Risk management is integral to Company's strategy and to the achievement of Company's long term goals. The Company success as an organization depends on our ability to identify and exploit the opportunities generated by Company's business.

The BoD is responsible for identifying and evaluating the Company's exposure to risks and ensuring that potential risks are effectively mitigated. In this function, the Board is supported by the Corporate Risk Management Team, which oversees the design and implementation of the Company's risk management systems, including the risk matrix, and ensures that they are regularly updated in line with the prevailing economic conditions and the growth of the business. The team comprises the Head of Internal Audit and the Financial Controller and is chaired by the Chief Financial Officer.

The Company believes that we had identified and assessed relevant business risks regularly. Below is the explanation of each principal and relevant risk, as well as the risk mitigation:

  1. Raw Material Supply

    A lack in raw material supply which is caused by the time delay in supply and inadequacy of materials on hand could affect the Company's production activities. Efforts are made through good inventory management, whereas the Company has the raw materials inventory on average over 3 months.

  2. Foreign exchanges rates.

    The fluctuations in foreign currency exchange rates may negatively affect the Company's, considering the majority of the Company's raw materials are imported and most of the Company's finished goods are exported. Efforts are made through forward exchange contract transactions (forward) against most foreign currencies in the form of accounts receivable owned by the Company to meet the operational needs of the Company.

  3. Distributor and Customer Relation.

    The Company has many local and international distributors and customers. If the relationship between them doesn't work as it should be, it could negatively affect the Company's marketing activities and income. The level of dependence can be reduced by a long-term sales agreement and long-term relationship between distributor and the customer.

  4. Business Competition

    The Company operates in an increasingly competitive automotive components industry with a large number of new competitors in a limited market. Therefore, the Company must maintain product quality according to international standards and make market penetration more intense. Company's Product has been able to compete with similar products in the international market, therefore it makes the Company prepared for the effects arising from the presence of the Free Trade Area.

  5. Regulatory Changes

    • Changes in government regulations/policies may have a direct impact on the Company's business, e.g. Government's regulations on the import of raw materials and the import duty incentive from the Ministry of Trade. The Company take an approach to the government through the Association and prepare to be able at any time to adjust plans and strategies in the face of changes in government policy regulations.

    • The Company is subject to local, regional, and global laws and regulations in such diverse areas as product safety, product claims, trademarks, copyright, patents, competition, employee health and safety, the environment, corporate governance, listing and disclosure, employment and taxes.

  6. Environmental Impact

    The Company has fulfilled all government regulations to minimize the environmental impact caused by the Company's activities, which is by managing the production's waste according with applicable regulations and follow all regulations related on the environment which compatible with government regulations.