Fostering a Corporate Culture of Employee Well-Being

Human Rights Policies and Commitments

PharmaEssentia recognizes and supports international human rights standards, including the “Universal Declaration of Human Rights,” “United Nations Global Compact,” “United Nations Guiding Principles on Business and Human Rights,” “International Labour Convention,” “ILO Declaration on Fundamental Principles and Rights at Work,” “ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy,” and “OECD Guidelines for Multinational Enterprises”; we have established our “Human Rights Policy” to protect the interests of corporate stakeholders, including all PharmaEssentia operational site workers, subsidiaries, affiliated companies that we hold a majority stake (more than 50% of shares) in, as well as suppliers, contractors, business partners, consumers, and communities where our operational sites are located. PharmaEssentia pledges to ensure equality and anti-discrimination, prohibit employment of child labor and trafficking of forced labor, protect freedom of association and collective bargaining rights, promote fair and reasonable remuneration as well as occupational health and safety, and implement information security. PharmaEssentia pledges to regularly implement human rights management processes, identify potential human rights risk issues in operational activities, formulate related mitigation and management measures, and communicate and convey human rights policies with employees and related stakeholders.

PharmaEssentia Human Rights Management System

1. Actions to prevent workplace bullying

   PharmaEssentia strives to incorporate the Human Rights Policy in existing management systems and amended the “Workplace Sexual Harassment Prevention, Correction, Complaint, and Punishment Measures” in accordance with law in 2024. These amendments were announced to all employees, and we organized lectures on prevention of workplace sexual harassment and other unlawful infringements to disseminate information on workplace sexual harassment, workplace bullying prevention, and related human rights issues.

   PharmaEssentia strives to incorporate the Human Rights Policy in existing management systems and upholds a zero tolerance toward discrimination and harassment. In 2024, the Company amended the “Workplace Sexual Harassment Prevention, Correction, Complaint, and Punishment Measures” in accordance with law in 2024. These amendments were announced to all employees, and we organized lectures on prevention of workplace sexual harassment and other unlawful infringements to disseminate information on workplace sexual harassment, workplace bullying prevention, and related human rights issues.

2. Evaluation mechanisms for human rights risks

   PharmaEssentia conducted human rights risk evaluations in 2024 on operational sites encompassing PharmaEssentia (Taiwan), Panco Healthcare, PharmaEssentia US, PharmaEssentia Japan. We used surveys, internal corporate records, and public human rights records to evaluate all employee human rights risks during operational processes. This evaluation identified forced labor, excessive working hours, discrimination and harassment, human trafficking, unreasonable salaries, occupational health & safety as significant human rights risks. PharmaEssentia has formulated risk mitigation and remediation measures for all significant issues, and has implemented mitigation actions at all operational sites to lower human rights risks.

Human Rights Risks Evaluation Results in 2024

Transparent Internal Communication and Grievance Channels

• PharmaEssentia has established a variety of grievance channels. All grievance reports are handled in accordance with grievance procedures and regulations, and grievant identities are keep confidential and anonymous. Our grievance channels include:

  1. “Contact us” page on our official website to collect reports and feedback from external personnel.
  2. Corporate grievance channels include our employee suggestion mailbox: voice@pharmaessentia.com, and mailbox for reporting unlawful infringement in the workplace: hr@phar-maessentia.com

• No discrimination incidents occurred at all PharmaEssentia operational sites in Taiwan in 2024, and there were also no grievances associated with employment of child labor, forced labor, or freedom of association and collective bargaining violations.

Diverse Labor-Management Communication Channels

Periodic labor-management meetings

Meetings are composed of 50% labor representatives and 50% management representatives. Management representatives communicate items related to employee health, environmental safety, salaries and benefits, and meeting minutes are released on internal websites for employee review. PharmaEssentia’s Taipei Headquarters and Taichung branch office each convened 4 meetings in 2024.

Quarterly employee conferences

We have established an employee welfare committee which convenes every quarter and invites employee proposals, following which the employee welfare committee jointly formulates employee benefits with company management.

Regular department meetings

We regularly convene department meetings with senior executives to form departmental consensus, enhance communication benefits, and convey senior executive expectations and understanding of department tasks.

