Risk Management Operations 

For steady operations and sustainable development, the Company has established a "Risk Management Policy and Procedures," approved by the Board of Directors, to serve as the highest guiding principle for risk management. Each functional unit is responsible for identifying, assessing, and formulating response strategies or measures, and reports the status of risk management operations to the Board at least once a year. This process ensures ongoing supervision, review, and rolling reassessment of relevant risks. 
 

Risk Management Process




 

Annual Key Tasks

  1. Regular Assessments: Each department shall initiate the risk assessment process in the fourth quarter every year. 
  2. Ad hoc Assessments: Risk assessment for operational processes and information assets within the scope of change shall be conducted in the following situations: 
    (1). Changes in the Company's operational structure. 
    (2). Changes in relevant laws and regulations that have an impact. 
    (3). Changes in operational processes or scope of services. 
    (4). Feedback from relevant stakeholders. 
    (5). Occurrence of significant quality, environmental, or occupational safety incidents. 
 

Risk Identification and Response Measures in 2024

Risk Category  Risk Assessment Items  Response, Control, and Management Measures 
Financial Risk 
  • Interest rate and exchange rate fluctuations 
  • High leverage investment risk, lending funds to others, derivative transactions, financial investment 
The Company's clinical trial drugs and services are partly outsourced to foreign vendors, so the Company forecasts foreign currency needs for a certain future period and maintains some foreign currency deposits. To reduce the impact of exchange rate fluctuations on future revenue and profits, the Company adopts the following measures: 
  • Payments for overseas purchases or technical license fees to foreign vendors will be made with foreign currency receivables as much as possible to minimize exchange rate fluctuation impact and achieve natural hedging. 
  • The finance department closely monitors international financial conditions and exchange rate movements, consults with banks for professional advice, and implements appropriate hedging strategies based on actual funding needs and market timing to reduce exchange rate risk.
  • The Company has established "Procedures for Acquisition or Disposal of Assets," which specify rules for derivative transactions, risk management, supervision, and auditing. When foreign currency is needed in the future, besides retaining foreign currency receivables without conversion, the Company may purchase foreign currency from the spot market in accordance with the procedures, with Board approval and public announcement. 
  • The Company manages credit risk in accordance with its credit risk policies, procedures, and controls, assessing counterparties’ credit risk based on financial conditions, credit ratings, historical transactions, current economic conditions, and internal rating standards. 
Operational / Compliance Risk 
  • R&D program development 
  • Policy and legal changes 
  • Technological and industry changes 
  • Other operational matters 
The Drug Development Department is responsible for managing related risks: ：
  • Implement countermeasures for changes in regulations and requirements from regulatory authorities and hospital ethics committees, and ensure the quality of submission documents. 
  • Establish quality control standards for active pharmaceutical ingredients and finished products to ensure compliance with current regulations. 
  • Design clinical trial protocols in accordance with Good Clinical Practice (GCP) guidelines, and closely monitor the safety of trial subjects.
  • Conduct clinical trials in accordance with GCP, applicable regulations, and internal SOPs, monitor trial processes and records, and arrange audits to ensure compliance. 
  • Establish a quality management system following the Quality Control Manual, issue SOPs to ensure necessary risk management measures in new drug development, compile risk assessment reports, and continuously evaluate the effectiveness of risk controls. 
Strategic Risk 
  • Changes in corporate image
  • Investment, reinvestment, and M&A effectiveness 
 Relevant issues are discussed in management meetings. The Audit Office conducts risk inspection, assessment, supervision, improvement tracking, and reporting. The Board/Audit Committee makes decisions and exercises final control over risk assessment and management. 
Compliance Risk 
  • SOP and regulatory compliance 
 The Office of the Chairman is responsible for aligning with the Company's short-, medium-, and long-term business strategies to control and manage intellectual property and legal risks in various business activities, including but not limited to intellectual property validity, contract execution, regulatory compliance, and litigation matters.