YFY : 2024 AGM Meeting Handbook

YFY INC.

2024 Annual General Meeting of Shareholders

Meeting Handbook

2024/06/20

Note: This is a translation of the meeting handbook of the 2024 Annual general meeting of shareholders of YFY INC. This translation is intended for reference only and nothing else, the company hereby disclaims any and all liabilities whatsoever for the translation. The Chinese text of the handbook shall govern all and any matters related to the interpretation of the subject matter stated herein.

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Table of Contents
Meeting Agenda	3
I.	Items to Report	4
	(I)	YFY's 2023 Business Report is presented for review. (Proposed by the Board of
		Directors)	4
	(II)	Audit Committee's Review of 2023 Financial Statements is presented for review.
		(Proposed by the Audit Committee)	4
	(III) YFY's 2023 Distribution of Cash Dividends is presented for review. (Proposed by the
		Board of Directors)	4
	(IV) YFY's 2023 Distribution of Remuneration to Employees and Directors is presented
		for review. (Proposed by the Board of Directors)	4
	(V) Report on YFY's amendment of "Board of Directors Meeting Procedures" is
		presented for review. (Proposed by the Board of Directors)	5
II.	Ratifications	5
	(I)	YFY's 2023 Financial Statements are presented for ratification. (Proposed by the
		Board of Directors)	5
	(II)	YFY's 2023 Earnings Distribution Proposal is presented for ratification. (Proposed5
	by the Board of Directors)	5
III.	Discussions and Elections	6
	(I)	29th election for 4 director seats and 3 independent director seats. (Proposed by the6
	Board of Directors)	6

1. Proposal to remove the non-competition restriction for YFY's new directors and the7 institutional entities they represent is hereby presented for resolution. (Proposed by the7

Board of Directors)	7
IV. Extraordinary Motions	7
Appendixes	7
1.Business Report	8
2. CONSOLIDATED BALANCE SHEETS	11
3. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	12
4. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY	15
5. CONSOLIDATED STATEMENTS OF CASH FLOWS	16
6.BALANCE SHEETS	19
7. STATEMENTS OF COMPREHENSIVE INCOME	20
8. STATEMENTS OF CHANGES IN EQUITY	22
9. STATEMENTS OF CASH FLOWS	23
10.2023 Statement of Earnings Distribution	25
11.CPA's Audit Report-Consolidated Financial Statements	26
12. Audit Committee's Review Report	34
13. Board of Directors Meeting Procedures	35
14. List of Director and Independent Director Candidates	41
15. YFY Inc. Election Rules for Directors	44
16.The Content Of The Proposal To Remove The Competition For The Company's Directors46
17.Rules of Procedure for Shareholders' Meetings	48
18.Articles of Incorporation	61
19. Current Shareholding of Directors of YFY Inc	66
(For the complete Financial Report, please visit: http://mops.twse.com.tw)

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The Agenda of YFY INC. 2024 Annual General Meeting of Shareholders

Meeting Agenda

Time: June 20, 2024(Thursday) 9:00 A.M.

Location: 5F, No. 24, Section 1, Hangzhou South Road, Zhongzheng District, Taipei City GIS MOTC Convention Center

Method for convening: Physical Meeting Procedure:

1. Meeting Called to Order

1. Chairperson Taking Seat

1. Chairperson's Remarks IV. Items to Report

1. YFY's 2023 Business Report is presented for review.

1. Audit Committee's Review of 2023 Financial Statements are presented for review.

1. YFY's 2023 Distribution of Cash Dividends is presented for review.

(IV) YFY's 2023 Distribution of Remuneration to Employees and Directors is presented for review.

1. Report on YFY's amendment of "Board of Directors Meeting Procedures" is presented for review.

V. Ratifications

1. YFY's 2023 Financial Statements are presented for ratification.

1. YFY's 2023 Earnings Distribution Proposal is presented for ratification.
   VI. Discussions and elections

1. 29th election for 4 director seats, 3 independent director seats.

1. Proposal to remove the non-competition restriction for YFY's new directors and the institutional entities they represent is hereby presented for resolution.

VII. Extraordinary Motions

VIII.Meeting Adjourned

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1. Items to Report

1. YFY's 2023 Business Report is presented for review. (Proposed by the Board of Directors)

Description:1. YFY's 2023 consolidated revenue was reported at NT$73,867,374 thousand (currency is assumed to be New Taiwan Dollars (NT$) hereinafter), gross profit at NT$10,083,296 thousand, operating income at NT$137,065 thousand, net profit for the current year at NT$2,100,339 thousand, of which NT$1,826,693 thousand was attributed to the owners' net profit; the earnings per share was NT$1.10.

