 (USD:NTD) $ 21,711,357 December 31, 2019
	Foreign Currencies (In Thousands) Exchange Rate Carrying Amount $ 879,803 29.98 (USD:NTD) $ 26,372,883

25. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions:
1) Financing provided to others. (None)
2) Endorsements/guarantees provided. (Table 1)
3) Marketable securities held (excluding investment in subsidiaries, associates and joint controlled entities). (Table 2)
4) Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the paid-in capital. (Table 3)
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital. (None)
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital. (None)
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (None)
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (None)
52 -
9) Trading in derivative instruments. (None)
b. Information on investees (Table 4)
c. Information on investments in mainland China:
1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 5)
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:
- a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period. (None)
- b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period. (None)
- c) The amount of property transactions and the amount of the resultant gains or losses. (None)
- d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes. (Table 1)
- e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds. (None)
- f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services. (None)
d. Information of major shareholders ： List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder. (Table 6)

26. SEGMENT INFORMATION

The Company has disclosed related segment information in accordance with IFRS 8 in consolidated financial statement.

53 -

TABLE 1

YFY INC.

ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

No.	Endorser/Guarantor	Endorsee/Guarantee		Limit on Endorsement/ Guarantee Given on Behalf of Each Party (Note 1)	Maximum Amount Endorsed/ Guaranteed During the Year	Outstanding Endorsement/ Guarantee at the End of the Year	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collaterals	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit (Note 2)	Endorsement/ Guarantee Given by Parent on Behalf of Subsidiary	Endorsement/ Guarantee Given by Subsidiary on Behalf of Parent	Endorsement/ Guarantee Given on Behalf of Company in Mainland China
		Name	Relationship
1	Endorsement/guarantee YFY Inc. Credit line (Note 4) YFY Inc.	YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd. Lotus Ecoscings & Engineering Co., Ltd. YFY (Shanghai) Financial Services Co., Ltd. YFY Venture Capital Investment Co., Ltd. YFY Global Investment Limited YFY Paradigm Investment Co., Ltd. YFY International Limited YFY Development Corp. (originally named as YFY Capital Co., Ltd.) YFY Jupiter Limited YFY Jupiter (BVI) Inc.	Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3 Note 3	$ 58,875,350 58,875,350 58,875,350 58,875,350 58,875,350 58,875,350 58,875,350 58,875,350 58,875,350 58,875,350 58,875,350	$ 302,500 3,981,664 230,000 400,302 1,870,000 695,175 2,070,000 3,086,025 3,350,000 283,324 453,375	$ 283,713 2,841,488 - - - 655,040 2,070,000 3,002,752 3,350,000 281,888 427,200	$ - 760,394 - - - 39,713 858,000 687,735 1,960,000 108,984 183,696	$ - - - - - - - - - - -	0.63 6.32 - - - 1.46 4.60 6.67 7.45 0.63 0.95	$ 78,500,466 78,500,466 78,500,466 78,500,466 78,500,466 78,500,466 78,500,466 78,500,466 78,500,466 78,500,466 78,500,466	Yes Yes No No No No No No No No No	No No No No No No No No No No No	Yes Yes No No No No No No No No No

Note 1: Represents 150% of the prior �ear�s net equit� of YFY Inc.

Note 2: Represents 200% of the prior �ear�s net equit� of YFY Inc.

Note 3: The relationship between guarantor and guarantee is subsidiary.

Note 4: In accordance with regulations, the credit lines jointly issued by the Company were disclosed.

54 -

TABLE 2

YFY INC.

MARKETABLE SECURITIES HELD DECEMBER 31, 2020

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

Holding Company Name	Type and Name of Marketable Security	Relationship with the Holding Company (Note)	Financial Statement Account		December 31, 2020	December 31, 2020		Note
				Number of Shares	Carrying Amount	Percentage of Ownership (%)	Fair Value
YFY Inc.	Ordinary shares SinoPac Financial Holdings Co., Ltd. Zhen Ding Technology Holding Limited TaiGen Biopharmaceuticals Holdings Ltd. Canada Investment and Development Co., Ltd. Synmax Biochemical Co., Ltd. Universal Investment Co., Ltd. Fu Hwa Development Enterprise Co., Ltd. Taiwan Creative Industry Development Co., Ltd. Shin Taiwan Kubota Co., Ltd. China Trade and Development Corp. Taiwan Stock Exchange Corporation Sino Cell Technologies Ltd. Yuen Foong Paper Co., Ltd. KHL IB Venture Capital Co., Ltd. iXensor Co., Ltd. Beneficiary certificates SinoPac TWD Money Market Fund	- - Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 - Note 1 - Note 2 - - -	Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Current financial assets at fair value through profit or loss	468,485,150 7,464,617 84,509,502 20,826,000 5,999,371 5,221,228 4,200,000 1,600,000 5,612 377,634 22,513,611 1,691,656 544,067 15,055,884 191,000 1,161,106	$ 5,364,155 850,966 1,931,042 183,214 81,446 34,318 58,282 16,150 61,397 3,265 3,155,583 14,234 10,495 371,960 3,897 16,283	4.2 0.8 11.8 12.9 13.9 3.0 14.0 8.0 5.5 0.6 3.0 10.0 0.7 14.9 0.4 -	$ 5,364,155 850,966 1,931,042 183,214 81,446 34,318 58,282 16,150 61,397 3,265 3,155,583 14,234 10,495 371,960 3,897 16,283	Note 3

(Continued)

55 -
Note 1: The investor is a member of the board of directors or a supervisor.
Note 2: A member of the board of directors of the investor.
Note 3: The Compan� acquired Zhen Ding Technolog� Holding Limited (�ZDTHL�) through stock e�change. The Compan��s board of directors approved the stock exchange of all of its o�nership of Boardtek Electronics Corporation (�BEC�) for o�nership of �ZDTHL� in Ma� 2020. The stock e�change �as conducted at an e�change ratio of 1 ordinar� share of �BEC� for 0.2 ne�l� issued ordinar� share of �ZDTHL�. The abo�e stock exchange has been completed on November 4, 2020.