PharmaEssentia actively works to attract diverse talents and strives to build diverse and inclusive workplace environments. We uphold principles of fairness and justice so talent values and salaries are not impacted by age, gender, race, or region. We also ensure that those with the same job responsibilities and performance obtain fair remuneration, and we appoint supervisors based on capabilities and performance, strengthen organizational capabilities, cultivate well-rounded talents, and firmly prohibit all forms of discrimination.

In accordance with diversity and inclusiveness principles, we establish talent structures based on job positions, education levels, age, gender, nationality, race, and other diverse indicators. As of year-end 2024, PharmaEssentia’s Taipei Headquarters and Taichung Plant had a total of 342 employees; 98.5% were Taiwanese employees and the remaining 1.5% were foreign employees. The ratio of male to female employees was 1:1, and the proportion of female supervisors was 42%, higher than the average proportion released by the Ministry of Labor (28%), fully demonstrating PharmaEssentia’s continued implementation of gender equality and empowerment. Panco extends our head office’s commitment to employees: The company is led by a female general manager who actively encourages new talents in hopes that young talents with good potential can bring innovation and vitality to the company. PharmaEssentia (Taiwan) emphasizes employment and cultivation of local talent; 98.5% of employees are Taiwanese, 0.9% are American, and 0.6% are from other countries. All executives are Taiwanese, so 100% of managers are local residents. All of Panco’s employees are Taiwanese, PharmaEssentia Japan’s employees are all Japanese, and the majority of PharmaEssentia US employees are American, with the remainder being from China, Canada, Spain, and Taiwan. PharmaEssentia US employs employees of Asian, African, Caucasian, and Pacific Islander descent, as well as employees from other regions and multiracial employees, demonstrating that our employee recruitment is not impacted by race or region. All PharmaEssentia (Taiwan) and Panco employees are of Asian descent.

PharmaEssentia 2024 Diversity Indicator- Gender

Note 1: The data covers PharmaEssentia (Taiwan), Panco, PharmaEssentia US, and PharmaEssentia Japan.
Note 2: 2030 target — PharmaEssentia (Taiwan), Panco, PharmaEssentia US, and PharmaEssentia Japan all aim for a female employee ratio of 50%.

PharmaEssentia 2024 Diversity Indicator – Race

Note: The data covers PharmaEssentia (Taiwan), Panco, PharmaEssentia US, and PharmaEssentia Japan.

Gender Pay Indicators(New Taiwan Dollar)

Note: The data covers PharmaEssentia (Taiwan), Panco, PharmaEssentia US, and PharmaEssentia Japan.

New Employees and Exited Employees

In 2024, PharmaEssentia (Taiwan) and Panco had a total of 56 new employees, most aged between 31-50 years, yielding a new employee rate of 15.34% and an employee growth rate of 7.35%. We actively work to attract external talents and promote outstanding internal employees. PharmaEssentia headquarters promoted 53 employees based on 2024 performance appraisal results, and 34% of senior executive positions were filled by promoted internal employees. To lower personnel turnover, we established a comprehensive retention program based around professional competency training blueprints to provide employees with personal development plans. In 2024, PharmaEssentia (Taiwan) and Panco had a total of 31 exited employees, with an involuntary turnover rate of 0%; the total turnover rate and involuntary turnover rate both decreased compared to 2023.

Note: The data covers PharmaEssentia (Taiwan), Panco, PharmaEssentia US, and PharmaEssentia Japan.

2024 Employment Data

Talent Cultivation Strategies

PharmaEssentia cultivates talent from three functional aspects (core values, management and leadership, and professional capabilities) to build comprehensive talent cultivation systems that link corporate culture, core values, and global strategies; create a dual-track training framework that balances management and professional competency developments; and focus on continued cultivation of mid and high level talent as well as key talent.

Cultivation methods include:

In 2024, PharmaEssentia officially introduced the Group digital learning platform to incorporate common competencies and global legal compliance courses in multiple languages. There are currently more than 3,000 courses on the platform, which greatly enhanced learning convenience and coverage. We plan to assess achievements and optimize content after the platform has been live for more than a year. In the future, we will continue to add learning resources, encourage employees to formulate customized learning plans based on personal development targets, build an independent learning culture, and cultivate key talents to support sustainable corporate development.

