Sustainable Governance

Risk Management

The Company has established appropriate risk assessment methods as the basis for risk management. After evaluating and consolidating risks, appropriate response measures are implemented. To ensure stable operations and sustainable development, and to serve as the foundation for managing and executing various risks, the Company formulated its Risk Management Policies and Procedures in 2023, in compliance with the “Regulations Governing the Establishment of Internal Control Systems by Public Companies” issued by the Financial Supervisory Commission, which recommend that public companies establish effective risk management mechanisms to assess and monitor their risk-bearing capacity, current risk exposure, risk response strategies, and compliance with risk management procedures.


The Company identifies risks and formulates corresponding measures in accordance with its Risk Management Policies and Procedures, aiming to address and manage operational risks in the most cost-effective manner. An annual report is submitted to the Board of Directors and serves as a reference for internal auditors to assess the effectiveness of risk management implementation.


In addition, to address the impact of climate change on the Company’s operations, the Sustainable Development Committee is responsible for identifying and assessing material climate-related risks and opportunities. A full assessment is conducted every two years and reviewed and updated annually.

Risk Management Organization Structure

  • Board of Directors

    As the highest level of risk management, it aims to promote and implement risk management as a goal, in accordance with the overall operating strategy and environment, and in compliance with the law. It aims to clearly understand the risks Billion facing in operation, ensuring the effectiveness of risk management, and bear the ultimate responsibility.

  • Chairman

    Responsible for planning and directing the execution of the Board’s risk management decisions, coordinating cross-departmental risk management interactions and communications to mitigate strategic risks.

  • Functional Units

    Responsible for analyzing, managing, and monitoring relevant risks within the respective units to ensure the effective implementation of risk control mechanisms and procedures.

  • Internal Audit

    As an independent unit under the Board of Directors, it assists the board in overseeing the implementation of the risk management mechanism, audits the execution status of risk response and control in various functional units, and provides improvement suggestions for risk monitoring.

Risk Management Process

Risk Assessment and Implementation in 2025

Billion Group establishes appropriate measurement methods for identified risks as the basis for risk management. Following evaluation and consolidation, suitable response measures are implemented to address the risks faced.


Billion Group manages risks through risk identification, measurement, and response. In 2025, the Group identified key risks across economic, financial, and operational aspects, including exchange rate, regulatory, information security, inventory, and human resources risks, and formulated corresponding response measures. 

Information Security Risks

Potential Risks :

To implement information security management and prevent the leakage of operational data or personal information of employees and customers.


Response Measures :

Billion Group adopts proactive information security measures, including ISP data center intrusion prevention and anti-hacking mechanisms, dual-layer email protection, 24/7 SOC firewall monitoring, vulnerability scanning, penetration testing, Group-wide implementation of MDR (Managed Detection and Response), as well as off-site and cloud backups. In addition, the Group regularly conducts information security awareness campaigns and social engineering drills to enhance employees’ cybersecurity awareness and ensure operational safety.


-


Regulatory Risk


Potential Risk :

Changes in government regulations and policies, as well as uncertainties in the international environment, may increase operating costs, delay project schedules, or cause fluctuations in market demand, resulting in additional expenses or lost business opportunities.


Response Measures :

A. Continuously monitor changes in domestic and international energy policies and environmental regulations,actively participate in seminars, and provide timely regulatory updates to management for decision-making.


B. In response to changes in the international environment, assess the impact of U.S. tariff policies and evaluate the feasibility of shifting part of the supply chain to production and assembly in the United States to reduce tariff impacts and related tax costs.

Foreign Exchange Risks

Potential Risks :

Billion Group recorded a net foreign exchange loss in 2025, mainly due to changes in the international financial environment. Market expectations that the U.S. Federal Reserve may begin an interest rate cut cycle weakened the U.S. dollar, while global capital inflows into Asian markets led to appreciation of the New Taiwan dollar against the U.S. dollar.


Response Measures :

A. Certain contracts are denominated in USD, with related purchases also settled in USD, adopting a natural hedging approach to mitigate exchange rate risks on receivables and payables.


B. Export pricing takes exchange rate fluctuations into account, adjusting sales prices to reflect costs when appropriate.


C. The finance department maintains close contact with banks to gather relevant information for forecasting interest and exchange rate trends.

Inventory Risk

Potential Risks :

Changes in market demand, rapid product technology iterations, customer order adjustments, or project delays may increase inventory turnover days,resulting in risks of obsolete inventory or inventory write-down losses. In addition, fluctuations in raw material prices or unstable supply chain lead times may create gaps between procurement planning and actual sales progress, affecting capital utilization efficiency and gross margin performance.


Response Measures :

A. Optimize cross-functional coordination among sales, finance, procurement, and materials management teams. By monitoring demand and inventory changes in real time, the Group strengthens procurement necessity assessments when inventory risk increases, and provides capital allocation support and early warnings to offer management more complete decision-making information.


B. Regularly review inventory levels to reduce the risk of excessive inventory buildup or inventory obsolescence.


-


Human Resources Risk


Potential Risk :

The Group’s operations rely heavily on professional talent and the management team. Loss of key personnel or delays in recruiting new talent may affect project execution efficiency, product R&D progress, and service quality. In addition, fluctuations in labor costs, changes in labor regulations, or labor-management tensions may increase operating costs or affect organizational stability.


Response Measures :

The Group convenes meetings to review employee benefits and workforce planning measures, recruits professional talent externally, and promotes employee care, workforce reviews, and education and training programs to support talent selection, development, deployment, and retention. For internal surplus manpower, the Group conducts job redesign and internal position adjustments in a timely manner to reduce human resources risks and improve overall workforce utilization efficiency.