Environmental Conservation and Local Coexistence

Drawing on its own industry and environmental management experience, YFY continues to invest in wetlands, biodiversity, environmental education and the promotion of circular materials. More than 90% of the water for the Dashu Old Railroad Bridge Wetland in Kaohsiung comes from the stable discharge water of Chung Hwa Pulp Corporation's Jiutang Plant, and over the years the site has gradually developed into an important wetland serving ecological conservation, recreation and environmental education. In 2025, YFY and Chung Hwa Pulp Corporation further joined the Kaohsiung City Government and the Water Resources Agency, Ministry of Economic Affairs, to sign the MOU for the Dashu Constructed Important Wetland Carbon-Sink Survey, launching Taiwan's first constructed-wetland marsh carbon-sink enhancement program and deepening wetland conservation and natural carbon-sink research through long-term scientific monitoring. At the same time, the environmental education park at Chung Hwa Pulp Corporation's Hualien Plant continues to use the manufacturing site to promote the Circular Economy and environmental education; YFY also took part in the Sustainable Paper Creation Lab exhibition, combining the Group's paper materials, all-paper products and circular applications so that the public can discover more possibilities for paper, recycled materials and circular design in everyday settings.

Educational Companionship and Knowledge Transfer

Education is an important long-term theme of YFY's social participation. The Company supports the development of children, adolescents and young people through rural companionship, science education, woodcraft culture and technology learning. YFY Taitung Academy has continued for 11 years since its launch in 2015, with corporate volunteers conducting one-on-one video reading with children at the Guanshan branch of the Taiwan Fund for Children and Families in Taitung. Cumulative companionship time has reached 5,300 hours, and this long-term, stable companionship helps rural children build reading habits and confidence.

In science education, YFY has supported the Yuan T. Lee Science Fun Competition for 29 consecutive years, encouraging senior-high and vocational-high-school students to develop scientific literacy through hands-on work and teamwork. Chung Hwa Pulp Corporation also continues to run charity technology competitions; in 2025 the self-driving car and drone events attracted large numbers of teachers and students, and nearly 2,000 students have benefited across all editions to date.

In cultural and craft heritage, YFY partnered with National Taipei University of Technology to establish the Fengyuan-NTUT Center of Woodwork Technology and Innovation. In 2025 the Center continued to run teacher workshops, outreach lectures, woodworking experiences and the development of domestic-timber teaching materials, and brought wood education courses into elementary and junior high schools, reaching 7 elementary schools, 26 classes and 639 students in Taichung City, helping to root woodcraft culture, the use of domestic timber and the concept of sustainable forestry.

Support for Disadvantaged Groups and Community Care

YFY also supports disadvantaged groups, post-disaster reconstruction and local communities through in-kind donations, volunteers, manpower and funding, according to the needs around each operating site. Since 2022, Chung Hwa Pulp Corporation has worked with the Taiwan Photographers Exchange Association to produce graduation albums free of charge for elementary schools and kindergartens in rural communities in Hualien and Taitung; over three years this has involved 42 volunteer attendances and NT$420,000 in funding, helping 225 students preserve a record of their growth. In 2025, YFY Consumer Products Co., Ltd. donated more than 1,500 cases of household paper and cleaning and antibacterial products to social welfare organizations and disadvantaged groups, and during the disaster in Guangfu Township, Hualien, provided tissue paper, hand-wash mousse, laundry detergent and cleaning products to meet post-disaster needs. Plants of YFY Packaging Inc. also continue to contribute to their communities through road adoption, beach cleanups, winter relief, scholarships, care for disadvantaged groups and sponsorship of local activities. In 2025, sites including Xinwu, Changhua, Zhunan, Kaohsiung and Pek Crown advanced environmental maintenance and community support according to local needs, building longer-term interaction between plant operations and local life.

Social Contribution Investment

YFY's total monetary and in-kind charitable donations in 2025 amounted to NT$7,193,833, directed toward Sustainable Development Goals including no poverty, good health and well-being, quality education, reduced inequalities and sustainable cities and communities. In addition, the Company donated 65 metric tons of organic fertilizer, 436 boxes/gift sets/packs/batches of food and gift boxes, and 2,662 boxes of tissue paper and cleaning products.

Association Participation and Policy Communication

YFY continues to participate in industry associations, professional associations and non-profit organizations, using industry exchange to keep abreast of international trends, policy developments, risks and market opportunities. Through public hearings, regulatory briefings and policy consultations, the Company provides practical industry input and promotes communication among business, industry and government. YFY complies with the Political Donations Act, the Integrity Management Code and the Ethical Management Procedures and Behavior Guidelines, and maintains a position of political neutrality.

In 2025, YFY Inc. participated as a member in organizations including the Taiwan Bio Industry Organization, the Monte Jade Global Science and Technology Association, the Chinese International Economic Cooperation Association, The Third Wednesday Club and the Chinese National Federation of Industries. In 2025, contributions to trade associations and tax-exempt groups amounted to NT$4,184,410; expenditure related to lobbying, interest representation, political campaigns, political organizations or candidates was NT$0. Data coverage for these figures was 100%. Representative external collaborations include the Kaohsiung Wild Bird Society, the Epoch Foundation, the Taiwan Fund for Children and Families, the Chinese National Federation of Industries and the Monte Jade Global Science and Technology Association, covering ecological conservation, talent development, rural education, industry policy exchange and technological innovation.

Climate Policy Engagement and Trade Association Alignment

1. Management System for Policy Engagement and Trade Association Memberships

YFY Inc. incorporates climate-related public policy engagement and industry association participation into its sustainability governance and risk management. Guided by political neutrality, ethical management and regulatory compliance, its ESG Office coordinates the three business groups and relevant subsidiaries. Through public hearings, policy dialogues, workshops, association platforms and written submissions, YFY provides practical industry input on carbon fees, emissions trading, resource circularity, renewable energy and low-carbon technologies. Its engagement is guided by the Company's climate strategy, emissions-reduction targets and net-zero transition direction.