(Concluded)

56 -

TABLE 3

YFY INC.

MARKETABLE SECURITIES ACQUIRED OR DISPOSED OF AT COSTS OR PRICES OF AT LEAST NT$300 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2020

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

Company Name	Type and Name of Marketable Securities	Financial Statement Account	Counterparty	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal		Other Adjustments	Ending	Balance	Note
					Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Amount	Carrying Amount	Gain (Loss) on Disposal		Number of Shares	Amount
YFY Inc.	Ordinary shares Yuen Foong Yu Consumer Products Co., Ltd. YFY Packaging Inc. Boardtek Electronics Corporation Zhen Ding Technology Holding Limited	Note 1 Note 1 Note 2 Note 2	Designated persons and financial investors YFY International Labuan Co., Ltd. Zhen Ding Technology Holding Limited Zhen Ding Technology Holding Limited	- Subsidiary - -	241,636,021 - 37,323,087 -	$ 2,888,148 - 940,542 -	- 410,150,000 - 7,464,617	$ - 7,222,888 - 940,542	83,631,456 (Note 3) - 37,323,087 -	$ 2,604,471 (Note 3) - 940,542 -	$ 1,181,618 (Note 3) - 940,542 -	$ 1,422,853 (Notes 3 and 4) - - -	$ 896,002 (Note 5) (98,505 ) (Note 5) - (89,576 ) (Note 6)	158,004,565 410,150,000 - 7,464,617	$ 2,602,532 7,124,383 - 850,966	- - - -

Note 1: Accounted for as investments accounted for using equity method.

Note 2: Accounted for non-current financial assets at FVTOCI.

Note 3: Included the 20,841,215 shares sold to YFY Development Corp. (originally named as YFY Capital Co., Ltd.) and YFY Paradigm Investment Co., Ltd. with an amount of $256,659 thousand. The carrying amount is $257,433 thousand and the gain on disposal recognized in capital surplus is $774 thousand.

Note 4: Accounted for as capital surplus.

Note 5: Included exchange differences on translation, share of profit (loss) of subsidiaries accounted for using equity method, net and gain (loss) on remeasurements of defined benefit plans.

Note 6: Accounted for as unrealized gain (loss) on financial assets measured at FVTOCI.

57 -

TABLE 4

YFY INC.

INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2020

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

Investor Company	Investee Company	Location	Main Business and Product	Investment Amount	Investment Amount	As of	December 31, 2020	December 31, 2020	Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31, 2020	December 31, 2019	Number of Shares	%	Carrying Amount
YFY INC.	Chung Hwa Pulp Corporation E Ink Holdings Inc. YFY International Limited YFY Global Investment Limited Yuen Foong Yu Consumer Products Co., Ltd. Shin Foong Specialty and Applied Materials Co., Ltd. Taiwan Global BioFund Co., Ltd. China Color Printing Co., Ltd. YFY Venture Capital Investment Co., Ltd. Effion Enertech Co., Ltd. YFY Development Corp. (originally named as YFY Capital Co., Ltd.) YFY Corporate Advisory & Services Co., Ltd. Union Paper Co., Ltd. YFY Paradigm Investment Co., Ltd. San Ying Enterprise Co., Ltd. Lotus Ecoscings & Engineering Co., Ltd. YFY Japan Co., Ltd. Yuen Yan Paper Container Co., Ltd. Fidelis IT Solutions Co., Ltd. Taiwan Genome Science, Inc. Sustainable Carbohydrate Innovation Co., Ltd. YFY Packaging Inc.	Hualien, Taiwan Hsinchu, Taiwan Cyprus Cyprus Taipei, Taiwan Pingtung, Taiwan Taipei, Taiwan New Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Yunlin, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Japan Miaoli, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan Taipei, Taiwan	Pulp and paper production, trading and forestry business Research, development, production and sale of thin-film transistor liquid crystal monitors Investment and holding Investment and holding Production and sale of high quality paper and paper - related merchandise Production and sale of SBR (styrene butadiene rubber) latex Biotechnology and biopharmaceutical business investment Design and printing of magazines, posters and books Investment and holding To operate cogeneration and provide power technology Real estate investment and development Consulting Manufacture and sale of paper Investment and holding Design and construction of water processing and environmental facilities Construction of sewage treatment plants and incinerators Trade of paper, chemical material and machinery Sale and manufacture of corrugated paper and materials 1. Provides services in information software and information processing. 2. Wholesale of information software and electric appliances. 1. Develop skills in genome medicine. 2. Manufacture and wholesale of chemical material. 3. Medicine testing. Researching and development Production and sale of high-quality craft paper and corrugated paper	$ 5,715,988 1,361,355 11,956,125 2,153,335 1,046,360 72,960 169,700 190,068 - 343,000 1,540,033 30,000 200,700 619,177 - - 2,099 62,462 10,000 5,613 30,000 7,222,888	$ 5,715,988 1,361,355 18,124,434 2,153,335 1,600,000 73,020 169,700 190,068 200,000 343,000 189,759 30,000 200,700 231,357 34,002 156,131 2,099 62,462 10,000 5,613 30,000 -	627,827,088 133,472,904 363,689,638 79,000,000 158,004,565 51,871,248 16,970,040 32,896,330 - 34,300,000 112,820,686 3,000,000 19,584,000 146,726,235 2,500,000 - 200 6,178,500 2,857,000 561,291 3,000,000 410,150,000	57.8 11.8 100.0 100.0 64.5 48.9 23.0 49.7 - 49.0 100.0 100.0 18.9 100.0 100.0 - 100.0 50.9 100.0 19.4 100.0 100.0	$ 8,596,617 3,595,979 15,737,977 5,973,380 2,602,532 2,367,344 430,897 449,718 - 215,659 2,133,843 42,197 232,759 2,332,943 62,966 - 116,122 74,701 56,959 11,443 31,253 7,124,383	$ (201,797 ) 3,602,589 2,215,208 341,358 1,487,228 1,777,831 37,945 14,980 122,825 (121,033 ) 141,561 9,673 58,321 99,939 19,925 25,099 (3,825 ) 6,116 164 (4,543 ) (845 ) 1,043,942	$ (115,911 ) 422,545 2,224,225 341,358 1,235,450 872,019 7,798 7,438 122,825 (57,294 ) 141,561 9,673 11,021 99,939 19,925 25,099 (3,825 ) 3,116 164 (879 ) (845 ) 116,141	Note 1 Note 2 Note 1 Note 1 Notes 1 and 3 Note 1 Note 2 Note 1 Notes 1 and 4 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Notes 1 and 5 Note 1 Note 1 Note 1 Note 2 Note 1 Note 1