1. 1. The Business Report can be found in Appendix 1 of the Handbook (please refer to page 8 to 10).
   2. Please review.
2. Audit Committee's Review of 2023 Financial Statements is presented for review. (Proposed by the Audit Committee)

Description:1. YFY's 2023 consolidated and individual financial statements have been audited and certified by CPAs, and have been reviewed and examined by the Audit Committee along with the Business Report and Proposal for Earnings Distribution. Audit and review reports have been submitted and are attached in Appendixes 11 to 12 (please refer to page 26 to 34).

1. 2. The Audit Committee's convener is requested to read out the review reports and the reports are presented for review.

2. YFY's 2023 Distribution of Cash Dividends is presented for review. (Proposed by the Board of Directors)

Description:1. In accordance with YFY's Articles of Incorporation, cash dividends are distributed upon the resolution of the Board of Directors and reported to the shareholders' meeting. YFY has passed the resolution at the 16th meeting of the 28th Board of Directors held on March 14, 2024 to distribute 2023 cash dividends of NT$0.9 per share, set the ex-dividend date on July 19, 2024 and the dividend payment date on August 9, 2024.

2. Please review.

(IV) YFY's 2023 Distribution of Remuneration to Employees and Directors is presented for review. (Proposed by the Board of Directors)

Description:1. In accordance with YFY's Articles of Incorporation, YFY shall distribute NT$1,981,000 (currency is assumed to be New Taiwan Dollars (NT$) hereinafter) as the 2023 remuneration for employees and NT$22,000,000 as the remuneration for directors, which was approved at the 10th meeting of the 5th Remuneration Committee held on March 12, 2024 and resolved at the 16th board meeting of the 28th Board of Directors held on March 14, 2024.

2. Please review.

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1. Report on YFY's amendment of "Board of Directors Meeting Procedures" is presented for review. (Proposed by the Board of Directors)

Description: 1. In response to January 11, 2024 Order No. Financial Supervisory Securities Corporate 1120383996 of the Financial Supervisory Commission, the competent authorities made amendments to the "Regulations Governing Procedure for Board of Directors Meetings of Public Companies". The 16th board meeting of the 28th Board of Directors held on March 14, 2024, approved of the amendments on the Company's "Board of Directors Meeting Procedures."

1. 1. The amended "Board of Directors Meeting Procedures" and amendment chart are attached in Appendix 13 (please refer to pages 35 to 39).
   2. Please review.
2. Ratifications

1. YFY's 2023 Financial Statements are presented for ratification. (Proposed by the Board of Directors)

Description:1. YFY's 2023 consolidated and individual financial statements have been audited by CPAs, and along with the Business Report, have been reviewed and approved by the Audit Committee with no discrepancies found. Related files (including the Business Report as well as consolidated and individual financial statements) are attached in Appendixes 1-9 (please refer to page 8 to 24).

2. Please ratify.

Resolution:

1. YFY's 2023 Earnings Distribution Proposal is presented for ratification. (Proposed by the Board of Directors)

Description:1. For the year 2023, the company's net profit after tax amounts to NT$1,826,693,089. Adding the previous year's accumulated undistributed earnings of NT$11,940,918,679, the reassessment of defined benefit plans of NT$349,519,200, and the reversal of special reserves of NT$2,483,227, and deducting the changes in the equity of the investee company recognized at NT$25,392,379, the total distributable amount is NT$14,094,221,816. After the statutory reserve of NT$215,330,314 is set aside according to the law, a cash dividend of NT$0.9 per common share will be distributed, totaling NT$1,494,334,346. The remaining NT$12,384,557,156 will be retained for future distribution.

2. In order to coordinate with computer checks and difficulties in currency exchange, the disbursement of cash dividends will be rounded to the nearest

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dollar. If the total amount of allocated cash dividends is less than NT$1, the amount will be transferred to the YFY Employee Welfare Committee.

3. This proposal was approved at 16th board meeting of the 28th Board of Directors. The 2023 Earnings Distribution Proposal is attached in Appendix 10 (Please refer to page 25). Please ratify.

Resolution:

1. III. Discussions and Elections

2. 29th election for 4 director seats and 3 independent director seats. (Proposed by the Board of Directors)
   Description: 1. YFY's current directors were elected at the shareholders' meeting held on May

17, 2021, and the three (3) year term of office is coming to an end; new elections will be held according to the Company's Articles of Incorporation.