2. Governance Framework and Executive-Level Accountability

YFY Inc.'s Board oversees climate and environmental policy engagement through its Sustainable Development Committee. The ESG Office serves as the dedicated coordination and execution unit. Led by the Chief Operating Officer, the Environmental Sustainability Team brings together senior managers from the business groups and personnel at operating sites to coordinate environmental strategy, climate-related public policy positions, and engagement with public authorities and industry associations. Relevant progress and management matters are reported regularly to the Committee and are subject to Board oversight.

3. Position on Specific Climate-Related Public Policies

YFY Inc. supports the climate objectives of the Paris Agreement and Taiwan's 2050 net-zero transition, and provides practical input on carbon pricing, energy transition and resource-circularity policies. Through the Ministry of Environment’s Green Growth League, YFY joined a European study program on carbon pricing and emissions trading and provided industry perspectives on Taiwan's prospective carbon-fee and emissions-trading framework. It also exchanges practices on energy efficiency, carbon management and product carbon footprints through the Industrial Carbon Neutrality Alliance. Chung Hwa Pulp Corporation, a YFY subsidiary, has provided industry input on Taiwan's carbon-fee system through the paper industry association and has obtained SBTi validation of its near-term science-based targets. YFY Consumer Products Co., Ltd., another YFY subsidiary, has participated in public discussions and submitted written views on measures under Taiwan's Climate Change Response Act. It supports the direction of emissions-reduction policy while recommending an implementation period that enables companies to plan their reduction measures and related applications.

4. Review and Monitoring of Direct Policy Engagement

YFY Inc. uses its climate strategy, emissions-reduction targets and net-zero transition direction to review the climate-policy views it presents externally. The Environmental Sustainability Team plans the Company’s climate-related public policy positions, consolidates information from operating sites, and tracks environmental-program outcomes and improvement needs arising from external engagement. Chung Hwa Pulp Corporation, a YFY subsidiary, assesses whether its engagement on carbon-fee policy is consistent with the objectives of the Paris Agreement. YFY Consumer Products Co., Ltd., another YFY subsidiary, coordinates external participation and policy input through its sustainability office and plant energy-management personnel to maintain consistency with its emissions-reduction direction.

5. Review and Monitoring of Trade Association Alignment

YFY Inc. uses its climate commitments and emissions-reduction direction as references when assessing participation in industry associations and external initiatives. Where an association's or initiative's policy direction may differ from YFY's climate position, the Company conducts an internal review and communicates with the organization before assessing its future participation or membership. Chung Hwa Pulp Corporation, a YFY subsidiary, follows a process of identifying and evaluating external initiatives, obtaining a management decision, implementing and monitoring participation, and adjusting its approach based on the outcomes.

6. Addressing Differences Between Association and Company Positions

If an industry association's or initiative's policy direction differs from YFY Inc.'s climate position, the Company uses its existing mechanisms for internal review and communication with the organization, and assesses whether its participation or membership should be adjusted. The assessment is guided by YFY's climate strategy, emissions-reduction targets and net-zero transition commitments, with coordination and oversight through its sustainability governance structure. The Company will continue to strengthen the management and documentation of review frequency, communication timelines and withdrawal criteria.

7. Reporting on Direct Climate-Related Policy Engagement

YFY Inc. discloses the topics and channels through which it has engaged on Taiwan's carbon-fee and prospective emissions-trading arrangements, including exchanges through the Ministry of Environment’s Green Growth League and the provision of industry perspectives to public authorities. Chung Hwa Pulp Corporation, a YFY subsidiary, has participated in carbon-fee policy discussions through meetings, public forums, consultations and written input. YFY Consumer Products Co., Ltd., another YFY subsidiary, has participated in public discussions and submitted written views on measures under Taiwan's Climate Change Response Act.

8. Reporting on Trade Associations' Climate-Related Topics and Activities

YFY Inc. discloses the climate-related topics and activities of key policy platforms in which it participates. Through the Green Growth League, it exchanges views on carbon pricing, emissions trading and carbon-market design. Through the Industrial Carbon Neutrality Alliance, it discusses energy efficiency, carbon management, product carbon rules and industrial decarbonization. Through the Biogas and Biomass Energy Industry Alliance, it shares experience in anaerobic treatment, biogas power generation and energy recovery from biomass resources. YFY also discloses its association memberships and related spending. This information describes YFY's participation and the platforms’ relevant topics; the Company is working toward more complete, association-by-association disclosure of each organization’s own policy positions and advocacy activities.

9. Geographic Scope and Coverage

YFY Inc.'s climate governance structure coordinates management across its three business groups and relevant subsidiaries. Its current examples of public policy engagement principally concern Taiwan's carbon-fee, emissions-trading, renewable-energy and resource-circularity policies. Regulatory monitoring and climate management in other operating locations are carried out according to local operating needs.

Organization and Employees

In line with the Group's operating structure and the scope of its sustainability disclosures, YFY continuously monitors organizational scale, workforce deployment and talent mobility as an important basis for human resource planning and organizational development. In 2025, YFY had a total of 9,969 employees. Headcount did not fluctuate significantly during or between reporting periods, and work locations covered Taiwan, Mainland China, Vietnam and the Netherlands.

In response to the operating models of each business group and the need for workforce flexibility, the Group also uses non-employee workers such as contractors and dispatched personnel to support operations, in addition to regular and contractual employees. YFY continues to align human resources with business development needs through workforce deployment, internal selection, job rotation and talent development, and sustains critical knowledge and professional capabilities through the transfer of experience from senior and retired colleagues.

Scope of Employee Data

The scope of employee data for 2025 covers YFY Inc., the principal business groups, production sites and the related companies included in the scope of this report.

2025 Employee Composition and Geographic Distribution

YFY had a total of 9,969 employees in 2025, with men accounting for more than 70%. Work locations covered Taiwan, Mainland China, Vietnam and the Netherlands. Employee composition is described below:

Employment Types

YFY adopts regular, contractual, full-time and part-time employment types according to differing operational needs. In this report, "regular employees" are defined as employees who have signed indefinite-term employment contracts with YFY, and "contractual employees" as those who have signed fixed-term contracts. Full-time employees are defined in principle as those working 40 or more hours per week, and those working fewer than 40 hours are classified as part-time. In 2025, the overall employee structure remained composed mainly of regular and full-time employees.