Note 1: Subsidiary.

Note 2: Associate.

Note 3: In response to the initial public offering of Yuen Foong Yu Consumer Products Co., Ltd, the Company conducted the share diversification. The Company disposed of partial ownership of Yuen Foong Yu Consumer Products Co., Ltd. to YFY Development Corp. (originally named as YFY Capital Co., Ltd.) and YFY Paradigm Investment Co., Ltd. in June 2020, respectively.

Note 4: YFY Venture Capital Investment Co., Ltd. was merged with YFY Development Corp. (originally named as YFY Capital Co., Ltd.) on October 7, 2020.

Note 5: Lotus Ecoscings & Engineering Co., Ltd. was merged with YFY Paradigm Investment Co., Ltd on October 7, 2020.

58 -

TABLE 5

YFY INC.

INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. Information on investments in mainland China

Investee Company (Note 7)	Main Businesses and Products	Paid-in Capital (Note 1)	Method of Investment (Note 4)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2020 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020 (Note 1)	Net Income (Loss) of the Investee	Ownership of Direct or Indirect Investment (%)	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2020 (Note 1)	Accumulated Repatriation of Investment Income as of December 31, 2020
					Outward	Inward
YFY Paper Enterprise (Fuzhou) Co., Ltd. YFY Paper Enterprise (Kunshan) Co., Ltd. YFY Paper Enterprise (Suzhou) Co., Ltd. YFY Paper Enterprise (Tianjin) Co., Ltd. YFY Paper Enterprise (Dongguan) Co., Ltd. YFY Paper Enterprise (Shanghai) Co., Ltd. YFY Paper Enterprise (Qingdao) Co., Ltd. YFY Paper Enterprise (Nanjing) Co., Ltd. YFY Paper Enterprise (Guangzhou) Co., Ltd. YFY Paper Enterprise (Xiamen) Co., Ltd. YFY Paper Enterprise (Zhongshan) Co., Ltd.	Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard Manufacture and sale of paper and cardboard	$ 142,400 (US$ 5,000 thousand) 313,280 (US$ 11,000 thousand) 199,360 (US$ 7,000 thousand) 227,840 (US$ 8,000 thousand) 170,880 (US$ 6,000 thousand) 227,840 (US$ 8,000 thousand) 227,840 (US$ 8,000 thousand) 283,632 (US$ 9,959 thousand) 270,650 (US$ 9,500 thousand) 185,120 (US$ 6,500 thousand) 170,880 (US$ 6,000 thousand)	a.(a) a.(a) a.(a) a.(a) a.(a) a.(a) a.(a) a.(o) a.(a) a.(a) a.(a)	$ 42,720 (US$ 1,500 thousand) 199,360 (US$ 7,000 thousand) 199,360 (US$ 7,000 thousand) 227,840 (US$ 8,000 thousand) 56,960 (US$ 2,000 thousand) 231,058 (US$ 8,113 thousand) 227,840 (US$ 8,000 thousand) 256,320 (US$ 9,000 thousand) 213,600 (US$ 7,500 thousand) 185,120 (US$ 6,500 thousand) 136,704 (US$ 4,800 thousand)	$ - - - - - - - - - - -	$ - - - - - - - - - - -	$ 42,720 (US$ 1,500 thousand) 199,360 (US$ 7,000 thousand) 199,360 (US$ 7,000 thousand) 227,840 (US$ 8,000 thousand) 56,960 (US$ 2,000 thousand) 231,058 (US$ 8,113 thousand) 227,840 (US$ 8,000 thousand) 256,320 (US$ 9,000 thousand) 213,600 (US$ 7,500 thousand) 185,120 (US$ 6,500 thousand) 136,704 (US$ 4,800 thousand)	$ (21,458) 29,464 34,240 57,460 49,779 71,949 53,427 49,278 22,686 (17,033) 74,627	100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 93.8 100.0 100.0	$ (21,458) (Note 2) 29,464 (Note 2) 34,240 (Note 2) 57,460 (Note 2) 49,779 (Note 2) 71,949 (Note 2) 53,427 (Note 2) 49,278 (Note 2) 21,268 (Note 2) (17,033) (Note 2) 74,627 (Note 2)	$ - 583,768 267,771 836,059 505,123 420,037 1,020,681 466,290 486,036 - 1,033,735	$ - - - - - - - - - - -
												(Continued)

