Implementation of the Sustainable Development

The performance of this table is summarized in the context of the Corporation and its subsidiary Yung Shin Pharm. Ind. Co., Ltd. (hereinafter referred to as the Company).

(一).The Corporation established the Sustainable Development Committee on November 9, 2022. This committee, a functional committee of the Board of Directors, is primarily established to assist the board in planning and supervising the Corporation's sustainable development strategies. Under the committee, a Sustainable Development Group is established to assist in establishing a mechanism for sustainable operation, drafting plans, and promoting related measures. Composed of five directors, the committee aims to oversee the sustainable operation strategies of the Corporation and its subsidiaries. It considers the goals of integrated performance, corporate social responsibility, and sustainable development, aligning with international standards, and assisting in promoting the United Nations' Sustainable Development Goals. Its functions include:

• Supervise the establishment of the annual plan and strategic direction of sustainable development.
• Supervise the establishment of sustainable development projects and activity plans.
• Supervise the tracking and review of the implementation effectiveness of the annual plan for sustainable development, strategic direction, project, and activity plans.
• Decisions on other sustainability-related matters.

(二).The Sustainable Development Group is responsible for identifying sustainability issues relevant to the company's operations and stakeholders, formulating corresponding strategies and work policies, planning and implementing annual programs, while tracking the execution effectiveness to ensure the full implementation of sustainable development strategies. The "Sustainable Development Committee" reports annually to the Board of Directors on the execution results of sustainable development and future work plans. In 2023, one meeting was held to report on the progress of YungShin Group's ESG initiatives, including

• the execution process and progress of the sustainable development blueprint,
• the progress of refining the execution process of sustainability reports, and
• the progress of greenhouse gas inventory execution process.

The corporation's board of directors annually receives progress reports, reviews the progress of strategies, and urges adjustments by the Sustainable Development Group when necessary.

Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof : No Deviation

(一).The Corporation engages in dialogue with internal and external stakeholders through various channels, and identifies and analyzes issues significant to the Corporation according to the 2021 version of the GRI Standards, taking corresponding management measures.

(二).The Corporation values the rights and interests of stakeholders, and pays attention to environmental, social, and corporate governance (ESG) issues, incorporating them into the Company's management policies. It evaluates various risk aspects that may affect the Corporation, and regularly tracks and integrates them into the daily operations of each unit.

Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof : No Deviation

In response to the new trend of environmental protection, the Corporation has successively made planning for relevant environmental management systems, including:

• Establish environmental management system of the plant and cultivate the concept of environmental protection among colleagues.
• Formulate and develop a sustainable environmental management plan consistent with the characteristics of the Corporation.
• In line with the energy-saving and carbon-reduction policy, encourage colleagues to bring tableware for meals.
• Make planing and design for an environmental protection plant, and promote environmental afforestation and beautification.
• Regularly conduct water quality inspections and do a good job in water quality management.
• Promote plant environmental audit to strengthen plant environmental management.

Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof : No Deviation

The Corporation's implementation results for improving the utilization efficiency of various resources and reduce the impact of environmental impact are as follows:

• Use bubble bags currently (recyclable and environmentally friendly materials) as the cushioning material of the shipping box.
• Regularly test the use efficiency of high-energyconsuming equipment, such as boilers, ice water machines, air compressors and other equipment, and use high-efficiency boilers to replace old ones with new ones.
• In each plant, major electricity support system equipment (chillers, cooling towers, air compressors) have been supplemented with voltage meters, temperature gauges, and flow meters for real-time monitoring and management.
• Steam recycling.
• Reuse the domestic wastewater after treatment for the irrigation of surrounding flowers and trees.
• RO purified water discharge and bottle washing water are recycled for reuse, being utilized for replenishing cooling tower evaporation. In 2023, the injection plant recycled water reuse reached 11,000 tons.
• Plant more trees and shrubs in the greening plants; Reduce the thermal temperature of plants.
• Advocate to use the toilet paper to wipe the wash basin and keep it clean.
• Recommend colleagues to save electricity, set the office temperature above 26℃ and turn off the lights at will.
• Implement garbage classification to recycle reusable resources.

Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof : No Deviation

The Corporation follows the framework of the Task Force on Climate-related Financial Disclosures (TCFD) published by the Financial Stability Committee to assess the potential risks and opportunities of climate change for the Corporation's present and future, and regularly re-executes the assessment process. In 2023, the Corporation completed its initial climate risk and opportunity identification process, identifying a total of 5 climate-related risks and 3 climate-related opportunities. The Corporation also inventoried the timing, financial impacts, and response measures of the aforementioned risks and opportunities affecting its operations. Key findings are excerpted on page 36 of the Corporation's 2022 Sustainability Report.

Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof : No Deviation

(IV) The Corporation has compiled the following data on greenhouse gas emissions, water usage, and total waste weight for the past two years:

• The Corporation's greenhouse gas reduction efforts are as follows:

  In 2019, all boiler units partially using heavy oil were switched to liquefied petroleum gas (LPG) as a cleaner energy source. LPG reduces air pollution and greenhouse gas emissions while improving combustion efficiency to achieve energy savings. The replacement of heavy oil boilers with natural gas at Youth Factory Plants 2 and 3 resulted in the installation of twenty-five natural gas boilers, reducing approximately 740 tons of carbon emissions per year, equivalent to the carbon absorption of forty-nine hectares of forest annually.

• An investment of NT$689 thousand resulted in a total benefit of saving 44,358 kWh/year in electricity, reducing carbon emissions by 22.275 tons/year, as detailed below:
  1. Youth Factory: A total investment of NT$476 thousand and 229 man-hours was made to replace 458 sets of LED lamps, resulting in a reduction of 189 kWh/day (based on 8 hours/day), reducing 41,580 kWh/year (based on 220 days/year), and reducing carbon emissions by 0.095 tons/day or 20.9 tons/year.
  2. Dingdian Plant: An investment of NT$213 thousand was made to replace 310 sets of LED lamps, resulting in a reduction of 2,778 kWh/year in electricity usage and reducing carbon emissions by 1.375 tons/year.

Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof : No Deviation

The Corporation formulates relevant management systems in accordance with labor laws and regulations, and formulates employee work rules to guide employees' behavior and development direction, respect internationally recognized principles of basic human rights in labor, regardless of gender, age, religion, sexual orientation without any discrimination in employment, and rationally and legally protect the rights and interests of employees.

• The Corporation has a code of ethical conduct and have designed our systems and vetting authority to prevent conflicts of interest.
• The Corporation has established rules for the appointment of new employees and the handling of gifts, and all employees have signed a letter of consent to the Code of Conduct for Employees, which requires employees to comply with confidentiality obligations and intellectual property rights, integrity, and prohibits sexual harassment and workplace violence.
• The Corporation promoted the "a letter of commitment to integrity" mechanism in line with the "ESG" corporate sustainability concept.
• Conduct publicity measures against workplace violence and sexual harassment from time to time and hold lectures on "Prevention of Illegal Infringement in Workplace", Strengthen staff self-protection awareness and encourage whistling mechanism.
• The Corporation had a barrier-free and nonhierarchical communication channel for employees to raise suggestions that can help the company move toward a friendly workplace or to obtain relief for personal injury.
• The Corporation has established a new partner care system to help new partners know the corporate environment and speed up their adaptation to the workplace. From before, during and after the newcomers come, there are newcomer care and other related measures to reduce the time for newcomers to find their way around, reduce their frustration, and at the same time, enhance the centripetal force of newcomers through continuous motivation and encouragement.
• The Corporation has established the "Exit Management Regulations" to manage the transfer of employees or their departure in accordance with the labor laws and regulations, so that employees' personal rights are fully protected.

Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof : No Deviation

The Corporation has established relevant measures for salary, attendance management, on-the-job training, etc., to improve the management of employees' salary pay, absence and other issues. The Corporation encourages employees to participate more actively in operation and management. Based on creating profits and sharing and comforting employees, the Compensation pays employees remuneration and implements performance-based salary adjustments every year in accordance with the Articles of Incorporation and the resolutions passed by the shareholders' general meeting.

• The Corporation has formulated the "Performance Evaluation Method" to implement performance appraisals and performance interviews twice a year. In addition to rewarding outstanding performance, supervisors also conduct performance interviews with underperforming employees to assist them in understanding areas for improvement or adjustment, developing improvement plans and schedules, and providing daily performance guidance to help employees improve their job performance.
• Individual performance is integrated with career planning to formulate a talent development system, aimed at recommending promotions and rotations for outstanding performers to accumulate achievements and work experience.
• The innovative proposal improvement reward system encourages employees at all levels, to propose innovative ideas and optimize resources for existing operations, meanwhile linking the performance system to recognize and reward employees who propose improvement operations and use them as a reference for employee promotion.
• Family care and infant & mom protection measures: To take care of employees' hard work and work safety with pregnant women, the Company implements flexible commuting measures, holds relevant doctor lectures from time to time, and builds comfortable and safe Nursing Rooms and Parking Spaces for pregnant women to use at ease. At the same time, the right of employees to apply for leave without pay is protected in accordance with the law, so that employees can combine work and life balance.
• Diversified employee benefits: complete leave, free meals, shuttle bus, uniforms, group insurance and general health checkups every three years, providing employees with comprehensive safety protection The Corporation provides annual scholarships for the education of employees' children to encourage them to work hard and study, also provides employees with in-service training subsidies, travel subsidies, subsidies for staff and relatives staying at the YungShin Elderly Nursing Home, birthday gifts, holiday bonuses, wedding and funeral fund, and various condolences fund to take care of employees' families. A Staff Welfare Committee is set up to organize various activities from time to time (New Year's Day hikes, family days, social activities, group trips, spring wine, and staff meetings...etc.) to link up the staff and achieve work-life balance.

Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof : No Deviation

The Corporation vigorously advocates for "zero occupational accidents in the workplace," aiming to raise awareness of workplace safety, promote proactive measures, and enhance vigilance regarding individuals, the environment, machinery, products, and construction processes. This is achieved through independent management practices that prioritize safety in the workplace. Adhering to the principle that employees are vital assets to the company, the Corporation prioritizes the health and well-being of its employees. It provides comprehensive in-service health examinations to a standard that exceeds legal requirements and monitors various health anomalies.

• The Corporation is highly concerned about workplace safety issues. In addition to implementing necessary access control, regular labor safety training, comprehensive non-smoking measures, employee cafeteria and laundry service, the Corporation attaches great importance to the physical and mental health of all its partners. In accordance with the regulations, the Corporation set up resident nursing staff and clinical doctors, and regularly arrange free health checkups for employees to provide professional health services, medical assistance and occupational disease prevention for early detection of health hazards and potential disease-causing factors.
• The Corporation has set up nursing room and hold a series of health promotion activities, enabling all partners working in the Corporation to receive perfect health care, so as to achieve the goal of "win-win for work and health", and strengthen the overall competitiveness.
• The Corporation places great emphasis on the safety of our employees and vendors. In 2023, we conducted a total of 8 "fire evacuation drills" across all company sites.
• In 2023, the number of occupational accidents was 10, accounting for 0.7% of the total number of employees in the Corporation. Among them, 4 accidents were commuting-related traffic accidents, and 6 were internal occupational accidents. Therefore, the Corporation actively promotes safety concepts through education and training methods, strengthens equipment safety management, and advocates safety awareness to employees. Training sessions for new recruits and periodic training for current employees are conducted regularly, inviting expert lecturers from both internal and external sectors to deepen employees' safety awareness.
• There were no fire incidents at any of our operational sites in 2023.

Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof : No Deviation

The Corporation makes plan for external training courses every year according to the training needs put forward by each unit, to enhance employees' key professional capabilities.

• The Corporation has set up the "Education and Training Management Regulations" to establish a complete training system, set up a separate training expense each year as a special budget for employee's training. Based on the operation strategy, the Corporation sets annual education and training goals and plans for the training needs of employees in various fields and levels vertically and parallelly, with external consultants, internal lecturers, participation in external knowledge, sharing of transfer training resources, job promotion, and rotation, etc., EQMS quality management online retraining, labor safety certification and retraining are all fully subsidized by the Corporation to cultivate multi-faceted professionals.
• The Corporation will provide training for newcomers. At the beginning of each month, HR will hold courses for all employees, the content includes the Corporation’s history and culture, management system, factory tour and the use of related systems, as well as the prevention of workplace violence and sexual harassment, labor safety and health, and other important laws and regulations. Through the training to encourage the interaction among the new partners on the same level to increase the network and cross the comfort circle.
• The Corporation formulated the "Internal Lecturer's Rules" to enhance professional competence and experience delivery.
• The Corporation has formulated the "On-the-job Training Management Measures for Employees" to encourage self-learning and provide an incentive system for on-the-job training with paid incentives so that employees can satisfy their self-fulfillment requirements in addition to improving their work performance.

Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof : No Deviation

The Corporation complies with the relevant laws and regulations and the provisions announced by the central health authority, and complies with Taiwan and local laws and regulations in the export of product and labeling. The Corporation formatted the western medicine over-the-counter drug instructions box to make it easier for the public to read and take medicine safely.

Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof : No Deviation

The Corporation has formulated the Supplier Commitment Code or the Supply Management Standard, which requires suppliers to commit or sign the "Letter of Supplier's Commitment to Environment, Safety and Health" to strictly abide by the labor safety and health-related regulations.

Contracts with suppliers include provisions requiring compliance with environmental laws, labor regulations, and occupational safety and health laws. In case of violation, the Corporation reserves the right to terminate or rescind relevant clauses of the contract.

The Corporation requires contract suppliers to sign the "Supplier Integrity Commitment Letter." In the event of any violation of the law or commitments outlined in the letter, the Corporation reserves the right to immediately suspend, terminate, or rescind transactions and cooperative relationships with the supplier.

Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof : No Deviation

The Corporation has been referring to internationally recognized guidelines in preparing its Sustainability Report, starting from the year 2023. This report follows the main framework provided by the Global Reporting Initiative (GRI) Standards released in 2021. Additionally, it adheres to the operating procedures for preparing and disclosing sustainability reports for listed companies, Sustainability Accounting Standards Board (SASB) sustainability indicators, and the Task Force on Climate-related Financial Disclosures (TCFD) for climate-related financial disclosures. The Corporation plans to continue issuing Sustainability Reports starting from the year 2024 and intends to obtain assurance opinions from third-party verification units.

Deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies and reasons thereof : No Material Deviation