Material Information

2020-06-22

On behalf of the subsidiary YFY Investment Co., Ltd., YFY announces its board decided to sell 100% shares of YFY Family Paper (Beijing) Co., Ltd.

1.Date of occurrence of the event:2020/06/22
2.Method of the present increase (decrease) in investment:
YFY Investment Co., Ltd., a subsidiary of the Company decided to sell
100% of its shares in YFY Family Paper (Beijing) Co., Ltd.
3.Transaction volume, price per unit, and total monetary
amount of the transaction:
Transaction Volume:100% shares of YFY Family Paper (Beijing) Co., Ltd.
Price per unit: NA
Total monetary transaction: RMB180million
4.Company name of the invested mainland Chinese company:
YFY Family Paper (Beijing) Co., Ltd.
5.Paid-in capital of said invested mainland Chinese company:
RMB 250,427,000
6.Amount of new capital increment currently planned
by said invested mainland Chinese company:NA
7.Main business items of said invested mainland Chinese
company:The manufacturing and sales of household paper.
8.Type of CPA opinion issued for the financial statement
of said invested mainland Chinese company for the most
recent fiscal year:Unqualified opinion
9.Total equity of said invested mainland Chinese company on
the financial statement for the most recent fiscal year:RMB 102,556 ,000
10.Amount of profit/loss of said invested mainland Chinese
company on the financial statement for the most recent
fiscal year: RMB -2,146 ,000
11.Amount of actual investment to date in said invested
mainland Chinese company:NTD1,057,875 ,000
12.Counterparty to the transaction and its relationship
to the Company:
Huatong Development (HK) Limited./ Not related to the Company
13.Where the counterparty to the transaction is an actual
related party, public announcement shall also be made of
the reason for choosing the related party as the
counterparty and the identity of the previous owner
(including its relationship with the company and the
trading counterpart), the date of transfer, and the price:NA
14.Where a person who owned the subject matter of the
transaction within the past five years has been an
actual related party of the company, public
announcement shall also be made of the dates and
prices of acquisition and disposal by the related
party and such party's relationship to the company
at those times:NA
15.Gain (or loss) on disposal:
The estimated disposal gain is NTD288,782,000. The actual amount
will be booked according to the CPA's audited amount.
16.Terms of delivery or payment (including payment period
and monetary amount), restrictive covenants in the
contract, and other important stipulations:
Terms of delivery: The matter will be handled according to the relevant
regulations and the negotiation results of both parties.
Restrictive covenants in the contract: The parties will implement relevaue
covenants baesd on the ueqotiation results of both parties.
Other important stipulations: Yuen Foong Yu Consumer Products Co., Ltd.
will sever as a guarantor for YFY Investment Co., Ltd. under this
transaction.
17.The manner of deciding on this transaction, the reference
basis for the decision on price and the decision-making
department:
Manner of deciding on this transaction: The transaction price was decided
through the negotiation of both parties.
The reference for the decision on price:Was decided by reference to the
appraisal report of a professional appraisal firm and the fairness opinion
of a CPA.
The decision-making body : It was decided by board meetings held on
Jun 22nd.
18.Broker:Yugi Technologies(Shanghai) Limited.
19.Concrete purpose of the acquisition or disposal:
To cope with the ever-changing market situation in China, the YFY Consumer
Product Co., Ltd. planned to consolidate its business operation in Northern
China into YFY Consumer Products (Yangzhou) Co., Ltd., which has better
resources condition and sound economy scale. Therefore, this transaction
will help YFY Consumer Product Co., Ltd. enhance the cost competitiveness
and contribute to its overall future growth of the Company.
20.Do the directors have any objection to the present transaction?: No
21.Is it a related party transaction?: No
22.Date of the board of directors’resolution:2020/06/22
23.Date of the recognition of the supervisors
or the board of independent directors’resolution:2020/06/22
24.Total amount of mainland China area investment
(including the present investment) approved by the
Investment Commission to date: NTD 20,301,111,000
25.Ratio of the total amount of investment (including
the present investment) in the mainland China area approved
by the Investment Commission to date to the paid-in capital
on the financial statement for the most recent period:122%
26.Ratio of the total amount of investment (including
the present investment) in the mainland China area
approved by the Investment Commission to date to the
total assets on the financial statement for the most
recent period:32%
27.Ratio of the total amount of investment (including
the present investment) in the mainland China area approved
by the Investment Commission to date to the shareholders’
equity on the financial statement for the most recent period:56%
28.Total amount of actual investment in the mainland China
area to date:NTD21,194,533,000
29.Ratio of the total amount of actual investment in the
mainland China area to date to the paid-in capital on
the financial statement for the most recent period:128%
30.Ratio of the total amount of actual investment in the
mainland China area to date to the total assets on the
financial statement for the most recent period:33%
31.Ratio of the total amount of actual investment in the
mainland China area to date to the shareholders’ equity
on the financial statement for the most recent period:59%
32.Amount of recognized profits and losses on investment in
the mainland China area for the most recent three fiscal years:
2017：NTD 1,866,676 ,000
2018：NTD -365,506,000
2019：NTD -35,386,000
33.Amount of profit remitted back to Taiwan for the most
recent three fiscal years:
2017：NTD 0
2018：NTD 0
2019：NTD 0
34.Has the CPA issued an opinion on the unreasonableness of the price
of the current transaction?:No
35.Name of the CPA firm:Chainlong CPAs Firm
36.Name of the certifying CPA: Rick Hsing
37.The practice certificate number of the CPA:
(086)Tai-Tsai- Sui-Deng-Tze No.2335
38.Any other matters that need to be specified:
The production and business of YFY Family Paper (Beijing) Co., Ltd.
have been consolidated into those of YFY Consumer Products (Yangzhou)
Co., Ltd. Therefore, this transaction has no material impact on the
business operation of YFY Consumer Product Co., Ltd.