泰鼎國際股份有限公司

Risk Management Policies and Procedures

In order to strengthen corporate governance and establish a sound risk management system, the Board of Directors approved a risk management policy on December 16, 2020, guiding the company’s units to identify effectively, measure, supervise and control various risks when handling their business. The resulting risks are controlled to an acceptable level to achieve the goal of rationalizing risks and rewards and the goal of sustainable operation of the company.

Scope of Risk Management

Risks involved in the Company's businesses include operational risk, market risk, financial risk, climate change and environmental risks, occupational safety risks, information security risk, compliance risk, etc.

Risk Management Organization

Risk Management Operation Situation

The Company started to promote the Risk Management Mechanism in 2020 and reported its operation to the Board once a year from 2020. In 2024, the Company held a risk management meeting to identify the risks faced by the Company, risk assessment and risk response measures and reported to the Sustainable Development Committee and the Board of Directors on December 20 2024, on the implementation of the Company's risk management, including risk identification, assessment of the impact of risks (including (including sustainable issues, TCFD) and the operation of the risk management strategies adopted. The major risk types of the Company, their responsible units and risk management methods are as follows.

Rank	Risk Factors	Impacts Description	Control Mechanism
1	20. Product quality management	Negative: potential impacts are (1) difficulty of introducing new products which block business development; (2) present orders could drain. Positive: catch the trend of movement of industry then introduce more orders from European and American areas.	Promote implementation of quality concept (14Q project) Improve quality management system and innovate management method (method for handling different quality specs in the same factory).。
2	19. Customer relationship management	Negatives: Inaccurate judgment of market demand, misplaced production and sales planning, failure to take customer complaints seriously, resulting in loss of orders or obstruction of new product development. Positive: Make good use of existing scale and industry trends, inject new orders to maintain scale and niche advantages, and create shareholder value.	Review market demand regularly, interact frequently with customers and agents to confirm feasibility, periodically review customer complaint content and progress, and manage core issues. Supplement negotiation, customer relationship management, and market analysis training content and establish channels for collecting political and economic trend analysis information.
3	8. Research development and innovation	Negative: insufficient competitiveness may lead lose orders. Positive: beneficial to marketing development, energy saving and efficiency increasing, increase job opportunity and shareholder value.	Continuously review manufacturing capabilities and quality management Invest in research and development and new equipment Improve the collaboration system between industry and education to nurture talent Strengthen awareness of intellectual property rights Apply for invention patents
4	1. Effectiveness of Board and corporate governance	Negative: declining of governance effectiveness would impact operation significantly, it could be strategic mistake, major operation loss or damage of survival ability. Positive: good governance effectiveness could increase scale, continuous growing profit and shareholder value.	Establish corporate governance regulations Conduct annual board performance evaluations (including individual director self-assessment, board self-assessment, and functional committee self-assessment) Conduct a comprehensive board performance evaluation by engaging external professionals every 3 years
5	5. Change of political and social environment	Negative: rising uncertainty level of market demand will control ability of orders decline; population structure and social environment change will make recruiting harder which affect integral competitiveness. Positive: based on existed scale advantage, strengthen linkage to society and counter parties then keep competitive advantage and inject new blood of orders and talents.	Interacting with external stakeholders through procurement, sales, finance, and other departments to gather market intelligence for analysis and feedback to management for planning and management activities. Establishing channels for gathering and analysing political and economic trends; devising mature education-industry collaboration models; enhancing the quantification system for employee competencies. Convening regular meetings of the Employee Welfare Committee.
6	36. Supply chain disruption and cost fluctuation	Negative: (1) unstable plans and implementation of material preparation; (2) trends of fragmentation of global market, pandemic disease, carbon cost and climate change make regional supply unstable. In addition, metal and material price are affected by political and economic situation that make range and frequency of price fluctuation of materials bigger. Purchase department face significant challenge of cost control. Positive: the irreversible change of international politics has pushed the industry to move to south-east Asia which indirectly induces joint of suppliers.	Plan and establish supplier development and evaluation processes. Conduct annual assessments of critical suppliers, provide guidance for improvement to those who fail to meet requirements, and reduce transaction volumes or cease transactions with suppliers who fail to improve over the long term. Monitor industry movement dynamics, increase the selection and auditing of localised suppliers, and explore innovative collaboration models.
7	24. Capital management	Negative: insufficient working capital will disrupt operations. Positive: well management of capital can expand operation leverage and create room for business upgrade.	Periodically review long-term/short-term capital arrangements and manage financing channels and financial tools.
8	26. Credit management	Negative: fail of account receivable management, declining investor confidence. Positive: helpful to capital management.	Regularly analyse accounts receivable ageing and review with business units to monitor customer dynamics proactively; conduct periodic credit reviews for existing customers; perform credit checks for new customer applications; finance department continuously monitors macroeconomic and industry changes. Continuously engage with professional institutions (such as banks and accounting firms) to enhance credit management mechanisms.
9	28. Energy management	Negative: unstable supply of energy and its price would directly impact operating cost; trend of increasing electricity price is certain and clear; if supply of electricity is not stable, cost of shut down is quite big. Positive: speed up innovation of reducing cost or increasing efficiency; to think of possibility of self-owned power plant in the future.	Energy-saving improvement plans for high-energy-consuming equipment and departments. Installation and expansion of solar energy facilities for self-generation. Implementation of ISO 50001 certification.
10	29. Rising price of GHG emission	Negative: carbon fee could be reflected in energy cost, material cost, management cost, regulation fee cost and transportation cost etc. That it may increase operation cost gradually. Positive: speed up innovation of reducing cost or increasing efficiency.	Continuously conduct GHG inventories. Plan to adopt ISO 50001 certification. Develop a timeline for the introduction of carbon footprinting and carbon pricing; adjust carbon strategies during the implementation process.
11	7. Fail of digital transformation	Negative: operating efficiency being behind the industry; mistake of data generation. Positive: promotion of operating efficiency; data and number generation being instant and correct which indirectly could support innovation.	An internal dedicated team is in place to assist with the gradual improvement of information systems, supporting the digitalization needs of various departments. Studying the timeline, necessity, and feasibility of upgrading overall information systems.
12	37. Harmed reputation	Negative: possibly lead shut down, losing talents, losing capital. Positive: based on existed scale and goodwill advantage, keep input ESG relative improvement to enlarge operating advantage in ASEAN area and inject momentum of growth.	Continuously managing operational tasks and related ESG efforts effectively. Ongoing enhancement of risk management mechanisms, including discussions on the timeline for adopting international risk management standards.
13	22. Uncertainty of Market Information	Negative: increasing uncertainty of market information would possibly lead mistake in planning of balancing production and sales which indirectly increase risk of stock and cash flow. Positive: we have scale advantage on quantity of purchase and amount of financing, therefore if we could well plan and well utilize the scale advantage, it could increase negotiation room	Enhance management rigour in existing processes such as market analysis, customer and distributor management, and logistics management to improve the ability to assess market changes. Supplement education and training content in negotiation, customer relationship management, and market analysis, and establish channels for collecting political and economic trend analysis information.
14	32. Investment in new technologies	Negative: lagging of installment or development of new technology which leads losing orders or operating difficultly. Positive: seek technical transformation under trend of carbon reduction which may possibly bring in potential orders and helpful to business development.	Continuously introducing new products and collaborating with customers to enhance technical capabilities. Exploring the integration of technology transformation plans aligned with carbon reduction strategies.
15	6. Sustainability risk	Negative: overly chasing after short-term performance would harm long-term competitiveness. Positive: think of operating strategy by macro and chronic aspects to improve competitive base.	Establish and adhere to internal control systems related to corporate governance to maintain diversity in decision-making processes. Execute all significant investment projects in accordance with internal control management regulations, with adequate management and discussion by executives. Provide multiple internal channels for employees to voice their opinions. Continuously enhance risk management mechanisms.
16	39. Groundwater depletion	Negative: Production halts, operational shutdowns. Positive: Improving water resource efficiency can lead to tax benefits and reduce long-term operating costs.	Established workflows and review mechanisms for water management. Planned maintenance budgets and schedules based on past experiences, internal knowledge, and supplier recommendations. Formed a business continuity team to assess risks of major hazards and relevant external information regularly. Initiated the wastewater recycling facility investment project at the Sinsakhon plant and monitored its effectiveness. Exploring the adoption of ISO 46001 Water Efficiency Management standards.