59 -

Investee Company (Note 7)	Main Businesses and Products	Paid-in Capital (Note 1)	Method of Investment (Note 4)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2020 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020 (Note 1)	Net Income (Loss) of the Investee	Ownership of Direct or Indirect Investment (%)	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2020 (Note 1)	Accumulated Repatriation of Investment Income as of December 31, 2020
					Outward	Inward
YFY Paper Enterprise (Jiaxing) Co., Ltd. YFY Packaging (Yangzhou) Investment Co., Ltd. YFY Paper Mfg. (Yangzhou) Co., Ltd. YFY Paper Mfg. (Jiangyin) Co., Ltd. Yuen Foong Yu Blue Economy Natural Resource (Yangzhou) Co., Ltd. Kunshan YFY Advertising and Printing Co., Ltd. Arizon RFID Technology Co., Ltd. (originally named as Arizon RFID Technologies (Yangzhou) Co., Ltd.) Yeon Technologies (Yangzhou) Co., Ltd. YFY Jupiter (Shenzhen) Ltd. Kunshan YFY Jupiter Green Packaging Ltd. YFY Jupiter Supply Chain Management Services (Shenzhen) Limited Chengdu JieLianDa Warehousing Co., Ltd. Chengdu JieLianDa Supply Chain Co., Ltd. Chengdu JingShiTong Packing Co., Ltd.	Manufacture and sale of paper and cardboard Investment and holding. Manufacture and sale of paper Manufacture, sale and print of cardboard and paper Technological development of agricultural resource recycling Design and print of advertisements Sale and design of RFID (radio frequency identification) products Sale and design of RFID (radio frequency identification) products Design of packaging and sale of paper Design of packaging and sale of paper Design of packaging and sale of paper General trade Management of supply chain General trade	$ 142,400 (US$ 5,000 thousand) 2,469,415 (US$ 86,707 thousand) 6,968,914 (US$ 244,695 thousand) 424,352 (US$ 14,900 thousand) 227,840 (US$ 8,000 thousand) 85,440 (US$ 3,000 thousand) 848,040 (RMB 194,290 thousand) 34,919 (RMB 8,000 thousand) 9,968 (US$ 350 thousand) 8,730 (RMB 2,000 thousand) - 6,547 (RMB 1,500 thousand) - 6,547 (RMB 1,500 thousand)	a.(a) a.(a) a.(b) a.(c) a.(c) a.(e) a.(f) a.(g) a.(h) a.(i) a.(i) a.(i) a.(i) a.(i)	$ 142,400 (US$ 5,000 thousand) 2,477,760 (US$ 87,000 thousand) 6,977,600 (US$ 245,000 thousand) 398,891 (US$ 14,006 thousand) 227,840 (US$ 8,000 thousand) - 723,164 (US$ 25,392 thousand) - - - - - - -	$ - - - - - - - - - - - - - -	$ - - - - - - - - - - - - - -	$ 142,400 (US$ 5,000 thousand) 2,477,760 (US$ 87,000 thousand) 6,977,600 (US$ 245,000 thousand) 398,891 (US$ 14,006 thousand) 227,840 (US$ 8,000 thousand) - 723,164 (US$ 25,392 thousand) - - - - - - -	$ (8,043) (144,336) (359,518) 1,220,742 4,157 (12,866) 224,416 7,219 185,515 42,966 31,266 2,019 39 (3,954)	100.0 100.0 100.0 94.0 100.0 100.0 86.5 86.5 81.1 81.1 81.1 28.4 28.4 28.4	$ (8,043) (Note 2) (144,336) (Note 2) (359,518) (Note 2) 1,171,008 (Note 2) 4,157 (Note 2) (12,866) (Note 2) 194,150 (Note 2) 6,245 (Note 2) 150,509 (Note 2) 34,858 (Note 2) 25,366 (Note 2) 573 (Note 6) 11 (Note 6) (1,123) (Note 6)	$ 123,474 103,665 1,161,283 328,540 99,320 - 2,854,403 52,205 247,332 87,497 32,172 2,950 - 2,637	$ - - - - - - - - - - - - - -
												(Continued)

