Corporate Governance

• Working capital and long-term loans are the main sources of interest rate risks. Interest risk arises from the floating rates of the Company's loans.
• Interest rate fluctuations are monitored by the Company to minimize any negative effects.
• In regards to interest rate risk from short-term loans, the Company’s policy is to charge the change in floating rate to customers through the selling prices.
• Risks associated with changing market interest rates mainly relate to the Group's floating interest rate long-term loans.

Foreign exchange risks are primarily associated with the Company's monetary assets and liabilities in currencies other than its functional currency.

This foreign exchange fluctuation poses a potential market risk to the Company. If possible, the Company would balance significant assets and liabilities denominated in foreign currencies to mitigate the impact of foreign exchange rate fluctuations on its assets and liabilities. In order to mitigate these risks, derivative transactions can also be entered into by the Company.

Commodities price fluctuations, especially soybean and soybean meal, pose a potential commodity price risk for the company.

In order to minimize the risks arising from fluctuations of finished goods prices, the Company observes and analyzes developments in the international market and enhances material procurement efficiency according to customer requirements. As part of continuous inventory management, the Company also enters into purchase agreements when prices are low, while keeping sales planning and material requirements in mind.

Providing credit to customers and placing funds on current and deposit accounts in banks exposes the company to credit risks.

Except for the disclosures below, the Company does not have a concentration of credit risk.

• Cash and Cash Equivalents
  Funds placed on current and deposit accounts are managed in accordance with the Company's policies. The Board of Directors reviews surplus funds investments annually and limits excess funds to each bank. Using such limits mitigates any potential financial loss due to bank failure by minimizing the concentration of credit risk.
• Trade Receivables
  The Company enforces policies to ensure that its products are sold only to creditworthy customers with a good track record. A precautionary approach to credit lending is applied by the company, and it regularly monitors the credit portfolio. A credit verification procedure must be completed by all customers who wish to trade on credit terms, including a detailed examination of their transaction history, business potential, financial strength, perception of their industry reputation, and business management skills.
  As part of the Company's policy, each customer is limited to a certain amount of credit. The management monitors how customers utilize their limits on a regular basis. Non-credit qualified customers must pay in advance. To reduce the Company's risk of bad debts, receivable balances are continuously monitored.
  On the date of reporting, the Company reported maximum credit exposure for each class of financial assets in its consolidated financial statements.

• Through an adequate amount of committed credit facilities and sufficient cash and cash equivalents, the Company manages its liquidity profile in order to finance capital expenditures and repay maturing debts.
• As part of its ongoing monitoring of the maturity of its financial assets and liabilities, the Company evaluates its projected and actual cash flow information on a regular basis.
• Further explanation on the Company’s risk management, including its internal control system is elaborated in Annual and Sustainability Report.