Non-Employee Workers

To support production, plant services and other operational needs, YFY also works with external workers, including outsourced contractor personnel, cleaning and catering staff, security guards and agency-dispatched workers. At the end of 2025, non-employee workers across the business groups numbered 5,555 in Taiwan, 686 in Mainland China and 858 in Vietnam, for a total of 7,099. Although non-employee workers have a different employment relationship with the Company, their work activities are closely connected to Group operations. YFY therefore continues to include these workers within the applicable operational management, safety requirements and operational risk management mechanisms.

Talent Mobility

YFY continuously tracks new hires and departures to understand workforce supply and demand and talent mobility trends in each operating region. In 2025, 1,520 employees were newly hired; calculated against employee headcount in each region, new hire rates were 12.0% in Taiwan, 11.2% in Mainland China and 37.3% in Vietnam.

Hiring

*Internal Fill Rate: (Number of positions filled by internal employees / total number of vacancies during the year) x 100%.

In terms of departures, total turnover rates by region in 2025 were 17.2% in Taiwan, 12.5% in Mainland China and 30.9% in Vietnam. Across 2024 and 2025, the average annual turnover rate for regular employees was 14.2%, and the average annual turnover rate for new hires within one year was 5.3%. The Company continues to strengthen talent stability and organizational development through talent development, internal development and job deployment.

Talent Deployment and Organizational Development

YFY links talent deployment to business development needs, developing and deploying talent based on performance, development potential and career planning. Internal vacancies are filled first through internal selection, transfers and talent referral mechanisms, and are combined with reserve-manager training, annual promotions and job rotation so that employees' capabilities match job requirements.

In response to the retirement of senior employees and the need for knowledge transfer, the Company also invites retired colleagues with professional experience to participate in project guidance and experience sharing through advisory arrangements, so that professional knowledge accumulated over the long term can be sustained, reducing the impact of personnel changes on organizational capability and operational continuity.

Health and Safety

A safe and healthy working environment is an important foundation for YFY's stable operations. Guided by the principle of zero tolerance for occupational accidents, the Company has established occupational health and safety management mechanisms spanning institutional governance, hazard identification, risk grading, audit and improvement, contractor management, education and training, and occupational health, continuously strengthening workers' safety awareness and risk-prevention capability.

In 2025, total employee working hours reached 21.707 million, employee work-related fatalities remained at 0 for the third consecutive year, serious work-related injuries numbered 1, recordable occupational injuries numbered 34, and the Total Recordable Injury Frequency Rate was 1.6. One non-employee/contractor died in a traffic accident; the Company has completed the incident investigation and the related corrective actions.

Occupational Health and Safety Policy

YFY Inc. established its Occupational Health and Safety Policy together with labor representatives, approved by the Chairperson, centered on safeguarding the safety and health of employees and contractors and preventing occupational accidents. Each business group formulates Safety and Hygiene Codes of Practice according to its operating model, the nature of the work and local regulations, establishing management requirements applicable to each operating site. With zero major occupational accidents as its long-term goal, the Company prioritizes improvement actions in accordance with YFY's OHS management principles and continues to review its management systems, strengthen preventive measures and build a safety culture, reducing risks that could cause worker injury or health impacts during operations.

Occupational Health and Safety Management System

YFY has established a tiered OHS management structure based on the Occupational Safety and Health Management Measures and the Safety and Hygiene Code of Practice, and uses digital management tools including health management, safety inspections, a major-incident response platform, occupational injury statistical analysis, and contractor and access control to continuously monitor the safety and health performance of each business group and operating site. OHS requirements are also incorporated into procurement processes and contracting agreements, so that contractors are subject to consistent safety management standards.

Apart from YFY Inc. and the headquarters offices, certain plants whose operations differ in nature, and contractors and transport drivers who do not work full time at plant sites – all of which are managed through internal audits and other management measures – the remaining production sites have adopted the ISO 45001 occupational health and safety management system either as required by law or voluntarily. Internal audit coverage of the OHS management system at production sites reached 100%, covering nearly 9,000 workers; third-party certification coverage was approximately 89%.

Joint Labor-Management Participation in OHS Management

To establish worker participation mechanisms, each operating site has an Occupational Health and Safety Committee in which both labor and management participate. Employees may elect labor representatives by vote or through union nomination to join OHS personnel and site management in reviewing, assessing, coordinating and making improvement recommendations on health and safety matters. In Taiwan, labor representatives account for more than one-third of total committee members; other regions comply with local regulations, so that workers' practical experience and safety needs are incorporated into the OHS system and management decisions.

Hazard Identification and Risk-Grading Management

YFY has established an OHS management process of “hazard identification → risk grading → audit and correction → continuous improvement.”

Worker Hazard Reporting and the Right to Stop Work

YFY encourages workers to proactively identify and report unsafe conditions. Where an immediate hazard exists in the workplace and appropriate protective measures have not been taken, workers may request that work be stopped in accordance with procedures and that the level of risk management be escalated. The Safety and Hygiene Code of Practice also provides that, so long as the safety of other personnel is not endangered, workers may stop work on their own initiative and withdraw to a safe location, notifying the person in charge of the workplace immediately. The Company protects the privacy and related rights of workers who refuse or withdraw from dangerous work.

Contractor Safety Management

YFY treats contractors as an important focus of OHS management, incorporating OHS requirements from the procurement and contracting stages onward, and applying consistent safety management principles to resident contractors and in-plant workers alike. Some plants hold regular construction-review meetings to examine the implementation of construction safety, on-site management deficiencies and potential risks, and to track improvement results. In 2025, resident-contractor participation in the related construction-review meetings reached 100%, using institutionalized communication to strengthen self-inspection, hazard identification and construction safety management capability.

In 2025 there were no recordable occupational injuries among non-employees/contractors; however, one contractor died in a traffic accident. The Company has completed the incident investigation and corrective actions and continues to include contractors and external workers within the scope of safety governance and improvement.