60 -

Investee Company (Note 7)	Main Businesses and Products	Paid-in Capital (Note 1)	Method of Investment (Note 4)	Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2020 (Note 1)	Remittance of Funds	Remittance of Funds	Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2020 (Note 1)	Net Income (Loss) of the Investee	Ownership of Direct or Indirect Investment (%)	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2020 (Note 1)	Accumulated Repatriation of Investment Income as of December 31, 2020
					Outward	Inward
YFY Investment Co., Ltd. YFY Family Care (Kunshan) Co., Ltd. YFY Family Paper (Beijing) Co., Ltd. (Note 8) Yuen Foong Yu Consumer Products (Yangzhou) Co., Ltd. Shanghai YFY International Trade Co., Ltd. Guangdong Dingfung Pulp & Paper Co., Ltd. Zhaoqing Dingfung Forestry Co., Ltd. Zhaoqing Xinchuan Green Technology Co., Ltd. Shenzhen Jinglun Paper Co., Ltd. YFY (Shanghai) Financial Services Co., Ltd. Kunshan Actview Carbon Technology Co., Ltd.	Investment and holding and sale of paper Manufacture and sale of tissue paper and napkins Manufacture and sale of tissue paper and napkins Manufacture and sale of tissue paper and napkins General trade Pulp and paper production and trading business Seedling cultivation and sales, reforestation, sales-cum-forest logging and other forestry, processing and transportation. Environmental equipment technology research and development; construction of wastewater, flue gas, noise and solid waste treatment; pure water treatment construction; environmental technology consulting; sale of environmental protection equipment and chemical raw material; import and export of cargo and technology Sale of paper merchandise and import/export business Export factoring, domestic factoring, business factoring and related consulting services, development of credit risk management platform Manufacture and sale of active carbon	$ 3,275,200 (US$ 115,000 thousand) 854,400 (US$ 30,000 thousand) 996,800 (US$ 35,000 thousand) 854,400 (US$ 30,000 thousand) 4,365 (RMB 1,000 thousand) 2,438,742 (US$ 85,630 thousand) 623,142 (US$ 21,880 thousand) 8,730 (RMB 2,000 thousand) 13,967 (RMB 3,200 thousand) 218,241 (RMB 50,000 thousand) 35,885 (US$ 1,260 thousand)	a.(j) a.(k) a.(k) a.(k) b.(a) a.(l) a.(m) a.(d) a.(d) a.(n) b.(b)	$ 3,275,200 (US$ 115,000 thousand) 854,400 (US$ 30,000 thousand) 996,800 (US$ 35,000 thousand) 854,400 (US$ 30,000 thousand) 4,365 (RMB 1,000 thousand) 626,560 (US$ 22,000 thousand) 210,182 (US$ 7,380 thousand) - - 218,241 (RMB 50,000 thousand) 23,809 (US$ 836 thousand)	$ - - - - - - - - - - -	$ - - - - - - - - - - -	$ 3,275,200 (US$ 115,000 thousand) 854,400 (US$ 30,000 thousand) 996,800 (US$ 35,000 thousand) 854,400 (US$ 30,000 thousand) 4,365 (RMB 1,000 thousand) 626,560 (US$ 22,000 thousand) 210,182 (US$ 7,380 thousand) - - 218,241 (RMB 50,000 thousand) 23,809 (US$ 836 thousand)	$ 526,241 (149,296) (28,536) 31,484 (133) (284,085) 22,526 44 23,885 (124,608) 3,350	73.0 73.0 - 73.0 73.0 75.2 75.2 75.2 75.2 79.3 66.4	$ 438,305 (Note 2) (114,778) (Note 2) (28,536) (Note 2) 25,220 (Note 2) (121) (Note 2) (212,917) (Note 2) 16,893 (Note 2) 35 (Note 2) 17,853 (Note 2) (98,789) (Note 2) 2,223 (Note 2)	$ 1,491,585 192,981 - 838,251 - 3,398,442 2,183,076 7,106 107,728 57,078 35,222	$ - - - - - - - - - - -
												(Continued)

61 -

Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2020 (Notes 1 and 5)	Investment Amounts Authorized by the Investment Commission, MOEA (Note 1)	Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA
$16,513,991	$17,453,621	$38,650,931

Note 2: Recognized from financial statements audited by the auditors for the same periods.

Note 4: Methods of investment and the related investors are as follow:
a. Investment in mainland China through companies set up in another company. The related investors are as follow:

b. Direct investment in mainland China and the investors are as follows:
(a) Yuen Foong Shop Co., Ltd. (b) San Ying Enterprise Co., Ltd.

Note 5: In calculating the accumulated outward remittance for investment, the reinvestment amount of $3,474,503 thousand made by investor of mainland China has been deducted.

Note 6: Recognized from financial statements that have not been audited.

In�estment in mainland China�s significant transaction events that occur directly or indirectly through companies set up in another country are referred to in Table 1.

(Concluded)

62 -

TABLE 6

YFY INC.

INFORMATION OF MAJOR SHAREHOLDERS DECEMBER 31, 2020

Name of Major Shareholder	Shares	Shares
	Number of Shares	Percentage of Ownership (%)
Shou-Chung Ho Hsin-Yi Foundation	170,615,028 94,004,485	10.27 5.66

63 -

YFY INC.

CONTENTS OF THE STATEMENTS OF IMPORTANT ACCOUNTING ITEMS

Item
Statement of Assets, Liabilities and Equities
Statement of cash
Statement of financial assets at FVTOCI
Statement of changes in investments accounted for using the equity method
Statement of changes in property, plant and equipment
Statement of changes in accumulated depreciation of property, plant and equipment
Statement of changes in investment properties
Statement of changes in accumulated depreciation of investment properties
Statement of deferred tax assets
Statement of current borrowings
Statement of short-term notes and bills payable
Statement of non-current borrowings
Statement of deferred tax liabilities
Statement of Profit and Loss
Statement of operating expenses
Statement of finance costs
Statement of employee benefits expense, depreciation and amortization by function

**Index **

Note 6
Schedule 1
Schedule 2
Note 10
Note 10
Note 12
Note 12
Note 17
Schedule 3
Schedule 4
Schedule 5
Note 17
Schedule 6
Note 16
Schedule 7

64 -

SCHEDULE 1

YFY INC.

STATEMENT OF FINANCIAL ASSETS AT FVTOCI FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Balance, December 31, 2019 Shares Amount 468,485,150 $ 6,090,307 84,509,502 1,554,975 37,323,087 940,542 - - 8,585,824 19,161,529 293,982 20,826,000 167,239 5,999,371 71,529 5,562,000 31,730 4,200,000 55,251 1,600,000 19,288 995,313 11,717 5,612 42,819 377,634 1,677 21,857,875 2,473,095 544,067 11,509 1,955,000 35,679 3,215,515 $ 11,801,339	Increase in 2020 Shares Amount - $ - - - - - 7,464,617 940,542 940,542 - - - - - - - - - - - - 1,194,000 11,940 - - - - 655,736 - - - - - 11,940 $ 952,482	The Amount Decrease in 2020 �� T�� Y�a�� Shares Evaluation (Note 3) Amount (Note 1) - $ - $ (726,152) - - 376,067 (37,323,087) (940,952) - - (940,952) (89,576) - (439,661) (4,105,645) (41,056) 119,034 - - 15,975 - - 9,917 (340,772) - 2,588 - - 3,031 - - (3,138) (497,657) - (9,423) - - 18,578 - - 1,588 - - 682,488 - - (1,014) (1,764,000) (45,453) 13,671 (86,509) 853,295 $ (1,027,051) $ 413,634	FairValue at the End of the Year	FairValue at the End of the Year
			Percentage of Ownership Shares (%) 468,485,150 4.2 84,509,502 11.8 - - 7,464,617 0.8 15,055,884 14.9 20,826,000 12.9 5,999,371 13.9 5,221,228 3.0 4,200,000 14.0 1,600,000 8.0 1,691,656 10.0 5,612 5.5 377,634 0.6 22,513,611 3.0 544,067 0.7 191,000 4.0	Amount Note $ 5,364,155 Note 2 1,931,042 Note 2 - Notes 2 & 4 850,966 Notes 2 & 4 8,146,163 371,960 183,214 81,446 34,318 58,282 16,150 14,234 61,397 3,265 3,155,583 10,495 3,897 3,994,241 $ 12,140,404
		Shares (Note 3) - - (37,323,087) - (4,105,645) - - (340,772) - - (497,657) - - - - (1,764,000)
Shares 468,485,150 84,509,502 37,323,087 - 19,161,529 20,826,000 5,999,371 5,562,000 4,200,000 1,600,000 995,313 5,612 377,634 21,857,875 544,067 1,955,000	Shares - - - 7,464,617 - - - - - - 1,194,000 - - 655,736 - -