1. In accordance with the Article 20 of the Articles of Incorporation "The Company shall have 7 to 13 director seats. The Board meeting is authorized to approve the elected numbers of seats of director. A candidate nomination system shall be adopted. Candidates shall be nominated and elected at the shareholders' meeting from the list of candidates in accordance with Article 198 of the Company Act. The term of office shall be three (3) years, and the director may be eligible for re-election." "The seats of independent directors shall be at least three and shall not be less than one-fifth of the total seats of directors specified in the preceding paragraph."
2. To comply with YFY's Articles of Incorporation and in accordance with the current practice and needs of the board meeting, seven (7) seats will be elected for the 29th board of directors (including 4 director seats and 3 independent director seats), which will assume the office after the election on June 20, 2024, with a three (3) year term of office lasting until June 19, 2027.
3. The candidate nomination system is adopted. Nominations are proposed in the list of director candidates by the Company's board meeting and can be found in Appendix 14 (please see page 41 to 43).
4. Please proceed to elect nominated directors in accordance with YFY's Election Rules for Directors attached in Appendix 15. (Please see page 44 to 45).

Chairperson announces commencement of elections.

Chairperson announces results of the elections.

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1. Proposal to remove the non-competition restriction for YFY's new directors and the institutional entities they represent is hereby presented for resolution. (Proposed by the Board of Directors)
   Description: 1. In accordance with Article 209, Paragraph 1 of the Company Act: "The director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval."

2. The newly elected directors and the institutional entities they represent may either invest in or operate other companies that are related or similar to the scope of YFY's business. So long as it does not hinder their duties as a director, they may request the shareholders with the said Act to remove the competition prohibition restrictions and the institutional entities they represent.

3. The proposal to remove the restrictions for the Company's directors is attached in Appendix 16 (please refer to page 46 to 47).

Resolution:-

IV. Extraordinary Motions

Appendixes

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YFY Inc.

1.Business Report

Appendix 1

The global economy has gradually recovered from the impacts of the pandemic, war, and inflation crisis, yet geopolitical and regional conflicts continue to emerge. The International Monetary Fund (IMF) forecasted that the worldwide economic would grow at 3.0% for 2023, with a mild slowdown to 2.9% anticipated in 2024. Despite challenged macroeconomic, YFY Inc. (YFY) maintains a cautiously optimistic view for future growth and takes proactive steps to strengthen our competitive edge to embrace the upcoming opportunities.

2023 revenue was NT$73.87 billion, a decrease of 7.2% from 2022, primarily due to weak demand for industrial paper & packaging and fluctuations in pulp prices. Non-operating income amounted to NT$2.43 billion, a decrease of 0.6% from the year before, mainly due to reduced profits from equity-method entities and dividend income. Net profit attributable to the parent company was NT$1.83 billion, a reduction of 15.8% from last year. Earnings per share were NT$1.10, a decrease of 16.0%.

YFY management team keeps the principle of "Specialization, Innovation, and Sustainability" in mind to enhance operational resilience and competitiveness through the five strategic directions. These approaches build a solid foundation for the group's long-term development, and detail achievements as follow:

1. Renewable Energy and Energy Management

YFY was the first Taiwan papermaking company to join RE100, committed to use 100% renewable energy by 2040. As circular economy in practice, by-products from papermaking are transformed into fuel for electricity and biogas generation which result in self-retain energy cycle. In 2023, the biomass energy system at Chung Hwa Pulp Corp. (CHP) Hualien mill was capable of generating 150 million kWh of green electricity a year. Furthermore, Ensilience Co., Ltd., an affiliate of YFY, has undertaken energy storage solutions and collaborated with CHP to establish Taiwan's first post-meter cogeneration energy storage system, aimed at optimizing electricity usage while achieving carbon reduction targets.

2. Industry 4.1 and Building Upstream/ Downstream Industrial Ecosystems

Through the integration of advanced Automated Virtual Metrology (AVM), the joint effort between the YFY group and National Cheng Kung University's Smart Manufacturing Center has collaborated the application of big data and AI technologies to improve the production processes. The implementation of AVM in the CHP Jiutang mill, specifically for quality inspections, has resulted in significant improvements in product quality, operational efficiency, and considerable decrease in energy use. This innovative application has not only enhanced production efficiency but has also highlighted the importance of digital transformation in modernizing traditional manufacturing sectors. This accomplishment also earned recognition for Smart Manufacturing Transformation Award and special ESG Award by "Harvard Business Review" outstanding representation in the large manufacturing category.

3. Continuous Development of the Circular Economy

YFY has pioneered sustainable cycles throughout 5 subdivisions in agriculture, paper, water, energy, and carbon. The operation model has received BS 8001 circular economy certification, as the first Taiwan papermaking entity to satisfy the standard. Leveraging agricultural and forestry by-products, the company produces bio-based products which are environmental friendly by preserving the carbon captured and stored in woods from photosynthesis, reduces greenhouse gas

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emission, and realizes green economy. YFY has committed to recover and recycle of water resources. We have turned agricultural waste to production material, and engaged in afforestation for carbon capture. Genovella Renewables Inc., a YFY affiliate, transforms bio-waste into sustainable building materials and organic fertilizers to promote resource optimization.

