Responsibilities and Composition of the Board of Directors

1. Responsibilities of the Board of Directors

The board has reached a decision of comprising 7 to 13 members in consideration of the company's scale of business development and major shareholders as well as the need for balanced and practical operations. The Board's main responsibilities are to:

• Guide company strategy
• Supervise senior management
• Responsible for the company and its shareholders

2. Members of the Board of Directors

Currently there are 7 directors, including 3 independent directors.

3. Board Diversity Policy and Implementation

Our board diversity policy

On November 13, 2018, the Board passed a resolution to introduce a Code of Corporate Governance. YFY’s board diversity policy is set out in Chapter 3 (Composition and Powers of the Board), Article 19 of the Code. This includes adopting a candidate nomination system and complying with the company’s Director Election Rules and Code of Corporate Governance to ensure the diversity and independence of board members. None of the directors is a spouse or a relative within two degrees of relationship as required by Item 3 and Item of Article 26-3 of the Securities and Exchange Act. None of the independent directors, their spouses or relatives within the second degree of relationship are directors, supervisors or employees of the Company, its affiliates or companies with specific relationships with the Company and do not hold shares in the Company; nor have they provided commercial, legal, financial or accounting services to the Company or its affiliates in the last two years.

The professional background of the directors includes industry, management, and accounting. The members of the 29th Board of Directors who excel in leadership, operational decision-making, business management, and crisis management including directors Huey-Ching Yeh, David Lo, and Chun-Chieh Huang, as well as CPA Chin-San Wang. Independent directors include Jin-Li Hu and Yie-Yun Chang, both are university professors; and Di-Shi Huang has expertise in criminal investigation.

Among the members of the Company's Board of Directors, there are one director with employee status. There are 3 independent directors, and they have served for 3 years. In terms of age, there are 1 director over the age of 70, 4 directors between the age of 60 and 70, 2 directors between the ages of 50 and 60. The Company also emphasizes gender equality in the composition of the Board of Directors. The current term of the Board of Directors includes one female independent director.

4. Functional Committees

Audit Committee: Comprising 3 independent directors(Jin-Li Hu, Di-Shi Huang, Yie-Yun Chang , among them, Jin-Li Hu is the convener ), our Audit Committee is responsible for monitoring whether the company’s financial statements have been properly presented, selecting and ensuring the independence of the independent auditor, whether the company’s internal controls are being effectively implemented, whether the company is complying with relevant laws and regulations, and whether the company is managing existing or potential risks.

Remuneration Committee: Comprising 4 independent directors ( Jin-Li Hu, Di-Shi Huang, Yie-Yun Chang , among them, Jin-Li Hu is the convener) members selected comply with board resolution, our Remuneration committee is responsible for formulating and periodically reviewing the policies, systems, standards and structures relating to the performance evaluation and remuneration of directors and managers; and determining and periodically reviewing the salaries and remuneration of directors and managers.

Sustainable Development Committee: Comprising by 5 directors according to board resolution (Huey-Ching Yeh - the convener , who is the former Director General of the Energy Bureau at the Ministry of Economic Affairs, possesses extensive management experiences in sustainable development, energy, and economic development. David Lo, Jin-Li Hu, Di-Shi Huang, Yie-Yun Chang (among them, Jin-Li Hu is the Chairman of Taiwan Association of Environmental and Resource Economics, whose functional competency is in environmental sustainable economics and policy). Sustainable Development Committee is responsible for formulating and periodically reviewing the policies, systems, standards and structures relating to the performance evaluation and remuneration of directors and managers; and determining and periodically reviewing the salaries and remuneration of directors and managers. The Committee is comprised of 7 functional teams which are Environmental Sustainability Team, Responsible Supply Chain Team, Corporate Governance Team, Employee Relations Team, Social Engagement Team, Information Security Team, and Risk Management Team. The functional teams convene work meeting every month, report the progress for each project to the Board on November 9 and December 28 2022, as well as on August 9 and December 22 2023, and willing to accept recommendations as rolling progress. The Committee reported to the Board on the company's progress in sustainable development on May 13, 2024.

5. Board of Directors evaluation status: According to "Board of Directors Performance Evaluation Guidelines":

The aforementioned performance evaluation results were reported to the meeting of the Board of Directors convened in every March meeting as reference for review and improvement.

6. Corporate Governance Officer

The Board of Directors resolved in the meeting on May 14, 2019 to appoint Vincent Chan, 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, 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 2023 is as follows:

1. Convened one annual general meeting of shareholders and produced meeting minutes of the shareholders' meeting.
2. Convened 4 meetings and special meetings of the Board of Directors in 2023 and produced meeting minutes of all the Board meetings.
3. Convened 4 meetings of the Audit Committee in 2023 and produced meeting minutes of all the Audit Committee meetings.
4. Issued letters to the directors of YFY in January and July 2023 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 Corporate Governance Officer participated in a total of 18 hours of courses in 2023, and continued to strengthen his professional skills.

7. Succession Plan for Board Members and Key Management

The company's board of directors is elected by shareholders during the shareholders' meeting. In line with the Corporate Governance 3.0 Sustainable Development Roadmap, which aims to strengthen the independence of directors in listed companies, we advocate for independent directors to serve no more than three consecutive terms. This policy ensures generational turnover in director and independent director selections.

To maintain continuity and stability, the board member turnover rate should not be excessively high during each election. This approach facilitates the transfer of management and governance experience from the outgoing board to the incoming one. Our company provides regular training programs for directors and key management, enhancing their professional expertise across a wide array of topics essential to corporate governance. These topics include finance, business strategy, legal compliance, accounting principles, ESG standards, and internal control systems. We ensure that every director, including those serving in dual roles, receives information relevant to their responsibilities. With a minimum of six hours of training annually per individual, our commitment guarantees that our board members and key management uphold exemplary corporate governance practices.

Furthermore, we invest in nurturing potential successors within our organization. We also actively seek accomplished individuals with diverse backgrounds in business, legal, finance, accounting, or corporate affairs to serve as directors or independent directors. This is part of our strategic succession plan for the future.