RISK MANAGEMENT PHILOSOPHY

 

The Company believes that risk management is an integral part of its business strategy and good corporate governance.

 
Risk management is defined as the process of identifying risks and assessing it in terms of frequency and severity, controlling risks by the application of practices and procedures for avoiding or reducing them, and financing those that cannot be avoided or reduced by the most logical and cost effective program.

 

Risk Management, therefore seeks to avoid, eliminate or reduce losses that can impair the operational capability and financial stability of the company, and transferring or financing those losses by insurance, self-insurance and other means.

 

Risk Exposure  Risk Management Policy  Objective 

Operational

Supply Chain risk 

Risks that may occur when purchasing its raw materials as the Company‚Äôs products are dependent on the raw materials availability and prices. Major disruption of its supplies could impact on its production and its ability to supply the products to the customers. Foreign exchange fluctuations also have effect on the production cost.

 

 

It is the policy of the company to determine the optimal minimum and maximum inventory level of law materials. Inventory levels should be reviewed and adjusted, as necessary. Alternative supplier program is also implemented. 

 

When planning the purchase, the quantity should be that which results in the lowest total cost to the Company, including the cost of carrying the raw material in stock as well as its procurement costs.

 

 

To ensure adequate supply of raw materials to support production requirements.

To optimize operational efficiency.

Financial

Credit risk

Risk that the company will incur a loss because its customers, clients or counterparties failed to discharge their contractual obligations.

Liquidity risk

Risk that the company will be unable to meet its payment obligations when they fall due under normal  and stress circumstances.

 
 
 
It is the policy of the Company that all customers that wish to trade on credit terms are subject to credit verification procedures.

 

It is the policy of the Company to use diversified funding sources.

 
 
 
To strengthens management of funds and assets.
 
 
 
 
 
To improve cash flow to generate
more investible funds.
 
To meet commitment to clients,
and to judiciously settle all valid
claims.

Hazard/Compliance

Properties Risk
   Fire
   Explosion
   Machinery breakdown
 
Natural Events Risk
   Flooding
   Typhoon
   Earthquake
 
Environmental Risk
 
 
The Company maintains systematic and total approach to the management of these risks which include risk control or loss prevention and risk finance or risk transfer.
 
The Company ensures compliance with environmental laws and Regulations.
 
 
To minimize losses or prevent
damage to finished products and
properties.
 
 
 
 
To ensure business continuity and protect company image.