Production Risk （G）

• Depending on the basis of the Business Department's estimated orders, plan production and sales targets, and dynamically adjust the production line to match production.
• Appropriately plan the schedule of subcontracted hot-rolling operations, and seek assistance from domestic excellent hot-rolling manufacturers in due course.
• Ensure the quality and quantity of steelmaking raw material deliveries, and monthly monitor and compare whether raw material and nickel metal input and output are normal; continuously monitor whether various steelmaking process parameters are stable.
• Establish appropriate spare parts management methods to prevent production line shutdowns due to material shortages.
• Build a maintenance knowledge base through maintenance cases, which can be used for inquiries in case of equipment failure, so as to shorten the maintenance time and quickly resume production.
• Implement autonomous quality control in each unit and actively collaborate with quality assurance to prevent batch defects, enhance inspection capabilities, and provide timely warnings to reduce the risk of batch defects.

Sales risks （G）

• Stabilize existing customer base: Through monthly customer visits, fully understand distributor and market demands, and build long-term cooperation models to effectively consolidate loyal customer groups.
• Adjust raw material procurement volume: Our company does not sign long-term contracts for raw material procurement. In response to rapid market changes, we timely convene meetings for review, flexibly adjust and leverage the advantages of a nimble procurement strategy to reduce the risk of inventory price drops.
• Propose flexible order acceptance models: To increase monthly order volume, propose special sales programs for certain products at pricing meetings to effectively improve equipment utilization rates.
• Expand the breadth of export orders: Continuously seek partners in markets such as Europe, America, and Southeast Asia, and gradually build distribution channels to reduce the risk of over-concentration in sales regions.

Business Environment Risk （G）

• Tsingshan Holdings Group, China and Indonesia use laterite nickel to smelt stainless steel, and sell it in the global market with low cost advantage. Taiwan's stainless steel industry has a high cost of raw materials, resulting in an oversupply of steel coils. Therefore, the Company continues to reduce production costs and develop new steel types Increase added value to enhance product competitiveness.
• The key indicators of operation are mainly: gross profit rate, operating profit and loss, pre-tax profit and loss, capacity utilization rate, inventory balance, idle capacity loss and inventory profit and loss, etc. The Accounting Office regularly produces relevant management reports every month for regular monitoring by responsible units.

Raw Materials & Supply Chain Risk （G）

• To ensure the supply of stainless steel scrap and ferrochrome raw materials, based on production and sales planning needs, secure the procurement of stainless steel scrap and ferrochrome raw materials for steelmaking production.
• Control the low-cost inventory model for black coil, and adopt a flexible application mechanism for black coil procurement and steelmaking replacement costs.
• Actively procure and develop nickel-based raw materials for use as steelmaking ingredients.

Supplier Management Risk （S）

• When purchasing raw materials from foreign suppliers, a purchase contract must be signed, which clearly stipulates that the supplier should abide by local laws and regulations, including labor and human rights related laws and regulations.
• Suppliers must also clearly provide the source of their raw materials, so as to filter and avoid obtaining raw materials produced by upstream manufacturers that violate international regulations or consensus.
• In terms of raw material supplier management mechanism, there is a rejection list of manufacturers and JIS MARK supplier evaluation. Through the above-mentioned procurement procedure specifications and review mechanisms, suppliers can be managed and screened for pre-qualification and contract performance capabilities.

Currency Risk （G）

• When the U.S. government releases monetary policy-related news every week, better observe exchange rate trends, so as to buy at a relatively low price and grasp the lower average cost to cover the payment in U.S. dollars.
• For monetary liabilities denominated in other foreign currencies, by buying or selling foreign currencies at the instant exchange rate, the net exposure risk is maintained at an acceptable level.

Information Security Risk （G）

• Regular data backup and recovery training for important information systems and data files; establish auxiliary and replacement computer equipment and emergency power facilities, strengthen monitoring, anomaly management, and backup, and set up early warning notifications to reduce the risk of information system interruption.
• Install firewall systems to defend against illegal external network packets, enhance intrusion prevention, block spyware, and improve protection against unknown attacks; set up antivirus servers to constantly detect the network and prevent computer virus intrusion and spread; build a cybersecurity zone defense system to isolate and eliminate virus infection spread, thereby strengthening information security protection.
• Implement a fingerprint access control system in the computer room to manage personnel entry and exit, prevent unauthorized personnel from entering, and ensure the security and confidentiality of computer room equipment.

Climate Change Risk （E）

• In response to changes in government laws and policies related to climate change, formulate energy-saving and carbon-reduction implementation plans.
• Carry out inventory and verification of greenhouse gas emissions to discuss reduction goals and benefits.
• In line with Taiwan's greenhouse gas reduction policy, set annual voluntary greenhouse gas reduction targets to reduce emissions and reduce impacts.
• Continuously report the Company-wide greenhouse gas voluntary reduction plan and performance every year.
• Collect and calculate product carbon content information for the EU CBAM transitional period.
• In response to the preliminary plan for carbon neutrality, implement the green power policy, build green power to reduce carbon emissions, and strive to obtain carbon rights.

Environmental Protection （E）

• Regularly monitor and analyze and effectively control the quality or quantity of industrial waste. For the slag produced in the steelmaking process and the inorganic sludge produced by wastewater treatment facilities, all meet the requirements and can be cleared by legal recycling organizations for removal and reuse.
• Strengthen the maintenance of pollution prevention and control equipment to maintain normal operating functions, and closely monitor the quality of pollutant emissions (such as nitrogen oxides, sulfur oxides, etc.) to comply with operating permits and relevant environmental regulations.

Compliance Risk （G）

• Each unit regularly conducts regulatory compliance checks. In the event of any non-compliance, it is required to correct and improve or formulate relevant operating procedures to reduce the risk of violations.
• Each unit conducts publicity or education training from time to time.
• Monthly, collect and compile amendments to occupational safety and health, environmental protection, and climate change-related regulations. After applicability identification, each unit conducts a compliance check. Non-compliant items must be immediately improved or management plans for improvement must be established and executed.

Property Risk （G）

The Company has property insurance for buildings or equipment such as offices, workshops, instruments, and wealth-generating appliances to reduce losses caused by disasters.