Note 1: Accounted for unrealized gain (loss) on financial assets at FVTOCI.

Note 2: The unit price is calculated by the closing price as of December 31, 2020.

Note 3 The decrease of capital was due to the sale of shares of iXensor Inc., Boardtek Electronics Corporation is merged by Zhen Ding Technology Holding Limited through stock exchange, Universal Investment Co., Ltd. and Sino Cell Technologies Ltd executed capital reduction to cover losses, and KHL IB Venture Capital Co., Ltd. executed cash capital reduction.

Note 4: The Compan� acquired Zhen Ding Technolog� Holding Limited (�ZDTHL�) through stock e�change. The Compan��s board of directors appro�ed the stock e�change of all of its o�nership of Boardtek Electronics Corporation (�BEC�) for o�nership of �ZDTHL� in Ma� 2020. The stock e�change �as conducted at an e�change ratio of 1 ordinar� share of �BEC� for 0.2 ne�l� issued ordinar� share of �ZDTHL�. The abo�e stock e�change has been completed on November 4, 2020.

65 -

SCHEDULE 2

YFY INC.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Balance, December 31, 2019 Shares Amount 627,827,088 $ 8,661,522 51,914,248 1,758,646 10,420,168 133,472,904 3,419,509 580,098,758 20,714,487 79,000,000 5,658,396 241,636,021 2,888,148 16,970,040 366,606 32,896,330 447,269 69,827,600 1,468,764 34,300,000 272,617 26,840,000 713,821 3,000,000 38,474 19,584,000 222,958 84,880,000 1,931,247 6,000,000 128,487 28,545,000 431,459 200 101,211 6,178,500 71,585 2,857,000 68,351 561,291 12,368 3,000,000 32,098 - - 35,568,346 $ 49,408,023	Increase in 2020 (Note 2) Shares Amount - $ - - - - - - - - - - - - - - - - 22,945,000 - - - 6,500,000 - - - - - 36,443,650 - - - 1,913,000 - - - - - - - - - - - 410,150,000 7,222,888 7,222,888 $ 7,222,888	Share of Profit or Loss of Decrease in 2020 (Note 3) Subsidiaries and Shares Amount Associates - $ - $ (115,911 ) (43,000 ) (232,725) 872,019 (232,725) 756,108 - (266,946) 422,545 (216,409,120 ) (6,168,309 ) 2,224,225 - - 341,358 (83,631,456 ) (1,593,737 ) 1,235,450 - - 7,798 - (4,605 ) 7,438 - - 122,825 - - (57,294 ) - - 141,561 - (3,984 ) 9,673 - - 11,021 - - 99,939 (3,500,000 ) (85,900 ) 19,925 - - 25,099 - - (3,825 ) - - 3,116 - - 164 - - (879 ) - - (845 ) - (824,402) 116,141 (8,680,937) 4,302,890 $ (9,180,608) $ 5,481,543	Other Adjustments (Note 6) Shares Amount - $ - - - - - - - - - - - - - - - - - (92,772,600 ) (1,350,274 ) - - 79,480,686 1,350,274 - - - - 25,402,585 387,820 - - (30,458,000 ) (387,820 ) - - - - - - - - - - - - - $ -	Balance, December 31, 2020 Percentage of Ownership Shares (%) Amount 627,827,088 57.8 $ 8,596,617 51,871,248 48.9 2,367,344 10,963,961 133,472,904 11.8 3,595,979 363,689,638 100.0 15,737,977 79,000,000 100.0 5,973,380 158,004,565 64.5 2,602,532 16,970,040 23.0 430,897 32,896,330 49.7 449,718 - - - 34,300,000 49.0 215,659 112,820,686 100.0 2,133,843 3,000,000 100.0 42,197 19,584,000 18.9 232,759 146,726,235 100.0 2,332,943 2,500,000 100.0 62,966 - - - 200 100.0 116,122 6,178,500 50.9 74,701 2,857,000 100.0 56,959 561,291 19.4 11,443 3,000,000 100.0 31,253 410,150,000 100.0 7,124,383 37,629,732 $ 52,189,672	Market Price (Note 5)
				Percentage of Ownership Shares (%) 627,827,088 57.8 51,871,248 48.9 133,472,904 11.8 363,689,638 100.0 79,000,000 100.0 158,004,565 64.5 16,970,040 23.0 32,896,330 49.7 - - 34,300,000 49.0 112,820,686 100.0 3,000,000 100.0 19,584,000 18.9 146,726,235 100.0 2,500,000 100.0 - - 200 100.0 6,178,500 50.9 2,857,000 100.0 561,291 19.4 3,000,000 100.0 410,150,000 100.0
					Unit Price (NT$) Total Amount $ 12.20 $ 7,659,490 148.50 7,702,880 45.80 5,197,059 - - - - - - - - - - - - - - - - - - -
Shares 627,827,088 51,914,248 133,472,904 580,098,758 79,000,000 241,636,021 16,970,040 32,896,330 69,827,600 34,300,000 26,840,000 3,000,000 19,584,000 84,880,000 6,000,000 28,545,000 200 6,178,500 2,857,000 561,291 3,000,000 -	Shares - - - - - - - - 22,945,000 - 6,500,000 - - 36,443,650 - 1,913,000 - - - - - 410,150,000	Shares - (43,000 ) - (216,409,120 ) - (83,631,456 ) - - - - - - - - (3,500,000 ) - - - - - - -	Shares - - - - - - - - - (92,772,600 ) - 79,480,686 - - 25,402,585 - (30,458,000 ) - - - - - -