Incident Reporting and Emergency Response

When an occupational accident occurs in the workplace, OHS personnel, the person in charge of the workplace and worker representatives carry out reporting, cause investigation, risk analysis and improvement in accordance with the internal incident-classification system. When an incident is determined to be major, the plant emergency response team is activated according to its task assignments and completes reporting on the major-incident platform within 60 minutes. Hazard and cause analysis is conducted simultaneously, the working environment and existing protective measures are verified, and an improvement plan is proposed within one week. Case announcements and experience feedback are used to reduce the likelihood of similar incidents recurring.

Each plant also conducts regular drills for fire safety, toxic-substance incidents, hazardous materials, earthquakes and other emergencies according to its risk characteristics, continuously verifying the effectiveness of reporting, evacuation and response mechanisms. In 2025, OHS, fire safety and natural-disaster drills totaled 172 sessions with 8,938 attendances.

OHS Education and Training

YFY plans OHS education and training according to the regulations of each operating region and the differing risks of work activities. Through on-site and online courses, workplace instruction, awareness campaigns and drills, the Company enhances employees' and workers' hazard identification, safe operation and emergency response capabilities, and continuously improves courses through training effectiveness or satisfaction surveys. In 2025, OHS-related training totaled 1,433 sessions with 46,856 attendances, primarily comprising:

Occupational Health Services and Health Promotion

YFY has progressively extended employee health management from disease treatment to prevention, early detection and physical and mental health promotion, establishing multi-layered support measures covering medical and nursing services, health checks, health risk management and employee assistance. In terms of health and medical resources, the Company deploys occupational health service personnel according to the needs of each operating site, with some sites assigning nursing personnel beyond regulatory requirements. Contracted physicians and nurses provide on-site health services, referrals and first aid, and online health reporting and related information channels have been established so that employees can obtain health support promptly. In terms of health checks, general employee health checks are conducted every two years together with four cancer screenings; production sites also arrange related health checks according to special operational risks and provide health-check items beyond regulatory requirements, such as ultrasound and specific cancer screenings. In terms of physical and mental health support, one-on-one physician and psychologist consultations were provided in 2025, and an Employee Assistance Program is offered in cooperation with external professional organizations, covering emotional, medical, family, career and stress-related issues. In 2025, occupational health services covered all employees with more than 9,200 attendances.

In health promotion, each business group advances activities according to employee needs, including chronic-disease prevention, health checks, exercise, physical fitness, mental health, musculoskeletal care and first-aid training. In 2025, health-promotion activities recorded more than 7,100 attendances.

Occupational Disease Prevention

Working with occupational medicine specialists and drawing on health-check and working-environment monitoring data, YFY identifies health risks that may arise from shift work, night work and long working hours, as well as from working conditions such as abnormal temperatures, noise and psychological stress, and conducts follow-up management for high-risk employees. Using annual health-check results and tools such as the Framingham Risk Score, the Company assesses ten-year cardiovascular disease risk and assigns different management levels according to the degree of risk, including self-managed health, care interviews, and consultation with a physician or occupational medicine specialist. Where necessary, job adjustment is further evaluated to reduce work-related health risks. In 2025, occupational disease cases numbered 0 and deaths caused by occupational disease also numbered 0.

2025 Occupational Health and Safety Performance

Employee occupational injury statistics for 2025 show that employee work-related fatalities remained at 0 and serious work-related injuries declined from 2 in 2024 to 1. Recordable occupational injuries numbered 34, the Total Recordable Injury Frequency Rate was 1.6, and total working hours were 21,707,278. The main types of occupational injury were being caught or pinched, entanglement, and falls.

Inclusive Growth

Talent is the foundation of YFY's continued growth and organizational resilience. The Company builds its talent development environment around capability cultivation, career development, continuous learning and family support, so that employees can obtain the resources they need across different roles and life stages, balancing personal growth with work-life balance. In 2025, YFY continued to strengthen organizational capability through talent strategy development, competency assessment and diverse training, and again joined the 2026 TALENT, in Taiwan – Taiwan Talent Sustainability Action Alliance, supporting sustainable talent development through concrete action.

Through compensation and benefits, flexible working arrangements, family care, parental leave and children's education support, the Company also addresses employees' needs at different life stages. Talent development therefore extends beyond professional capability to long-term retention and lifestyle support, creating a workplace that offers both growth opportunities and stable support.

Development and Training

To address the challenges arising from market, industry and digital transformation, YFY continues to build a systematic and sustained talent development mechanism through management-level consensus on talent strategy, adjustments to the training system and competency assessment at all levels, linking employee development to the Company's business strategy. In 2025, average training hours per employee were 17.6 hours and average training expenditure per employee was NT$1,186. By management level, managers averaged 22.8 hours and non-managers 17.4 hours, with learning resources continuing to be allocated according to differing roles and development needs.

Diverse Learning Environment

YFY provides learning resources across four categories – new-hire, management, professional and general education – delivered through classroom courses, online learning and self-directed learning platforms to help employees develop continuously according to their career stage and job requirements. In 2025, total training expenditure exceeded NT$11.66 million, with cumulative training attendance of 67,597. Training attendances by category in 2025 comprised professional competency 44,712, management and general education 21,525, and new-hire training 1,357, together with continued support for continuing education, so that professional skills, management capability and shared organizational competencies develop in parallel. The Company has also established YFY Learning – Cloud Library, offering e-books, magazines and learning content across diverse themes to encourage self-directed reading and knowledge sharing. In 2025, registered users exceeded 1,153, and by early April 2026 cumulative views had reached 60,630.

Sustainability Capabilities and Digital Transformation

Beyond general talent development, YFY also incorporates sustainability and digital transformation capabilities into its employee learning system. In 2025, ESG training and related awareness activities totaled 3,500.4 hours with 28,777 attendances, covering topics including climate and greenhouse gas management, environmental and pollution prevention, talent development, occupational health and safety, Integrity Management, information security, and AI capabilities and digital transformation, continuing to embed sustainability awareness and professional capability into daily work.