Material Topics Matrix

The implementation of risk management (including sustainability issues and TCFD) in 2024 is as follows:

TCFD and Risk Management.pdf

Information Security Management Strategy and Structure

(I) Information security risk management framework

A. Information Security Organization
Apex Circuit (Thailand) Co., Ltd. (APT), the operating entity of the Group, established the Information Security Management System Committee (ISMS Committee) in Year 2022 with a total of 34 members, and a total of 13 meetings were held in 2023. The ISMS Committee governs the APT Information Security Operation Center (Cyber Security Operation Center; CSOC) is responsible for coordinating the group's information security and protection related policy formulation, implementation, risk management and compliance assessment. The information security supervisor of the center will report the effectiveness of information security management, issues and directions related to information security to the parent company's board of directors and CEO every year. The audit office of the Group conducts audits to ensure internal compliance with the related standards, procedures and regulations of information security.

In order to implement the information security strategies set by CSOC and ensure internal compliance with relevant information security standards, procedures and regulations, the dedicated information security supervisor and the personnel of the center will work with the business department, human resources department, engineering department and legal department, etc., to review and decide on information security and information protection guidelines and policies every year, and implement the effectiveness of information security management measures.

B. Group's ISMS Committee Organization Structure

(II) Information Security Policy

A. Group’s ISMS strategy and structure Information security and operational data protection are important cornerstones for the sustainable development of enterprises and the maintenance of core competitiveness. In order to enhance the safety and stability of the Group's information and communication operations and ensure the confidentiality, integrity and availability of information assets, smoothly promote the Group's various businesses, the Group is committed to strengthening the information security management mechanism and defense capabilities, establishing a safe and reliable computerized operating environment, and ensuring the security of systems, data, equipment and networks to protect the company's important information assets and information systems are operating normally. In order to effectively implement information security management, the Group's information security organization holds regular meetings every month through the CSOC.　 Based on the management cycle mechanism of Plan-Do-Check-Action; PDCA, review the applicability and protection measures of information security policies, and regularly report the implementation results to the ISMS Committee.

B. Concrete Management Programs

C. Investments in Resources for Information Security Management

For improving information security, we invested 8,605,000 baht.

Risk Management

Risk Management Policies and Procedures

Material Topics Matrix

The implementation of risk management (including sustainability issues and TCFD) in 2024 is as follows:

Information Security Management Strategy and Structure

Investor Relations

Sustainable Focuses

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+886-2-2717-0032

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Risk Management

Risk Management Policies and Procedures

Material Topics Matrix

The implementation of risk management (including sustainability issues and TCFD) in 2024 is as follows:

Information Security Management Strategy and Structure

Investor Relations

Sustainable Focuses

News Center

+886-2-2717-0032

+886-2-2717-0032