Note 1: Except for YFY Japan Co., Ltd., the rest were calculated according to the audited annual financial statements.

Note 2: Except for YFY Packaging Inc. acquired in November 2020, other companies issued stock dividends.

Note 3: Except for the issuance of cash dividends of Shin Foong Specialty and Applied Materials Co., Ltd. and Yuen Foong Yu Consumer Products Co., Ltd. and the sale of the Compan��s shares of Shin Foong Specialt� and Applied Materials Co., Ltd. and Yuen Foong Yu Consumer Products Co., Ltd., capital reduction of YFY International Limited, cash capital reduction and issuance of cash dividends of San Ying Enterprise Co., Ltd., other companies issued cash dividends.

Note 4: This includes recognition of adjustments not recognized by shareholding ratio, exchange differences on translation of foreign financial statements, remeasurement of defined benefit plans, and unrealized gain (loss) on financial assets measured at FVTOCI, etc.

Note 5: Calculated based on the closing price at the end of 2020.

Note 6: The Company completed the merger of its subsidiary YFY Paradigm Investment Co., Ltd. and Lotus Ecoscings & Engineering Co., Ltd. and the merger of its subsidiary YFY Capital Co., Ltd. and YFY Venture Capital Investment Co., Ltd. in October 2020. The board of the directors of YFY Capital Co., Ltd. approved the name change from YFY Capital Co., Ltd. to �YFY De�elopment Corp.� in October 2020.

66 -

SCHEDULE 3

YFY INC.

STATEMENT OF CURRENT BORROWING DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

			Balance,	Balance,
			December 31,		Amount of the
Type of Loan and Creditor	Deadline of the Loan	Rate (%)		2020	Financing
Credit loan of the bank
Yuanta Bank	2020.11.20-2021.01.15	0.81	$	300,000	$	300,000
Taishin Bank	2020.12.25-2021.01.22	0.81		280,000		600,000
Bangkok Bank	2020.12.04-2021.01.06	0.84		225,000		227,840
			$	805,000	$	1,127,840

67 -

SCHEDULE 4

YFY INC.

STATEMENT OF SHORT-TERM NOTES AND BILLS PAYABLE DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Guarantee Agency Deadline of Issue Discount Rate (%) Ta Ching Bills 2020.12.25-2021.01.13 0.83 Taishin Bills 2020.12.25-2021.03.25 0.81 International Bills 2020.12.18-2021.03.18 0.80 International Bills 2020.12.22-2021.03.18 0.80 Taiwan Bills 2020.12.18-2021.01.13 0.85 International Bills 2020.12.18-2021.01.13 0.85 Grand Bills 2020.12.18-2021.01.13 0.85 China Bills 2020.12.18-2021.01.13 0.85		Amount of Commercial Principal Unamortized Short-term Amount of Issue Notes and Bills Payable Discount Carrying Amount Mortgage or Guarantee $ 200,000 $ 54 $ 199,946 - 180,000 332 179,668 - 150,000 249 149,751 - 150,000 249 149,751 - 100,000 28 99,972 - 50,000 14 49,986 - 50,000 14 49,986 - 50,000 14 49,986 - $ 930,000 $ 954 $ 929,046
		Unamortized Short-term Amount of Issue Notes and Bills Payable Discount $ 200,000 $ 54 180,000 332 150,000 249 150,000 249 100,000 28 50,000 14 50,000 14 50,000 14 $ 930,000 $ 954

68 -

SCHEDULE 5

YFY INC.

STATEMENT OF NON-CURRENT BORROWING DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Bank of Loan Period of the Contract Repayment Method Rate (%) Syndicated loans Taiwan Bank 2018.12.24-2023.12.24 Due repayment, monthly interest payment 1.79 Taiwan Bank 2020.02.10-2025.02.10 Due repayment, monthly interest payment 1.79 Taiwan Bank 2020.12.30-2025.12.30 Due repayment, monthly interest payment 1.79 Mega Bank 2017.12.25-2022.12.25 Due repayment, monthly interest payment 1.79 Less: Hosting fee of bank joint loan Bank credit loans Taiwan Bank 2020.09.28-2022.09.29 Due repayment, monthly interest payment 0.85	Balance, December 31, 2020	Total Guarantee and Guarantee Situation $ 5,440,000 - 4,800,000 - 5,040,000 - 3,500,000 - (35,008) 800,000 - $ 19,544,992
	Due within One Year Expires After One Year $ - $ 5,440,000 - 4,800,000 - 5,040,000 - 3,500,000 - (35,008) - 800,000 $ - $ 19,544,992

69 -

SCHEDULE 6

YFY INC.

STATEMENT OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2020 (In Thousands of New Taiwan Dollars)

Items Employee benefits expense Agency fee expenses Tax Professional service expenses Others (Note)	Amount $ 180,473 36,155 36,351 42,338 66,362 $ 361,679

Note: The amount of each item does not exceed 5% of the account balance.

