Company: SCAG
Filing Date: 2025-07-03
Form Type: 20-F
Source: 0001213900-25-061408
Chunk: 111

Company: Scage Future
Filing Date: 2025-07-03
Form: 20-F
Item: Item 11
Chunk 111
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ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
 
Credit risk
 
Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. We manage credit risk through in-house research and analysis of the worldwide economy and the underlying obligors and transaction structures. We consider many factors in assessing the collectability of our receivables, such as the age of the amounts due, the customer’s payment history, credit-worthiness and other specific circumstances related to the accounts.
 
Interest rate risk
 
We are exposed to interest rate risk on our interest-bearing assets and liabilities. As part of our asset and liability risk management, we review and take appropriate steps to manage our interest rate exposures on our interest-bearing assets and liabilities. We have not been exposed to material risks due to changes in market interest rates, and not used any derivative financial instruments to manage the interest risk exposure for six months ended December 31, 2024, and the fiscal years ended June 30, 2024 and 2023.
 
Liquidity Risk
 
We are exposed to liquidity risk. We have managed this liquidity risk by arranging for long-term credit facilities with the banks, seeking financial support from shareholders, or issuing convertible debts, to ensure that our outstanding loans and debts will be repaid and that we are able to roll out our NEV business and expansion initiatives.
Foreign Exchange Risk
 
Our functional currency is Renminbi and reporting currency is U.S. dollars. We are exposed to foreign exchange risk in respect of our operating activities, including the import of some supplies and components used in the manufacture of our NEVs, including the chassis, powertrain, and electrical and electronic parts. Our exposure to foreign exchange risk will increase when revenue from the sales of NEVs and the provision of related services in other markets other than PRC, which are denominated in foreign currencies, contribute to a greater share of our revenue.