Dual-Track Diverse Talent Development Framework

To ensure effective implementation of talent development systems, we continually optimize our systems through PDCA cycle adjustments. Implementations and assessments are as follows:

Employee Education and Training in 2024

Performance Appraisals

PharmaEssentia conducts two performance appraisals each year to help employees and supervisors gain consensus on work targets through a circular process of goal setting, mid-year interviews, and year-end appraisals. This process also allows us to understand areas requiring improvement in employee work. The human resources department organizes employee participation in appropriate courses to improve work methods and efficiency so we can improve work capabilities and achieve corporate targets. Employees that perform well on annual performance appraisals receive awards and bonuses as incentives. New employees that have completed probation periods undergo performance interviews and appraisals conducted by their unit supervisors regarding their work during probation periods. Those who fail appraisals may have their employment contracts terminated in accordance with relevant regulations, or, upon mutual agreement, extend their probation period. Performance appraisal results are also used as a reference for reviewing employee career developments. Employees and supervisors use performance appraisals and corporate professional competency training blueprints to formulate personal career development plans, uncover employee potential, and continue to cultivate outstanding internal corporate talent. In 2024, all employees at PharmaEssentia (Taiwan), Panco Healthcare, PharmaEssentia US, and PharmaEssentia Japan (not including employees who had not completed their probation period or employees on leave without pay) underwent performance appraisals and career development reviews, achieving an employee appraisal rate of 100%. Our headquarters commended 44 employees and promoted 53 employees based on appraisal results for 2024, and 34% of middle and senior management positions were filled by promoted internal employees. Panco commended 5 employees and promoted 2 employees.

At the end of 2024, PharmaEssentia introduced the SAP GMPM system, which entered a pilot phase in early 2025, aiming to enhance management by objectives, multidimensional performance appraisal, Team-based performance appraisal and agile conversations. At the beginning of each evaluation cycle, employees propose their individual goals, while supervisors provide suggestions and adjustments through the system and assign departmental objectives to employees as their individual development goals. Both supervisors and employees may jointly review goals within the system, and employees may submit progress reports mid-cycle to inform supervisors of their work status and receive timely feedback. The system facilitates quarterly performance reviews as well as the biannual performance evaluations, enabling continuous feedback and adjustments to support employee long-term development. In addition, senior management at PharmaEssentia also awards bonuses based on the performance of individual business units and manufacturing sites.

To improve personal performance, motivate continued improvement in our colleagues, and build high-performance teams and organizations, PharmaEssentia appraised the following items:

Talent Attraction and Retention Strategy

Talent cultivation is PharmaEssentia’s responsibility and commitment toward employees. We will continue industry-academia collaborations and expand diverse recruitment channels to attract outstanding talent, build friendly and safe work environments that can inspire employee motivation and commit them to long-term career developments, thereby retaining talent. PharmaEssentia established internal talent cultivation and development policies in the third quarter of 2024 to provide more diverse incentives.

Note: The data covers PharmaEssentia (Taiwan), Panco, PharmaEssentia US, and PharmaEssentia Japan.

PharmaEssentia has implemented an employee development program for all full-time staff, aiming to enhance talent value and drive organizational performance. In 2024, the company achieved a global average employee retention rate of 90.7%. The related initiatives are as follows:

Teams and Networks

PharmaEssentia encourages both individual and team learning by inviting consultants to share extensive industry experience and best practices, thereby improving team effectiveness and learning opportunities. Employees are also encouraged to participate in industry associations and professional communities to gain insights into the latest technological trends, expand professional networks, and foster knowledge exchange.

Leadership development program - Coaching

In 2025, PharmaEssentia will conduct individual leadership assessments for designated managers across the entire group for the first time, in order to evaluate leadership competencies. Based on the assessment results, Individual Development Plans (IDPs) and coaching programs will be designed to support career goal setting and planning. A total of 95 managers will participate in the assessment in 2025, and development objectives will be systematically planned for the following three years.