70 -

SCHEDULE 7

YFY INC.

STATEMENT OF EMPLOYEE BENEFITS EXPENSE, DEPRECIATION AND AMORTIZATION BY FUNCTION FOR THE YEARS ENDED DECEMBER 31, 2020 AND 2019 (In Thousands of New Taiwan Dollars)

Employee benefits expense Salary Labor and health insurance Pension Board compensation Share-based payments Others Depreciation Amortization	2020	Total $ 141,379 5,413 9,598 22,000 1,144 939 $ 180,473 $ 6,262 $ 5,819	2019
	Classified as Operating Costs Classified as Operating Expense $ - $ 141,379 - 5,413 - 9,598 - 22,000 - 1,144 - 939 $ - $ 180,473 $ - $ 6,262 $ - $ 5,819		Classified as Operating Costs Classified as Operating Expense $ - $ 135,178 - 5,901 - 15,746 - 12,500 - - - 1,084 $ - $ 170,409 $ - $ 6,476 $ - $ 6,881	Total $ 135,178 5,901 15,746 12,500 - 1,084 $ 170,409 $ 6,476 $ 6,881

Note 1: For the years ended December 31, 2020 and 2019, the Company had average 40 and 43 employees, respectively, which included 6 non-employee directors.

Note 2: a. Average employee benefits expense for the years ended December 31, 2020 and 2019 were $4,661 thousand and $4,268 thousand, respectively.
b. Average salary for the years ended December 31, 2020 and 2019 were $4,158 thousand and $3,653 thousand, respectively.
c. The average salary changed by 14% year over year.
d. The Company did not have supervisors.

Note 3: The Compan��s compensation policies:

a. According to the Articles of Incorporation, if the Company made a profit based on operating results in the current year, 0.1% or more of the income shall be set aside as compensation of employees and 2% or less shall be distributed as remuneration of directors.
b. The total compensation paid to the executive officers which included salary, bonus, and compensation of employees is based on the condition of the industry to meet the market standard and company performance, personal performance, and projected future risks. Such compensation and remuneration are submitted to the compensation committee for review and approval.
c. The Company participates in compensation surveys to measure pay levels in the market of employment. Besides, the Company also takes into account the pay levels of the industry in order to make an adequate adjustment to the overall compensation policies. In addition to annual salary adjustment and comprehensive promotional practices, various award systems are established to attract, retain, develop, and encourage talents.
71 -

Notice to readers

This English-version annual report is a translation version from the Chinese version and is not an official document of the shareholders’meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.

YFY INC.

==> picture [103 x 99] intentionally omitted <==

==> picture [48 x 49] intentionally omitted <==

Chairman of the Board Felix Ho

==> picture [52 x 51] intentionally omitted <==

==> picture [95 x 44] intentionally omitted <==

15F, No. 51, Sec. 2, Chongqing S. Rd., Taipei[ /] +886 -2-2396- 8020

AI assistant

YFY — Annual Report 2020

51935_rns_2021-10-14_6afdd743-7e61-4743-9b38-c0efda4f2412.pdf

1. Spokesperson and Contacts�

2. Headquarters, branch offices and plants�

3. Stock Administration�

4. Auditor:

5. Overseas Securities Exchange� None

Table of Contents

Letter to Shareholders

Dear Shareholders,

Multidisciplinary Investment

Circular Economy

Innovation

Incubation and Portfolio Management

“Zero Waste” “Net Zero Emissions”

Digital Platform

Enhance Asset Utilization

2020 ������

Consolidated Revenue NTD$73.235Billion �����������������������������������������

ESG Corporate Development

Social

Governance

Environmental

Chung Hwa Pulp Corp.

Develop series of “CircuWell” product Plastic-free and fully recyclable paper products

Clean Energy

Biogas power generation

SRF Deducting Carbon Emissions

Zero Waste

Huge Improvement in Zero Waste

Marching Towards the New Targets of Advanced Biomass Energy

Innovates Green Building Materials to Reduce Carbon Emissions

Chapter 2. Company Profile

Ho Jei Lai Trading Company

Developed the First Domestic Coated Paper

Chung Hwa Pulp Co., Ltd.

Stepped into Technology Business

YFY listed on the Taiwan Stock Exchange

Extended Footprint in China.

Step into Organic Food Industry

Expand Investment Portfolio into Biomedical Business

YFY INC.

Arizon RFID Technology (Yangzhou) Co., Ltd. Commenced New Plant

Chapter 3. Corporate Governance Report

1. Organization

II. Profiles of Directors, Independent Directors, President, VP, VPs, and Managers (I) Profiles of Directors and Independent Directors

Note 1.

Note 2.

Note 3

Note 4

Note 5

Note 6

1. Major Direct and Indirect Institutional Shareholders (1). Major Direct Institutional Shareholders

(2). Major Indirect Institutional Shareholders

(II). Profiles of President, VP, AVPs, and Management

Note 2

Note 3

Note 4

Note 5

(II). Remuneration to supervisors

(III). Remuneration to the President and VP

Unit: NT$ thousand

(IV). Names of managements who distribute employee salaries and distribution status:

IV. Corporate Governance Practice

(I) Board of Directors operating status

(II). Operating status of the Audit Committee

Independent directors’ attendance to the Audit Committee meetings in 2020 is described below:

Other statutory information:

3. Recent communication between independent directors, internal audit managers, and

Companies

(2) Operation of Compensation Committee

(V) Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons

(V) Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons

(V) Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons

(V) Corporate Social Responsibility (CSR), Deviations from "Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies", and Reasons

(IX). Status of implementation of internal control system:

1. Statement on the Internal Control System

YFY Inc.

Statement on the Internal Control System

YFY Annual Report 2020

2020 ��

Consolidated Revenue NTD$73.235Billion ��