Phison Electronics : Annual Report 2022

PHISON

|Stockcode : 8299|

•

Phison Electronics Corporation

2022 ANNUAL REPORT

Annual Report is available in the following websites Taiwan Stock Exchange Market Observation Post System: http:／／mops.twse.com.tw Corporation Website : https:/／www.phison.com Printed on May 12, 2023

• Name, Position, Contact Number, and Email of the Company's Spokesperson: Name: Zhi Chyang Yu
  Position: Senior Special Assistant and Chief Operating Officer
  Tel: [phone] ext.10019
  Email: [e-mail]
• Name, Position, Contact Number, and Email of the Company's Deputy Spokesperson: Name: Kuo Ting Lu
  Position: Project Manager
  Tel: [phone] ext. 26022
  Email: [e-mail]
• Addresses and Phone Numbers of Corporate Headquarter, Subsidiaries, and Plants Headquarter
  Address: 10F-6, No.251, Fuxing 1st St., Zhubei City, Hsinchu County 302 Zhunan Branch and Plant
  Zhunan Branch Address: No.1, Qunyi Rd., Jhunan Township, Miaoli County 350, Taiwan (R.O.C.)
  Zhunan Plant 2 Address: No.1-1, Qunyi Rd., Jhunan Township, Miaoli County 350, Taiwan (R.O.C.)
  Zhunan Plant 3 Address: No.1-2, Qunyi Rd., Jhunan Township, Miaoli County 350, Taiwan (R.O.C.)/No.1-3, Qunyi Rd., Jhunan Township, Miaoli County 350, Taiwan (R.O.C.)
  Zhunan Plant 5 Address: No.1-5, Qunyi Rd., Jhunan Township, Miaoli County 350, Taiwan (R.O.C.)
  Tel: [phone]
• Name, Address, E-mail Address, and Telephone Number of the Stock Transfer Agency Name: Stock Affairs Department, Horizon Securities Corp.
  Address: 3F, No. 236, Section 4, Xinyi Road, Da'an District, Taipei City
  Website: www.honsec.com.tw
  Tel: [phone]
• Name of the CPA who Audited the Financial Statements for the Most Recent Year, and the Name, Address and Telephone Number of the Accounting Firm
  Name of CPA: Chien Hui Lu, Wan Yuan Yu
  CPA Firm: KPMG
  Address: No.11, Prosperity Road I, Hsinchu Science Park, Hsinchu, Taiwan (R.O.C.)
  Website: www.home.kpmg/tw
  Telephone: [phone]
• Name of Offshore Stock Exchange and Method for Accessing Information on Offshore Securities: None.
• Website: www.phison.com

		Phison Electronics Corporation
		2022 Annual Report
		Table of Contents
Chapter 1	Letter to Shareholders	1
Chapter 2	Company Profile	5
2.1	Date of Incorporation	5
2.2	Company History	5
Chapter 3	Corporate Governance Report	7
3.1	Organizational Systems	7

3.2 Profile of Directors, Supervisors, General Managers, Deputy General Manager, Co-managers, Heads

of Departments and Branches

10

3.3 Remuneration paid to directors, supervisors, general manager and deputy general manager in the most

	recent year	20
3.4	Implementation of Corporate Governance	29
3.5	Information Regarding the Company's CPA fees	115
3.6	Replacement of CPA	115

3.7 The Company's chairman, general manager, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified

public accountant or at an affiliated enterprise of such accounting firm

115

3.8 Stock Transfer and Pledge of Directors, Supervisors, Management Team and Major Shareholders Who Own 10% of the Stock in the Most Recent Year and as of the Publication Date of the Annual

	Report	116
3.9	Relationship among the Top Ten Shareholders	117

3.10 Consolidated Number of Shares owned by Company, Directors, Supervisors, Management Team and

	Businesses Controlled Directly or Indirectly by the Company	118
Chapter 4 Capital Overview	120
4.1	Capital and Shares	120
4.2	Status of Corporate Bonds	131
4.3	Status of Preferred Stocks	132
4.4	Status of Global Depository Receipts	132
4.5	Status of Employee Stock Option Plan	133
4.6	Issuance of New Restricted Employee Shares	136
4.7	Status of Issuance of New Shares in Connection with Mergers and Acquisitions	136
4.8	Finance Plans and Implementation	136
Chapter 5 Operation Overview	141
5.1	Business Activities	141
5.2	Market and Sales Overview	154
5.3	Human Resources in the Previous Two Years Before the Publication of the Annual Report	163
5.4	Environmental Protection Expenditures	163
5.5	Labor Relations	164
5.6	Information Security Management	166
5.7	Important Contract	168

Chapter 6 Financial Information	171
6.1	Five-Year Financial Summary	171
6.2	Financial analysis in the most recent five years	176
6.3	2022 Audit Committee's Review Report	180

6.4 2022 Financial Statements (Including CPA Audit Report, Two-year Comparative Balance Sheet,

	Statement of Comprehensive Income, Statement of Changes in Equity, Cash Flow Chart, and Notes or
	Attachments)	182
6.5	The Audited Nonconsolidated Financial Statement for the Year of 2022	182

6.6 Financial Impact on the Company where the Company and its Affiliated Companies Have Incurred any Financial or Cash Flow Difficulties in the Most Recent Year and as of the Publication Date of the

	Annual Report	182
Chapter 7 Financial Status and Operating Results Review and Risk Matters	183
7.1	Financial Status Analysis	183
7.2	Operating Results Analysis	184
7.3	Analysis of Cash Flow	185
7.4	2022 Major Capital Expenditures and Impact on Financial and Business	186

7.5 2022 Investment Policy, Main Causes for Profits or Losses, Improvement Plans and Investment Plans

	for 2023	187
7.6	Risk Management and Analysis	190
7.7	Other Major Events	197
Chapter 8 Special Disclosure	198
8.1	Summary of Affiliated Companies	198

8.2 Private Placement of Securities in the Most Recent Year and as of the Publication Date of the Annual

Report

206

8.3 Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Year and as of the

	Publication Date of the Annual Report	206
8.4	Other Necessary Statements	206

Chapter 9 Material matters specified by Article 36.3.2 of the Securities and Exchange Act that has a material impact on interests of shareholders or price of securities over the most recent year and as of the publication date of the annual report. 207

Chapter 1

Letter to Shareholders