Cultural education

Upholding the spirit of diversity and inclusion, PharmaEssentia’s subsidiaries in Japan and the United States provide multicultural training courses to cultivate respect for diversity and cultural awareness.

Transition program for retiring and terminated employees

The company is currently implementing the Employee Assistance Programs (EAP) to offer professional and confidential counseling services for full-time employees, covering legal, psychological, financial, managerial, and health-related issues, to help them effectively cope with challenges in both work and personal life. Retiring and terminated employees may also access EAP services prior to leaving the company, enabling them to consult with professionals regarding retirement and career change planning, as well as to explore the use of relevant resources.

Digital transition program

Since 2023, PharmaEssentia has progressively implemented a comprehensive suite of digital tools—including corporate BPM systems, procurement systems, human resource management systems, performance evaluation systems, and LMS platforms—to overcome limitations of time and space. To support employees in utilizing these digital tools, more than 20 training sessions will be conducted across the group in 2025, enabling staff to learn and apply digital systems effectively.

Remuneration System

PharmaEssentia adheres to local labor standard laws and formulates remuneration policies (including highest governance policies and remuneration for senior management) based on salary management regulations, performance management regulations, and our articles of incorporation. (Please refer to 2.1 Corporate Governance Framework for more information.) We strive to maintain industry-leading remuneration standards with performance, promotion, and structural salary adjustments adhering to annual operational conditions, personal annual performance appraisals, and third-party remuneration and benefits surveys and reports. PharmaEssentia US remuneration policies reference local regulations and AoN Radford Lifesciences Benchmarking Data, offering competitive salaries and bonuses. We also provide “employee stock options,” “employee subscriptions in cash capital increases,” “new restricted employee shares,” and other rewards to retain talent using revenue-sharing systems. If there is surplus at the end of the fiscal year, employee bonus distribution ratios for the year should be formulated, approved by the Board, and submitted to the shareholders meeting for ratification after taxes have been paid and any accumulated losses from previous years have been offset.

Employee Benefits and Care

PharmaEssentia established the employee welfare committee in 2013. The committee convenes 4 times every year, and works with company management to jointly formulate employee benefits and activities. In 2024, total expenditures for employee benefits at PharmaEssentia and Panco amounted to NT$6.16 million, an increase of 56% compared to the previous year, and a total of 1,491 employees applied for these benefits. We plan to establish emergency relief regulations in 2025 so our employees who are unable to work and face financial difficulties due to serious diseases and other factors can apply for emergency relief support to cover their basic living needs.

To attract talent, PharmaEssentia not only provides labor insurance and health insurance in accordance with law, but also provides the following employee benefits and care items superior to market standards:

Retirement System

PharmaEssentia appropriate pensions in accordance with law. Employees eligible for the old pension system deposit 2% of monthly salaries into a pension reserve account at Bank of Taiwan. Employees under the new pension system appropriate 6% of salaries each month to their personal pension accounts based on their pension levels. Panco employees all participate in the new pension system, and 6% of salaries are appropriated to their personal pension accounts based on their pension levels.

Parental Leave Policies and Current Conditions

To help employees achieve balance between work and family, PharmaEssentia (Taiwan), Panco, PharmaEssentia Japan, and PharmaEssentia US all provide parental leave benefits. PharmaEssentia Japan also offers flexible working hours and work-from-home opportunities. Primary caregivers can apply for more than 30 weeks of paid leave and non-primary caregivers can apply for more than 4 weeks of paid leave. In 2024, 26 employees at PharmaEssentia (Taiwan) and Panco were eligible to apply for parental leave without pay, and 3 employees actually applied for parental leave without pay. Reinstatement rates and retention rates all reached 100%. No employees at PharmaEssentia Japan were eligible to apply for parental leave without pay.

Maternal Care and Breastfeeding Rooms

In response to government maternity and child health and safety policies, we provide nursing care services covering consultations and follow-ups on physical and ergonomic hazards, work-related stresses, and personal health risks for pregnant employees starting from pregnancy until one year after childbirth to prevent and reduce potential maternal hazards. To protect infant and child health, we also stipulate that female employees are not allowed to work at tasks that are harmful to infants during pregnancy and breast-feeding periods. PharmaEssentia set up breastfeeding rooms in accordance with law and received the Taipei City Government Department of Health Excellent Breastfeeding Room Certification in 2023. This certificate is valid from 2023 to 2026.