Employee Development Programs

Through management competency training and annual thematic learning programs, YFY continues to develop managers' leadership, business perspective and digital working capabilities. Management training in 2025 focused on Lean Management and Political/Economic Trend Sharing, together with AI and environmental economics topics for senior executives; management-related courses recorded 435 completions in total. The annual theme for YFY Learning was Smart Work Learning, focusing on smart working techniques in the first half of the year and workplace resilience in the second half, combining the cloud library, online platforms, TED videos, classroom courses and thematic lectures to encourage employees to build habits of continuous learning.

Performance and Career Development

YFY conducts annual employee performance appraisals and career development reviews, applying consistent standards for goal setting and performance evaluation to 100% of full-time employees within the scope of the system. Performance management follows a management-by-objectives approach comprising three stages – employee self-assessment, supervisor interview and supervisor evaluation. Employees receive individual feedback after evaluation, which serves as an important reference for subsequent career development and training.

Long-Term Incentives for Employees

YFY plans to introduce an employee share ownership trust program, under which a portion of performance-based compensation awarded to key executives and high-potential employees will be converted into shares held through the trust. The awards will be linked to the Company’s business performance, transformation outcomes, and individual performance.

The incentive program will be subject to defined performance thresholds and a three-year phased vesting schedule. In principle, the awards will vest at 30%, 30%, and 40% over the three-year period. This long-term incentive mechanism is designed to strengthen the retention of key talent and align employee compensation with the Company’s long-term value creation and shareholder interests.

Employee Benefits and Family Support

In addition to providing basic insurance and retirement protection in accordance with the regulations of each operating region, YFY offers measures covering holidays, birthdays, marriage and bereavement, childbirth, children's education, continuing education and lifestyle support through the Joint Workers' Welfare Committee and various benefit programs. In 2025, 31 employees received marriage gift payments, 87 received childbirth subsidies and gifts, and 326 received children's education subsidies. For family and care needs, the Company provides application mechanisms for remote work and flexible working hours; family-care leave can be taken in increments as small as 0.5 hours. Support also includes early-childhood education resources for employees' children, priority admission to the experimental preschool affiliated with the Hsin-Yi Foundation, and more than 1,200 partner stores offering discounts across Taiwan, helping employees balance family responsibilities with career development. For details of the benefit programs, please see Employee Benefits and Retirement System.

Parental Leave and Return-to-Work Support

Through parental leave and family support programs, YFY continues to help employees maintain work-life balance while raising children and to return to work smoothly after leave. In 2025, 82 employees were entitled to parental leave – 53 men and 29 women – and 46 employees actually took parental leave – 26 men and 20 women. Of the 47 employees due to return to work during the year, 39 actually returned. The return-to-work rate after parental leave was 70.83% for men and 95.65% for women; the retention rate for those who returned in the previous year and remained employed for 12 months was 66.67% for men and 85.71% for women. Employees had 78 newborns in 2025.

Human Rights and Labor Practices

YFY respects and safeguards the fundamental human rights of stakeholders involved in its operating activities and value chain. The Company supports the principles of the UN Global Compact and has established a Human Rights Policy in accordance with international human-rights principles including the Universal Declaration of Human Rights, the United Nations Declaration on the Rights of Indigenous Peoples and International Labour Organization conventions. YFY prohibits all forms of discrimination, human trafficking, forced labor and child labor; safeguards equal remuneration, freedom of association and the right to collective bargaining; and pays particular attention to vulnerable and high-risk groups including women, persons with disabilities, Indigenous peoples and migrant workers.

We value the labor rights and personal dignity of all workers and are committed to building a safe, healthy, diverse, equal and inclusive working environment, embedding human rights and labor practices in daily operations through institutionalized management and continuous improvement mechanisms. These principles apply not only to regular employees, contract and temporary personnel and interns, but are also expected to be followed by suppliers, contractors and business partners, progressively extending human-rights protection across the value chain. For operating and supply chain activities involving new logging or plantation development, YFY requires respect for the Free, Prior and Informed Consent (FPIC) of local Indigenous peoples and communities.

Labor Practices Commitment

YFY incorporates labor rights into its human resources and human-rights management systems, focusing on the following five commitments:

1. Paying a Living Wage: YFY continues to establish a market-competitive compensation system with reference to the cost of living at each operating location, industry salary levels and regulatory requirements.
2. Avoiding / Reducing Overtime and setting Maximum Working Hours: YFY complies with working-hour regulations at each operating location, prevents excessive working hours and compulsory overtime, and has established overtime-application and working-hour management mechanisms.
3. Equal Pay for Equal Work and Equal Opportunity: Salaries and promotions are determined by position, professional capability, work experience and performance, without differential treatment based on gender, age or other personal characteristics.
4. Paying workers for Annual Leave: YFY ensures employees receive all categories of paid leave required by law, and provides certain leave entitlements and family-support measures that exceed regulatory requirements.
5. Setting Minimum Consultation or Notice Periods before Mass Terminations: Where major organizational adjustments are required for operational reasons, affected employees are notified in advance in accordance with local law, and communication and necessary career support are provided.

Human Rights Due Diligence and Assessment

YFY extends the scope of human rights due diligence to its own operations, subsidiaries and supply chain, as well as to new business relationships such as investments and joint ventures. Through the four stages of Collect, Assess, Manage and Disclose, the Company identifies actual and potential human-rights impacts on employees, suppliers and other stakeholders.

Collect: Inventory of Human Rights Issues    With reference to international standards and peer disclosure practices, YFY conducted an inventory of human-rights issues covering 10 human-rights indicators. Six human-rights issues were identified for employees and six for suppliers, as shown in the table below.

Assess: Human Rights Risk Assessment    To assess negative human-rights impacts, YFY designed employee and supplier self-assessment questionnaires to understand the magnitude and likelihood of negative impacts for each human-rights issue, providing the basis for identifying priority issues for improvement. Employee questionnaires were distributed to employees of YFY and its subsidiaries; supplier questionnaires were distributed to the Company’s significant suppliers in Tier-1. Based on the questionnaire responses, YFY completed separate human-rights risk assessments for employees and suppliers.

