Company: OSRH
Filing Date: 2025-11-12
Form Type: 10-Q
Source: 0001213900-25-109054
Chunk: 22

Company: OSR Holdings, Inc.
Filing Date: 2025-11-12
Form: 10-Q
Item: Part I, Item 1
Chunk 22
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 excess of liquidity.

Market risk management 

Market risk is the risk of possible
losses which arise from the changes of market factors, such as interest rate, stock price, foreign exchange rate, commodity value and
other market factors related to the fair value or future cash flows of the financial instruments, such as securities, derivatives and
others.

a.Currency risk

The functional currency of the foreign
subsidiary’s operations is the local currency. Therefore, for purposes of the condensed consolidated financial statements, the results
of foreign operations are translated from the local currency into U.S. dollars. Local currency assets and liabilities are translated at
the rates of exchange on the balance sheet date, and local currency revenues and expenses are translated at average rates of exchange
during the period. Resulting translation gains or losses are included in the accompanying condensed consolidated financial statements
as a component of accumulated other comprehensive loss.

b.Interest rate risk

Interest rate risk refers to the risk
that interest income and interest expenses arising from deposits or borrowings will fluctuate due to changes in market interest rates
in the future, which mainly arises from deposits and borrowings with floating interest rates. The goal of interest rate risk management
is to maximize corporate value by minimizing uncertainty caused by interest rate fluctuations.

As of the end of the reporting period,
there are no financial instruments subject to a variable interest rate.

c.Price risk

Price risk is the risk that the fair
value of a financial instrument or future cash flows will change due to changes in market prices other than interest rate or foreign exchange
rate. As of the end of the reporting period, the Group is not exposed to commodity price risk. Investments in financial instruments are
made on a non-recurring basis according to management's judgment.

Credit risk management

Credit risk is the risk of possible
losses in an asset portfolio in the events of counterparty’s default, breach of contract and deterioration in the credit quality
of the counterparty. For the risk management reporting purposes, the Group manages the credit risk systematically and pursues value maximization
and continuous growth of the Group by efficient resource allocation and monitoring non-performing loans. In order to reduce the risks
that may occur in transactions with financial institutions, such as cash and cash equivalents and various deposits, the Group conducts
transactions only with financial institutions with high creditworthiness. As of September 30, 2025, the Group believes that there are
low signs of material default, and the maximum exposure to credit risk as of September 30