Employee Assistance Program

We offer on-site health services, EAP counseling, return-to-work assessments, assistance on major events, and other diverse employee assistance programs to care for employee health while building a healthy and friendly workplace environment.

1. Flexible working hours

   The official working hours at PharmaEssentia are from 8:00 a.m. to 5:00 p.m., with a one-hour lunch break. To encourage employees to achieve work-life balance, flexible working hours are offered as follows:

   • Taipei Office: Employees may adjust their working hours by up to 1.5 hours. Work start time is between 8:00 a.m. and 9:30 a.m., and end time is between 5:00 p.m. and 6:30 p.m.
   • Taichung Office: Employees may adjust their working hours by up to 0.5 hours. Work start time is between 8:00 a.m. and 8:30 a.m., and end time is between 5:00 p.m. and 5:30 p.m.
   • In addition, a common afternoon break is scheduled from 3:30 p.m. to 3:45 p.m.
2. Working-from-home arrangements

   PharmaEssentia’s subsidiaries in the United States and Japan allow employees to work remotely for up to two days per week, reducing commuting time and enhancing flexibility.

3. Parental Leave System
   • Paid parental leave for the primary caregiver: up to 33 weeks.
   • Paid parental leave for the non-primary caregiver: 25 weeks.

   As follows:

   1. Parental Leave Allowance: During the approved parental leave, employees are entitled to a six-month parental leave allowance provided by the competent authority in accordance with the Employment Insurance Act.
   2. Prenatal Checkup Leave: Pregnant employees are entitled to seven days of paid prenatal checkup leave during pregnancy.
   3. Maternity Leave: Female employees who give birth or experience miscarriage are entitled to maternity leave, during which they are required to stop working. Public holidays and weekends are included in the leave period.
   • Employees with at least six months of service receive full pay during maternity leave.
   • Employees with less than six months of service receive half pay during maternity leave.
   1. Female employees who give birth are entitled to eight weeks of maternity leave.
   2. Female employees who miscarry after three months of pregnancy are entitled to four weeks of maternity leave.
   3. Female employees who miscarry after two months but before three months of pregnancy are entitled to one week of maternity leave.
   4. Female employees who miscarry before two months of pregnancy are entitled to five days of maternity leave.
   4. Paternity Leave for Prenatal Checkups and Childbirth:

      Employees are entitled to seven days of paid leave to accompany their spouse during prenatal checkups or childbirth. Apart from leave taken during prenatal checkups, paternity leave must be taken on the day of childbirth and within fifteen days before or after the childbirth.

4. Breastfeeding (or Milk Expression) Time

   Employees with children under the age of two who personally breastfeed or express milk are entitled to an additional 60 minutes per day, apart from regular rest periods. This time is considered working hours.

Occupational Disaster Incident Rate

No occupational injuries (excluding traffic accidents) or occupational diseases occurred at PharmaEssentia Taipei Headquarters and Taichung Plant, Panco, PharmaEssentia US, and PharmaEssentia Japan in 2024.

Lost time injury rate (LTIR)

LTIR : the number of lost-time injuries per 200,000 hours worked
LTIR=(number of lost time injuries) / (total hours worked in accounting period) x 200,000

Occupational Health and Safety Management System

PharmaEssentia formulated the “Environmental Health and Safety Policy” and adheres to environmental protection and occupational health & safety regulations. We provide internal environmental protection and occupational health & safety training to improve employee awareness of environmental protection and health & safety topics, and strive to achieve zero disasters, energy conservation, and waste reduction. PharmaEssentia has formed an occupational health and safety committee, and formulated the “Occupational Safety and Health Policy,” which has been approved by our chairperson. The Occupational Safety and Health Policy encompasses the 368 full-time employees at our Taipei Headquarters, Taichung Plant, and Panco Healthcare, achieving a coverage rate of 100%. We strive to build safe and healthy work environments that protect the health and safety of employees and related personnel, preventing injuries from happening and reducing operational risks. Occupational Safety and Health Policy management targets and indicators are as follows:

Our Taichung Plant incorporated the ISO 45001 Occupational Health and Safety Management System in 2024, formed an implementation team, executed management systems, provided complete education and training, and obtained SGS third-party verification in December 2024, establishing comprehensive hazard identification, risk assessment, and incident investigation measures. Our Taipei Headquarters plans to introduce the ISO 45001 Occupational Health and Safety Management System in 2026.

