YFY : 2023Q1 Consolidated Financial Statements

YFY Inc. and Subsidiaries

Consolidated Financial Statements for the

Three Months Ended March 31, 2023 and 2022 and Independent Auditors' Review Report

INDEPENDENT AUDITORS' REVIEW REPORT

The Board of Directors and Shareholders

YFY Inc.

Introduction

We have reviewed the accompanying consolidated balance sheets of YFY Inc. and its subsidiaries (collectively referred to as the "Group") as of March 31, 2023 and 2022, the related consolidated statements of comprehensive income, the consolidated statements of changes in equity and cash flows for the three months ended March 31, 2023 and 2022, and the related notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the following paragraph, we conducted our reviews in accordance with the Standards on Review Engagements of the Republic of China 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As disclosed in Notes 13 and 14 to the consolidated financial statements, the financial statements of some non-significant subsidiaries and investments accounted for using the equity method included in the consolidated financial statements referred to in the first paragraph were not reviewed. As of March 31, 2023 and 2022, the combined total assets of these non-significant subsidiaries were NT$28,046,163 thousand and NT$33,483,845 thousand, respectively, representing 20% and 24%, respectively, of the consolidated total assets, and the combined total liabilities of these non-significant subsidiaries were NT$8,121,880 thousand and NT$10,314,933 thousand, respectively, representing 11% and 14%, respectively, of the consolidated total liabilities; for the three months ended March 31, 2023 and 2022, the amounts of combined comprehensive income of these non-significant subsidiaries were a gain of NT$89,419 thousand and a gain of NT$943,966 thousand, respectively, representing 19% and 17%, respectively, of the consolidated total comprehensive income. As of March 31, 2023 and 2022, the carrying amounts of the above mentioned investments accounted for using the equity method were NT$120,082 thousand and NT$141,492 thousand, respectively; for the three months ended March 31, 2023 and 2022, the

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amounts of comprehensive income (loss) of investments accounted for using the equity method were a loss of NT$6,753 thousand and a loss of NT$13,009 thousand, respectively.

Qualified Conclusion

Based on our reviews, except for the adjustments, if any, as might have been determined to be necessary had the financial statements of the non-significant subsidiaries and investments accounted for using the equity method as described in the preceding paragraph been reviewed, nothing has come to our attention that has caused us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of the Group as of March 31, 2023 and 2022, and its consolidated financial performance and consolidated cash flows for the three months ended March 31, 2023 and 2022 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34 "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors' review report are Chih-Ming Shao and Hui-Min Huang.

Deloitte & Touche

Taipei, Taiwan

Republic of China

May 12, 2023

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 review such consolidated financial statements are those generally applied in the Republic of China.

For the convenience of readers, the independent auditors' review 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' review report and consolidated financial statements shall prevail.

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YFY INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars)