4. The Saccharide Economy and New Materials Development

YFY Academy has advocated for the extraction of biomaterials from saccharides, employing cellulose and starch-derived saccharides to develop sustainable and low-carbon materials that are environmentally friendly. The objective is to replace conventional use of petrochemical plastics with eco-friendly alternatives. Recyclable paper tape is the revolution product to meet the purpose. The tape features biodegradable paper and glue can tolerate refrigerated condition and recycle together with cardboard box without additional process. The ultimate goal is to reduce carbon footprint, reliance on plastics, and material waste which we believe can be achieved by innovation of new materials.

5. Invest and Grow on New Business

YFY expands its investment horizon and utilizes its management expertise and resources to support the growth of its invested entities. The intention is to generate sustainable value through strategically IPO invested entities. The funds raised from these IPOs will be reinvested into nurturing the next generation entities, establishing a pattern of sustainable value creation. In the first quarter, Arizon RFID Technology (6863) launched a successful listing in the Taiwan Stock Exchange. Up till now, there were four entities, including Taigen Biopharmaceuticals Holdings Limited (4157.TW), ShenFeng Specialty and Applied Material Co., Ltd (6582.TW), Yuen Foong Yu Consumer Products (6790.TW), and Arizon RFID Technology (6863.TW) have been listed. Equity investments and dividend income from associated companies have contributed reliable profits reflecting the returns on our dedication to innovation.

Modern day's challenges and opportunities for manufacture companies are highly interconnected with impacts caused by climate change. Given the escalating threat that climate change presents to the environment, human well-being, and businesses, the principles of ESG have attracted unparalleled attention. Globally, more than 130 countries have pledged to reach net-zero emissions by the year 2050, indicating a universal agreement and determination to reduce greenhouse gas emissions.

The implementation of carbon pricing and trading systems in Taiwan marks a significant step forward in global efforts to reach net-zero emissions. This development has prompted a stronger focus on energy efficiency, carbon reduction, and the transition to alternative energy sources within the manufacturing industry. Concurrently, these changes have paved the way for new business models and opportunities.

Energy Transition and Smart Power Grids

• Ensilience Co., Ltd. aims to expand the scope of its energy storage system activities, and build on the present strategy to enhance in-house energy storage capabilities. By consolidating self-generated power, out-sourced electricity, and energy storage solutions, the company offers advanced smart power grid solutions for customers.
• YFY plans to assist waste water treatment centers across the country in 2024 transforming waste into energy under the Reconstruction-Operation-Transfer (ROT) model. Turn each waste water station into biogas electricity facilities.

Innovation and Automation

• ShenFeng Specialty and Applied Material Co., Ltd and Industrial Paper Xinwu mill schedule to implement AI technology to improve production yield and optimize efficiency.

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• The papermaking operations can improve production quality and decrease errors by implementing Automated Optical Inspection (AOI) system to identifypotential issues, enhance quality, and boost yield.

Sustainable Materials Research and Development

• CHP has partnered with Sustainable Carbohydrate Innovation Co. Ltd., an affiliate of YFY, developing biodegradable paper yarn. This innovation aims to provide an alternative for chemical fiber and influence sustainable thinking into fashion industry.

YFY has dedicated efforts toward research and investment in leading-edge areas, including next-generation materials, new energy sources, and automation on industrial process. This approach highlights the group's dedication to environmental stewardship, going beyond mere compliance with regulations and carbon emission reduction. By actively seeking out transformative innovations and changes, YFY not only embraces the benefit for operational changes but also positions itself to seize emerging opportunities for future growth.

Facing the impacts of climate change and net-zero emissions targets, YFY has actively promoting circular economy, digital transformation, economy driven by saccharide-based materials, proper use of resources, and sustainable operations. Looking forward, we will progress alone the group's five strategic directions, further enhancing our commitments toward energy transition and technology innovation to achieve energy saving, carbon reduction, and resource optimization. Additionally, YFY will conduct a thorough assessment of its operations across various dimensions, including human capital, financial performance, environmental impact, and regulatory compliance, ensuring alignment with global trends and technology advancements to preserve its adaptability and resilience. YFY firmly believes that through ongoing innovation and transformation, we can unlock new business opportunities while continuing to be a sustainable enterprise that delivers value to its shareholders, society, and the environment.

Chairman: Jean Liu

President: David Lo

Accounting Manager: Shu-Fan Lin

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