We also implemented permit, chemical, machinery, and other management procedures, achieving the following results:

Hazard Identification, Risk Assessment, and Incident Investigation

To ensure effectiveness and applicability of risk assessments during the initial stages of ISO 45001 management system incorporation at our Taichung Plant, the implementation team conducts annual health and safety risk assessments for high-risk items, and a comprehensive hazard identification and risk assessment will be regularly conducted every 3 years. This assessment is conducted using three indicators for quantitative evaluation: Severity, Frequency, and Control Effectiveness. Hazards and risks from activity changes are identified before changes can be made to related equipment processes, raw materials, products, services, and associated activities. Department hazard identification and risk assessment results for 2024 found 809 occupational health and safety risks and opportunities; 5% (44 items) of identified items scored 320 points and we implemented a total of 2 health and safety management plans.

The Taichung Plant has continuously reported zero-incident working hours. From August 28, 2023, to March 31, 2025, a total of 504,936 zero-incident hours were accumulated.

Contractor Safety Management

We have established contractor management regulations as well as management mechanisms that should be implemented before construction, before entering factories, and during construction to protect employee and contractor safety, ensuring safety and reliability in work environments. In 2024, no contractor occupational injury incidents or occupational diseases occurred in PharmaEssentia and Panco workplaces.

Occupational Health and Safety Training

A total of 800 employees at PharmaEssentia and Panco participated in occupational health and safety training in 2024 and total training hours amounted to 4,098 hours. PharmaEssentia’s Taipei Headquarters and Panco conduct external evacuation training each year as well as non-periodic training associated with emergency response, first-aid, occupational health and safety, chemical labeling, and general rules. Our Taichung Plant regularly hosts education and training, including but not limited to internal biosafety response training every year; fire and toxic chemical disaster training, ISO 45001 system incorporation training, basic environmental health and safety certification training, and on-the-job training every six months; and 3 hour general hazard training as well as health and safety training every three years. PharmaEssentia also regularly conducts fire drills and first-aid (AED & CPR) courses. We conducted a fire drill in November 2024 and implemented evacuation broadcasts, evacuation headcounts, shutdowns of important facilities, and fire extinguishing training. Our Taichung Plant conducted AED and CPR courses attended by 22 participants in 2024.

Occupational Health Services and Activities

PharmaEssentia provides various occupational health services in accordance with the “Occupational Safety and Health Act” and the “Labor Health Protection Rules,” including annual physical examinations, non-periodic health promotion lectures, special health examinations, and workplace maternal health protection. Illnesses triggered by abnormal workloads are addressed through workload questionnaires, 10-year cardiovascular disease risk assessments, and preventive measures for ergonomic hazards. We arrange for professional therapists, physicians, or nurses to provide on-site services every year. In 2024, we organized 39 physician/nurse on-site factory service sessions in Taichung and Taipei, providing services that included health management, care for middle-aged and elderly persons, and maternal health promotion to 189 personnel who participated in health education activities, received face-to-face guidance, and accepted work adjustments to reduce potential health risks. PharmaEssentia’s Taipei Headquarters and Taichung Plant have obtained the Ministry of Health and Welfare Health Promotion Administration “Accredited Healthy Workplace Health Promotion Certificate,” which is valid for 3 years. We strive to reduce occupational injury risks and build work environments that promote employee physical and mental balance, health, and happiness.

PharmaEssentia Occupational Health Services in 2024

Occupational Disaster Incident Rate

No occupational injuries (excluding traffic accidents) or occupational diseases occurred at PharmaEssentia Taipei Headquarters and Taichung Plant, Panco, PharmaEssentia US, and PharmaEssentia Japan in 2024.