			March 31, 2023						December 31, 2022				March 31, 2022
			(Reviewed)						(Audited)						(Reviewed)
ASSETS			Amount	%					Amount	%					Amount	%
CURRENT ASSETS (Note 4)
Cash and cash equivalents (Note 6)	$	8,936,627		6		$	8,698,263	6		$	8,313,273		6
Current financial assets at fair value through profit or loss (Note 7)			758,681	1					914,843	1					2,914,192		2
Current financial assets at fair value through other comprehensive income (Notes 8
and 29)			8,633,140		6					7,967,004	6					8,711,111		6
Current financial assets at amortized cost (Note 9)			3,059,169		2					3,045,337	2					3,531,236		3
Notes receivable, net (Notes 10, 21 and 30)			2,570,683		2					2,842,143	2					3,962,243		3
Accounts receivable, net (Notes 10 and 21)			11,477,239		8					12,120,124	9					12,277,748		9
Accounts receivable due from related parties, net (Notes 21 and 29)			56,385	-					64,230	-					73,480	-
Current inventories (Note 11)			12,151,844		9					11,872,315		8					11,119,594		8
Current biological assets (Note 12)			3,294,202		2					3,255,711	2					3,373,301		2
Prepayments			2,089,859		2					2,198,126	2					1,676,231		1
Other current financial assets (Note 30)			560,871	1					827,945	1					397,894	-
Other current assets, others (Note 29)			1,781,043		1					651,794	-					1,356,646	1
Total current assets			55,369,743		40					54,457,835		39				57,706,949		41
NON-CURRENT ASSETS (Note 4)
Non-current financial assets at fair value through other comprehensive income (Notes 8
and 29)			18,284,608		13					18,132,758		13				18,479,531		13
Non-current financial assets at amortized cost (Note 9)			1,924,082		1					1,918,107	1					698,918	-
Investments accounted for using equity method (Note 14)			6,867,505		5					7,466,226	5					6,018,511		4
Property, plant and equipment (Notes 15 and 30)			48,720,255		35					49,015,451		35				49,536,550		35
Right-of-use assets (Notes 16 and 30)			2,194,252	2					2,097,384	2					2,131,447		2
Investment property, net (Notes 17 and 29)			3,953,652		3					3,958,773	3					3,583,700		3
Goodwill			516,855	-					521,064	-					486,696	-
Deferred tax assets			312,850	-					305,525	-					339,307	-
Prepayments for business facilities (Notes 15 and 17)			763,229	1					712,614	1					1,038,481		1
Net defined benefit asset, non-current (Note 19)			607,437	-					576,233	1					717,957	1
Other non-current assets, others (Note 30)			323,897	-					310,354	-					328,987	-
Total non-current assets			84,468,622		60					85,014,489		61				83,360,085		59
TOTAL ASSETS	$	139,838,365		100		$	139,472,324		100	$	141,067,034	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES (Note 4)
Current borrowings (Notes 18 and 30)	$	11,740,072		8		$	8,812,071	6		$	11,995,037		9
Short-term notes and bills payable (Note 18)			21,195,026		15					2,723,116	2					12,170,983		9
Current financial liabilities at fair value through profit or loss (Note 7)			61,887	-					45,843	-					40,559	-
Current contract liabilities (Note 21)			564,475	-					496,039	1					578,501	-
Notes and accounts payable			9,620,959		7					10,759,751		8					11,344,393		8
Accounts payable to related parties (Note 29)			82,447	-					110,870	-					50,682	-
Other payables, others (Note 15)			5,034,226		4					4,124,484	3					6,948,997		5
Current tax liabilities			508,973	-					484,546	-					1,542,861		1
Current lease liabilities (Note 16)			215,169	-					203,868	-					186,710	-
Long-term liabilities, current portion (Notes 18 and 30)			800,000	1					-		-					360,040	-
Other current liabilities, others (Note 29)			1,192,411		1					1,237,851	1					1,441,340		1
Total current liabilities			51,015,645		36					28,998,439		21				46,660,103		33
NON-CURRENT LIABILITIES (Note 4)
Non-current portion of non-current borrowings (Notes 18 and 30)			15,800,894		11					36,344,562		26				22,084,021		16
Deferred tax liabilities			3,565,886		3					3,565,188	3					3,606,996		3
Non-current lease liabilities (Note 16)			559,420	1					514,916	-					519,540	-
Net defined benefit liability, non-current (Note 19)			6,446	-					7,814	-					52,576	-
Other non-current liabilities, others			439,741	-					448,012	-					451,765	-
Total non-current liabilities			20,372,387		15					40,880,492		29				26,714,898	19
Total liabilities			71,388,032		51					69,878,931		50				73,375,001		52
EQUITY ATTRIBUTABLE TO OWNERS OF PARENT (Notes 4, 20 and 26)
Share capital			16,603,715		12					16,603,715		12				16,603,715		12
Capital surplus			3,718,868		3					3,459,112	2					3,301,997		2
Retained earnings			21,039,333	15					22,536,470		16				20,808,097		15
Other equity interest			11,580,044		8					12,037,107		9					12,931,630		9
Total equity attributable to owners of parent			52,941,960		38					54,636,404		39				53,645,439		38
NON-CONTROLLING INTERESTS			15,508,373		11					14,956,989		11				14,046,594		10
Total equity			68,450,333		49					69,593,393		50				67,692,033	48
TOTAL LIABILITIES AND EQUITY	$	139,838,365		100		$	139,472,324		100	$	141,067,034		100
The accompanying notes are an integral part of the consolidated financial statements.
(With Deloitte & Touche review report dated May 12, 2023)

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YFY INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share) (Reviewed, Not Audited)

		For the Three Months Ended March 31
	2023				2022
		Amount	%				Amount	%
OPERATING REVENUE (Notes 4, 21 and 29)
Net sales revenue	$ 15,543,090		89		$ 17,037,990	86
Other operating revenue, net		1,988,310		11			2,777,688	14
Total operating revenue		17,531,400		100			19,815,678	100
OPERATING COSTS (Notes 11, 22 and 29)
Cost of sales	13,869,293		79		14,802,045	75
Other operating costs		1,516,018		9			2,072,868	10
Total operating costs		15,385,311		88			16,874,913	85
GAINS (LOSSES) ON CHANGES IN FAIR VALUE
LESS COSTS TO SELL OF BIOLOGICAL
ASSETS (Notes 4 and 12)		(314)	-		114		-
GROSS PROFIT FROM OPERATIONS		2,145,775		12			2,940,879	15
OPERATING EXPENSES (Notes 22 and 29)
Selling expenses	1,267,461		7		1,427,891	7
Administrative expenses	928,049		5		929,627	5
Research and development expenses		127,597		1			151,960	1
Total operating expenses		2,323,107		13			2,509,478	13
NET OPERATING INCOME (LOSS)		(177,332)	(1)	431,401	2
NON-OPERATING INCOME AND EXPENSES
Finance costs, net (Notes 4 and 22)	(297,765)	(2)	(134,167)	(1)
Share of profit of associates accounted for using
equity method, net (Notes 4 and 14)	277,455		1		224,322	1
Interest income	114,686		1		32,317	-
Rent income (Notes 16 and 29)	16,304		-		12,647	-
Other income, others (Note 27)	107,575		1		58,345	-
Gains (losses) on disposals of property, plant and
equipment	7,708		-		(326)	-
Foreign exchange gains (Note 32)	122,818		1		83,694	1
Miscellaneous disbursements	(10,680)	-		(13,854)	-
Losses on financial assets or liabilities at fair value
through profit or loss (Note 4)		(82,575)	(1)	(75,175)	-
Total non-operating income and expenses		255,526		1			187,803	1
								(Continued)

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