Human Rights Risk Exposure Matrix

Manage: Human Rights Issue Management Measures   Employees: Based on the Human Rights Risk Exposure Matrix above, YFY identified Workplace Health and Safety and Working Hours Management as two material risk issues in its own operations, with measures implemented across all 36 sites. Responsible departments record and manage each issue, continuously review, implement and revise risk-management measures, and track status. Suppliers: From 2023 to 2025, YFY completed assessments for 28% of significant suppliers in Tier-1. No significant human-rights risks were identified, so no related mitigation measures were taken in 2025. If future assessments identify human-rights risks among suppliers, YFY will continue tracking and take relevant actions to reduce human-rights impacts in the supply chain.

Disclose: Information Disclosure    YFY communicates its human rights policy and due-diligence results externally, including disclosure in the annual Sustainability Report.

Relocation, Resettlement and Livelihood Restoration Management Framework

YFY respects the rights of residents and communities in its operating locations in relation to land, housing, assets and livelihoods. The Company is committed to avoiding physical or economic displacement arising from land acquisition, restrictions on land use or project development. Where displacement cannot be avoided, YFY will minimize adverse impacts on affected people through meaningful engagement, fair compensation, appropriate resettlement and livelihood restoration measures.

This Framework applies to YFY and the subsidiaries and operating sites under its management control. It covers new construction, expansion, land purchases or leases, acquisition of rights of way, changes in land use, and the development of forests, plantations and associated facilities. For joint ventures and investments outside its control, and for business partners, YFY will promote the relevant requirements according to its influence and the level of risk.

Physical displacement refers to situations in which affected people must leave their existing homes. Economic displacement refers to the loss of assets, income sources or resources needed to sustain livelihoods as a result of land acquisition or restrictions on land use, whether or not affected people move from their homes. YFY will implement this Framework in accordance with applicable laws in its operating locations, with reference to the relevant principles of IFC Performance Standard 5.

1. Minimizing the acquisition of land resulting in physical or economic displacement

At the early stages of site selection, investment and project planning, YFY will assess how land acquisition and use arrangements may affect homes, agricultural land, business activities, public access and the use of natural resources. To avoid displacement and loss of livelihoods, the Company will prioritize the comparison of feasible alternatives, including using existing sites, selecting alternative locations, reducing land requirements, and modifying project designs or construction methods.

Assessments will include landowners, tenants, actual occupants, cultivators, businesses and other users who depend on the affected land or resources for their livelihoods, with particular attention to vulnerable groups and Indigenous peoples. A site’s location within an industrial zone, the use of a negotiated purchase agreement or government approval of the land does not, by itself, establish the absence of impacts on rights.

YFY will retain records of alternative assessments, impact screening and the reasons for its decisions. Where significant displacement or livelihood impacts remain, the relevant management plans must be completed and approved before activities causing those impacts may proceed.

2. Disclosure of displacement eligibility and entitlements as early as possible in project planning

At the early stages of project planning, YFY will explain the proposed land requirements, potential impacts, survey procedures, eligibility criteria, compensation and resettlement options, livelihood support, anticipated schedule and grievance channels in languages and formats that affected people can understand. Adequate opportunities will be provided for questions and discussion.

YFY will establish a register of affected people through population, asset and livelihood surveys, and develop an eligibility and entitlement matrix based on the nature of their rights and actual losses. Where an eligibility cut-off date is required, the Company will clearly disclose the date, its purpose and how it applies, and establish procedures for addressing omissions, corrections and disputes.

Eligibility assessments will consider legal rights, traditional or customary use rights recognizable under applicable law, and the circumstances of people who are affected but lack formal land titles. The absence of formal title will not automatically exclude consideration of losses of non-land assets, relocation assistance or livelihood support. Information will be updated and further engagement undertaken when the project scope or measures change.

3. Fair determination of compensation for land acquisition and other assets

YFY will assess compensation transparently, consistently and in a verifiable manner, distinguishing losses of land, buildings, crops, equipment and other assets. Relocation costs, business interruption and support needs during the transition period will be assessed separately.

For eligible asset losses, YFY will apply the principle of full replacement cost, including reasonable transaction costs necessary to acquire equivalent assets, rather than relying solely on book values or depreciated amounts. Where necessary, qualified professionals free from conflicts of interest will be engaged to conduct valuations. YFY will explain the valuation methods and results to affected people and provide a channel for review.

As a general rule, compensation and necessary resettlement assistance should be made available and provided before possession of land is taken or displacement occurs. Where land acquisition or resettlement is led by government authorities, YFY will, within the scope of its participation, review gaps between those arrangements and this Framework and coordinate any necessary supplementary measures.

4. Development of resettlement action plans for physical displacement

Where a project may require residents to leave their existing homes, YFY will prepare a Resettlement Action Plan before displacement occurs. The plan will specify the affected people, survey findings, compensation entitlements, resettlement options, relocation and transitional support, budget, schedule, responsible functions and monitoring arrangements.

YFY will discuss feasible options with affected residents and host communities, assessing the safety and security of alternative housing, security of tenure, water and sanitation facilities, and access to transport, healthcare, education and employment. Family, community and cultural ties will be preserved, and appropriate assistance will be arranged for older people, persons with disabilities and others with specific needs.

Where Indigenous peoples are affected, YFY will coordinate implementation with its Indigenous Peoples Engagement and Cultural Heritage Protection Framework and determine the applicable consultation and Free, Prior and Informed Consent (FPIC) requirements. Resettlement outcomes will be assessed against actual living conditions and the protection of rights, rather than solely on the completion of relocation or payment of compensation.

5. Development of livelihood restoration plans for economic displacement

Where land acquisition or restrictions on land use cause the loss of income, employment, farming, business or resource-use opportunities, YFY will prepare a Livelihood Restoration Plan with the objective of improving, or at least restoring, affected people’s previous livelihoods and living standards.

YFY will first establish baseline information on income, assets, production activities and dependence on resources, and then consult affected people on appropriate measures. These may include alternative land or resource-use arrangements, assistance with re-establishing businesses, skills training, job placement support and transitional assistance. For people whose livelihoods depend primarily on land or natural resources, priority will be given to assessing replacement resources with comparable productive capacity and accessibility.

