Corporate Governance Enhancement

We enhance our core strengths through global resource integration and expand our product marketing efforts worldwide to meet customer demands promptly, ensuring sustained competitiveness and value creation.

Supply Chain Management

PHIHONG values the importance of establishing a sustainable supply chain. Through the “Procurement Management Procedures” and other related systems, we regulate the various procedures of supplier management. We also require our suppliers to sign the “Integrity Pledge”, “Confidentiality Agreement”, “Environmental and Social Responsibility Pledge”, and “Conflict Minerals Investigation Form” to understand and control labor rights, environmental protection, ethical regulations, safety, and health risk management in the supply chain, to reduce operational risks and costs for ourselves and our suppliers. We work together with our suppliers to achieve a stable and sustainable future.

Specific measures for information security management

Managed item	Information security management measures	Specific implementation details
Account Management	Management measures for personnel account authorization and password	Authorization management of staff entry, change or departure accounts Account and password specification and management
Access Control	Control measures for personnel access to internal/external systems and data transmission channels	Internal/external access control measures Control Measures for Data Leakage Channels Operation behavior track record analysis
External Threats	Potential weaknesses in internal systems, virus infected channels and protective measures	Firewall setup, update and automatic defense function activation Vulnerability detection, update and upgrade measures for operating systems, applications or software and databases of host/ computer/ laptop equipment Implement virus protection, malware detection
Weakness Analysis	Regular scanning and inspection of PC and server systems for weaknesses and remedial measures	Regular execution
Social Engineering Walkthroughs	Strengthen information security measures for personnel access to external email messages	Regular rehearsals
Education & Training	Regularly publicize the concept of information security to users and employees Implementation of account, equipment and data management for users	Regular execution

Key material risk management

Local procurement

Phihong’s Green Supply Chain Management strengthens its local procurement strategy, reducing supply chain risks, overall carbon emissions, and creating local job opportunities. We prioritize suppliers located in the same region as our production facilities to minimize carbon footprint. The localization ratio for 2023 is illustrated in the following diagram, with China having the highest proportion of local procurement, while efforts are ongoing in Vietnam to increase the use of local components. New suppliers are selected based on the principle of being within a 2-hour drive from the factory, whether for mechanical or electronic compo-nents, aiming to further enhance the localization ratio. Local procurement helps reduce the environmental impact of overseas logistics and transportation processes, reducing greenhouse gas emissions. If overseas procurement is necessary, we carefully consider lead times to minimize shipping frequency, reducing both inbound and outbound costs for both Phihong and suppliers.

Eco-Friendly and Energy-saving Design

In 2023, Phihong has designed and developed a total of 3009 models (products). The development results of lead-free (RoHS) and halogen-free (Halogen Free) models are as follows:

The number of cases of lead-free RoHS (compliant with the International Green Directive benchmark) models: 2916. An increase of 1977 newly developed cases compared to 2022.
The Number of Halogen Free (above the International Environmental Directive benchmark) models: 93. Compared with 2022, there are 6 new development cases. Many materials are newly designed and are currently required to comply with international environmental protection directives. In the future, we will continue to move towards the goal of being environmentally friendly and complying with halogen-free requirements.
All machine parts are WEEE compliant. The total recycling rate (recyclable materials) can reach more than 80%. The total recycling rate of some models can even reach 90% or more.

Manage Projects	Information Security Management
Raw material use	Comply with international environmental standards. Comply with RoHS, REACH and Substances of Very High Concern SVHC and other relevant regulations. According to the environmental standards of exporting countries, such as California Proposition 65, TSCA, or to meet the requirements of halogen-free specifications of customers' products, etc. Promote local sourcing and supply chain for environmental sustainability and ban conflict minerals.
Production planning	All plants are certified to ISO 14001/ISO 45001 Environmental Health Management System or equivalent. Compliant emissions. Improve energy efficiency to reduce energy consumption and greenhouse gas emissions. Comply with production process volatile organic compounds (VOCs) specification.
Transportation	All factory zones have obtained ISO 14001/ISO 45001 environmental health and safety management system certification or equivalent, ensuring compliant emissions. Improving energy efficiency to reduce energy consumption and greenhouse gas emissions. Meeting volatile organic compound (VOC) regulations in the production manufacturing process.
Consumer safety	Optimize transport route planning to minimize trips. Evaluate transportation distances and packaging usage for frequent transactions, recycle materials, and promote reuse.
Recycling redesign	PHIHONG’s full range of electronic products comply with the EU WEEE requirements.