Risk Management

First line of defense - Business departments lead risk prevention and control. Each business function acts as the primary responsible party for risk management by integrating risk control into daily operational processes. By formulating standardized operating procedures, they identify, assess, and control risks directly related to their functions at the front end to ensure compliant and stable business operations.

Second line of defense - Professional functional departments oversee and coordinate.

The Company establishes a special management center composed of directors and senior management teams (such as the Compliance Management Office, Responsible Supply Chain Office) as the second line of defense to collaboratively formulate company-wide uniform risk management policies, internal control standards, and compliance frameworks, monitoring and guiding the execution of the first line of defense.

Third line of defense - Internal audit independent verification.

The Company establishes an internal audit department directly under the audit committee of the Board of Directors as the independent third line of defense. The Internal Audit Department possesses a high degree of independence and objectivity, making it one of the four cornerstones of corporate governance. It provides an independent confirmation of the effectiveness of enterprise governance, risk management, and internal control, including whether the first and second lines of defense have achieved the objectives of risk management and control.

Compliance Managment

The Company benchmarks against the ISO 37301 international standard, regularly identifies compliance obligations and risks in various fields, and continuously implements PDCA closed-loop management to enhance the Company’s compliance governance level. The Company obtained the ISO 37301:2021 compliance management system certification in 2025, marking that the Company’s compliance management work in domestic and overseas markets has entered a new stage of high-quality development.