YFY will monitor the recovery of income and productive capacity and, where necessary, adjust measures or extend support. General local hiring, charitable donations or one-off cash compensation may be counted toward livelihood restoration outcomes only where they are linked to affected people’s actual losses and restoration needs.

6. Physical and economic displacement grievance mechanisms

Building on its existing community communication and grievance channels, YFY will explicitly include concerns relating to land acquisition, eligibility, valuation and compensation, relocation and resettlement, resource use and livelihood restoration. Affected people may raise concerns through site contact points, telephone, email or other appropriate means. Language assistance and support for recording oral submissions will be provided where needed.

YFY will disclose contact points, handling procedures and expected response times, and establish processes for registering, investigating, discussing, responding to, remedying and following up on grievances. The Company will protect complainants’ privacy, prohibit retaliation and ensure that raising a grievance does not reduce the compensation or support to which they are entitled.

Cases involving conflicts of interest, significant disputes or unresolved concerns will be escalated to the appropriate management level, with independent professional assistance sought where necessary. The Company’s grievance procedures will not restrict affected people’s access to judicial, administrative or other remedies.

7. Periodic audit and assessment of resettlement action plans and/or livelihood restoration plans

YFY will establish monitoring and audit plans proportionate to project impacts. Reviews will assess the adequacy and timeliness of compensation, the suitability of alternative housing, the restoration of income and resource access, the effectiveness of support for vulnerable groups, and the resolution of grievances and completion of corrective actions. Affected people’s views will be incorporated into these reviews.

Under this Framework, YFY will periodically conduct comprehensive assessments of ongoing resettlement and livelihood restoration plans. Project reviews will also be conducted at key stages, including relocation, handover of alternative housing and completion of major livelihood restoration measures. Significant or complex cases will be assessed by qualified professionals independent of the implementation team, with external completion audits undertaken where necessary.

Where deficiencies are identified, YFY will specify corrective actions, responsible persons, budgets and deadlines. Closure will require evidence that key commitments have been fulfilled and that affected people have been provided with adequate opportunities and assistance to restore their livelihoods. Outstanding matters will remain subject to follow-up.

Indigenous Peoples Engagement and Cultural Heritage Protection Framework

YFY respects Indigenous peoples’ dignity, self-identification, collective rights, customary land and resource use, culture and livelihoods. Building on its Human Rights Policy and support for the United Nations Declaration on the Rights of Indigenous Peoples, this Framework applies to YFY and subsidiaries under its management control, including operations, projects, land acquisition and use, forestry and raw-material procurement. Suppliers and partners are addressed through risk-based due diligence, contractual requirements and corrective follow-up, according to YFY’s leverage. Joint ventures and other investments are addressed in proportion to control and risk.

1. Identifying affected indigenous peoples

Before new construction, expansion, land acquisition or leasing, land-use changes, new logging, plantation development and relevant sourcing decisions, YFY will identify potentially affected Indigenous peoples and rights holders. Screening will combine public and government information, land and sourcing records, field inquiries and community self-identification. It will consider customary territories, resource use, seasonal activities and dependence on land, forests and water, without relying solely on formal title or official recognition. Direct, indirect and cumulative impacts connected to operations and supply chains will be assessed. Uncertainty or competing claims will be reviewed with potentially affected communities and qualified experts, with the basis for decisions documented.

2. Understanding the local context for engaging with indigenous peoples

Before engagement, YFY will understand affected Indigenous communities’ languages, history, customs, social organization, customary and current decision-making processes, representation, resource use and livelihoods. The assessment will consider women, elders, youth and other groups whose views may be underrepresented. YFY will agree appropriate participants, languages, locations, timing and information formats with the communities, providing translation or independent expertise where needed. Baseline studies and engagement arrangements will respect cultural restrictions, ceremonies and sensitive information and be updated when project conditions or community needs change.

3. Principles of good engagement of indigenous peoples

YFY’s engagement will be respectful, conducted in good faith, transparent, inclusive and ongoing. Consultation will use representatives and decision-making arrangements recognized by the communities and provide opportunities for different groups to express their views. Engagement will begin while alternatives remain open. YFY will provide understandable information on activities, alternatives, impacts, safeguards and grievance channels, allow adequate deliberation time and avoid coercion, manipulation or improper inducements. Community input will inform siting, design, resource use and protection measures, with feedback on decisions. Employment, donations and community programs will not be made conditional on consent.

4. Free prior and informed consent

YFY maintains its existing requirement that its own operations and suppliers respect and protect the FPIC of local Indigenous peoples and communities before new logging or plantation development. To implement this commitment, YFY will agree consultation and consent-verification arrangements with affected communities in advance, provide adequate and understandable information on risks, alternatives and rights before activities begin, and allow decisions through community processes without coercion, intimidation or manipulation.

YFY proposes extending FPIC screening to impacts on customary lands or resources, relocation, unavoidable significant impacts on critical cultural heritage, and commercial use of Indigenous cultural knowledge. Relevant activities will not proceed without required consent. Supplier cases will require evidence and corrective follow-up, with sourcing suspended where necessary. Material changes will trigger a renewed consent review. Government permits, donations or meeting attendance will not be treated as consent.

5. Commitment to protect and preserve cultural heritage from the adverse impacts of local activities

YFY will identify and protect tangible cultural heritage, culturally or spiritually important natural features, and traditional knowledge, expressions and practices potentially affected by its operations, projects and related sourcing. Protection will extend beyond legally registered assets to archaeological sites, graves, structures, ceremonial places, sacred forests and culturally significant waters. YFY will prioritize avoidance through siting and design and agree necessary mitigation, protection and restoration with communities and qualified experts, including appropriate cultural access. Suspected heritage discovered unexpectedly will trigger a halt to disturbance in the affected area, site protection and notification; work will resume only after professional assessment and necessary consultation.

Commercial use of Indigenous knowledge, imagery, names or practices will require prior disclosure of purpose and impacts, applicable FPIC and authorization, and agreed fair benefit sharing. Collection and disclosure of cultural information will respect community confidentiality.

