Market Risks

Change in Interest/Exchange Rate

Changes in interest/exchange rate affects financial revenue and expenditures, impacting financial gains and losses.

The accounting department carefully evaluates and responds to reduce losses.

Information security

Cyber-attacks or unexpected outage of information and communication caused by a major natural disaster

Cyber-attacks and information leak will impact the protection of the internal and external IPR, disrupt operations, cause serious problems such as financial damage or breach of laws or contracts and will damage the goodwill and customer relations.

Important information system obtains ISO 27001 certification.

Manage mobile storage devices.

Set up a firewall and conduct relevant information security education and training to continue educating employees about information security concepts.Manage mobile storage devices.

Frequently scan for vulnerabilities to constantly upgrade and strengthen our information protection system.

Conduct internal information security audits at least once a year, followed by external audits by 3rd party certification agencies.

Perform Information System recovery mechanism drills to test the effectiveness of our information system recovery procedures to ensure that the company’s system can continue to operate even if subject to a national disasters and malicious attacks.

Climate Change Risk

Electricity rationing, outage, outage due to circuit breaker tripping

Electricity outage, whether due to power cut or a tripping circuit breaker, interrupts the operation of crucial machine rooms and machinery, and may jeopardize personnel safety.

Conduct a load bank test on the generator very month.

Practically maintain the UPS every quarter to ensure the stable operation of critical machine rooms and machinery.

Purchase oil pumps and empty oil drums.

At present the IN factory generator is capable of up to power supply for 4 hours to those life sustaining equipment, for example fire safety equipment, MIS server room, elevators and light fixtures.

Climate Change Risk

Water rationing outage.

Water rationing and water outage will hinder operations, prevent the cooling of the temperature of the engine and testing equipment, and disrupt the work of the personnel.

Establish a water level situation monitoring mechanism.

Modify supply pipelines of the city water and modify them to the effect that they can supply water to equipment and machinery whenever needed.

Supply Chain Management

An abnormality or disaster emergency including incidents such as malicious price increase exploiting insufficient capacity in the economic cycle, infectious diseases, earthquake, typhoon, flood, fire and explosion or vandalism due to riots and protests.

An abnormality may interrupt the supply of parts, suspend the production lines of processing plants, therefor delay shipments to customers, and thus cause the Company’s having to compensate for breach of contract and sustaining a loss due to suspension of production lines.

Emergency Investigation and Short, Medium, Long Term Risk Assessment. Short term risk assessment Assesses the risks associated with the inventory level of suppliers, the ability of agents to allocate and mobilise products, replacement with substitute materials. Rush purchase on the spot market, product origin investigations and capacity investigations. Medium- and long-term assessment will assess the potential risks that the suppliers determine the abnormalities will have on their company by inferring from the abnormalities extent of worsening and impacting presumed by them.

An emergency response meeting may be convened by the head of the procurement staff and ever needed the extent of the impact as indicated in the emergency investigation results may server. As the reference for response to be made by the relevant units.

Investment Management: have the Rd/PM confirm Weather the materials not in use for long can be changed to other commonly used materials to increase commonality or resell.

Lead time management: negotiating on long lead time materials, communicate to bring the lead time back to a normal length of time and identify NCNR, LTA, cancellation day and forecast supplies, to effectively shorten the lead time.

Legislation Change

The Indian Government has amended the Energy Conservation act in 2022 mainly focusing of the carbon trading scheme and an energy conservation and sustainable building code for large buildings which has a minimum connected load of 100 Kilowatt (kW) or contract demand of 120 Kilovolt Ampere (kVA). In addition, the EU will commence a test run of its Carbon border adjustment mechanism (CBAM) which will apply to more industries in the future.

In the future, if operations continue to scale up or the government revises down the emission threshold, the company must bear additional carbon cost> brand customers will also respond to the international requirements on disclosure of carbon information by demanding the company to provide relevant date and adopt response measures.

Continue to implement carbon inventory and energy conservation and carbon reduction projects every year.

Purchase renewable energy certificates.

Inventory the carbon footprint of major products. Gradually gather relevant data and grasp the carbon hotspots during a product life cycle.

Labour shortage

According to a job bank’s statistics, the semiconductors sector’s ratio of opening to applicants is higher than the recruitment market as a while, given the emergence of electric cars, metaverse and AI, low birth rate and labour shortage in the semiconductor sector, making it harder for enterprises to reach and retain talents.

Local labour market manpower is not sufficient enough to underpin the development of the industry and the company and costs higher with increased competition.

Reference the survey in the industry to constantly improve the attractiveness of employee welfare and salary.

Launch improvement projects based on the results of the employee opinion survey. Maintain clear and effective labour management communication channels so as to enhance employee recognition for the company.

Provide new skill training, diversity, the portfolio of the occupational competencies among the existing talents so that they may be more lined with the company's business direction in the future.