6. Grievance mechanisms

YFY will enable affected Indigenous peoples and their representatives to raise concerns through community contacts, telephone, email or other culturally appropriate channels. The mechanism will address land, resources, livelihoods, heritage, engagement, FPIC and resettlement. YFY will explain contact points, procedures and expected response times, support language or written submissions where needed, and offer anonymity or confidentiality and protection from retaliation. Responsible functions will assess and investigate cases and discuss resolution and remedy with complainants. Conflicts of interest and unresolved cases will be escalated or receive appropriate independent assistance. Access to judicial, administrative or other remedies will remain available.

7. Audit and assessment of relocation/resettlement

YFY will assess potential physical and economic displacement affecting Indigenous peoples. Where such impacts are identified, YFY will apply its Relocation, Resettlement and Livelihood Restoration Management Framework for avoidance, eligibility, compensation, resettlement planning, livelihood restoration, grievance handling and monitoring, together with this Framework’s Indigenous-specific safeguards.

Assessment and implementation will respect customary and collective land and resource rights, community decision-making processes, cultural ties and access to culturally significant places. YFY will consult affected Indigenous communities and meet this Framework’s applicable FPIC requirements before proceeding with activities that cause displacement.

Periodic assessments and audits will follow the general framework and additionally verify compliance with applicable consent requirements and agreed conditions, cultural suitability of resettlement, restoration of resource access and livelihoods, and fulfillment of community commitments. Affected communities will participate in these reviews. Material or complex cases will be assessed by qualified professionals independent of implementation. Completion will require verification of agreed outcomes, with unresolved deficiencies remaining under corrective follow-up.

Implementation of Human Rights and Labor Practices

Equality, Inclusion and Labor Relations

Anti-Discrimination / Harassment

YFY has established anti-discrimination and anti-harassment policies and is committed to a respectful, safe working environment free from sexual harassment and improper treatment. Gender-equality, sexual-orientation-equality and harassment-prevention training is conducted regularly for employees, managers and personnel who may participate in handling complaint cases, with a required 100% pass rate. The Company has formal complaint and investigation mechanisms: complaints are handled by the Human Resources department, and complaint and investigation panels are formed case by case, including external professionals with gender sensitivity where necessary, in order to protect the rights, privacy and procedural fairness of the parties involved. No discrimination or harassment cases requiring investigation occurred in 2025.

Freedom of Association and Labor-Management Communication

YFY respects employees' freedom of association and right to collective bargaining, and has established trade unions or labor-management communication mechanisms at each operating location in accordance with local regulations. In 2025, trade unions covered 55.6% of employees. Union representatives can raise employee needs directly with management through joint meetings with senior management; sites without unions communicate through regular labor-management coordination meetings. In Taiwan, unions hold at least one general or delegate meeting annually, and labor-management meetings are held quarterly. No cases were reported in 2025 in which employee rights were harmed by inadequate communication.

Workplace Diversity and Equality

YFY is committed to building a diverse and equal working environment, with continued attention to workforce composition across gender, age, professional background, nationality and disability status. Through talent recruitment, promotion and development mechanisms, the Company ensures that employees are not treated unfairly on the basis of gender, age, nationality or other personal characteristics.

In 2025, women accounted for 24.5% of the total workforce and 21.5% of management positions, with women holding 34.2% of STEM-related positions. The Company continues to review composition across management levels, job functions and the talent pipeline, and promotes the advancement of diverse talent into professional and management roles. In disability employment, the Group employed 100 persons with disabilities in 2025, and its workforce represents nine nationalities, reflecting the composition of a cross-regional operation.

Local Talent Development

Local Talent Policy

As a global group, YFY has a diverse workforce representing nine nationalities. Given the nature of our industries, we are committed to hiring local talent at our operating sites, promoting local employment and cultural integration, and ensuring that our business grows alongside local communities.

We value locally rooted operations and actively implement our local talent policy through flexible development strategies tailored to regional market conditions and operational needs. These strategies include prioritizing local recruitment, developing local talent for management roles, and providing career training opportunities. Through these efforts, we build a skilled workforce, strengthen local ties, and enhance our long-term competitiveness.

YFY has experience delivering turnkey plants overseas dating back to 1984. Today, we continue to share papermaking expertise, develop talent across our operating locations, and promote local employees to management positions.

Local Employment

We value social inclusion and talent development, and are committed to strengthening local talent’s vocational skills and helping job seekers develop the expertise needed by YFY and related industries. We actively participate in local recruitment events and offer professional training courses to enhance job seekers’ employability.

We also provide on-the-job training and upskilling programs to support employees’ continued development, strengthen local workforce capabilities, and promote diverse and inclusive employment opportunities that create greater value for society.

Over the past four years, local employees have accounted for more than 90% of our workforce on average, reflecting our strong commitment to local talent. The table below shows the proportion of local employees at our operating locations.

Remuneration and Fair Pay

Balancing external market competitiveness with internal equity, YFY has established compensation, benefit and performance management systems, and upholds the principle that employees share in the results of the Company’s operations in order to attract, retain and motivate talent. Employee remuneration is determined by education, work experience, professional capability and assigned position, with salaries adjusted upon promotion and without differential treatment based on gender, age or other personal characteristics. The Company also continues to review salary competitiveness and internal equity with reference to peer and market salary surveys.

YFY's salaries in Taiwan, Mainland China and Vietnam all exceed the local statutory minimum wage. In 2025, the average monthly starting salary for inexperienced new hires was 33.3% above the statutory minimum wage, supported by market-level bonuses and allowances that support employees’ basic livelihood and long-term career development. The Company continues to review pay differences and discloses salary information for full-time non-managerial employees in accordance with Taiwan Stock Exchange requirements. In 2025, the average annual salary of full-time non-managerial employees was NT$780,000 and the median annual salary was NT$689,000. Gender pay analysis shows a 0.4% mean gender pay gap and a 7.0% median gender pay gap in 2025; for bonuses, women’s average and median amounts were higher than men’s. YFY continues to review pay equity through its compensation system, market benchmarking and performance management mechanisms.